`STEALING FROM CHILDREN'; STATE MUGS CRIME VICTIMS TO BALANCE BUDGET.

Byline: Paul Hefner Daily News Sacramento Bureau

In a budget-balancing trick that has infuriated victims rights groups, legislators siphoned away $26 million collected from criminals that was supposed to assist victims of violent crime.

The full impact of the budget-balancing sleight-of-hand was still being assessed Thursday, nearly a week after the Legislature adjourned for the year. Lawmakers say they needed the money to balance the budget because Gov. Pete Wilson insisted on repaying in full the state's $1.3 billion debt to its employee pension fund.

The shift - an interest-free loan due in 1999 - drains most of the Restitution Fund's $35 million surplus, money victims groups were counting on to extend help to more abused children, battered women and other crime victims.

Victims already eligible for payments will not be affected. But the move still angered victims rights groups who have been lobbying to lift restrictions on payments imposed several years ago when the fund was in debt.

Since then, new methods of collecting from violent criminals has sharply increased the size of the fund, but the program's restrictions have remained in place.

``It's unbelievable,'' said Jim Falls, 35, of Studio City, who though molested as a teen-ager, is ineligible for aid. ``This wasn't a bond. There were no taxes raised for this. It's truly stealing from children.''

An outgrowth of the Victim's Bill of Rights approved by voters in 1982, the fund gets its money from criminals, reimbursing victims for up to $46,000 in medical expenses, rehabilitation, therapy and lost wages.

Judges usually order the payments, which range from $100 to $10,000, during sentencing. The money is collected from garnishing offenders' prison wages and trust accounts.

But the budget shifted money from the fund into the state's $52 billion general fund, which pays for the operation of most departments, from running parks to supplying state workers with paper clips.

``For all we know, it's going to build bridges,'' said Melissa Knight-Fine, director of Legislative Coalition to Prevent Child Abuse. ``But this is tainted money. People suffered for this money. Victims suffered for this money. It was collected as restitution money. The victims should be the first priority.''

Lawmakers said they were forced to make the transfer to balance the state budget after Wilson ordered immediate repayment of a $1.3 billion debt to a state pension fund.

Wilson called for the repayment to the Public Employees Retirement System after Democrats refused to approve his plan to cut income taxes during a two-month budget stalemate.

``We had no choice once the governor made the PERS repayment decision. That was his decision,'' said Sandy Harrison, a spokesman for Sen. President Pro Tem Bill Lockyer, D-Hayward. ``After he did that, this and many other special funds got raided.''

Officials for Wilson, meanwhile, blame the lawmakers for the shift.

``You should talk to the Legislature. They took the action to do it. The Legislature chose to transfer the $26 million,'' said H.D. Palmer, assistant director of the state Department of Finance.

Victims advocates upset

Neither explanation sits very well with victims groups and anti-crime activists.

``This constant robbing Peter to pay Paul is ridiculous,'' said Harry Coleman, who oversees the North Hills Coordinating Council. ``The public is kind of tired of it, of the misuse of funds. If they're allocated for one purpose, they ought to go for that. This one should be left alone.''

Some lawmakers agree, including Assemblyman Robert Hertzberg, D-Sherman Oaks. He said he learned about the transfer only because it jeopardized funding for a witness protection program he proposed.

``I have a problem with all these various loans. It's not the purpose for which the fund was intended,'' Hertzberg said. ``It's how we play smoke and mirrors in this business.''

The Restitution Fund built up the surplus only in the past few years. Before that, claims on the fund were often greater than collections from offenders.

In 1993, lawmakers had to approve a $44 million bailout to cover the fund's obligations, said Curt Soderlund, deputy executive director of the state's Board of Control, which oversees the fund.

Fund begins to grow

At the same time, officials also took steps to bring more money into the fund, encouraging judges to include restitution orders in their sentences and pressing prison officials to be more strict about collecting fines, he said.

The changes helped put the fund in the black, building a reserve of $35 million. Victims advocates argue that the surplus exists in part because the state is too restrictive about who receives fund payments.

While the fund provides assistance to roughly 100,000 crime victims a year, many more can't tap into it. Victims have only a limited time to seek payments, which often means adults abused as children are barred from receiving help, Knight-Fine said.

``The money was only left because injured victims are being denied,'' Knight-Fine said.

Soderlund disagreed, saying the limitations on the fund are sensible, requiring victims to seek help soon after a crime and to cooperate with law enforcement agencies.

``The number that might be excluded probably represent a small percentage of our clientele,'' he said.

Some victims left out

Before the loan was approved, several lawmakers proposed using the surplus to provide aid to victims currently left out of the program.

Lockyer introduced a measure that called for spending $10 million to better assist child victims of crime. Assemblywoman Valerie Brown, D-Santa Rosa, proposed spending up to $11 million to cover counseling for parents of victimized children, adults abused as children, and victims of domestic violence.

Hertzberg proposed using part of the fund to provide protection for witnesses threatened with retaliation for testifying against defendants.

But the funding shift touched off disagreements over how best to spend what remains of the surplus. The board wants at least part to stay in the fund as a reserve.

Knight-Fine said she objects to Hertzberg's proposal to use the fund, because those aided in witness protection programs often have criminal backgrounds themselves.

``I think it would be really sad if injured victims end up being denied, and money goes out to criminal witnesses,'' she said.

Hertzberg and others counter that a threatened witness is also a victim of crime. His bill would require protected witnesses to refrain from committing any new crimes and would make money available for witnesses only after eligible victims receive help.

And prosecutors supporting Hertzberg's bill say they are desperate for such assistance. Los Angeles County Deputy District Attorney Jennifer Snyder said she's currently preparing for the penalty phase of a murder trial of a gang member who has been acquitted in four other murder cases.

``If you review the cases, you'll see there's a recurring absence of witnesses,'' Snyder said. ``Witness intimidation is an integral part of what is hanging up the system.''

Hertzberg's and Lockyer's measures cleared the Legislature before lawmakers began their recess this week. Both are awaiting Wilson's signature.

But Brown's proposal stalled in committee, even after she rewrote it to try to sidestep the sudden shortfall in the fund by delaying any new aid until July. An aide to the lawmaker said it was threatened with a veto on policy grounds as well.

Even the lawmakers who got their proposals to Wilson's desk did so only after retooling their proposals in the wake of the loan. Hertzberg amended his bill to limit its first-year cost to $3 million. Lockyer's bill would be funded if the Department of Finance repays the loan early.

That is likely to mean putting off aid to some victims, including to some children in abusive homes who would be eligible for home visits by social workers. They can't afford to wait, Knight-Fine said.

Price to be paid

``There's going to be a cost,'' she said. ``The cost is going to be in lives and further injury to children if those funds don't come through. Those kids won't be there later. For some, this year is their last hope.''

And unless Brown succeeds in pushing her proposal through next year, the fund won't be of any help to Falls. He said he's one of at least 20 people believed to have been abused as a youth by a Catholic priest who committed suicide when criminal charges were brought against him.

``Every one of us needs counseling and therapy,'' Falls said.

He said he's in better shape than many abuse victims, but has battled emotional problems for years. A younger brother, abused by the same man, lives on the streets.

He met with sarcasm the prospect of putting off receiving assistance.

``Why don't we start in the year 2000?'' Falls said. ``I'm sure my brother can live another couple of summers on the street. A lot of people do it.''