WILSON SHUNS NEW TAX CUTS; LAST BUDGET CALLS FOR RECORD SPENDING.

Byline: Paul Hefner Daily News Sacramento Bureau

Presenting his final state budget Friday, Gov. Pete Wilson said he wants California to spend a record $73.8 billion next year and agree to borrow $7 billion more to build new schools, prisons and flood control projects before he leaves office.

Wilson's budget - predicated on a continued boom in the state's economy - proposes a 5.6 percent overall increase in spending, with no new cuts in taxes for individuals or businesses. Nor does it call for restoring a 4.9 percent cut in welfare grants or the $65 renter's tax credit.

He said his proposals would allow California's public facilities to keep pace with its growing population. And he borrowed a page from his usual political rivals, describing his plans as ``investments.''

``The ideas and initiatives in this budget reflect the investments most vital to California's future,'' Wilson said. ``They are investments in an infrastructure for the 21st century.''

Some conservatives had harsh criticism for the proposal. Assemblyman Tom McClintock, R-Granada Hills, called it a ``borrowing binge.''

``This is a Democratic budget. Not only is there no tax cut, there's at least a half a billion dollars in tax increases,'' McClintock said, referring to the extra taxes people will pay if the renter's credit is shelved again.

Wilson said he might consider proposing a tax cut if a May revenue forecast proves favorable. But he defended his plan, noting that under a tax cut package approved last fall, parents are entitled to claim a larger credit for dependents.

``We gave a credit to those who need it,'' he said.

But McClintock charged that unless the state rolls back its tax rates, Wilson will leave office with tax collections far higher than when he started the job.

``Californians overall are paying $3.6 billion a year more than they would have if this administration had simply not happened,'' McClintock said. ``This is the last opportunity to square things with the people of California. I hope the governor can be convinced to do so.''

In contrast, leading Democratic lawmakers, who for years have sparred with Wilson over state spending plans, all but gushed over the governor's proposal for the 1998-99 fiscal year.

``We ought to change about six things and pass it next week,'' said state Senate Budget Committee Chairman Mike Thompson, D-Santa Rosa. ``It's high on education, high on kids. I only wish this would have been his first budget, not his last budget.''

As required by law, the budget sets aside the largest share of state funding to public schools and colleges. Elementary, middle and high schools would receive $23.5 billion, raising per pupil spending to $5,636, an increase of $222 from last year.

That includes a $350 million increase to extend the school year by up to seven days to 180 days of instruction. Wilson also wants to bolster spending on teacher training and to provide summer school for elementary-age children behind in reading.

But some said Wilson's plan went too far in requiring districts to spend on specific programs and that he had shortchanged general education budgets in the process.

``The governor cuts basic support for schools and instead proposes $500 milling in spending on his education initiatives,'' said Senate President Pro Tem Bill Lockyer, D-Hayward. ``He's saying, `Let's shift more power from local school boards to Sacramento so he can dictate the way education money is spent.' ''

The budget also would provide increases for all three of the state's college systems. The capital budget for the California State University system would include $11.3 million for the conversion of Camarillo State Hospital to a CSU campus.

In addition, the proposal calls for a pilot program to allow 2,000 scholarship students to purchase computers.

Other big-ticket items include $15.1 billion for health and welfare programs, $4.4 billion for prisons and $1 billion for trial courts.

Beyond his spending plan for the fiscal year, which begins July 1, Wilson also called for bond measures totaling $7 billion. To take effect, those proposals would have to be approved by both the Legislature and state voters.

Wilson said the new borrowing is needed because the state is back on its growth track after finally shaking off the effects of a long recession.

``If we had a static population, this bond program would not be before you,'' Wilson said.

The new debt would include $2 billion for public schools, $1 billion more for colleges and universities, $1.4 billion for new prisons and juvenile halls, $1.3 billion for flood control and water projects and $800 million for parks and coastline preservation.

In addition, Wilson wants to borrow $200 million to provide capital for an infrastructure bank that would help local governments finance public works projects and a $300 million bond measure for state laboratories and office buildings.

``You spend it because you need to spend it, to fund needed investment,'' Wilson said. ``It's the right thing to do for our people.''

What's in the spending package?

Highlights of Gov. Pete Wilson's proposed 1998-99 state budget:

HOW BIG? - $73.8 billion in state spending, including bonds and special funds. About $108 billion, when federal money is included.

HOW MUCH FOR EMERGENCIES? - About $296 million is set aside for a reserve.

WHO GETS THE MOST? - Public schools, kindergarten through 12th grade, receive the lion's share, 42.5 percent of General Fund money, roughly $23.5 billion, or $5,636 per student. This would put California 36th in the nation in per-pupil funding, according to the California School Boards Association.

AFTER THAT, WHO GETS THE MOST? - Health and welfare programs receive about $15.1 billion; higher education, $7.2 billion; correctional programs, including prisons, $4.4 billion.

WHAT'S NOT IN THE BUDGET? - No major tax increases, no new major tax cuts, no elimination of major programs.

HOW MUCH TAX MONEY? - $27.6 billion from the personal income tax, $18.3 billion from the sales tax, $6.2 billion from corporation taxes and $18 billion from an array of other tax revenues.

HOW MUCH SPENDING PER PERSON? - About $2,200 for every Californian.

HOW MUCH SPENDING, BY TIME? - About $202 million per day, $8.4 million per hour, $140,000 per minute, or $2,339 per second.

HOW MUCH SPENDING, BY COMPARISON? - Enough to buy a half-dozen 30-second television advertisements on the Super Bowl every hour of 1998, enough to purchase 15 Nintendo-64 machines every second.

WHAT'S IT WEIGH? - Five pounds.

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BOX: What's in the spending package? (see text)

Associated Press