Wilson Says Budget Meets 2 Top Needs : Legislation: Plan called best option for schools and safety. Assembly completes action on spending package.

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.

Orange County will see $12.5 million cut from the county treasury. Combined with funds slashed from the county’s special districts, which maintain everything from libraries to parks, Orange County faces the loss of $57.2 million, according to Ron Rubino, the county’s budget director.

Cities fare better, thanks largely to a newly cemented budget agreement that shifts more of the sales-tax dollars from counties to cities. Early projections, for instance, had Huntington Beach getting a cut of nearly $2 million, but the city now faces only a $1-million loss of revenue. Most others also saw their cuts halved. Santa Ana now stands to be slashed $983,000 instead of $1.8 million, while Anaheim faces a $570,000 cut instead of $1 million.

Although the county suffered less than many others around the state, several Orange County lawmakers expressed displeasure with the budget and the various “trailer” bills that implement it. Most members of the county delegation in Sacramento voted against the documents, but there were a few twists.

Assemblyman Mickey Conroy, a staunch conservative Republican from Orange, surprised his colleagues by voting with Democrats on several of the trailer bills early Thursday morning--including one that extends the half-cent sales tax--after siding against the budget several days before.

“When I came to Sacramento, I said I would not vote to raise taxes,” Conroy declared. “I am still not going to vote to raise taxes. But to give the counties time to put their own houses in order, I will vote to extend the sales tax for six months.”

Conroy’s votes brought him the ire of fellow Orange County Assemblyman Ross Johnson (R-Fullerton), who chastised his colleague in a hard-hitting speech on the Assembly floor. Later, Johnson said he felt lawmakers were passing the buck by failing to cut deeply enough into government fat.

“I once again believe that this is the first day of the next budget crisis,” Johnson said. “We are still billions of dollars out of balance. This is very discouraging.”

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 current fiscal year.

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.

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.”

Some, however, said the law enforcement groups had been sold a package by legislative leaders that will do nothing to boost crime-fighting efforts.

“I think the sheriffs made a fool’s bargain,” said Orange County’s Johnson. “There’s no guarantee that those monies can’t be used for something else.”

Orange County Sheriff Brad Gates acknowledged that there are no written assurances in the budget that law enforcement will not see the sales tax money they get simply supplant funds already allocated for them. But he expressed optimism that Orange County supervisors would maintain a strong commitment to maintaining sufficient funding for public safety agencies.

“I believe my board has said that their No. 1 issue is public safety,” Gates said. “I’m confident they’ll spend the money that way.”