Clinton’s Spending Plan Doesn’t Fill Wilson’s Budget Gap : Finances: Governor was counting on $2.3 billion to balance the state’s books. But the White House targets no funds specifically for illegal immigrants.

Setting the stage for another government fiscal crisis in California, the Clinton Administration’s $1.5-trillion budget released Monday targets virtually no federal funds to pay specifically for services to illegal immigrants.

Republican Gov. Pete Wilson was counting on an unprecedented $2.3-billion federal bailout of immigration costs to balance his proposed 1995 state budget. Without federal assistance to cover education, emergency medical care and imprisonment costs associated with illegal immigration, Wilson said California will be forced to raise taxes or make even deeper budget cuts.

“I’m a little surprised and disappointed,” said Assemblyman John Vasconcellos (D-Santa Clara), chairman of the Ways and Means Committee. “Without getting that (federal) money, the state will have to declare bankruptcy. There doesn’t seem to be much option except to do that. I don’t have any idea how we put the budget together now.”

Clinton Administration officials stressed that, although their budget blueprint contains no money to reimburse states for providing services to illegal immigrants, it does include nearly $3 billion to provide health care and education to indigent Californians, many of whom are illegal immigrants.

Federal officials had no estimates late Monday of how much of that money might go for services to illegal residents.

Overall, California stands to benefit from several new spending proposals submitted by the Clinton Administration while suffering its share of pain from nearly $20 billion in Defense Department cuts, reductions in domestic outlays and the elimination of 115 long-established government programs.

The Clinton budget proposes spending $4.8 billion for defense conversion programs ranging from worker retraining to the development of civilian-use technology by defense contractors. About one-fourth of such money went to California last year.

The Los Angeles Metro Rail project is slated to receive $184 million for the route extending from Hollywood to North Hollywood. But the Transportation Department budget also calls for more than $400 million in unspecified cuts in highway demonstration programs across the country.

In a pilot program that would be funded for the first time by the federal government, the Interior Department’s Bureau of Reclamation proposes $10 million to devise ways to recycle water that is used, treated and normally dumped into Santa Monica Bay. Under the program, $5 million would be spent on a project in the San Gabriel basin and another $5 million on a project in Los Angeles.

The Immigration and Naturalization Service, criticized by state officials as woefully underfunded, is in line for $2.1 billion, a 22% increase over 1994. A two-year “border initiative” announced last week would reduce illegal immigration, deport illegal immigrants from state jails, step up enforcement of employer sanctions and make it easier for 8 million immigrants to become citizens.

The shortage of funds for illegal immigrants during a tight fiscal era comes as little surprise. Wilson last month announced the heavy reliance on federal reimbursement without any assurances the state would receive the funds. Last year, Wilson asked for $1.4 billion from the federal government; Congress approved only $324 million.

Wilson Administration officials criticized the Clinton budget.

“It’s deeply disappointing and simply unacceptable to the people of California,” said H. D. Palmer, assistant director of Wilson’s Department of Finance. “This budget would deprive California taxpayers of needed services because the federal government is forcing the state to shoulder the costs of these federally mandated programs.”

Clinton Administration officials accused Wilson of trying to shift blame for the state’s financial woes--during an election year--to the Democrat-controlled Congress and the White House.

“It sounds like the governor is doing some political posturing on what’s really in the budget,” said Tom Epstein, White House liaison for California issues. “Gov. Wilson never even bothered to ask President Bush for this reimbursement. Here, he is getting a lot more than he ever got under the prior Administration, but he is still not satisfied.”

Administration officials estimated that their budget contains $2.2 billion in Medicaid funds for indigent health care and $700 million for disadvantaged students that would pick up portions of the illegal immigrant tab in California. Budget Director Leon E. Panetta also promised last week to make reimbursement for the incarceration of illegal immigrants a top priority this year.

“We think by the end of this legislative session we will be able to make substantial progress in helping states with the cost of illegal immigrant prisoners,” Epstein said.

Times staff writers Jerry Gillam in Sacramento and James Bornemeier and Melissa Healy in Washington contributed to this story.

What’s Next for the Budget

The likely timetable:

* Spring: The House and Senate budget committees approve a budget resolution, a non-binding outline of the year’s plans for spending and revenue collections. It does not require the President’s signature.

* Summer, probably into fall: Congress will work on Clinton’s health care package, which includes a higher tobacco tax and savings in Medicare and Medicaid.

* Fall: Congress’ appropriations committees will consider the 13 annual bills that actually govern agency spending. The goal, to finish before the Oct. 1 start of the new fiscal year, is almost never met.

Source: Associated Press