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- <text id=91TT1548>
- <title>
- July 15, 1991: California:Wilson Tries to Do It Right
- </title>
- <history>
- TIME--The Weekly Newsmagazine--1991
- July 15, 1991 Misleading Labels
- </history>
- <article>
- <source>Time Magazine</source>
- <hdr>
- NATION, Page 22
- CALIFORNIA
- Wilson Tries To Do It Right
- </hdr><body>
- <p>By Jordan Bonfante/Los Angeles
- </p>
- <p> In Sacramento lawmakers call it "the budget from hell"--and not just because trying to reach agreement on the $56.4
- billion spending plan has required both houses of the
- legislature to work far into the night no fewer than a dozen
- times. Closing a $14.3 billion deficit--the largest state
- shortfall in U.S. history--means violating the politician's
- basic instinct to please voters by cutting taxes and handing out
- goodies.
- </p>
- <p> Previous Governors spent years postponing the hard choices
- the state must make, but Republican Pete Wilson, who took
- office in January, is determined to put California's rickety
- fiscal house in order. To raise revenues, he called for $7
- billion in new sales and alcohol taxes as well as higher
- vehicle-registration and education fees. He also proposed $5
- billion in spending cuts, including a 5% salary reduction and
- monthly one- to two-day furloughs for the state's 276,000
- employees. His most controversial proposal for getting the state
- off what he calls "autopilot spending": a $500 million reduction
- in the Aid to Families with Dependent Children program that will
- not only suspend cost-of-living increases but actually cut the
- $694 monthly welfare payment to a poor mother with two children
- to $663.
- </p>
- <p> Wilson's main opponents in the budget battle are
- legislators from his own party. Last week the assembly's 31
- Republican members helped torpedo Wilson's compromise plan for
- raising the $2.3 billion still needed to balance the budget. The
- sticking point was a proposal to increase state income tax rates
- for those with incomes over $100,000 from 9.3% to 10%. As an
- enticement to tax-shy Republicans, Wilson had backed a pro
- business reform that would make it harder for workers to qualify
- for stress-related workers' compensation. But after Democrats,
- under pressure from organized labor, rejected the linkage
- between the tax and workers' compensation reform, the compromise
- collapsed. Rather than veto the whole budget, a battle-weary
- Wilson pledged to continue bargaining.
- </p>
- <p> California's fiscal plight is rooted in explosive
- population growth. During the 1980s, the state's population
- swelled more than 6 million, to nearly 30 million; almost half
- of the new arrivals were immigrants, who put huge strains on
- welfare, health-care and education programs. The crunch was made
- worse by plummeting tax collections caused by the current
- recession and by the limits on new levies imposed by Proposition
- 13, the 1978 ballot measure that cut property taxes and shifted
- the lion's share of fiscal responsibility from local governments
- to the state. Wilson has suggested reversing that trend by
- returning $2.3 billion worth of social and health programs from
- the state to county governments. Local administrations have
- welcomed the idea, because the shifted programs are to be
- accompanied by corresponding tax revenues to pay for them.
- </p>
- <p> Wilson's attempts to find a long-term cure to the crisis
- have reopened old fissures within the state's G.O.P. On one
- side are die-hard antitax conservatives. On the other are
- moderate pragmatists like Wilson. Faced with the feuding in his
- own party, Wilson has decided to write off the right wing and
- seek common ground with moderate Republicans and Democrats.
- Conservative assemblyman Tom McClintock has refused to vote for
- any part of what he called Wilson's "obscene" budget. He recalls
- meeting with the Governor's chief of staff last February and
- being told bluntly, "If you don't play along, we're going to
- ignore you." So far, Wilson has made good on that threat. On the
- other hand, the dozen Republican assemblymen who have backed
- Wilson, off and on, have been offered what G.O.P. insiders call
- "protection." That includes promises of the Governor's
- endorsement in future races, fund-raising help for next year's
- primary and the implicit promise of his help in preserving their
- districts when the state is reapportioned later this year.
- </p>
- <p> If Wilson's mix of arm twisting and cajoling succeeds in
- breaking the impasse, more than California's budget could be at
- stake. Wilson's own future could also be riding on the outcome.
- Putting his state on the road to fiscal sanity would burnish
- Wilson's credentials as a can-do politician with the guts to
- cast aside ideology for the sake of better government. That in
- turn could put him on a very short list of Republicans who might
- succeed George Bush in 1996.
- </p>
-
- </body></article>
- </text>
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