EARTHQUAKE: THE LONG ROAD BACK : Wilson Backs Bonds to Pay for Recovery : Financing: Governor says he does not support a tax increase to fund reconstruction. Democrats say his stance could adversely affect the lobbying effort to pass Clinton Administration’s $6.6-billion aid package.

Unwilling to support tax hikes of any kind for the moment, Gov. Pete Wilson said Sunday he prefers that the state sell government bonds to cover its share of earthquake recovery costs in Southern California.

“I am not eager to increase taxes really for any purpose, and certainly not for people who suffered a devastating natural disaster,” Wilson told reporters. “You don’t want to tax people any more heavily than you absolutely have to in a recession.”

Wilson has come under sharp criticism from Democrats here and in Sacramento for insisting that the federal government pay 100% of some earthquake costs. They say his refusal to acknowledge the state’s financial obligation could adversely affect the lobbying effort on Capitol Hill to pass the Clinton Administration’s $6.6-billion earthquake aid package.

But Wilson, who is attending a National Governors Assn. meeting here, said he is protecting the state’s interests.

“I don’t apologize for pressing to make the best deal we possibly can,” he said. “Whatever the federal government doesn’t pick up, the state government has exposure for. I’m trying to minimize that exposure.”

The Republican governor cautioned the state’s congressional delegation against rushing to submit an aid package based on premature estimates that are certain to rise as the full extent of the quake’s damage is calculated.

Administration sources said Sunday that Clinton will announce a new figure this week--possibly today--that will exceed the $6.6-billion proposal to rebuild California highways, repair government buildings, provide housing for victims left homeless and rebuild small businesses.

Wilson said he recognizes that the state must pay its fair share of federal programs to reconstruct highways, help families left without household goods and provide other assistance. But Wilson said he is pressing for the Administration to pick up all costs to clean up and repair public buildings, just as it did in Florida after Hurricane Andrew.

Last week, Assembly Speaker Willie Brown (D-San Francisco) proposed a half-cent sales tax increase for 13 months beginning March 1, which would raise an estimated $1.5 billion. A quarter-cent sales tax hike levied after the 1989 Loma Prieta earthquake raised $761 million and was supported by George Deukmejian, Wilson’s Republican predecessor.

Instead of raising taxes, Wilson wants the state to sell bonds toward its portion of the damages, estimated to exceed $30 billion.

Until the Jan. 17 temblor, Wilson had intended to focus this trip on enlisting the governors of six other large states to pressure the federal government to pay the costs of providing medical, social, education and incarceration services for illegal immigrants. Wilson’s budget proposal for the next fiscal year calls for federal reimbursement to California of $3 billion in immigration services, a figure most legislators consider overly optimistic.

Wilson is to join the governors of Florida, New York, Illinois, Texas, Arizona and New Jersey in meeting with Budget Director Leon E. Panetta today to push for more federal money for soaring immigration costs. In four years, Wilson said, California’s cost of providing emergency medical services for illegal immigrants has increased eighteen-fold.

In the long run, immigration costs will create a bigger drain on the state’s treasury than the earthquake recovery, Wilson said.

“The quake is a onetime disaster, hopefully,” Wilson said. “Illegal immigration is a growing and recurring disaster, and the dimensions in terms of impact on the state’s financial resources have been and will continue to be even greater.”

While Wilson has suggested cutting off health, welfare and education services to illegal immigrants, he said he does not support legislation by Rep. Dana Rohrabacher (R-Huntington Beach) to prohibit federal earthquake funds for illegal immigrants.

During the interview, Wilson could not resist taking shots at Democratic gubernatorial candidate John Garamendi, the state insurance commissioner, who has called for raising taxes for earthquake recovery.

“I am not sure there is a tax that Garamendi has failed to mention,” Wilson said. “He seems simply hellbent to tax people. He has said property taxes, sales taxes, income taxes (should be raised) and he is seemingly eager, which to me doesn’t make much sense.”

Meanwhile, Republican leaders here said they will introduce legislation next week that could divert another $4.5 billion to earthquake aid beyond the Clinton Administration’s $6.6-billion package.

The Republican plan would impose a moratorium on mandates--federal spending requirements--for the earthquake disaster area.

GOP leaders would offer legislation in March to repeal about half of the mandatory spending requirements in Los Angeles, or about $1.5 billion a year, said House Minority Whip Newt Gingrich (R-Georgia).

Without some relief, Los Angeles would receive roughly $7 billion in earthquake aid--but would have to pay about $5 billion to meet unfunded federal requirements over the next three years, Gingrich said.

“I think that is well worth exploring,” Wilson said of the idea Sunday.

But Rep. Henry A. Waxman (D-Los Angeles), whose district was hit hard by the quake, characterized it as “a cheap gimmick” to score election year political points. Waxman wants Congress to pass the earthquake package and then review whether to lift federal mandates passed on local communities.

Big-city mayors have long complained about financial burdens placed on them by rules in such legislation as the Clean Water Act and the Americans With Disabilities Act. Unfunded mandates cost the city of Los Angeles about $1.75 billion a year, Mayor Richard Riordan has told lawmakers.

Rep. David Dreier (R-San Dimas) said he hopes to use Los Angeles as a pilot project to relieve communities nationwide of unfunded federal requirements.

“We are looking for every possible bit of relief for California governments, which are going to be stretched to the limit when it comes to the recovery effort of this earthquake,” Dreier said.

But the plan puts as risk federal laws written to provide health care to low-income residents, safe drinking water, clean air and other environmental protections, Waxman said.

“I get suspicious when I hear Republicans simply say, let’s no longer have mandates fulfilled,” Waxman said. “If there are federal requirements that certain activities have to be done by cities, counties and states, it is usually for public protection.”