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Wilson, Leaders Seek Statewide Sales Tax Vote : Budget: The bipartisan compromise plan is sent to the Legislature for action. It would shift $2.6 billion in property taxes from cities and counties to schools.


SACRAMENTO — Gov. Pete Wilson and legislative leaders crafted a compromise spending plan Sunday that would cut state services, shift a quarter of local government's property tax revenue to the schools and trigger a statewide vote in November on whether to make permanent a temporary half-cent surcharge on the sales tax.

Wilson and the Democratic and Republican leaders in the Assembly and Senate disclosed the plan as they emerged from nearly 20 hours of closed-door negotiations spread over two days.

They said no one liked the plan but each agreed it was the best the state could do under the circumstances.

"This was a wise and good compromise," Wilson said. "Not everyone is going to be happy. In fact, there's something to make all of us unhappy. It is that kind of a thing. We are stretching resources and they just don't stretch quite far enough. But essentially, I think it has been an equitable distribution."

Assembly Speaker Willie Brown (D-San Francisco) said there was not much in the budget for the people he represents.

"My constituents are getting a budget that operates the state with the meager resources the state has for the next 12 months," he said.

Orange County would fare much better than most counties under the budget proposal that emerged Sunday. Under the proposed property tax shift, $8.4 million would be taken from county government to help fund schools, far less than officials originally feared might be funneled away.

The totals assume that voters agree to make the half-cent sales tax permanent.

Under budget proposals that emerged earlier in the spring, Orange County government, including special districts, stood to lose in excess of $200 million.

"A preliminary review would indicate Orange County will be hit the least of any of the large counties," said state. Sen. Marian Bergeson (R-Newport Beach). "Under this scenario, we should fare relatively well."

But Bergeson also expressed concern that if the budget isn't passed in the next day or so, it could spell trouble for Orange County.

Any delays would give some of the state's larger counties, which stand to be hit hardest, a chance to push through a funding formula that would shift the economic burden away from them and onto regions such as Orange County, she said.

While the county was getting relatively good news, the budget still contained a fair dose of fiscal misfortune for some of the region's cities. Huntington Beach, for instance, stood to lose $1.9 million as a result of the property tax shift, while Santa Ana would lose $1.8 million and Anaheim $1 million, according to figures issued by Senate staff.

If the compromise survives, it will keep law enforcement on an even keel, said Orange County Sheriff Brad Gates, who has spent much of the past three weeks in Sacramento lobbying lawmakers.

Extension of the half-cent sales tax through the end of the year would provide law enforcement with about the same funding as it received last year, he said.

Gates also said he would campaign for voters' approval of an extension of the half-cent sales tax if it is put before them later this year. "If it doesn't pass in November, we're going to have the same kind of mess once again next year," he said.

The centerpiece of the state budget plan is a $2.6-billion shift of property tax revenue from cities, counties and special districts to the schools. Every dollar transferred from local government to education saves the state a dollar it would otherwise have to give the schools from its own treasury.

To help local government survive that loss of revenue, the leaders proposed extending the state's half-cent sales tax surcharge through the end of the year and shifting the $700 million it would raise to counties. In November, at a statewide special election, voters would be asked to make the tax permanent and dedicate its revenue to law enforcement and other public safety programs.

The ballot measure would be a constitutional amendment designed to circumvent voter-approved Proposition 98, which would require that the lion's share of the sales tax revenue go to schools. A majority vote would be needed for passage.

Wilson originally wanted the sales tax to expire on schedule June 30. He later agreed to extend it for six months but said the November vote would have to be on a county-by-county basis to expand local control over taxes and spending. In the end, he agreed to a statewide vote but insisted that the money go to local government.

Wilson had wanted deeper cuts in health, welfare and higher education programs than he settled for. But he won restoration of $400 million in prison spending that lawmakers had wanted to delete from his budget.

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