Deficit-Financed State Budget Goes to Wilson : Government: Senate OKs plan. Some Democrats complain that the governor won too many concessions.

The Senate, convening in a rare Independence Day session, gave final legislative passage Monday night to a recession-squeezed, $57.3-billion state budget that largely reflects the priorities of Gov. Pete Wilson.

The deficit-financed measure, passed by the Assembly on Saturday, continues a series of red-ink state spending plans unrivaled since the Depression.

It accommodates growth in public schools and universities and the state prison system, but cuts health and social services to the poor and aid to local governments.

The budget includes no new taxes. The $60 renters credit, which was suspended in 1993, will be kept dormant for another year.

The bill was approved on a vote of 27 to 11--the bare two-thirds majority required for passage.

Although it came four days late, passage of the budget will allow the state to borrow more than $4 billion this month to stave off an embarrassing round of IOUs, such as those issued two years ago.

Democrats provided 17 of the 27 votes for the budget, but some grumbled that their leaders gave too much ground to the Republican governor, who is running for reelection to a second term.

“I think Pete Wilson won this one,” said state Sen. Tom Hayden (D-Santa Monica), who tried without success to win approval for higher taxes on the wealthy and on businesses. “He is being given all the tools he needs for his campaign arsenal.”

Sen. Alfred Alquist (D-San Jose) complained that a personal income tax cut for the wealthy scheduled to take effect in 1996 was left untouched even as programs for the poor were cut back.

“What you have here is a budget balanced on the backs of the poorest and most defenseless in our society,” Alquist said.

But Senate Leader Bill Lockyer (D-Hayward), while conceding that there was little in the budget for Democrats to be proud of, implored his colleagues to vote for it anyway.

“The time for argument, the time for negotiation, has ended,” Lockyer said. “It’s time to act.”

Wilson is expected to sign the budget bill today or Wednesday, after both houses of the Legislature have completed action on all the related measures needed to balance the spending plan and make it work.

The governor already has signed the budget’s most important companion measure, an extraordinary standby plan that could trigger deep cuts in all services except education if the state’s fiscal condition deteriorates over the next two years.

That bill, which Wilson signed Friday, was demanded by a consortium of international banks that will vouch for the state’s credit when it borrows more than $4 billion from Wall Street investors to keep state operations afloat.

Led by Bank of America, the syndicate said Wilson’s hope for a $2.8-billion bailout from the federal government the year after next was not sufficient to assure jittery financial markets that the state’s debts would be paid.

Senate Republican Leader Ken Maddy of Fresno said the budget will not resolve the state’s ongoing fiscal problems. He said it will take higher taxes or deeper spending cuts to end a string of state deficits, and there are not sufficient votes for either.

Instead, the plan carries over part of last fiscal year’s deficit and assumes that the state will not climb out of the red again until 1996, and then only with new aid from the federal government.

“It was the best you could do under the current political situation,” Maddy said after he and the other legislative leaders reached agreement with Wilson.

He added: “There is absolutely no doubt that a year from now, unless there’s a dramatic, beyond-all-belief recovery, that everything we have visited the last five or six years we will have to revisit. It will probably be the greatest opportunity we’ve ever had to restructure government and perhaps take some realistic view of what we’re doing in California, what the future holds.”

The budget provides enough money to allow kindergarten through 12th-grade schools to keep up with rising enrollments, though not inflation. State and local funding will total about $4,200 per student for the third consecutive year.

Community college budgets also will hold steady, and the governor’s proposal to raise fees 50%--from $13 per unit to $20--was defeated. Fees for students at the University of California and California State University are expected to climb 10%.

The state prisons will get a 9% boost in taxpayer funding, enough to keep pace with the rapidly expanding number of felons behind bars. The budget includes money to pay for the expected increase in prison admissions caused by the passage earlier this year of the “three strikes” sentencing measure.

The budget trims funding for the poor who are in managed-care health plans and reduces payments to hospitals that care for the indigent. It eliminates funding for prenatal care for pregnant illegal immigrants. And it trims funds to the regional centers that care for the developmentally disabled.

Welfare grants will be reduced 2.3%, to $593 a month for a family of three. Aid to aged, blind and disabled couples also will be cut, from $1,297 a month to $1,267. Individuals in the program will see nominal reduction in their grants.

Although Wilson and the legislative leaders agreed last week to deny additional benefits to women who conceive children after they go on the welfare rolls, a dispute developed Monday about the details of that accord.

Senate Democrats, according to one aide, wanted to exempt from the provision welfare mothers who say they were using contraception when they became pregnant. Wilson opposes that idea.

The issue was resolved by allowing the additional benefits--about $120 per child--to couples who have records showing they used contraceptive implants or sterilization that failed.

Times staff writer Carl Ingram contributed to this story.

How the New Budget Affects You

The state budget with its billions of dollars in spending, and sizable deficit, will have an impact on most Californians, especially the poor and the young.

If you are:

* A tenant, you will lose the renters tax credit for another year. The credit--$60 for individuals and $120 for couples--has been suspended for the past year but was scheduled to go back into effect at the end of 1995.

* A University of California student, your fees will go up by 10%. That means the typical fee for undergraduates for the 1994-95 school year will be about $3,799--in addition to room, board and books.

* A Cal State student, your fees will go up $144, or 10%. That means that undergraduate fees will average $1,584 for the upcoming school year in addition to personal expenses, books and various activity charges.

* The parent of a student in primary or secondary schools, your child’s school will get about the same amount as last year but will lose ground to inflation for the third year in a row.

* A welfare parent with two children, your grant from the state will drop from $607 a month to $593. Parents who conceive additional children while on welfare no longer will receive additional benefits when the child is born.

* A poor, aged or disabled person, living independently, your monthly grant will drop from $603 to $602. Grants to couples will drop more sharply, from $1,109 monthly to $1,083.

* Blind, your monthly grant will drop from $670 for an individual to $657 and from $1,297 to $1,267 for a blind couple.

* A Medi-Cal patient who needs prescription drugs, you will be limited to six prescriptions per month without prior approval from the state.