Wilson Says Welfare Costs Imperil Schools

Gov. Pete Wilson used his State of the State address Wednesday to warn Californians that the education of their children is being threatened by runaway welfare costs.

“The people need to know the truth,” he said, taking advantage of a powerful forum to campaign for his proposed November ballot initiative that would make sweeping cuts in California’s welfare system. “The truth (is) that if we don’t take control, if we don’t get off autopilot spending now, state government is headed for a fiscal train wreck in which the victims will be schoolchildren.”

But in a move that advisers hoped would blunt criticism of Wilson’s renewed attack on welfare, the governor proposed a new health insurance program for preschoolers, basically for children from poorer families.

Called “CheckUp” by the governor, the program would provide state subsidies to buy insurance to cover outpatient services for all uninsured preschoolers. Wilson said his plan also would improve health care for preschoolers whose low-income families are on Medi-Cal.

But the other shoe is expected to drop today. According to Administration sources, the Republican governor in his annual budget proposal will advocate cutting other health services, including those for people on Medi-Cal.

Also, while Wilson on Wednesday repeated his promise to provide full Proposition 98 funding for elementary and high schools as well as community colleges, sources said that in today’s budget proposal he will advocate cuts for higher education.

The dilemma that Wilson and the Legislature again face is a growing budget deficit, exacerbated by the lingering recession. But the governor admonished legislators that “we must transform this season of crisis into the greatest season of reform in California history.”

Wilson, beginning his second year as California’s governor, said there are some things that Sacramento can do to help pull the state out of the recession, a theme some Orange County legislators wished he had dwelled on more in the address.

“I would have liked to have heard 100% recognition of the economic crisis we’re in and how we’re going to get out of it,” said Assemblyman Gil Ferguson (R-Newport Beach). “I certainly approve of all his welfare reforms, education programs. Although he’s only reiterating what other governors have said before, but never done.”

Sen. Cecil N. Green (D-Norwalk) called the governor’s education proposals “a lot of political rhetoric. Where did the money come from? How do we add programs in the middle of a recession. It’s not palatable.”

But Sen. Marian Bergeson (R-Newport Beach) said Wilson’s speech was “optimistic and offered a positive approach in improving our children’s education.”

As Democrats did Tuesday, the Republican chief executive called for asking voters this year to approve $6 billion in bonds to pay for varied construction projects. Wilson’s list included buildings for elementary and high schools and universities, as well as facilities for prisons, transportation, water and sewers.

Wilson also renewed his call for reforming California’s system of compensating workers injured on the job. He said the present “archaic, fraud-ridden workers’ compensation system (is) driving jobs out of California. It pays phony stress claims at an unaffordable cost to employers, but denies decent benefits to genuinely injured workers. It’s time for major reform and not just tinkering.”

Wilson spoke from the dais of the Assembly chamber, which was jampacked with members of the Assembly and Senate, other statewide officeholders, top Administration officials, the governor’s family, invited guests, reporters and television cameras.

Security was tight, particularly after the recent discovery of a bomb in the Capitol mail room in a package addressed to the governor. State police disarmed the weapon and nobody was injured. On Wednesday, a trained dog worked its way around the Assembly chamber before the speech, sniffing for anything suspicious.

The address was available for live television broadcast by any station in the state that wanted to carry it. But few did and apparently none in Los Angeles or San Francisco carried the speech live.

“Obviously we’re disappointed because we’re talking about two markets--Los Angeles and San Francisco--that account for three-fourths of California’s TV viewers,” said James Lee, the governor’s deputy press secretary. “But the stations are basing their decisions on economics--they’d have to cancel commercials to carry the speech--and we’re not going to encourage these people to go bankrupt.”

Some TV stations planned to carry the speech later--probably in the early morning--and many radio stations broadcast it live, according to Lee.

Wilson already had taken most of the potential excitement out of his speech by disclosing major items that a governor normally would have saved for such an address. These included pledges not to raise tax rates or to again try to cut Proposition 98 funding. He also had unveiled a comprehensive plan to protect the state’s private forests. His biggest pre-speech disclosure, however, was that he would sponsor the welfare reforms, including cuts of up to 25% in grants and sharp restrictions on aid for new residents from out of state.

“We didn’t want there to be the appearance--as there has been with President Bush--that we weren’t willing to do anything,” a key Wilson aide said.

There also was the political realization that Wilson’s popularity, as measured by the polls, has slipped dramatically, and the governor’s strategists did not want to wait until the State of the State address to begin trying to resurrect it.

