Wilson Bond Issue for Quake Aid Blocked

In its first legislative test, Gov. Pete Wilson’s $1.05-billion bond issue to help pay the state’s share of recovery costs from the Northridge earthquake went down to surprise defeat before an Assembly committee Wednesday.

The centerpiece of the Republican governor’s election-year reconstruction program failed in the Assembly Ways and Means Committee against opposition from Democrats who argued against the state incurring more debt. They would rather meet the state’s obligation through a temporary tax increase.

Despite the setback, Wilson’s bond proposal, or some version of it, seems to be the only politically realistic option available. Most Republicans in both houses oppose temporary tax increases and, because it takes a two-thirds vote in both houses to raise taxes, majority Democrats cannot act without Republican support. The bond bill could be reconsidered as early as today.

“It’s unfortunate that this happened, but we are not greatly concerned,” said J.P. Tremblay, a Wilson spokesman. “We believe this bond issue is the right approach.”

The bond legislation, which would be subject to voters’ approval June 6, would repay costs already incurred for repair of damaged roads and state and local public buildings. It also would supplement federal relief by financing low-interest loans to homeowners.

Wilson and supporters of the plan had anticipated heated debate at the committee hearing, but they also expected the measure to win approval and go to the full Assembly for a floor vote.

The setback sent Wilson aides and the author, Sen. David A. Roberti (D-Van Nuys), scrambling to find favorable votes to overturn the defeat. The bill fell four votes short of the 12 needed for approval. Seven Republicans and Democrat Barbara Friedman of North Hollywood voted for it while eight Democrats and Republican Ross Johnson of Placentia voted against it.

Republican and Democratic sources indicated privately that in the rush to get the bill before the committee, the usual lining up of votes and consultations apparently did not occur.

Democrats generally favor a temporary increase in the sales tax or gasoline tax, or a combination of the two, to help finance the state’s $1.9-billion share of the massive earthquake recovery project. In 1989, a temporary quarter-cent sales tax was enacted after the Loma Prieta earthquake.

Wilson has ruled out an election-year tax increase as a “last resort,” saying that the recession-weakened California economy cannot withstand higher taxes.

Other elements of the governor’s recovery plan include delaying payment of $334 million owed to the federal government for disaster relief and cutting $290 million worth of unspecified state services from the budget. Democrats want the proposed cuts identified now, which Wilson has refused to do.

In the aftermath of the Jan. 17 Northridge earthquake, President Clinton and Congress swiftly committed $9.5 billion in federal relief to Southern California, an action that seemed to ease the pressure on Wilson and the Legislature to also act quickly.

On Wednesday, Democrats assailed the Wilson bond issue, charging that it would be irresponsible to sell bonds, a form of borrowing, when the state faces a multibillion-dollar budget deficit and may incur billions more in prison construction costs if “three strikes and you’re out” anti-crime bills are enacted, as expected.

Assemblyman John Burton (D-San Francisco) asked if the governor had a backup plan in case voters rejected the bond issue.

The governor’s representative, Steve Olsen of the state Department of Finance, said he was not prepared to discuss any contingency plan. He told Burton that voters’ defeat of the bonds “certainly is a possibility, but I think it is unlikely.”

Burton shot back, “It’s the most gutless thing this tough little Marine (Wilson) has ever done.”

Roberti, whom Wilson had picked to carry the bill, was so confident the committee would approve the measure that he did not appear to argue the case. Instead, he held a news conference in his San Fernando Valley district, where he is the target of a recall.

Later, in a telephone interview, Roberti said he had been assured by Wilson and Assembly Speaker Willie Brown (D-San Francisco) that the bill faced no problem in the committee.

“He was as surprised as anyone at the committee’s vote,” Roberti said of Brown.