Surplus Spending Plan Is Proposed

Gov. Pete Wilson on Monday proposed a flurry of almost $400 million in environmental spending initiatives, including $130 million to help buy the 7,500-acre Headwaters Forest, the largest tract of old-growth redwoods not in government hands.

The forest’s owner, Pacific Lumber Co., hailed the governor’s proposal, saying in a statement that “permanent protection of the Headwaters Forest . . . would be significantly advanced” by the $130-million appropriation.

Anticipating a state budget surplus of about $4 billion, Wilson announced plans to repay $172 million to local governments for the state’s share of several flood control projects.

The bulk of the money--$104 million--is earmarked for projects on the Santa Ana River in Orange, San Bernardino and Riverside counties.

“That’s wonderful news,” said Herb Nakasone, who helps oversee the Orange County flood control project, designed to protect several cities, including Anaheim, Santa Ana and Huntington Beach. The county has been pushing to get state reimbursement for several years.

Additionally, Wilson called for a $50-million program to provide grants to help truckers replace high-polluting diesel engines. Under the proposal, businesses could obtain state grants if they buy less polluting trucks rather than more costly diesels.

The program would be especially important in Los Angeles and the San Joaquin Valley, where there is heavy use of diesel engines, a major source of air pollution.

Finally, Wilson called for spending $25 million on long-delayed maintenance projects at state parks, and $30 million on a joint project with the federal government for improvements to the Sacramento-San Joaquin River Delta. The proposal, part of the Calfed water program, would help ensure continued water transfers to Southern California and the San Joaquin Valley, where the bulk of the water is consumed.

“These are all necessary investments to meet current challenges facing California’s natural resources,” the governor said.

The proposals come as Wilson prepares to unveil his revised $73.8-billion state budget Thursday. The release of the revised budget signals the start of serious negotiations between Wilson and the Legislature over the spending plan for the 1998-1999 fiscal year that begins July 1.

Aides to Wilson say the revised budget will be fattened by about $4 billion, the result of unexpectedly strong income tax receipts that have arrived in Sacramento since the April 15 deadline to file tax returns.

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Democratic lawmakers, who control the Legislature, welcomed Wilson’s proposals for more spending on environmental projects, just as they did an announcement over the weekend that he wants to boost funding for the University of California and California State University systems.

However, Wilson is expected to call for tax cuts. Democratic leaders say they intend to fight the tax cuts, hoping to push instead for more spending on public schools.

As for the Headwaters proposal, Wilson had initially planned to use bonds to finance the state’s share of the purchase from Pacific Lumber and its owner, corporate raider Charles Hurwitz, chairman of Maxxam Inc. Hurwitz acquired the Humboldt County land a decade ago when he took over Pacific Lumber, and accelerated the company’s overall tree-cutting in part to help pay off debt.

But now that state revenues are running ahead of projections, Wilson wants to use part of the surplus to pay the state’s share and avoid more costly bonds, which take several years to pay off. The federal government is putting $250 million toward the total purchase price of $380 million.

“If this isn’t the end, it’s very close to the end of the Headwaters fight,” said Doug Wheeler, Wilson’s resources secretary.

The appropriation would be tied to approval of a separate agreement between the state and Pacific Lumber limiting environmental damage on 200,000 acres of timberland owned by the company.

While lawsuits and demonstrations by environmentalists have blocked Hurwitz’s company from cutting the Headwaters’ ancient trees, environmentalists fear that logging could begin this summer unless the state and federal government complete the purchase.

“The history has been that if acquisition is an issue, vigorous logging will expedite the deal,” said Tim McKay of the Northwest Environmental Center in Arcata.

McKay said that even if the land is bought this year, Pacific Lumber plans to log the 200,000 acres in the vicinity of Headwaters. Unless that logging is restricted, there will be further damage to salmon habitat on the Eel, Mattole and Van Duzen rivers and their tributaries, he said.