Senate Shuts Door on County Lobbyists : Budget: Shift of $2.6 billion in property taxes to schools is approved. Local coffers could lose $300 million. Half-cent sales tax extension is also approved.

Turning aside a last-minute lobbying campaign by Los Angeles County officials, the state Senate on Friday passed the major pieces of budget-related legislation that Gov. Pete Wilson said he needs before he will sign the $52.1-billion spending plan on his desk.

After several hours of pressure from Wilson and party leaders, the Senate voted at 2:51 a.m. to shift $2.6 billion in property taxes from local government to the schools, saving an identical amount that the state otherwise would have been obligated to give to public education.

The Senate on Friday also approved and sent to Wilson bills to extend a temporary half-cent sales tax surcharge for six months and place a measure on the ballot in November asking voters to make the tax permanent.

Other legislation would keep school funding about at its current per-pupil level, raise college fees and tuition, cut welfare grants and reduce aid to the aged, blind and disabled.

The Senate adjourned until Monday, when a final battle is expected over suspension of the renters tax credit, which would save the state $400 million a year. Wilson is expected to sign the budget next week, putting a spending plan in place before the start of the fiscal year for the first time since 1986.

“We’re not out of the woods yet, but we’re confident that the Senate will wrap it up on Monday,” said Dan Schnur, the governor’s chief spokesman.

The local government property tax shift was the most controversial piece of the package in the Senate, just as it was in the Assembly the day before. But although many members denounced the proposal, enough voted for it to attain the two-thirds majority needed for passage.

Los Angeles County would lose about $300 million under the plan in the coming year, an amount county officials say represents about 10% of the county’s discretionary income. If the voters do not extend the sales tax beyond the end of this year, the county would lose nearly $200 million more.

Sen. Art Torres, a Los Angeles Democrat, helped lead the opposition. At one point, he floated a plan that would have reduced the cut in Los Angeles to $125 million. But Torres could not find enough takers in the Senate to move it along.

Torres met privately with Wilson for an hour late Thursday night. He said the governor seemed open to ideas for helping the county, but told Torres that “there is a lot of bloat” in local government, and saw no obvious sources of funds. Torres vowed to wage one more fight when the last few pieces of the budget package are put to a vote on Monday.

“The opera is not over,” he said. “We have got to keep on trying. There is too much at stake.”

One problem facing Torres is that Los Angeles city officials believe the proposal in Wilson’s hands is the best option for them. The city is to lose about $23 million, far less than the $70 million the city feared it would lose a week ago.

But realistically, any additional funds for Los Angeles County probably would have to come at the expense of all the cities in the county.

Wilson has thrown cold water on the chances of two bills that have passed the Assembly and, if enacted, might help the county.

One bill, by Assemblyman Terry B. Friedman (D-Brentwood), would shift about $100 million in bank tax receipts from the state to cities and counties, targeting the funds to urban areas said to be most in need of assistance. Wilson said he would veto that bill because the money already is allocated in the budget to other purposes.

A second measure, by state Sen. Leroy Greene (D-Carmichael), would allow county supervisors to increase the sales tax for local purposes without a vote of the people. The increase would be in addition to the half-cent levy that will be on the ballot in November.

Supporters of the measure argue that it clarifies existing law, which county officials say leaves them confused about whether or not they need voter approval for a sales tax increase. But Wilson does not like the bill, Schnur said.

“These are decisions that ought to be made by the people, not the politicians,” he said. “To give that power back to the county supervisors is something we oppose very strongly.”

Times staff writer Dan Morain contributed to this report.

State Budget Watch

Six days before the end of the fiscal year, these 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: Just before 3 a.m., the Senate passed most of the implementing legislation necessary to complete work on the budget. Bills were approved shifting $2.6 billion in local property taxes to schools, tacking on a six-month extension to a temporary half-cent sales tax, authorizing voters to make the extension permanent, hold kindergarten through Grade 12 school funding at present levels, raise college fees and lower welfare benefits.

GOV. PETE WILSON: Wilson and aides went over the budget in anticipation of signing next week.

KEY DEVELOPMENTS: Still undecided in the Senate was the fate of legislation to suspend the renters tax credit, the final major piece of the budget not yet in place. Another session was scheduled for Monday.