Assembly Rejects Budget Plan That Senate Approved : Deficit: To balance the package, the Legislature must still approve $7 billion in tax increases. Lawmakers, having missed deadline, will resume deliberations today.

The state Senate passed a $56.4-billion spending plan Saturday that would erase part of a huge budget deficit with cuts in health and welfare spending, but Republicans in the Assembly, seeking deeper reductions, managed to block the proposal less than two hours before the constitutional deadline for taking action.

Neither house voted on the bulk of the $7 billion in taxes needed to balance the budget. Lawmakers are scheduled to meet again today.

Although the plan has the support of Republican Gov. Pete Wilson, the Assembly Republicans derided it, one calling it a “junk heap” that proposes too many tax increases and not enough permanent reductions in state spending. It was rejected on a 40-31 vote with 29 Republicans and two Democrats in opposition. Fifty four votes are needed for passage.

“It is obvious the supporters of this measure are hoping that this junk heap of a budget can be sold to the Assembly before anyone has time to look under the hood to see what we are buying for the people of California,” said Assemblyman Tom McClintock (R-Thousand Oaks), a staunch opponent of higher taxes.

Assembly Republican Leader Ross Johnson of La Habra said supporting the budget “would be irresponsible” without first dealing with the taxes that would be required to support the spending plan.

In the Senate, the budget bill was approved on a 27-8 vote, a bare two-thirds majority, with support from 20 Democrats, six Republicans and an Independent.

The bill, as debated in both houses, included only the expenditure side of the package. More than a dozen other bills, including most of the $7 billion in tax increases needed to close a projected $14.3-billion deficit, are still pending in both houses.

The Senate took up only one tax bill before adjourning late Saturday. The measure, which would raise $210 million by increasing taxes on beer, wine and liquor, was passed on a 33-4 vote.

“This is a budget that everybody can hate,” said Senate President Pro Tem David A. Roberti (D-Los Angeles).

Roberti said he regretted voting to cut welfare grants for poor mothers, reduce the renters’ tax credit and implement other budget cuts that he did not support.

“Nevertheless, vote on these programs we must,” Roberti said, “because the public expects us to have a budget to get the state of California moving and moving forward.”

Republican Leader Ken Maddy of Fresno said the agreement required “a considerable amount of compromise” on the part of Republicans and Democrats.

“It is the best job that we could do,” Maddy said.

But others thought they could do better.

Democratic Sen. Diane Watson of Los Angeles said the budget is unfair to people at the lowest economic rungs of society.

“The people who make the largest incomes are getting away like grand thieves,” Watson said. “The people who make the least are getting double- and triple- and quadruple-whammied.”

Parts of the complicated budget deal were still being drafted Saturday night. But the agreement hammered out by Wilson, Roberti and Maddy received the qualified endorsement of Assembly Speaker Willie Brown, who said through an aide that he supported it “in principle.”

Midnight was the constitutional deadline for the Legislature to pass a budget. The deadline has seldom been met, in part because the law contains no sanctions. But Wilson has said that every day of delay costs the state $11 million because the new taxes and spending cuts he has proposed will not be implemented.

In a radio address earlier in the day, Wilson said lawmakers will deserve gratitude if “the Legislature acts boldly, if it enacts deep and lasting reforms that reduce the cost of government in the future.”

But he told voters: “If the Legislature doesn’t act, it will be . . . a betrayal of your trust. . . . We simply cannot afford delays that dig us ever deeper into a fiscal hole.”

To be balanced, Wilson’s budget requires about $7 billion in new taxes. In addition to the levy on alcohol, they include a 1.25-cent increase in the sales tax and increased annual vehicle license fees.

Overall, revenues would climb about 12% over the current year’s budget, according to the state Department of Finance. But even that increase would not keep up with the rising cost of state-financed programs for everything from public education to prisons. As a result, the budget reduces the growth in spending by about $5 billion below what would be needed to finance services at current levels for another year.

The cuts include a 4.4% reduction in grants to poor women under the Aid to Families With Dependent Children (AFDC) program. This would mean about a $30 cut in the current $694 monthly grant to a mother with two children.

The package includes a five-year suspension of automatic cost-of-living increases for most health and welfare programs. For the AFDC program, the governor’s staff said the agreement called for the permanent elimination of the cost-of-living raises. The intent of the negotiators was to resume the raises after three years. The raises would be paid for through increased enforcement of child support orders on parents who are delinquent in their payments.

However, if the stepped-up child support enforcement fails to produce sufficient revenue, the cost-of-living raises will not be granted, said Fred Silva, the top budget aide to Roberti. Even so, Roberti said he believed welfare recipients would be able to go to court to force payment of the increased benefits.

The package also eliminates the renters’ tax credit for individuals earning more than $20,000 a year and couples making more than $40,000.

For education, the budget contains $18.4 billion--the amount required by voter-approved Proposition 98. But it also requires schools to repay the state $1.2 billion that they received this year above what Proposition 98 guaranteed.

The budget provides about $200 million for several programs proposed by Wilson as part of his “preventive government” policy. The initiatives include expanded preschool and new health services for children.

The spending plan contains a 10% increase in the state prison budget, although it provides $112 million less for correctional programs than Wilson proposed.

The package also proposes to transfer $2.3 billion in health and welfare programs to the counties, along with the money to pay for them. In the future, the counties would have the freedom to decide how much to spend on the programs.

Also included is an overhaul of the trial court system that is expected to save the state $295 million in the next fiscal year.

Times staff writers Virginia Ellis, Jerry Gillam, Douglas P. Shuit and George Skelton contributed to this story.