Wilson Urges Welfare Cuts, Tax Increases : Austerity: State of the State Address outlines his plan for balancing the books during a time of national recession.

Gov. Pete Wilson, in his first State of the State Address, called Wednesday for widespread cuts in governmental programs--especially welfare--plus some unspecified tax increases to balance the books during the national recession.

The new governor sweetened his toughly worded message of fiscal austerity with an ambitious 10-point program aimed at keeping his pledge to shift the state more toward prevention of society’s ailments and away from remedial action for the afflicted.

Designed to help children get started on the right path, the “prevention” program involves such things as prenatal care for pregnant women, integration of social services with schools, mental health counseling in elementary grades, preschool for 4-year-olds from low-income families, “mentor” volunteers to advise disadvantaged high school students and treatment of pregnant drug addicts.

In normal times, Wilson’s prevention programs would have been the highlight of his State of the State Address to a joint session of the Democratic-controlled Legislature. But during hard financial times such as these, the lawmakers were especially anxious to learn how the new Republican governor intends to “spread the pain” of spending cuts and tax increases, which virtually everyone agrees will be necessary to balance the state’s books.

Wilson estimated that state government, if it keeps on the present course, will be short more than $7 billion in tax revenues during the next 18 months, covering the remainder of the current fiscal year and the next budget cycle, which begins July 1.

The governor, a self-described conservative, said he will not propose any “general increases in income, corporation or sales taxes.” But he did acknowledge that he will propose “additional revenues for our (new) initiatives.” One knowledgeable source said these “additional revenues”--political parlance for tax increases--will amount to nearly $2 billion.

The full details of Wilson’s spending plan will be unveiled today when he sends the Legislature a proposed budget for the next fiscal year.

But in what he termed “a sneak preview,” Wilson disclosed that his first budget proposal will provide no cost-of-inflation increases for most state programs, including education, although there will be enough funds to account for population and caseload growths. As a result, services and benefits will not keep pace with inflation.

Wilson said he will protect “the safety net for senior needs--the blind and the disabled,” but he did not elaborate.

Taking the heaviest hit, he indicated, would be the big AFDC welfare program, or Aid to Families With Dependent Children. About 2 million Californians--mostly women and children--receive benefits from this program. Without being specific, he said AFDC “will be reduced.”

“Treating welfare as a socially acceptable permanent lifestyle is a disservice to AFDC children,” Wilson said in his prepared text, some of which he skipped during the speech to save time. “It risks perpetuating dependency from generation to generation.”

The governor said “AFDC has exploded” in the state, which in 1975 ranked No. 16 nationally in payment level, but now is No. 2. A single California mother with two children receives an average monthly payment of $694, compared to $184 in Texas, he said.

Wilson also announced that he will propose shifting administration of public health and mental health programs to local governments, along with “all the new revenues to do the job.” He did not elaborate. An aide said he was talking about shifting about $1 billion in programs away from state government.

And the new governor said he will offer legislation granting counties the ability to increase local sales taxes by one-half cent, with voter approval, to fight crime and provide for drug treatment and education.

But Wilson received his loudest ovation when he announced that he will propose legislation lowering the vote requirement for local school bond issues from a two-thirds majority to a simple majority. “As an interim measure,” he advocated placing a statewide school bond issue on the June, 1992, ballot.

In all, Wilson’s 30-minute speech was interrupted 19 times by applause. He spoke from the dais of the ornate, 19th-Century-style Assembly chamber, jampacked with lawmakers, other statewide officeholders, top Administration officials, invited guests and television cameras. The address was televised live throughout the state to any stations that wanted to pick it up. Apparently very few did.

During his long-awaited speech, Wilson began trying to make good on the campaign promises that helped him narrowly beat Democrat Dianne Feinstein in last November’s election.

The candidate who pledged to fight for new “criminal laws with teeth” announced that he would sponsor legislation to increase penalties for selling drugs to pregnant women or to children near schools. He also said he would push for legislation to speed up the legal process in death penalty cases. “Convicted murderers don’t deserve any more breaks,” he said.

