THE STATE BUDGET : Veto of Court Funds Comes as Rude Surprise

SACRAMENTO —  Gov. Pete Wilson set off fiscal alarms in county courthouses Thursday with his quiet veto from the state budget of $206 million that the Legislature proposed in additional funds for local trial courts.

Wilson said he also plans to veto a separate bill that would have provided the extra funds through increased civil suit filing fees and established a schedule for distributing the money to the counties.

The governor said he vetoed the funds because the separate bill by Assemblyman Phillip Isenberg (D-Sacramento) would not raise enough revenue to finance the $206 million in court grants.

At least initially, it appeared that the veto may have contradicted Wilson’s repeated commitment during the months-long state budget fight to protect local government services from heavy cuts.

Additionally, under an agreement reached last year with Wilson, the state this year is supposed to pay 55% of local trial courts costs, increasing 5% in subsequent years until the full level of state funding reaches 70%. The governor’s veto actions appear to have rolled back the effort to last year’s 50% level.

A top Administration official, Chief Deputy Director of Finance Steve Olsen, conceded that vetoing the court grants and rejecting the fee bill have raised concerns, but indicated that he believes the issue was technical and could be smoothed out.

“There are some things we are going to need to fix,” Olsen said.

The veto of $206 million still left about $430 million available for distribution to the counties for trial court operations.

Although the governor disclosed his unexpected veto of the funds in a message Wednesday afternoon, it did not sink in until Thursday when local officials and other analysts began examining the 39-page document.

“This was like a midnight surprise,” said Allison Harvey, an assistant to Isenberg, chairman of the Assembly Judiciary Committee and an expert on court financing. “No one ever told us he (Wilson) had any concerns.”

Jerrianne Hyslett, spokeswoman for the Los Angeles County Superior Court system, said it was too soon to fully assess the governor’s action, but said that it threatens a loss of $48.1 million for Los Angeles Municipal and Superior courts.

She said court officials had not anticipated additional cuts and had no “scenario to deal with them.” The funding shortfall comes as the judicial system is coping with staggering caseloads and already shrunken budgets.

Lynn Holton, spokeswoman for the state Judicial Council, the administrative arm of the California court system, said officials fear the action may “jeopardize the stability of the state trial court fund.”

She said council Director William C. Vickrey believes there may be misunderstandings over Isenberg’s fee increase legislation and he hopes to convince Wilson not to veto it.

Harvey, the Isenberg aide, said the trial court funding arrangement had been put together in June and was “not something we did on midnight on Aug. 31,” the scheduled adjournment date of the Legislature.

Fred Klass, a program manager in the Department of Finance, said, however, that “we didn’t see the specific language” until late in the session and “a lot of things were happening at the end of the session.”

Times staff writers Virginia Ellis and Matt Lait contributed to this story.