CALIFORNIA ELECTIONS : PROPOSITION 165 : Welfare Measure That Boosts Governor’s Power Sparks Costly War

Proposition 165 is best known as the state welfare initiative, but the measure also greatly enhances the budget powers of the governor and has sparked a bitter, well-financed political war.

With the November election nine days away, Proposition 165 has become one of the most fiercely contested issues on the ballot as the two major parties pour hundreds of thousands of dollars into the battle over its passage.

The presence of so much party money, political experts say, is proof that the stakes are high for both Republicans and Democrats and suggest that it could be a watershed in Pete Wilson’s term as governor.

Wilson, whose rating in the polls has dipped as California’s economy has faltered, has made the passage of the initiative a high priority of his Administration. So far, Wilson has donated $1.6 million from his political committees to the campaign to pass Proposition 165--more than any other single donor has contributed to any initiative this year.

In public he relentlessly urges its approval, asking voters in speech after speech to help him reform the welfare system. In private, campaign officials say, he spends hours raising money for its passage.

“The Republican Party is interested because this is a priority for the governor. The Democrats are interested because they don’t want Pete Wilson to have this kind of power over the budget process and they want to deny him a victory,” said Sal Russo, a Republican political consultant.

The initiative would shift the constitutional balance of power, expanding the governor’s authority over the budget so that the Democratic-controlled Legislature would either have to fashion the state’s spending plan to his liking or risk having him put his own plan into effect.

Except for programs protected by the Constitution, such as education, Proposition 165 would allow the governor to cut the budget without a vote of the Legislature if a spending plan is not in place by July 1 or revenues and spending are out of sync by more than 3%. The Legislature could forestall the cuts by passing an alternative budget within 30 days, although the two sides dispute what would happen in the event the governor vetoes the legislative spending plan.

Critics of the drafting of 165 say the proposition’s language takes away legislative authority to override a veto of the budget and thus gives the governor unbridled power over state spending. Wilson maintains the Legislature’s veto power would remain intact and it could override the veto by a two-thirds vote.

On the welfare issue, the proposal attempts to reshape the state’s public assistance system by denying cash benefits to children born to mothers on welfare by limiting the amount of aid that can be paid to new state residents and by a 23% reduction in the cash benefits paid to most recipients.

The political warfare has driven up the cost of the campaign, making the battle over Proposition 165 one of the most expensive contests in this election. The two sides have collected more than $6.9 million, with the yes side having about a $500,000 edge over the opposition.

The Democratic Party donated $579,000 to the No on 165 campaign, whose directors say they intend to spend about $1.5 million on radio and television advertising--all focusing on Wilson.

The California Republican Party in turn has invested $338,000 in the Yes on Proposition 165 campaign, mainly in the form of loans and in-kind contributions.

“This has become a fight that absolutely orbits around Gov. Wilson and so the Republicans, because he is their leader in the state . . . find it incumbent on them to back him,” said Leo McElroy, a consultant who has managed many initiative campaigns.

The initiative also has high stakes for other groups--particularly state employees, social service organizations and taxpayer associations--all making major investments in the campaigns.

Government employee unions and professional organizations have donated more than $2 million to the No campaign to help stop an initiative that they see as giving the governor too much power to reduce their pay and to cut the programs that employ them. In a fiscal emergency, the initiative would authorize the governor not only to slash the budget but also to reduce by 5% the salaries of all state workers not protected by union contracts.

The California State Employees Assn. has donated $976,385, the California Teachers Assn. Issues PAC gave $311,664 and the California Assn. of Highway Patrolmen donated $215,000.

The welfare proposal has attracted opposition from churches, children’s organizations and charitable groups whose members have contributed hundreds of hours to fight a proposal they say will further impoverish the poor.

Wilson has drawn his financial support equally from major corporations, including Hewlett-Packard and the Great Western Financial Corp., and small donors. More than a fifth of the money raised by the Yes on 165 campaign has come from contributors who gave less than $100.

Many of these contributors are members of the state’s taxpayer organizations, most of which have endorsed the initiative. They argue that the cuts in welfare spending will help avoid future tax increases.

To capture the votes of those who haven’t aligned themselves with either camp, both campaigns are relying heavily on radio and television advertising.

George Gorton, director of the Yes on 165 campaign, said he will use the bulk of his funds--about $2.5 million--for television commercials. Initially the ads concentrated on the welfare issue, warning voters that spending for public assistance has gotten out of control and must be reined in by the initiative’s cost-cutting provisions. More recently, the ads have focused on a provision in the initiative that would dock the governor and the Legislature’s pay if they don’t pass a budget on time.

The opposition ads have focused on Wilson and the budget issues, arguing that his sponsorship of Proposition 165 is an attempt at a budget “power grab.”

Gorton said the opponents are relying on the traditional strategy that opposition campaigns employ to defeat initiatives: They try to find some issue or personality that can be used to cast doubt about the measure. “Doubt works to defeat initiatives. When in doubt people vote no,” he said.

Larry Sheingold, Gorton’s counterpart on the No on Proposition 165 side of the issue, agrees with the analysis. “Is our strategy strictly Wilson?” he asks rhetorically. “It’s hard for it not to be. He’s the one who wrote it (the initiative). He’s the one who paid for it. And he’s the one who has deliberately written into Proposition 165 extraordinary powers for himself.”

He acknowledges that it is a strategy that is naturally compatible with Democratic Party goals to defeat Wilson in 1994 and to keep him from obtaining budget authority that would allow him to overpower the Democratic-controlled Legislature.

Sheingold said the No on Proposition 165 campaign, like the party, also wants to register Democrats and bring them to the polls, believing that most of those who ultimately vote against the initiative will be Democrats. The major exception to his thesis, he said, is the California Republican Assembly, an 8,000-member conservative organization that opposes the proposal. President Mike Schroeder said the organization is concerned that the initiative would give the governor too much budget power.

Gorton said although the core of his support will come from conservative Republicans, he also expects the welfare issue will attract a large number of conservative and moderate Democrats. “This ain’t going to pass unless a whole hell of a lot of Democrats vote for it,” he said.