NEWS ANALYSIS : Brown May Hold Key to Budget Talks : Government: Speaker and Gov. Wilson have discarded old animosities, meeting with leaders in an effort to enact a plan by July 1. Prompt passage could aid them both.

SACRAMENTO —  Bitter political enemies just a few months ago, Gov. Pete Wilson and Assembly Speaker Willie Brown are in harmony once again.

As the two met Saturday, their common goal was to get a state budget completed on time. Their common strategy is to stick it to local governments.

For Brown, it’s a return to his historic stance, abandoned last year, that the best budget is one that can win a two-thirds vote in his house before the fiscal year begins July 1. To him, what’s in the budget sometimes isn’t as important as meeting deadlines.

For Wilson, an on-time budget would be the first step in erasing the public’s image of him as a stubborn, take it or leave it chief executive who was largely blamed for last year’s two-month budget standoff. The impasse forced the state to pay its bills with IOUs for the first time since the Depression.

Wilson, Brown and the other legislative leaders met all day Saturday to try to reach an agreement they could put to a vote in both houses of the Legislature tonight.

Even as the leadership group was moving toward consensus, there were signs Friday and Saturday that rank-and-file legislators may not be the pushovers that the leaders are counting on. And the Senate may not be as eager to settle as the Assembly. But if the leadership gambit succeeds--and odds are it will--the key will be the meeting of the minds between Wilson and Brown, whose on-again, off-again political alliance seems to be what sets the tone for the rest of the Capitol.

“If the two of them are at odds, they cast quite a shadow,” said Dan Schnur, the governor’s chief spokesman. “When they agree, everyone else seems more willing to set aside their differences.”

The personal relationship between the Republican governor and the veteran Democratic Assembly Speaker, once cordial, soured midway through Wilson’s first year in office. The governor concluded that Brown reneged on some parts of a 1991 budget agreement, and Brown resented the way Wilson handled the once-a-decade fight over drawing new district boundaries.

Last year, Wilson ran afoul of Brown again when he tried to cut per-pupil spending in the public schools. Brown concluded that Wilson’s move was a political blunder and gambled that a long budget stalemate focused on the issue of education would damage Wilson more than it would any individual legislator.

Brown was right. The public held Wilson accountable for the ensuing 63-day deadlock and faulted the governor for targeting schools. Wilson’s approval ratings sunk and his political agenda, including a ballot initiative to cut welfare and seize budgeting powers from the Legislature, was rejected in the November election.

But Brown’s summer-long holdout was atypical for him. Throughout his 13 years as Speaker, Brown has been the biggest cheerleader for getting the budget done on time. His top priority: finding 54 votes, the two-thirds majority needed to pass a spending plan in the 80-member Assembly.

“At some point, the public is not nearly as concerned about the contents of the budget as they are about the symbol,” Brown said Saturday, paraphrasing a speech one of his members delivered the night the Legislature missed its June 15 constitutional deadline for passing a budget.

Having missed that milestone, Brown is focusing on July 1, the start of the fiscal year. He has concluded that the quickest way to get to 54 votes is to shift much of the state’s problem to local governments.

The idea is to transfer property tax revenues from cities, counties and special districts to schools. Every dollar shifted from local governments to schools saves the state a dollar it would otherwise be obligated to spend on education.

When Brown proposed the tax transfer last year, Wilson opposed it and only reluctantly agreed to a shift totaling $1.3 billion, or about 10% of the total property tax statewide. But when the time came to propose a budget for the next fiscal year, Wilson found himself with a $2.6-billion hole and adopted the property tax transfer as a way to fill it.

Almost as if by reflex, Democrats recoiled. The tax shift, they said, would devastate local government services. Brown never condemned the governor’s proposal but distanced himself from it and stood back while his chief lieutenant on fiscal matters--Assemblyman John Vasconcellos of Santa Clara--tried to draft an alternative.

Wilson, meanwhile, was offering additional concessions. He agreed to take more than one year to repay the state’s $2.9-billion deficit--another idea first advanced by Brown--and he set aside his opposition to extending a temporary half-cent sales tax beyond its scheduled June 30 expiration.

When the plan drawn up by Vasconcellos and an Assembly-Senate conference committee failed to win the required two-thirds majority, Brown quickly stepped in. He endorsed the governor’s property tax shift, which was his own idea to begin with, and agreed to try to sell it to the 46 Democrats at whose pleasure he serves in the Assembly.

The biggest problem with the governor’s plan, the Speaker said, was that Wilson hadn’t explained it well enough.

“The governor has a marketing problem,” Brown said in an interview.

Although the proposal had been widely portrayed as a $2.6-billion tax shift, Brown noted that the net effect could be whittled down by giving counties the half-cent sales tax, relieving them of state-ordered obligations, and spreading the burden to cities and special districts.

Brown said Saturday that he was glad to be described as having “caved in” to the governor on an idea he’s been fond of all along. He seemed amused that Wilson, having adopted the Speaker’s concept, was the object of derision from law enforcement and local government officials throughout the state.

“When you take a solution and that solution has some political downsides, you’ve got to take the heat for it, no matter where it originates,” he said.