U.S. Aid Urged for State Prison Costs : Spending: Clinton Administration wants Congress to allocate $350 million to help cover expense of incarcerating illegal immigrant felons.

Under increasing pressure from states that are severely affected by illegal immigration, the Clinton Administration asked Congress for $350 million Friday to help California and other states pay the prison costs for illegal immigrants convicted of felonies.

The amount the Administration seeks is only a fraction of those costs, but the action is significant because it is the first time the federal government has demonstrated any obligation to reimburse states for such expenses. California alone estimates it will spend more than $375 million next year to jail illegal immigrant felons.

To provide the money, the Administration is reaching back to the 1986 immigration reform law, which authorized that states be reimbursed for the cost of imprisoning illegal immigrants. But no funds were ever appropriated under the program, officially called the State Criminal Alien Assistance Program.

“No previous President has asked for funds . . . and no previous Congress has acted to fund (the program),” Budget Director Leon Panetta said at a midday briefing.

The announcement comes as members of Congress and governors of affected states are stepping up criticism that the federal government has lost control of its borders. Florida has filed a lawsuit against the Administration, seeking $1.5 billion to help it offset the costs of providing education, health care and criminal justice services to illegal immigrants.

Gov. Pete Wilson, in a conference call with reporters, said the Clinton Administration’s announcement was a “very welcome development” but not enough to appease him. Wilson said the state still plans to file a series of lawsuits against the federal government with the first, coming next week, to focus on prison costs. States argue that they must unfairly shoulder immigration costs because Washington has failed to halt illegal immigrants.

“It’s a step,” Wilson said of the Clinton move. “It’s the first step on the journey.”

Although the White House has been working on an immigration strategy for more than a year, the threat of lawsuits and recent congressional action clearly have turned up the political heat.

The crime bill approved by the House this week contains an amendment that would require the federal government to pay all costs of imprisoning illegal immigrant felons, starting in 1998. The White House is opposed to that approach, fearing it would create a massive new entitlement program.

Panetta said the Administration “is not supportive of new entitlements” and would rather see reimbursements come out of discretionary funds and be subjected to the annual budget process.

He also denied that the $350-million plan outlined Friday was hurriedly unveiled to dilute congressional support for the more expensive method required in the crime bill. The Senate bill has no such provision.

“You can’t pull off (these announcements) in a day,” Panetta said.

Rep. Anthony C. Beilenson (D-Woodland Hills), who co-authored the crime bill amendment, praised the Administration for its quick response to the House action--and also saw an ulterior motive.

He said he suspects the funding request will be used as an argument against keeping the House langauge in the final bill, which will be produced by a House-Senate conference committee responsible for reconciling the different versions.

“They’ll be able to say they fought for appropriations to cover these costs,” Beilenson said. “If we can get into the habit of appropriating money every year (for immigration costs), that’s a fairly decent argument against putting in entitlement language. I don’t care how we get the money, as long as we get it.”

Panetta described he $350 million as “a ballpark figure . . . that may be short.” A Panetta aide, Christopher F. Edley Jr., was even more candid. “It’s at the very low end of what the costs would be.”

Even so, Panetta warned that winning final legislative approval will be difficult in light of tight budgetary restraints. “This is the beginning of the battle, not the end,” he said.

Wilson agreed: “It’s going to require real leadership on the part of the Administration to move some of those in Congress who are not sympathetic.”

The governor said he is skeptical because Clinton Administration officials have been quoted recently saying that the process of settling the immigration issue might take a year or more.

“What the hell do they expect the states to do in the meantime?” he asked.

Panetta urged that the federal and state governments form a partnership to rally support in Congress, particularly from states without significant illegal immigration problems.

“It would behoove states to work with us . . . and spend more time on Capitol Hill than in the courts,” Panetta said. “States should take some responsibility” and not engage in a “finger-pointing exercise.”

If approved, the reimbursements would be directed at the seven states most heavily impacted by illegal immigration--California, New York, Texas, Florida, New Jersey, Illinois and Arizona.

The Administration is still devising a formula to distribute the funds. But Panetta made it clear that they would be distributed roughly in proportion to the number of such felons in state prisons.

The budget office doubts the accuracy of most states’ estimates of their illegal immigrant prison populations. With the exception of New York, said Edley, “All the numbers from the states are numbers that somebody just made up.”

Asked about Gov. Wilson’s projection of 18,000 such felons in California prisons, Panetta said, “His estimate varies a great deal from the estimates from Texas and Florida, New York and others. It’s our sense that the impact is less.”

Nationwide, there are 23,000 to 34,200 illegal immigrants held in state prisons, he estimated. The annual cost per prisoner is around $18,000. The annual cost is estimated to be $420 million to $615 million.

In California, the Wilson Administration projects the expense of housing more than 18,000 such felons--nearly 14% of its total prison population--will exceed $375 million in this fiscal year.

Panetta said the Urban Institute would be asked to develop a consistent methodology to assist states in counting illegal immigrants in prison.

To find the $350 million in the fiscal 1995 budget, the Administration is proposing a 30% increase in FCC licensing fees, expected to generate about $72 million. The rest of the money will come from “negative allowances,” which are various budget surpluses from all federal departments.

Times staff writers Alan C. Miller in Washington and Daniel M. Weintraub in Sacramento contributed to this story.