Wilson OKs Extra $1 Billion for Schools : Education: Governor also agrees to settle teachers union lawsuit against state. Accord could lead to a budget vote in the Legislature this week.

SACRAMENTO —  Gov. Pete Wilson, moving to end the 26-day budget impasse, agreed Tuesday to give an additional $1 billion to public schools and settle a major lawsuit by teachers against the state.

With the key education component of the budget in hand, Wilson and legislative leaders expected to reach a final accord as early as today, sending the entire $56-billion state spending plan to the Legislature for a vote later this week.

“It’s a very good agreement for all concerned,” Wilson said after briefing legislative leaders Tuesday on the terms of the settlement of the suit by the California Teachers Assn.

The deal would give public schools an immediate infusion amounting to $200 per student overall, pushing California from its current rank of 42nd in spending per student to about 40th among the 50 states.

Part of the additional money for schools came as Wilson relented on his demand that schools this year repay nearly $800 million of a $1.8-billion “loan” given to them in 1992.

By agreeing to settle the lawsuit and boost school spending, Wilson took a large step toward ending the deadlock that has left California without a budget since July 1, when the 1995-1996 fiscal year began.

Any budget agreement still faces hurdles in the Legislature, where a two-thirds vote is needed for approval. Some conservatives, for example, remain unwilling to vote for a budget containing $40 million for abortions for poor women.

Some Los Angeles Democrats are demanding more help for the financially strapped county, some Democrats are upset about cuts to welfare and aid to the aged, blind and disabled. A handful of lawmakers are skeptical that the budget will be balanced, despite the constitutional mandate that California not run deficits.

But with the powerful public school lobby satisfied about the level of education funding, many lawmakers will be hard-pressed to hold out for a better deal.

“This is a big win for education,” Assembly Republican Leader Jim Brulte said, adding that a budget vote is “probable” by Saturday. “This agreement reflects the No. 1 priority that most legislators have: Providing a quality education for the children.”

As a result of the settlement, Brulte noted, schools will receive block grants amounting to $52 per student for one-time projects, everything from new books and computers to roofs for classrooms.

Perhaps more importantly, Wilson and Republican lawmakers are backing Democrat-sponsored legislation boosting funding for specific school districts--an idea certain to entice individual lawmakers to support the document.

The plan provides that up to $150 million will be spread among under-funded school districts, as part of an overall strategy dating back to a landmark 1972 Supreme Court case making school district funding equal.

“It will be a vote-getter,” said Assemblywoman Kerry Mazzoni (D-Novato), who is carrying the legislation equalizing funding among school districts. “Those members whose districts stand to gain will be very inclined to vote for it.”

Despite the Supreme Court decision that schools receive equal funding, the amounts spent on individual school districts in California vary, largely as a result of the differing amounts of property tax raised by counties.

The plan to provide more equal funding is especially appealing to Republican lawmakers because it will pump large sums into suburban and rural schools.

Los Angeles schools also would benefit.

“This is the first good-news budget we’ve had in six years,” said John Mockler, a leading education lobbyist in Sacramento who represents the Los Angeles Unified School District.

Mockler said Los Angeles Unified stands to receive an extra $31 million for one-time expenditures, such as books and new buildings. Los Angeles schools also would get an extra $13 million to bring the city’s per-student spending closer to the statewide average.

Altogether, Mockler said, spending on California’s 5 million public school students will rise by the equivalent of $100 per pupil for the year just ended and another $100 in the 1995-1996 school year, pushing the amount spent from state tax revenue to an average of $4,420 per child.

“For the first time in five years, California’s relative standing among other states will move up. That is startlingly good news,” Mockler said.

The deal reached Tuesday came after Wilson relented on his demand that $760 million be withheld from schools this year to help repay a $1.8-billion loan given to them as part of a deal struck to end the 63-day budget impasse in 1992. The remainder was to be paid off over the next three years.

Under the tentative settlement, the schools will have to repay only $150 million of the loan this year. Legislative leaders say schools will additionally have about $500 million for a variety of one-time projects and about $500 million in increased per-student spending in the 1995-1996 school year.

Schools will have eight years to pay the remainder of the so-called loan. In the meantime, funding for schools will increase by at least an extra $100 million a year over those eight years. Schools stand to receive more than $26 billion overall in the new budget.

The tentative settlement of the lawsuit must be approved by the court. As part of the accord reached Tuesday, the state would to pay $31 million to Long Beach schools to settle a long-running desegregation case.

Wilson also is earmarking some of the added education money for some of his favored programs--$10 million for an early childhood program called Healthy Start; $5 million for a volunteer mentor teacher program in the schools, and $5 million for the politically influential Simon Wiesenthal Center for its nonprofit Museum of Tolerance.

The teacher lawsuit stemmed from a side deal that ended the budget debacle of 1992, and involves the highly complex method by which California funds education. In 1992, Wilson and lawmakers agreed to boost school funding by $1.8 billion, but declared that the extra money was a loan. By calling it a loan, Wilson was able to limit the size of future increases in education funding.

The California Teachers Assn. never acknowledged that schools agreed to the accept the loan scheme. The teachers union sued and a Superior Court declared the loan illegal. Although Wilson is appealing, the state could have been liable for $3 billion in payments to schools.

Given the potential size of the award, both sides agreed it was in their interest to settle. A court order that the state pay an extra $3 billion to schools would have sent the state into such extreme financial disarray that Sacramento might have been unable to meet its obligations.

Whether the added school money will be enough to persuade Los Angeles-area lawmakers to support the budget remains uncertain. Los Angeles Democrats remain unhappy because the budget deal forged by Wilson and legislative leaders--none of whom are from Los Angeles--does little to assist Los Angeles County with its $1.2-billion budget deficit.

Assemblyman Louis Caldera (D-Los Angeles) said he and several other Democrats want Wilson to give Los Angeles County supervisors the authority to impose a half-cent sales tax increase, which the electorate would have to vote on.