The annual address, coming just after the Legislature reconvenes following a long fall recess, always marks one of the most festive occasions of the year in the Capitol. After the speech, Wilson was host to the legislators at a banquet downtown. But this year, the mood was gloomy, in contrast with last January, when Wilson took office after a series of gala inauguration parties and made a conscious effort to ingratiate himself with lawmakers.

“The relationship is 100 times more strained now between the governor and the legislators,” said Robert Forsyth, spokesman for Senate leader David A. Roberti (D-Los Angeles). “There’s more suspicion of him. Last year was a bad one with tough budget negotiations and it left a lot of people unhappy.”

Also, the Proposition 140 term limits Wilson endorsed in 1990 have been approved by the state Supreme Court, and the court is on track to approve a redistricting plan that basically pleases the governor but irritates many incumbent legislators, especially Democrats. Largely because of Wilson’s political finessing, therefore, many lawmakers are fretting about their future.

The Legislature was civil toward the governor, but not overly enthusiastic. The 30-minute address was interrupted 18 times with applause, mostly of short duration.

Assembly Speaker Willie Brown (D-San Francisco) later graded the speech “incomplete.”

“It was not a very good speech,” the Democratic Speaker said. “It is incredible that he didn’t mention health insurance for workers who are uninsured and almost did not even let you know there is a state budget. If I closed my eyes, it was like watching an old movie on television.”

Roberti applauded Wilson’s advocacy of the bond issues and predicted that the proposals will receive fast action in the Legislature. But he criticized the governor’s proposed welfare cuts as mean-spirited.

“There’s no sense in talking about giving kids a better education if you are putting them out into the streets,” the Democrat said.

From the other side of the aisle, Assembly Republican Leader Bill Jones of Fresno saw the speech as “optimistic, upbeat.”

Wilson used the address to make his arguments for welfare cuts and to outline his 1992 agenda. He also said that he shortly will propose a long-awaited comprehensive plan for dealing with California’s continuing water shortages. The governor said the plan will “require conservation and encourage water marketing,” such as he implemented last spring during the fifth year of the state’s drought. He said new water storage facilities will be needed south of the Sacramento Delta as well.

Wilson mentioned only in passing growth management, which was to have been his top priority this year. But that long-term issue has been overshadowed by the budget deficit and welfare.

Arguing for his welfare reforms, Wilson sought to persuade Californians that they must decide between providing quality education for their children or maintaining the current level of welfare payments for the poor. Last year, Wilson and the Legislature cut welfare grants by 4% and froze cost-of-living increases for five years.

“As we add more than 200,000 children to school enrollments each year (there is) growing competition for funds between education and public assistance,” the governor said.

“Welfare is one of the fastest-growing programs in our state budget--growing at almost 12% per year, four times the pace of California’s population growth. . . . The status quo is not fair to the children of California--children who are at risk of having state spending for education and preventive programs crowded out by state spending for public assistance.

“The people should know that a competition perilous to education is under way.”

Wilson also sought to accentuate the traditional conflict between workers and welfare recipients. “Runaway (welfare) spending is unfair to California taxpayers . . . the working men and women of California,” he said. “Their jobs are threatened by a continuing exodus of employers fleeing both the present burden of high taxes and the ever-present threat that autopilot spending by the state will make that burden even heavier.”

Because of this and other reasons, such as “mindless regulation,” he said, “California has lost much of the competitive edge we used to enjoy, the edge we need to provide jobs for our growing population.”

But while advocating major cuts in aid for welfare children, Wilson also proposed the state-subsidized health insurance program for preschoolers. He saw it as a further, major step in the “preventive government” program he began last year--an effort to head off costly problems before they develop.

Carrying out his children’s theme, Wilson borrowed a page from the Ronald Reagan book of speechmaking by inviting to the chamber two young role models, introducing them to the audience and quoting them.

Veronica Valencia, a 17-year-old high school honor student, was praised by the governor as “an inspiration” for her 15-year-old cousin, Jennifer Blount, who had raised her grade average from D to B. He quoted Veronica as saying, “Life has not always been easy for me (but) my education is my top priority.”

Despite California’s problems, Wilson said, “the state of our state is good--and can be much better if California makes important changes.”

He said, “We can’t wait for good times to make basic course changes that were needed but ignored long before the recession ever hit.”

EXCERPTS OF SPEECH: A20

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