Wilson Defends Budget as Best for Schools, Safety

With the state Senate still debating the final pieces of a multi-bill legislative package on the budget, Gov. Pete Wilson on Thursday defended the emerging spending plan as the best option for two of the public’s top priorities: education and public safety.

“Revenue shortfalls require all of us to prioritize,” Wilson told reporters. “This budget makes my priorities very clear--putting people to work, providing our children with the best education possible, and, especially, keeping our streets safe.”

The Assembly, after another round of arm-twisting by Speaker Willie Brown (D-San Francisco), early Thursday approved the final bills needed to implement the $52.1-billion budget, which has been on Wilson’s desk since Monday.

But the governor said he will not sign the budget bill until all 21 pieces of related legislation clear the Senate.

Among them are measures that would transfer $2.6 billion in property tax revenue from local governments to schools, extend a half-cent sales tax surcharge for six months, and place on the November ballot a measure that, if passed, would make the sales tax permanent and give the money to local government.

Other legislation to suspend the renters tax credit, cut welfare grants and relieve local governments of several hundred million dollars in state-ordered obligations also were pending.

The Senate had been expected to complete action on the bills Thursday but got off to a slow start as several members made a last-ditch effort to scuttle the package. As progress slowed, Senate Republican Leader Ken Maddy of Fresno said it would take until at least today to pass all the legislation.

The main target of the Senate opposition was the $2.6-billion property tax shift, which would move the money from cities, counties and special districts to the schools.

Critics say the tax shift would simply allow the state to dodge responsibility for its problems while forcing local governments to cut programs and requiring the voters to approve a tax or risk losing more local services, including law enforcement.

State Sen. Dan McCorquodale (D-Modesto), a member of the joint Senate and Assembly conference committee on the budget, was seeking support for a smaller shift, perhaps in the range of $2 billion.

“We have huge welfare caseloads, public health problems, poor housing and threats to public safety,” he said. “We can’t expect to tackle these issues with a $2.6-billion cut.”

Wilson may have aggravated the problem in the Senate by declaring Thursday that he would veto a bill by Assemblyman Terry B. Friedman (D-Brentwood) to shift about $100 million in bank tax revenue to big cities and counties to help them withstand the property tax shift.

Supporters of the bill saw it as one way to repair political damage done with the controversial vote on the property tax shift. But its value as a policy alternative or as a political fig leaf faded quickly when Wilson announced his opposition. He said the bill would throw the budget plan, which anticipates a deficit 12 months from now and a tiny reserve a year after that, out of balance.

“There isn’t money for it,” Wilson said. “This is money that has already been spent.”

Wilson said the property tax transfer is needed so that the state can meet its obligations to education without further tapping its treasury. Schools would get $4,187 per student in the coming year, almost the same amount they will spend in the fiscal year that ends next week.

Part of the education funds would come in the form of loans that would be repaid by forcing the schools to go without future cost-of-living increases otherwise guaranteed by the state Constitution.

As for local governments, Wilson argues that the revenue they lose to the schools could be recovered in part through the sales tax extension and the proposed relief from state mandates.

Money raised by the six-month extension of the sales tax, as well as by the permanent tax if voters approved it, would be shifted to counties and cities and dedicated to law enforcement, prosecutions, jails, firefighting and other public safety programs.

If the measure fails, local government will be short about $700 million in the second half of the coming fiscal year and $1.4 billion annually.

At a Capitol news conference, Wilson surrounded himself with more than a dozen law enforcement officials. Several praised him for making their services a priority. But they also acknowledged that the budget deal Wilson engineered did not guarantee them a stable future.

“If this (sales tax extension) doesn’t pass Nov. 2, we are going to be in the deepest trouble we have ever been in,” said Sacramento County Sheriff Glenn Craig. “Even at best we don’t come out with a lot of extra dollars. It could work out to be almost a wash.”

State Budget Watch

Seven days before the end of the fiscal year, there were these key developments in Sacramento:

THE PROBLEM * The state will end the year with a $2.7-billion deficit and faces a $9-billion gap between anticipated tax revenues and the amount needed to pay off the deficit and provide all state services at the current levels for another 12 months.

THE LEGISLATURE * The Assembly completed its work on follow-up budget bills, passing legislation to shift $2.6 billion in local property taxes to schools, to extend a half-cent temporary sales tax another six months, to cut welfare benefits 2.7% in two major categories, and to allow counties the option of cutting general assistance welfare by 27% if they can show financial need.

* Action on the budgetary “trailer bills” shifted to the Senate, where Republican Leader Ken Maddy of Fresno said debate and final votes could take two days.

GOV. PETE WILSON * At a news conference, he called the budget that is on his desk awaiting completion of companion bills the best option for two of the public’s top priorities, education and public safety.

KEY DEVELOPMENTS * The holdup in the Senate on the last legislative votes needed to pass the budget was attributed to senators seeking last-minute changes.