Gov. Edmund G. (Jerry) Brown Jr. yesterday rushed to get ahead of the movement he has opposed for the past six months, and called upon the California legislature to distribute $5 billion in state surplus funds to hard-pressed local governments.
Saying that "major human tragedies" could be averted by prompt action, Brown called upon legislators of both parties to go along with the letter and spirit of Proposition 13, the property-tax-limitation measure approved by two-thirds of the State voters Tuesday.
In New York, Standard and Poor's Corp., the bond rating agency, said it was suspending all ratings on California bonds whose repayment revenues might be affected by Tuesday's vote. "Nobody in California can sell a bond right now," an official of the firm said. (Story, Page F1.)
"I appeal to you to rise above the partisan temptaions, to work together as a body and to fashion a bill that keeps faith with the fiscal realities and the mood philosophy of the people that we serve," Brown told a joint session of the legislature.
Afterward, state Assembly Republican Leader Paul Priolo dubbed the governer "Jerry Jarvis," in a scarcastic suggestion that Brown was surrounding very much like Howard Jarvis, author of the tax-limitation initiative. Last month Brown called Proposition 13 "the biggest can of worms that has ever been presented to government anywhere," and said it would cause fiscal problems akin to those in New York City.
In an interview Priolo also warned his fellow Republicans that Brown was likely to be successful in making his political transformation, and said GOP legislators must avoid opposing him on strictly partisan grounds.
"I'm scared stiff that the Republicans, in order to be responsible, are going to get boxed in and have to support what he's doing," Priolo said. "He's likely to get the credit for making Proposition 13 work, and with it a ticket to the White House."
A similar view was taken on the Senate side by Republican Peter Behr, author of a rival tax-limitation measure that was defeated by voters.
"Gov. Brown's speech was very sensible," Behr said. "He shifts positions with such ease and good grace that you can't hear the clanking of the gears,"
In his brief address to a somber legislature, the governor called for creation of an immediate $1 billion emergency loan fund by the state to help local governments through serious cash-flow problems next month. He said the state also should give $4 billion outright from its growing surplus to school districts and local governments.
Without specifying where the cuts would come, Brown also said that the state should cut its budget by $300 million and give this money back to local governments. On Wdenesday the governor ordered a state government hiring freeze that is likely to remain in effect indefinitely.
Under Proposition 13, total property taxes are limited to 1 percent of assessed valuation. This is expected to cost school districts and local governments $7.4 million of the $11.4 million they now receive.
The legislature must act by July 1 to avert firing of thousands of public employee and the substantial reduction of services. In addition to distributing the state surplus, the legislature also must decide upon a formula allocating the remaining $4.4 million in property tax.
The likely barrier - one that prevented the legislature from acting on property tax relief in 1977 and indirectly created Proposition 13 - is rivalry between the state Senate and Assembly, both controlled by Democrats.
The Senate is talking about giving countries, cities and school districts an equal property tax allocation. The Assembly seems more concerned at this point about funneling most of its aid to school districts. But everyone agrees that unless the legislature acts promptly, the tax revolution is likely to grow.
"If we want to keep any shred of credibility at all, we're going to have to act." said Assembly Speaker Leo McCarthy of San Francisco. "Local governments around the state are hanging by their thumbs."
In other developments yesterday:
State Superintendent of Public Instruction Wilson Riles, reelected for a third term last Tuesday, called upon school districts to suspend summer school programs. The decisions are likely to come next week.
Legal sources said it was unlikely that the state Supreme Court would declare propopition 13 unconstitutional, as requested by several lawsuits.
Attorney General Evelle J. Younger, defending the constitutionality of Proposition 13, said he would ask the court to determine how the remaining property tax will be allocated if the legislature fails to do so by July 1.
Younger, Brown's Republican gubernatorial opponent in November, acknowledged in an interview that the governor could make up some of his lost political ground if he successfully implements Proposition 13. But Younger added that he thought Brown was "out of step with the people" on this and other issues and would not be able to overcome growing skepticism about his administration.