Additionally, Wilson proposed “at least tripling” prison sentences for “dangerous sex offenders.” And he said he would introduce a bill to limit the ability of “violent and dangerous” prisoners to get out early for good behavior.

And he reiterated his pledge to create a California Environmental Protection Agency “to consolidate state environmental functions.” Cal-EPA, as Wilson calls it, also will take over regulation of pesticides, now handled by the state Department of Food and Agriculture.

As for his sweeping “prevention” program, Wilson said, “To lead is to choose. And our choice must be to give increasing attention and resources to the conditions that shape children’s lives.” This is what he has in mind:

* Provide $53 million to establish a prenatal care insurance program for low-income pregnant women.

* Appropriate $20 million for a “healthy start” program to integrate county health and social services with schools.

* Provide unspecified money for mental health counseling in elementary grades and $50 million to supplement the federal Head Start program for 4-year-olds from low-income homes.

* Modeled after “The 100 Black Men” in Los Angeles, create a statewide program of “mentor” volunteers to oversee the education of students whose parents do not seem to care about their schooling.

* Institute state-mandated drug education for junior high and high school students.

* Provide $25 million for treatment of drug-abusing pregnant women.

* Supplying “substantial” funding increases for the Office of Family Planning, an agency whose funds were sharply cut by former Gov. George Deukmejian.

* Creating a program for testing performance of both students and teachers.

“I don’t intend for these proposals merely to serve as window dressing,” Wilson said. “Once the Legislature acts, the responsible officials in the Wilson Administration will discover that I am very persistent. I want results, not excuses or delay. Let me give fair notice: It’s even likely that I’ll visit state agencies to assure we are meeting our goals.”

Speaking directly to the Legislature, Wilson said, “We are compelled to set new priorities and to bring needed change when faced with an unprecedented gap between what state government receives in taxes and what we’ve been spending. . . . The challenge that we in this chamber face is to begin to move from reaction and remedy to anticipation and prevention.”

Aides said Wilson tinkered with the speech all day, rewriting, inserting and deleting until an hour before he rode the elevator up to the Assembly chamber three floors above the governor’s office.

Democrats especially applauded when Wilson proposed a big funding increase for family planning services. Republicans applauded heartily when he proposed reducing welfare grants.

“I liked the stuff about crime the best,” said Assembly Republican leader Ross Johnson of La Habra. But the GOP leader, in an indication of the conservative opposition Wilson is likely to encounter, strongly disagreed with the governor’s proposal to reduce the vote requirement for local school bonds.

Assembly Speaker Willie Brown (D-San Francisco) said Wilson “sounded more like a moderate Democratic legislator than a Republican ex-senator.”

“But,” Brown added, in an indication that the Democrats’ honeymoon with the new GOP governor may be a short one: “I am at a loss to understand how he intends to reduce welfare grants and expect people to still live in California. How can he expect people to live here on less than $600 a month?”

Senate President Pro Tem David A. Roberti (D-Los Angeles) said, “We always have to remember that AFDC goes to kids. We don’t want to take away from one group of kids and give to another. Democrats are going to be vigilant in that area.”

However, Roberti also said, “I’m not going to complain. I think (the speech) was very good. We want to work with the governor.”

“There’s enough in there for everyone to like,” said Senate GOP Leader Ken Maddy of Fresno. “Also, there is enough in there for someone to find fault.”

Wilson is consciously trying to have better relations with the Democratic-controlled Legislature than did his predecessor, Deukmejian, who recently recalled that “I no sooner got off the inaugural platform and they were opposing me. It just seemed like they went out of their way to be hostile.” On Wednesday night, the new governor held a dinner for all the legislators in downtown Sacramento. Political comic Mark Russell entertained. Deukmejian never did anything like that after a State of the State speech.

Times staff writers Carl Ingram and Jerry Gillam contributed to this story.