State Senate OKs Plan to Raise Taxes on Rich : Deficit: Democratic proposal barely wins. Assembly Republicans suggest spending cuts to Wilson.

Putting pressure on Gov. Pete Wilson and Republican legislators to increase the income tax, Senate Democrats on Thursday narrowly passed tax-the-rich legislation that would hit corporations and wealthier wage-earners with bigger tax bites.

At the same time, as the governor and legislators scrambled to try to resolve the state’s $14.3-billion budget deficit, Assembly Republicans handed Wilson a list of demands for more budget cuts. Their proposals included such things as a plan to reduce the need for prison guards by stringing lethal electrified fences around state prisons.

The developments came as Wilson and legislative leaders held their seventh closed-door meeting. Little progress was reported after a 2 1/2-hour session in Wilson’s office.

Democrats in the Senate rounded up just enough votes to pass a bill to raise $995 million a year by boosting income tax rates levied on corporations and the rich. Needing 27 votes for approval, Democrats at first came up one vote short, 26 to 12, but Democratic leaders kept the roll call open as they struggled to find Sen. Alan Robbins (D-Tarzana) for the 27th vote.

Robbins, who was having a social lunch with his lawyer in Century City, flew from Los Angeles and showed up in the Senate nearly six hours later to cast his vote as some of his steamed colleagues shot him cold stares. All 12 opposing votes were cast by Republicans.

The tax bill is opposed by the governor and faces rough going in the Assembly, which on Tuesday rejected a similar bill calling for a slightly higher tax rate. But with a long way still to go in budget negotiations, a tax measure like that approved by the Senate could form part of the final budget solution.

Senate leader David A. Roberti (D-Los Angeles) said Democrats will continue to keep pressure on Wilson and Republicans for an income tax increase. “We’ve got to show our constituents that we are fighting for them. We have to try as hard as we can.”

The proposal to install lethal, electrified fences around state prisons was part of a $4-billion package of potential budget cuts personally handed to Wilson during a private meeting with Assembly Republicans on Thursday.

Though perhaps the most dramatic of the recommendations on the GOP hit list, it was by no means the only controversial proposal among the dozens of money-saving ideas suggested to Wilson.

Other proposals in the Assembly Republican plan include elimination of 20 state boards and commissions, for a saving of $113 million. Among the agencies the Republicans want to abolish are the Coastal Commission, the Commission on State Finance, the Little Hoover Commission, the Native American Heritage Commission, the Commission on the Status of Women, the California World Trade Commission and the Agricultural Labor Relations Board.

In addition, the Assembly Republicans proposed adopting the federal income tax system, which would allow the state to abolish the staff and administration of the Franchise Tax Board and save $100 million annually. The GOP lawmakers also called for deportation of the approximately 9,000 illegal aliens in state prisons, which would save another $100 million. Roughly $2 billion in state employee wages and benefits would be eliminated under the proposal. And it would double the size of the reduction Wilson wants to make in basic welfare grants.

Noting that the Department of Corrections stations guards in perimeter towers at most of its prisons to prevent escapes--at an annual cost of $25 million--GOP budget writers said: “The technology exists to construct lethal fences as an alternative to towers.”

Assembly Republican Leader Ross Johnson of La Habra explained that three fences would be involved, with the middle fence carrying so much current it could kill prisoners attempting escapes.

“It’s not inhumane, it’s not cruel. You have to climb over one hellacious fence topped with razor wire before you ever get near the lethal fence,” Johnson said.

Johnson said Wilson’s reaction was “positive” when the proposal for electrified fences was outlined to him. The governor’s office had no immediate response.

During a luncheon meeting between Wilson and GOP lawmakers, conservatives made it clear that they would need more budget cuts before even considering a tax increase.

Said Assemblyman Tom McClintock (R-Thousand Oaks): “Every member who spoke, and there were about 25 of them, told him that they wanted more spending cuts and not a tax increase. There wasn’t any reaction from the governor. Essentially he just sat there and listened.”

Wilson went from the luncheon meeting directly to the meeting in his office with legislative leaders.

Senate Republican Leader Ken Maddy of Fresno said that tensions developed among some of the budget negotiators during the later meeting, but he did not elaborate and explained that they were “very short-lived.”

“I think we are getting closer on some items,” Maddy said, but he cautioned that it was “too early, too premature” to be more specific.

The tax bill, carried by Sen. Daniel E. Boatwright (D-Concord) and approved by the Senate, would increase from 9.3% to 10% the rate at which well-off Californians are taxed on their incomes. Single individuals and heads of households with taxable incomes of $100,000 and married couples with incomes of $200,000 or more would pay the new rate.

A couple filing a joint return and earning, for example, $500,000 in taxable income would pay the state an additional $1,008, after taking their federal deduction. Now, individuals earning $27,647 or more and couples making $56,293 or more are taxed at the same 9.3% rate as wealthy Californians.

The bill also would reduce the writeoff on business lunches from 80% to 70% and increase from 9.3% to 10% the state income tax paid by banks and corporations. The bill would produce $955 million in new revenue this year and $860 million next year.

Boatwright, asserting that his proposal would tax “not the rich in California, but the very rich,” maintained that the highest-income earners received an unintended windfall tax break in 1987 when California sought to conform its taxes to federal tax codes. “Now is the time to ask for it back,” he said, noting that the top 1% of income earners in California earn 30% of all the money made in the state.

An impassioned Roberti told the Senate that “California has more multimillionaires than any other state” and “they are the ones who in the last 10 years have progressed financially to an extent that no one else in the state has progressed. Those who have prospered beyond anyone’s wildest dreams are the ones who should have to pay the increased tax.”

But Republican Maddy brushed aside the Democratic drive to pass the bill as merely part of the partisan ritual of enacting a budget. He said everyone knew the proposal was not part of the continuing budget negotiations with Wilson and “not part of the solution.”

Times staff writer Jerry Gillam contributed to this report.