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COLUMN RIGHT : The Facts Line Up on Wilson’s Side : His reforms are necessary to protect the system that helps the needy.

<i> Joel Fox is president of the Howard Jarvis Taxpayers Assn</i>

It is difficult to fly an unconventional political idea through the partisan flak that is quickly sent up to shoot it down.

Gov. Pete Wilson has been labeled a David Duke and the “dictator” of California because of the welfare-reform package he has introduced.

Yet the idea must be judged on its merits. And the facts are on the governor’s side.

With the boldness of a fictional Daniel Webster who settled the case of a man’s soul with the devil before a jury of the devil’s own, Wilson has the facts to stand before welfare recipients and make the case that his reforms are necessary to protect the system that produces the largess for those in need.

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The facts are simple. California, on its current course, is going broke. After last year’s record-breaking budget deficit, the state faces another deficit of undetermined billions.

When faced with these shortfalls, Wilson and the Legislature first tried to relieve the problem largely by raising taxes. The state levied a staggering $7-billion tax increase, enough to account for an additional $220 per Californian.

But this formula for bringing California into the black failed. As many of us who opposed the size of the tax increases predicted, it led to an even larger economic crisis. State Controller Gray Davis noted that last year’s tax collection was lower than the previous year’s collection for the first time since the Depression. And five months into this new fiscal year, we are doing worse than last year. New taxes have accelerated the flight of business, jobs and taxpayers from the tarnished Golden State.

While some of our problems are tied to the nationwide recession, there are reforms that have to be made to our budgetary process. Since we failed to tax ourselves out of financial disaster, we must come to grips with the spending side of the budget, and Wilson’s plan recognizes that.

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The Department of Finance has compiled trends which indicate that the number of tax receivers in California is growing faster than the number of taxpayers. The department predicted that with the projected growth of welfare recipients, secondary and higher-education students, prisoners and non-welfare Medi-Cal cases, by the year 2000 we will have eight-tenths of one taxpayer for each tax recipient.

So-called entitlement programs, education and health and welfare, take 77 cents out of every dollar from the state general fund. At current growth rates, these services will demand more than 100% of the state’s general fund by the turn of the century, causing a $20-billion deficit.

While education spending must be reformed, too, education provides a long-term solution to our problems and should be nurtured.

The welfare budget, particularly Aid to Families with Dependent Children, has been escalating at a tremendous rate. Over a 10-year period, it has increased twice as fast (9.4%) as real family income (5.1%). The AFDC caseload is projected to grow four times as fast as the state population over a four-year period, which began in 1989.

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California taxpayers have been generous in providing AFDC benefits. California payments rank fourth in the United States and first among the 10 most populous states. Even if the cuts proposed by Wilson are enacted, California AFDC payments will be higher than all the other big states.

It is clear that California taxpayers are doing more than their share in shouldering the welfare commitments of this country. While California is home to 12% of the nation’s population, it pays 26% of the nation’s AFDC costs.

The governor’s initiative includes incentives to break welfare dependency by allowing recipients to work without losing benefits and by offering cash incentives for teen-age mothers to finish high school.

Opponents of welfare cuts have suggested that more revenue be taken from business. But business in California has been taxed to a point where one in four companies in a recent Business Roundtable survey is considering leaving the state. Business is the vehicle to get us out of the doldrums and supply the jobs that most welfare recipients want. Business will be the backbone of a recovery.

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The governor’s welfare proposal will not go far enough to balance the budget, either in the short or long term. Other cuts must be considered, including those offered up last year by members of the governor’s political caucus, most notably Assemblyman Tom McClintock (R-Thousand Oaks), which were considered drastic at the time.

The facts before the jury are clear. For the good of all California, to keep the system working so that we can continue to take care of those in need of temporary help, the governor’s plan must prevail.


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