What was going on when I was born?

With Democrats providing the votes needed for passage, the New Jersey Legislature tonight passed a scaled-down $6.2 billion state budget that forecasts increased transportation costs for commuters, a reduction in school aid, a cut in funds to relieve prison overcrowding and a loss of money needed to repair bridges and local roads. The Democratic majority had trimmed $136 million from the budget and had increased some tax revenue estimates last week in order to present Governor Kean with a balanced budget. The moves came after attempts to pass a 5 percent surtax on gasoline designed to raise $186 million were defeated in the State Senate. In a separate action, the Senate concurred with technical Assembly amendments to a bill restoring the death penalty for first-degree murder and sent the measure to Mr. Kean, who has promised to sign it.

Palestinian, Lebanese and American officials tried to reach agreement today on a Palestine Liberation Organization proposal that would neutralize the group's military presence in Lebanon and allow for the eventual departure of the P.L.O. leadership from Beirut, Government sources said. Senior Government officials said the talks had made ''progress on several important points'' but a great many questions on both the style and substance of the future P.L.O. presence in Lebanon remained to be resolved. It was not clear, they said, when or if an agreement would be reached. While the political negotiations may have made headway, there was some question of whether it was enough to forestall an assault by Israeli troops ringing west Beirut against the 6,000 to 7,000 guerrillas trapped inside. (Israeli officials in Jerusalem said the P.L.O. would be given only a few days to accept Israel's offer of safe passage out of Beirut. Page A8.)

The Assembly tonight overrode Governor Carey's vetoes of $320 million in new spending on school aid, aid to local governments and other programs. As what legislators hoped would be the last week of the session began, the Assembly majority leader, Daniel B. Walsh, repeated ritual phrases over and over again as 28 separate vetoes were overridden. Only one veto was sustained. ''I move that the bill become a law notwithstanding the Governor's objections thereto,'' the Franklinville Democrat said before each vote.

Aided by an increase in travel for pleasure, the nation's major airlines have been experiencing increased traffic this year and are expected to show further gains this month. With the exception of a slight decline in May, revenue passenger miles have been up every month this year, and a 7 percent or 8 percent rise is expected to be reported for June. For an industry that has undergone two consecutive years of declining traffic and some steep losses, the recent upturn is welcome indeed. But many believe it is too early to call it a lasting recovery and are afraid that any benefits could evaporate in another outbreak of fare wars this fall.

The San Francisco Board of Supervisors passed a law today banning most residents from owning pistols. The vote was 6 to 4. The ordinance, which was proposed by Mayor Dianne Feinstein, who said she would sign it immediately, makes ownership of a pistol a misdemeanor punishable by up to 30 days in jail and a $500 fine. It will take effect 30 days after it is signed, and pistol owners will have 90 days to dispose of their weapons.

Less than two months after inheriting a virtually bankrupt economy, Costa Rica's new Government has begun introducing a series of belt-tightening measures, including across-the-board price increases, in an attempt to lift the country out of its worst economic crisis in 30 years. The measures, which will bring increased unemployment and a sharp contraction in the economy, have been demanded by the International Monetary Fund in exchange for a $100 million standby credit. Foreign banks, in turn, are awaiting the I.M.F. agreement before they begin to renegotiate their own huge debt with Costa Rica. ''This country is going to become very sad and gray,'' said Carlos Manuel Castillo, president of Costa Rica's central bank, referring to the impact of the austerity program. ''People still have no idea how difficult things are going to be.''

Canada's ruling Liberal Government announced a program to encourage foreign investment and to curb wages and prices in a bid to end the nation's worst economic crisis in 50 years. Finance Minister Allan J. MacEachen said that, to help cut inflation, wage rises for 500,000 federal employees would be limited to 6 percent in the next 12 months and 5 percent the following year. (Page A1.) Costa Rica's new Government has begun introducing a series of belt-tightening measures, including across-the-board price increases. The measures, which are sure to bring increased unemployment and a sharp contraction in the economy, were demanded by the I.M.F. in return for a $100 million standby credit. (D1.)

A special prosecutor announced yesterday that he had found no evidence to justify charging Labor Secretary Raymond J. Donovan with any crime for activities when Mr. Donovan was an executive of a New Jersey construction company. ''In sum, there was insufficient credible evidence to warrant prosecution of Secretary Donovan on any charge,'' the prosecutor, Leon Silverman, said in a summary at the beginning of his 1,025-page report. ''The grand jury declined Text of Donovan's statement and summary of report are on page A17. to indict the Secretary with respect to every allegation it considered. The special prosecutor concludes that no prosecution of the Secretary, on any of the allegations investigated, is warranted or could successfully be maintained.''

''In sum, there was insufficient credible evidence to warrant a prosecution of Secretary Donovan on any charge.'' - Special Prosecutor Leon Silverman. (A1:6.)

MASAI MARA GAME RESERVE, Kenya ''BE very quiet,'' warned John, the guide, as he switched off the ignition of the Land Rover. He pointed to a wooded knoll about 300 yards away. ''Rhino,'' he whispered. There, just below the crest, was the dark, massive form of a black rhinoceros. Behind it, barely visible in the tall grass, was a baby rhino, born perhaps eight days before. The sun was starting to sink toward the distant hills. The party had spent most of the day traversing the rolling green plains of this game reserve near the Tanzanian border in search of rhinos. But until now not one had been sighted. Until the last few years, the African black rhinoceros, Diceros bicornis, had been relatively abundant on these plains. But over the last decade both the black and the larger white rhino, Ceratostherium simus, have been disappearing rapidly here and throughout the continent.

The Treasury auctioned three- and six-month bills yesterday at sharply higher yields compared with last week's auction. The average rate on the three-month bills jumped to 13.269 percent from 12.588 a week earlier, while the companion six-month bill rose to 13.419 percent from 13.031. The rise in bill yields, which was not unexpected because of the pressures resulting from huge Treasury financings scheduled for this week, brought the average rate on the new 90-day bills to the highest level since last March 29, when the average was 13.339 percent. The average six-month yield was the highest since last Feb.16, when it was 14.360 percent.

The Soviet Union and the United States will begin strategic arms reduction talks in Geneva on Tuesday with positions that are far apart despite ritualistic expressions of ''cautious optimism'' and publicly shared hopes for ''substantial reductions.'' President Reagan is seeking deep cuts as a first step, particularly in what he says are superior Soviet forces. The Kremlin says it wants to build on the 1979 strategic arms limitation treaty that was signed by Moscow and Washington but never approved by the Senate, to pursue a freeze on further deployments and to agree on deep cuts later. The two sides have taken those negotiating positions even as they stand on the threshold of deploying what experts say are even more devastating strategic nuclear arms: ballistic missiles with pinpoint accuracy and cruise missiles so small and numerous as perhaps to defy future control. American intelligence sources say that Moscow is making a crash effort to develop sea-launched cruise missiles to match the thousands of these new missiles that are called for in Reagan Administration programs.