Wilson Calls for Stiff Budget Cuts : Finances: Health, welfare and education programs are targeted under governor’s proposal to ease deficit. No direct tax hikes are included in the plan.

SACRAMENTO —  Gov. Pete Wilson, presenting a united front with Republicans in the Legislature, on Friday disclosed his plan to erase the state’s budget gap with deep reductions in health, welfare, education and other programs.

Wilson, offering his first budget proposal since January, said that cuts as deep as 30% in some programs are needed to balance the budget.

In most cases, the governor declined to explain how his proposed reductions would affect services, generally disclosing only the size of proposed cuts in broad areas. Wilson has said he does not want to make his detailed plans public for fear that opponents--doctors and hospitals critical of health cuts, for example--will lobby the Legislature to defeat his plan.

The $39.9-billion general fund spending plan--a 9% reduction from this year’s $44-billion budget--is expected to get a hostile reception next week in the Democratic-controlled Legislature. Democrats have accepted the certainty of deep spending cuts but want to protect education funding by stretching out repayment of the state’s deficit over two years, raising taxes on business and the wealthy, and extending for at least one year a one-half-cent sales tax that is supposed to expire in 1993.

“I can guarantee you this plan will not pass the Assembly, not with a $2.3-billion reduction for schools,” said Assembly Speaker Pro Tem Jack O’Connell (D-Carpinteria).

The Democratic and Republican plans are expected to face off in showdown votes on the floors of both houses of the Legislature early next week. If neither plan wins the two-thirds majority needed for passage, Wilson and legislative leaders will return to the bargaining table. If the Legislature and the governor fail to enact a budget by July 1, the state will begin paying its employees and creditors with registered warrants, or IOUs.

Wilson’s plan includes no direct tax increases, and the governor withdrew his earlier proposal to repeal the renters tax credit, which Democrats had said was a tax increase for renters and had used as a rationale to defend their plan to raise taxes.

But part of Wilson’s plan could lead to higher taxes anyway: He proposed taking back $1 billion from local governments and then giving cities and counties broader authority to raise local levies, including utility and sales taxes, without a vote of the people.

Thousand Oaks City Manager Grant Brimhall said the $1-billion cut in local government funding would be devastating if finally approved--costing his city $4 million and 100 of its 400 jobs.

“If this budget passes, there will be no choice but to cut deeply into police and every other program in the city. It’s unconscionable.”

Wilson also suggested that counties be relieved of their obligation as the caretaker of last resort for the sick and the poor.

Wilson proposed cuts of 15.3% in health and welfare programs, 11.3% in the University of California and the California State University systems, 20% in the Resources Agency, and 25% in his newly created California Environmental Protection Agency.

He said spending for the Business, Transportation and Housing Agency would be reduced by 30% and expenditures for the State and Consumer Services Agency would drop 15.5%, including a “significant reduction” in state support for the California Museum of Science and Industry.

Wilson proposed consolidating the Franchise Tax Board and the State Board of Equalization and eliminating the California Water Commission, the State Reclamation Board and the Boating and Waterways Commission. The governor also proposed eliminating more than 500 advisory boards and commissions.

For education, Wilson said public schools would get a reduction of about 1% from what they spent this year, even as 200,000 new students are expected to pour into the system. But the cut represents a $2-billion reduction from the amount Wilson proposed in January and would trigger a new round of budget cutting in school districts.

State prisons, which have grown faster than any other program during the past 10 years, would absorb a 2.9% cut under Wilson’s plan.

Wilson acknowledged that his proposed reductions would be painful but said the education and prison cuts could be accomplished without damaging “the integrity of these two spending priorities.”

The governor said the public schools could absorb his proposed cut without hindering classroom instruction. He said revenue from increased fees on community college students seeking second degrees would be applied to the kindergarten through 12th grade budget. And an aide said budget increases proposed earlier for summer school, textbook purchases and maintenance would be withdrawn.

Assembly Republican Leader Bill Jones of Fresno said that the plan envisions cutting the strings on most if not all of the so-called “categorical programs,” allowing local school boards to decide how they want to spend the money.

“We are proposing . . . to try to drive more dollars into the classroom,” Jones said.

But state schools Supt. Bill Honig said the funding plan Wilson proposes would devastate education programs.

“This is going to be a disaster for the schools,” Honig said. “It’s a terrible policy for the state of California. There has got to be a better way to do it.”

Ventura County’s 20 school districts stand to lose nearly $28 million under Wilson’s proposed cuts.

For example, the Simi Valley Unified School District would be forced to contend with $4.4 million in lost revenues on top of its projected $4.5 million shortfall for next year. School officials said such a loss would mean the elimination of more staff positions and special education programs. “We’ll be going back to the Dark Ages in education if we have to face cuts like this,” Asst. Supt. Mary Beth Wolford said.

The governor’s plan was received politely by Democratic leaders who are negotiating with the governor, but it was blasted by a key Assembly budget writer.

Senate Leader David A. Roberti (D-Van Nuys) said Wilson’s proposal was “constructive because it moves the process forward” but still takes too much from the schools.

But Assemblyman John Vasconcellos of Santa Clara, chairman of the Assembly Ways and Means Committee, said he would be “embarrassed” to put out such a plan if he was governor.

“He’s talking about closing universities, laying off thousands of teachers, and starving kids. That’s not a formula for the future and not one I’m ever going to be a party to.”

The Democratic alternative, expected to be presented in full detail Monday, would create a “two-year budget” that would set spending and revenue levels over 24 months. Democratic leaders have agreed to cut welfare, Medi-Cal, aid to the aged, blind and disabled and the renters tax credit.

But they also propose scaling back from 80 to 50% the share of business meal costs that companies may deduct and limiting to $50,000 per year the amount of mortgage interest that homeowners can deduct. And they want to keep in place a one-half-cent sales tax that Wilson supported last year as a temporary measure.

But Wilson aide Kassy Perry said the governor will stick by his opposition to a tax increase.

“The health of the California economy cannot sustain a tax increase, no matter what kind of name you want to put on it,” she said. “For the first time in many years, state government will have to do what working families have to do, which is set priorities based on how much you have in the bank.”

Times staff writers George Skelton, Carl Ingram and Jerry Gillam also contributed to this story.

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Wilson’s Plan to Erase the Deficit

Here are the highlights of Gov. Pete Wilson’s plan to erase the state’s deficit and balance next year’s budget without raising taxes:

* Public schools: Reduce state and local spending on kindergartens through community colleges by about $200 million, or 0.9%, from 1991-92 to 1992-93. Schools would get about $2 billion less from the state in Wilson’s plan than they would under a Democratic proposal.

* Local government: Shift $1 billion in property tax revenue from cities, counties and special districts to the state’s general fund. Repeal law that makes counties the caretaker of last resort for the sick and the poor. Give cities and counties additional taxing powers.

* Health and welfare: 15.3% cut.

* Higher education: 11.3% cuts to the University of California and state university systems.

* Youth and adult corrections agency: Cut 2.9%; delay opening of new prisons at Lancaster and Delano.

* Legislative, executive and judicial branches: 24% cut.

* Resources, including water, recreation and parks agencies: 20% cut.

* State Board of Equalization, Franchise Tax Board and Employment Development Department: 9.9% cut.

* Business, transportation and housing category: 29.2% cut.

* State consumer services: 15.5% cut.

* Environmental protection: 24.6% cut.