State Expects to Win Delay on Quake Tab : Recovery: Move by Clinton Administration would allow California extra time to pay its $334-million share of aid.

Responding to requests by California officials, President Clinton is expected to announce today that the Administration will allow the hard-pressed state government to delay payment of the $334 million it is required to contribute to $9.5 billion in federal earthquake aid.

The decision will give California flexibility in repaying its matching funds. Without this action, the state would be required to begin contributing to the emergency aid shortly--posing an additional burden as lawmakers struggle to close a projected deficit and produce a balanced budget for the 1995 fiscal year.

The Administration plans to allow the state to borrow the funds from private lenders. The federal government would then guarantee the loans against future state Community Development Block Grants. Terms of repayment would depend on these agreements but might entail a longer period than the four-plus years requested by Gov. Pete Wilson and legislative leaders.

“This is purely a cash-flow problem,” said a senior Administration official. “They’re in the middle of a budget. The state and (local governments) are strapped for cash. This is not something that increases the cost to the federal taxpayer.”

The money is California’s share of the Federal Emergency Management Agency’s public assistance and individual and family grants programs. Overall, the state plans to provide $1.9 billion to help the quake-damaged Los Angeles region recover and rebuild.

FEMA’s public assistance program pays for repairs and reconstruction of schools, colleges, sewers, power plants, hospitals, and state and municipal facilities. The federal government contributes 90% of these costs; the state, 10%. The state projects its share to be $164 million.

Individual and family grants of up to $12,200 are available to cover medical and transportation costs, home repairs and other immediate needs. The federal government provides 75% of these costs; the state, 25%. The state projects its cost at $170 million.

A third FEMA program that provides individual assistance, including temporary housing, crisis counseling and disaster unemployment aid, is financed entirely by the federal government. Congress allocated $4.7 billion for FEMA aid for Southern California.

In addition, the federal agency pays 100% of all costs in the first three days after a federal disaster. Clinton extended the cost-sharing waiver for an additional five days after the temblor.

FEMA has received more than 360,000 applications for assistance in the wake of the Jan. 17 Northridge quake. The $344 million is an estimate of the state’s eventual share of the costs.

The federal government recently approved an $8.6-billion earthquake aid package. Another $900 million in contingency funds already has been committed.

Seeking to defray the immediate cost to California, Wilson sent a letter to Clinton requesting a loan of $334 million and asking that the state be allowed to repay it over a three-year period, beginning July 1, 1995. Assembly Speaker Willie Brown (D-San Francisco) and Senate President Pro Tem Bill Lockyer (D-Hayward) made the same request.

California lawmakers inserted language into the massive emergency spending bill that urged the federal government to “make every effort to provide the highest degree of financial flexibility to minimize the fiscal impact to the state.”