WILSON, DEMOCRATS EXCHANGE BLAME; POLITICIANS DECRY TACTICS THAT LED TO STALEMATE, BUDGET CUTS.

Byline: Paul Hefner Daily News Sacramento Bureau

As California on Friday entered the second month of its fiscal year without a state budget, Gov. Pete Wilson tried to place the blame for the delay on Democrats in control of the Legislature.

Wilson accused Democrats of intentionally dragging out their work to try to force him to approve a package of welfare-reform legislation that had virtually no support from conservatives.

``They deliberately waited. I can't think that they were lazy or incompetent,'' Wilson said. ``I think that a very significant part of that was an effort to hold the budget hostage, thinking that in order to avoid being late, I was jammed, coerced into signing that bill.''

Instead, Wilson vetoed the first welfare-reform package, forcing a second round of negotiations that led to a compromise on the issue. The Legislature is expected to approve the new version Monday.

But the welfare issue was overshadowed this week by a second budget skirmish in which Wilson played the leading role. When Democrats rejected his income-tax proposal, he directed state officials to immediately pay off a $1.36 billion debt to an employee pension fund.

Lawmakers rush to slash spending

The move, which Wilson once likened to dropping a ``neutron bomb'' on the state budget, has lawmakers scrambling to sharply cut spending. Democrats called Wilson's statements an attempt to avoid the political fallout for an explosion he set off.

``The governor is taking the heat for cutting local law enforcement and threatening students with fee increases, so he may be eager to lay the blame elsewhere,'' said Assembly Speaker Cruz Bustamante, D-Fresno. ``But it's really time to stop the blame game and get on with the work that needs to be done.''

State Senate President Pro Tem Bill Lockyer, D-Hayward, said Wilson had lengthened the standoff by keeping Republican lawmakers from breaking ranks. Budgets must pass each house by a two-thirds vote.

``The reason there's no budget yet is because Pete Wilson cynically exploits the two-thirds vote requirement to enhance his own political power at California's expense,'' Lockyer said. ``If Wilson had refrained from threatening to murder any Republican who votes for a budget, or had Republicans been courageous enough to defy him for the good of their constituents, we could have had a budget a month ago.''

Political experts found middle ground in the dispute.

``I think there's blame enough to go around,'' said Sherry Bebitch Jeffe, senior associate at Claremont Graduate University.

Jeffe said she believes that forcing the pension fund payment has given Wilson a tactical advantage in the budget fight - and a strong hand to play in support of a tax cut next year.

Wilson move forces sacrifice

The payment will likely force Democrats to sacrifice money they had hoped to spend on a number of programs, including raises for state workers. Wilson, meanwhile, can cast himself as the prudent fiscal conservative.

``He socks it to the public employee unions in a roundabout way, and he saves a lot of money,'' Jeffe said. ``He can say, look at all the interest I've saved.''

Since many of the spending proposals that now must be scaled back originated with Democrats, Wilson loses little when they fall by the wayside, she said.

``If you begin to add it up, it appears to me the hurt is more on the Democratic side of the scale than on the Republican side of the scale,'' she said.

But Democrats contended that the cuts forced by the pension fund payback will hurt across the board, including $100 million that was to have been set aside to help local police, and $280 million earmarked for city and county governments that have had property tax revenues siphoned away by the state in recent years.

Wilson may have to pay later

``I think as time goes on, the governor is going to pay a political price for that decision,'' said Assemblyman Tony Cardenas, D-Panorama City. ``I think the governor gets the blame, and it's appropriate he get the blame.''

Cardenas said that the state's improving revenue picture had many local agencies looking forward to improved funding for the first time in years.

``All of that's out the window,'' he said. ``Today, already, local governments are already having to tell people help is not on the way. These local governments provide services, not only to families, but to businesses as well.''

Cardenas said he believes the public backs Democrats for their refusal to go along with Wilson's tax cut plan. Democrats had argued that the $1.2 billion tax reduction would take too many dollars away from public education.

``I think that's an argument we won with the public,'' he said.

But Jeffe said that if the state's economy continues to grow, Wilson's tax cut plan will likely get a better reception next year. The governor has already said he'll include a tax cut in next year's budget.

Such a proposal would be hard for Democrats to reject in 1998, a campaign year for all Assembly members and half the Senate.

``What are the Democrats going to do, deny a tax cut in an election year?'' Jeffe said.

Indeed, Wilson signaled Friday that he was already thinking ahead. He suggested that if the Legislature balks at enacting a tax cut next year, he might support an initiative to force a tax reduction through.