SPENDING PLAN TOUGH ON WELFARE : STATE BUDGET AT A GLANCE.

Byline: Paul Hefner Daily News Sacramento Bureau

Gov. Pete Wilson outlined a $66.6 billion proposed state budget Thursday that includes a blueprint for a new California welfare system far more strict than the federal welfare reform laws require.

At a morning news conference, Wilson said his plan would allow welfare recipients to ``earn the self-esteem that comes only with self-sufficiency.''

``We must end a welfare system that undermines the work ethic, that has trapped generations in dependency, that discourages marriage, that has driven fathers out of the home and encouraged out-of-wedlock births,'' he said.

Wilson's welfare plan would limit new recipients to 12 months of cash assistance over two years. Cash payments to families already on welfare would be limited to 24 months over three years.

Both groups would be subject to a five-year lifetime limit. Anyone receiving a cash grant would see it shrink by 15 percent after six months, and would lose aid if they refused to take part in job training or turned down work.

Democrats and advocates for the poor were quick to criticize the plan, which would have to pass the Legislature before taking effect. The state must overhaul its welfare system to come into step with federal reform approved last year.

Assembly Speaker Pro Tem Sheila Kuehl, D-Encino, noted that the time limits on aid set forth by Wilson went beyond the federal mandates.

``The minimum the feds envisioned was two years. He has come up with something even more draconian,'' she said.

Kuehl said that the plan failed to adequately address the issues of job training and child care. Wilson proposed paying block grants to individual counties for such programs, but the size of such grants would be up to negotiation.

``I am very concerned that Los Angeles County, which has the biggest caseload, will have inadequate resources to meet the need,'' she said.

Others called Wilson's plan misguided, including Casey McKeever, directing attorney for the Western Center on Law and Poverty, a legal aid group.

``Overall, it's disappointingly draconian, and based on the myths and illusions that have driven his policies for years,'' McKeever said. ``It relies on the assumption that people receive aid because they lack the will to become self-sufficient.''

Wilson said that his plan did what was needed, setting new eligibility standards, grant levels and time limits for aid, but leaving individual counties free to fashion their own programs.

Discussion of the welfare plan overshadowed the other elements of Wilson's proposed budget. Expecting the state's economy to continue to grow, the governor called for stepping up spending in several areas.

Chief among them was spending for children in public schools. As he had announced earlier, Wilson's spending plan called for expanding class-size reduction to a fourth grade and raising the per-pupil grant for the program to $666. He also included a cost-of-living increase for regular school funding on top of new money for teacher training and computers for high schools.

Wilson sought to highlight education spending in the budget. When aides produced a chart with a giant $1 bill, carved up to reflect his spending priorities, he pointed to the 55-cent share for education.

``See that?'' he asked.

Democrats noted that the voter-approved Proposition 98 required Wilson to set aside what he had for schools.

Wilson's plan also calls for adding 40 new trial court judges, spending more on juvenile halls and camps, and putting $100 million toward a public safety grant program for local communities to hire more police, prosecutors and jailers.

Wilson's budget leaves personal income tax rates alone, but asks for a 5 percent tax cut for banks and corporations this year and next, saying they were important to keep the state competitive with others for jobs.

Democrats seemed unlikely to go along with the idea. Senate President Pro Tem Bill Lockyer said the tax cut would siphon $1 billion away from education spending over four years.

Poring over the 2-inch thick budget proposal, lawmakers were hard-pressed to say immediately how individual areas like the San Fernando Valley fared. The budget does call for spending $3.4 million to air-condition some buildings at Valley College in Van Nuys. Kuehl said she believed the recreational facilities in the Santa Monica Mountains might get a share of $5 million set aside for river parkways.

But most of the attention was focused upon welfare, particularly among officials in Los Angeles County, which has the largest single share of the state's 2.6 million welfare recipients.

County Supervisor Zev Yaroslavsky said he hoped Wilson's call to repeal the requirement that counties provide general relief cash payments to the indigent was a sign that state lawmakers were ready to start sharing in the costs of the program, now borne entirely by the county.

``When those people fall through the cracks, they fall on county heads,'' he said.

Under Wilson's proposal, many seeking assistance will be required to start with an ``up-front job search'' attempting to link them directly with employers. If they go to work, they'd leave the program at that point, officials said.

Those unable to find work immediately would go through a screening process in which they would be expected to describe what they need to get back into the work force.

They would then be expected to take part in a work plan tailored to their needs, all with the idea to get them employed and off aid.

Single parents on aid would have to take part in training or other programs 32 hours a week, far more than the 20-hour requirement imposed under federal law.

Eloise Anderson, head of the state's welfare department, said she expected the new time limits to provide a powerful incentive.

``Some people are not going to enter the system. Some people already in are going to say, `I'm outta here,' because if I start using up my five-year clock, I'm in trouble,'' she said.

Here are some details of the 1997-1998 budget proposed Thursday by Gov. Pete Wilson:

WELFARE: Set strict time limits for grants and new eligibility rules. Families already receiving aid would get no more than 24 months of assistance over three years. Those who come into the system later would get grants no more than 12 months in two years. Payments would drop 15 percent after six months. Counties would not be required to pay general assistance in cash.

TAXES: No change in personal income taxes. Taxes on corporations and banks would drop 5 percent.

EDUCATION: Increases for class-size reduction in primary grades, teacher training and high-school technology. No tuition increases for students at community colleges or state universities.

SAFETY: Additional funding for a block grant for new police officers, prosecutors and jail staff. Wilson also wants to create 40 new trial court judgeships and increase funding for juvenile halls, camps and ranches by $140 million.

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Box: State budget at a glance (see text)