THE GOVERNOR'S BUDGET PROPOSAL : NEWS ANALYSIS : Wilson's Budget May Mean Quick End for Honeymoon

By GEORGE SKELTON

Jan. 11, 1991 12 AM PT

TIMES SACRAMENTO BUREAU CHIEF

SACRAMENTO — The friends, the fawners, the fat cats and the San Diego Chicken have all left. The rental tuxedoes have been returned and the party’s over. Now it’s just Gov. Pete Wilson and the Legislature, alone, eyeball to eyeball.

“He had a great three days, but reality has set in,” said Senate Republican Leader Ken Maddy of Fresno, looking back on a festive, nonpartisan Inaugural Week that ended with a thud Thursday when the new GOP governor dropped a $55.7-billion budget proposal on the Democratic-controlled Legislature.

The austere budget contained tax increases abhorrent to conservative Republicans and welfare cuts unacceptable to liberal Democrats.

“I’m sure the honeymoon, for the most part, ended last night,” said Maddy, referring to a jovial dinner that Wilson hosted for the Legislature after his State of the State Address.

The governor and the legislators, entertained by political satirist Mark Russell, had such a good time that they even joked and laughed about the new term limits that Wilson supported and now are a political death sentence for lawmakers.

There does seem to be a sincere desire on both sides to work cooperatively during this era of acute fiscal crisis and strong public suspicion of Sacramento. Wilson, holding out bipartisan olive branches, was showered with praise for his Inaugural Address Monday and his State of the State Wednesday, especially his ambitious plan to shift toward prevention of society’s ailments. But he could tiptoe around specifics in those speeches. He could not in his budget proposal Thursday.

“I was sorry that the honeymoon ended so quickly; I rather liked Wilson,” said Sen. Diane Watson (D-Los Angeles), chairwoman of the Senate Health and Human Services Committee. “At his dinner, I had such a feeling of conciliation and warmth and I thought, ‘Oh, we’re getting off to such a good start.’ And then I heard his budget proposal.

“There’s not a likelihood of this passing since the welfare and health issues will come through my committee.”

Watson’s counterpart in the Assembly, Tom Bates (D-Oakland), chairman of the Human Services Committee, figured that Wilson’s attempt to cut benefit payments for recipients of Aid to Families with Needy Children (AFDC) was “really a sop to his right-wing constituency.” Bates added, “It has no real chance of success.”

Meanwhile, the so-called right-wing constituency in the Assembly was upset with Wilson’s proposal to increase taxes on liquor and motor vehicle registrations and eliminate some sales tax exemptions.

“There will be real resistance, especially in our caucus, to some of his revenue proposals,” said Assembly Republican Leader Ross Johnson of La Habra. “Members of our caucus are opposed to tax increases.

“On the other hand, his proposed cuts in Aid to Families with Dependent Children will be met with enthusiasm by the (GOP) caucus.”

Former Assembly Republican Leader Pat Nolan of Glendale, who was one of former Gov. George Deukmejian’s staunchest supporters in the Legislature, said: “I don’t intend to support any tax increase.”

Maddy took a more moderate, pragmatic view, one that Wilson is counting on to prevail as hetries to balance the state’s books in the face of a projected $7-billion revenue deficit over the next 18 months. “He crafted as good a budget as he could under the circumstances,” Maddysaid.

Senate President Pro Tem David A. Roberti (D-Los Angeles) seemed to be in a negotiating mood. Wilson will hold his first meeting with legislative leaders next week. “The budget is a reflection of the bleak economic period we are in,” Roberti said, indicating that Democrats may go along on education cuts. “We’re not going to war (over school funding) right now.”

Roberti and Assembly Speaker Willie Brown (D-San Francisco) acclaimed Wilson’s State of the State address as the best they had heard in years, if not decades. “It was a speech far more progressive and liberal than Dianne (Feinstein) would have ever dared to give,” the banquet audience was told by Brown, who had strongly supported Democrat Feinstein’s gubernatorial bid.

There are tensions and sore points between Wilson and the Legislature, not the least being Proposition 140’s term limits, coupled with its elimination of legislators’ pensions and deep cuts in their operating budgets. The Legislature wants to shift some of its costs to the executive branch, and Wilson has hinted he might be willing to consider this. But first he wants the lawmakers to work much faster than they are accustomed to on the budget. “Delay will only aggravate the crisis,” he told reporters Thursday.

For now, Wilson has gotten through the first week, managing to create an initial atmosphere of goodwill in the Capitol while delicately drafting a proposed budget--perhaps with some smoke and mirrors--that somehow winds up being balanced despite an uncertain recession.

Steven A. Merksamer, who was Deukmejian’s first chief of staff, remembered what it was like to wake up after all the inauguration parties, wave goodby to supporters and be left facing the Democratic-controlled Legislature:

“Nothing is more euphoric, heady or fun than doing a gubernatorial transition because you have the luxury of time. . . . But after you take office, that’s when the rubber meets the road. That’s when the tough choices have to be made. It’s very sobering. The fun has ended and the work begins. And each day generally gets harder in the first year--you’re doing so many things for the first time; learning the players, which legislators can you trust, which legislators can’t you trust.”

Times staff writers Virginia Ellis, Carl Ingram, Jerry Gillam and Daniel Weintraub contributed to this story.