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Budget Crisis: Now Is Time for the Governor to Lead : Pete Wilson must put a realistic financial plan on the table soon

April 03, 1991

The situation is bleak. The politician catapulted into the governor's mansion on a staunch Republican platform, fighting his tax-and-spend opponent at every campaign stop.

But now reality is staring him in the face. Declining revenues, a yawning budget deficit. What to do? Duck the issue? Hide under the desk? Or propose new taxes to close the gap and get the state back on a solid financial footing?

The situation facing Pete Wilson today? Yes, and also the situation inherited by Ronald Reagan in 1966, during his first hours as California's 34th governor. After hiding behind the skirts of Republican Party platform ideology, he joined the issue directly by offering a realistic program of new taxes and expenditure cuts to close a big gap.

That action drew brutal political fire from within his own party. But it was widely seen as a necessary step. The people of California do not want to be held hostage to party ideology; rather, they elect a governor to govern the state as sensibly and maturely as possible. Even a politician as ideological as Reagan realized that there comes a time when the politician needs to rise above ideology and govern.

This is the challenge that faces Pete Wilson today: to be the leader of California or a Republican spokesman. Partisanship may make him a hero among the party faithful.

But that won't solve the mounting state budget crisis--now totaling something in excess of $12 billion.

Not many Democrats in the state Legislature can be counted on to rise above the political fray. Neither can many of their Republican counterparts, particularly in the Assembly.

The state political process, which nearly ground to a halt last summer over a $3.6-billion budget gap, is no better this year for having to bridge one more than three times as large. The political stalemate in Sacramento was one reason behind the passage last November of Proposition 140, which limited state politicians' terms. In some ways, the Legislature brought that on upon itself.

But a new governor always breeds new optimism. There is still hope that this quiet, experienced, usually careful politician will do what his predecessor failed to do, which was to bring to the table a realistic, workable, serious budget that takes account of the $12-billion-plus shortfall.

This is the time for the conciliatory talents of Pete Wilson. Though no doubt discouraged by the enormity of the task, he must take heart in the thought that he may be the only person who can bring the state together and lead it out of this crisis. He must seize the political initiative in Sacramento and offer a bold and coherent plan of tax increases and spending cuts to forge a fiscal bridge over the widening budget gap.

To that end his economic and political advisers must look at all options, including those they dismissed in January. They might take another look at the state sales tax, which--for each 0.25% increase--could add $770 million in annual revenue, extension of the sales tax to services, which could add more than $500 million, and an increase in rates for upper-income Californians. One or all of these will be needed in some combination with whatever trimming of the state budget that is still feasible and responsible after eight years of George Deukmejian and his pruning shears.

The governor is responsible not only for producing a balanced budget, but he is responsible as well to all the people of the state. The single parent living on public assistance, the college student, the ill, the young, the unspoken-for. We will hold together as a state, and as a society, only if we embrace each of the members of our society and work to keep those many parts together.

To this end, cuts are necessary--and so are new taxes. The governor must take the lead to do that.


Where we rank in per capita taxes

1. Conn.: $7,358

2. N.J.: $6,776

3. D.C.: $6,326

4. Mass.: $6,076

5. N.Y.: $5,647

6. Md.: $5,456

7. N.H.: $5,374

8. Del.: $5,344

9. Ill.: $5,166

10. Alaska: $5,164

11. California: $4,921

12. R.I.: $4,906

13. Va.: $4,681

14. Nev: $4,606

15. Pa.: $4,569

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