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STATE OF THE STATE

Davis Pledges No Tax Hikes in State Speech

Politics: But governor stops short of saying he would block legislative attempts to raise taxes. He focuses on education, health care and terrorism.

January 09, 2002|DAN MORAIN | TIMES STAFF WRITER

SACRAMENTO — Gov. Gray Davis delivered his final State of the State address of his term Tuesday evening, promising to protect education and other programs while vowing not to propose new taxes to close an anticipated $12-billion budget shortfall.

Appearing on television statewide, Davis laced his election-year speech with references to Sept. 11, and proclaimed that no state has done more to protect itself against terrorism. Then, he urged even more: broader wiretap authority, higher pay for National Guard troops posted around California and additional spending to stimulate the economy.

In the budget proposal he will release on Thursday, Davis told lawmakers and other officials he will increase education spending, boost after-school programs by $75 million and expand health care for 100,000 additional children of low-income parents. At the same time, he said he "will not increase taxes."

But Davis was careful not to say that he would block all tax hikes pushed by legislators. Several key legislators already have expressed support for tax increases to pay for various state programs and fill the multibillion-dollar deficit.

"I will not advocate raising taxes," Davis said. "That would further burden individuals and businesses struggling to stay afloat in these difficult economic times."

Davis' remarks amounted to an opening of his reelection campaign, and he used much of his speech to enumerate his successes: expanded spending on schools, transportation and health care, and $4.6 billion in tax cuts, most of which were enacted during his Republican predecessor's final term.

Davis' Republican foes--and some fellow Democrats--viewed the speech more as a campaign event than as a traditional opening of the legislative session.

"It was a good campaign speech," said Senate Republican Leader Jim Brulte of Rancho Cucamonga, adding that Davis "took a lot of credit for a lot of things he had nothing to do with." Brulte said the governor's promise that he would not be an advocate for new taxes was "a little less than forceful."

Senate President Pro Tem John Burton (D-San Francisco), who missed all but the final five minutes of Davis' speech, said the governor announced his support for new programs just months after he vetoed bills that would have created them.

"Now, it's an election year," Burton said.

Several legislators said Davis equivocated on tax hikes.

Assemblywoman Carole Migden (D-San Francisco) said Davis' statement on taxes was "clever phraseology to be sure. But I think he is sincere. He is sending messages to us as legislators [who support tax increases] to tread with caution."

The Legislature must approve the budget by a two-thirds majority, meaning that some Republicans must join with the Legislature's overwhelmingly Democratic majority in order to approve the document. That is an especially difficult challenge in an election year.

Few Republicans are likely to vote for a budget that includes significant tax hikes, while many Democrats will oppose one that cuts deeply into social programs.

Despite the difficult budget debates ahead, Davis' speech was largely upbeat, emphasizing the underlying strength of the California economy and arguing that the state is well-positioned to bounce back from any downturn.

Davis gave few details of the budget he will release Thursday.

But he said public education "will be protected above all else," and added that he will push to boost spending on schools and public safety, while also expanding the Healthy Families insurance program for 100,000 additional children and ensuring that state financial aid to local government continues.

He offered no specific prescription for closing what could be a budget shortfall of as much as $12 billion other than to say: "I will call on you to close the budget gap with a combination of cutbacks, deferred spending, internal borrowing and accelerated revenue."

He also called on lawmakers to cut $2 billion from the current year's budget: "Failure to act quickly on these cuts will only increase the pain for our fellow citizens who depend on the state for vital services."

In a move aimed at stimulating the economy, Davis promised to send lawmakers a $678-million bond package to speed construction of public works projects. He also renewed his call on lawmakers to place $30 billion in school construction bonds on statewide ballots, with votes starting this November and continuing in 2004 and 2006.

The governor called for a Cabinet-level labor secretary and reorganization of the state's $4.6-billion job training system, saying it now is composed of 34 separate programs in 13 different agencies. He promised to streamline the programs and "achieve greater accountability and efficiency."

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