CALIFORNIA ELECTIONS / GOVERNOR : Brown Assails Wilson Budget as $3 Billion in Red

State Treasurer Kathleen Brown on Monday described Gov. Pete Wilson’s proposed budget as “a lie” and called on Wilson to get realistic about how big a federal bailout the state can expect to receive in the coming fiscal year.

Brown, a Democratic candidate for governor, said the state has a permanent, $3-billion deficit and no credible plan to reduce it.

If the Legislature passes Wilson’s budget as proposed, she said, she may have to borrow more than $10 billion from private investors to get the state through the 1994-95 fiscal year--at a cost of more than $300 million in short-term interest.

“This is not the way the state of California should be managing its finances,” Brown said.

Despite the harsh critique, Brown suggested no specific alternative to the $55-billion budget Wilson proposed in January. The governor is expected to offer an updated plan Friday in an annual event that usually triggers the first serious discussion about the budget in the halls of the Legislature.

A Wilson spokesman rapped Brown for not offering a plan of her own.

“We would be more than happy to entertain any alternative budget proposal she would put forth that specifies either what spending cuts she’d make or what taxes she’d increase,” said H. D. Palmer, assistant director of finance.

Brown was scheduled Monday to meet with legislative leaders and with a team of private financial advisers. She said she would make public today some options for the state to consider, but she said those choices would focus on financing the debt and would not include proposed budget cuts or tax increases.

Those decisions, she said, are the responsibility of the Legislature and the governor, not the treasurer, even one running for governor.

The crux of the problem, Brown said, is Wilson’s reliance on $3.1 billion in new federal funds, most of it to cover the cost of providing health, education and prison cells to illegal immigrants. Clinton Administration sources and members of Congress have said federal funds totaling about $500 million might be more realistic.

Brown said she supports Wilson’s request but criticized him for depending on the money to balance his budget.

“The budget as presented by Gov. Pete Wilson is a lie,” Brown said. “It is fiscally irresponsible to attempt to balance the budget on hopes and prayers.”

Palmer of the Wilson Administration said the request for immigration funds was both realistic and responsible. The request amounts to nearly 10% of the state’s general fund.