Excerpts From Wilson’s Address: A Focus on Economy

Excerpts from Gov. Pete Wilson’s State of the State address.

California needs our leadership as never before because California is in crisis. We have lost 800,000 jobs. At least one in 10 Californians is out of work.

As a result, state government lacks the revenues and cannot pay--cannot pay--for all the increased services we are asked to provide.

Economists say America’s recession is ending.

But in California we know better. We know that Californians are still losing their jobs, or live in fear of losing their jobs. The end of recession will come not just when we start to create more jobs than we lose. The recession will end only when people can once again feel secure and confident about the future.

There’s no time to waste. No time for politics as usual. No time for partisan finger-pointing, and no time for self-pity. . . .

Let’s begin by showing the world all that is right and good about California.

We’re the people who made the first movies, the first home computers, designed the space shuttle and gave America the tools of victory in the Cold War.

We face hard times now, but we can change that. We can make our own future. California has courage equal to any challenge. We have the daring, we have the vision and we have the talent to change our luck.

Last spring, we saw one of America’s great cities in flames, the casualty of violence and bitterness, of grief and economic devastation that linger with us yet.

We saw merchants, many of them newcomers struggling ot make it in America, stoutly defend their stores and their families.

We saw the very worst bring out the very best.

We saw Angelenos with guts enough to wade through violent crowds, risking their very lives to save total strangers. . . .

Can’t Afford Divisions

We can no longer afford to be a collection of disparate, rival interest groups. We must all be Californians first.

We must work together to keep a solemn promise, an especially American obligation.

I first learned it from my father, Jim Wilson. He believes there is an unspoken bond between the generations. It’s the promise parents make to their children to leave them a world of greater opportunity.

You and I have increased the number of children receiving early mental health counseling fivefold. We’ve doubled the number of 4-year-olds in preschool. We’ve helped thousands of low-income, uninsured pregnant women and their newborns receive prenatal and well-baby care. And our Healthy Start program will help 60,000 kids this year to overcome inadequate nutrition, and a host of mental and physical problems.

But, my fellow Californians, we are the first generation in American history in danger of breaking that special promise to our children.

We’ll never be able to continue to do right by them, to keep our word, to keep our schools safe, to protect the public, if we do not restore California as the best place in America to live and work.

So today I want to speak exclusively of jobs, because along with the personal cost of being out of work comes a public cost. People who are out of work can’t pay taxes. And as a result--and yes, I repeat--state government cannot pay for all the increased services that we’re asked to provide. . . .

All public programs begin not in this chamber, but in the sweat and toil of working men and women. Jobs make all else possible. That’s why we must rebuild California, job by job by job.

To do that, California must start easing the burden on job-creators. You can’t have employees without employers. You can’t love jobs and hate job-creators.

California is in sharp competition with other states and other nations that tax a lot less than we do. That’s why I insisted we hold the line against taxes last year. It meant tough, painful choices, but the alternatives were to lose even more jobs.

We must hold the line again. But if we are to create new jobs, we’ll have to do more than reject higher taxes. If we are to create jobs, we’ll have to cut taxes.

A temporary half-cent sales tax is set to expire on June 30th. Some say government can’t afford to let that happen. I say we can’t afford to let more Californians be thrown out of work. Higher California taxes simply mean fewer California jobs.

Call for Tax Incentives

So I ask this new Legislature to create new jobs--to put Californians back to work by enacting tax incentives and other changes to create jobs.

First, California is the great incubator of ideas. After all, Hewlett-Packard was once just Bill Hewlett and Dave Packard working out of a garage. So I ask you to invest in the jobs of the future by enhancing the tax credit for the research and development of new technologies. And I ask you to make it permanent.

Small business led us out of the last recession by creating three-quarters of all job growth. Small business will lead us out of this recession too. So second, I ask you to pass a small business investment tax credit to encourage more people to invest in these small, but powerful, engines of job growth.

Third, for small employers to grow large, they need time to become profitable. Too many don’t survive their heavy start-up costs long enough to provide the jobs they should. To keep them in business through those tough, early times, we should keep the bargain we made two years ago and reinstitute the net operating loss carry-forward.

We can do even more.

I ask you to expand the loan guarantee program for small businessmen and women. Our goal should be to provide up to $300-million credit for these job-creating entrepreneurs.

And I ask you to work with me to restructure our state’s competitive technology program. We must compete for federal defense conversion funds. These are resources California needs as we move from building weapons for global military competition to building products for global economic competition.

We must consider doing even more. After all, we lead a nation-state possessing the eighth largest economy in the world. California has a larger gross domestic product and about one-fifth more people than Canada. California abounds in economic expertise. I think it’s time for California to benefit from the wisdom of a Council of Economic Policy Advisers.

I’ll soon name the full membership of this council. But today, I’m proud to announce that former Secretary of the Treasury and former Secretary of State George Shultz has agreed to serve as our chairman.

One of the things that we must do is encourage the growth of manufacturing jobs in California. Even in a high-tech information age, manufacturing will continue to be critical to our economic health. An earnings tax credit or sales tax exemption for the purchase of manufacturing equipment would spur investment in jobs for California.

So one of the first questions I want to put before this new council: Whether and how California can offer this incentive in so challenging a time, a time of both budget gap and painfully high unemployment. . . .

A ‘Job-Killing Machine’

Last year, the Council on California Competitiveness accused state and local governments of becoming a “job-killing machine.” John Vasconcellos and his hard-working ADEPT team in their report reached the same conclusions. So here we are on both sides of the aisle and we seem to agree on the urgent need for a cure. What remains is for us to take action and to get the job done. . . .

When Los Angeles was ravaged by riots, we created a revitalization zone, a place where rules and regulations take a back seat to jobs and opportunity. But today we need a revitalization plan not just for South-Central but for all of L.A.

And not just for L.A., but for all of California, for the small business owner in the San Fernando Valley, the farmer in the Central Valley and the inventor in the Silicon Valley.

Our economy is drowning in a sea of red tape. That’s why I’ve ordered every agency in state government to streamline policies and regulations, to create jobs to get the job done.

When my Administration hears of a major California employer who is considering leaving, we unleash a strike force, modeled after what is known in the aerospace industry as a “Red Team.”

These teams, drawn from leaders in the public and private sector, cut through the usual bureaucratic procedures, fix problems and save jobs. In short, they do what’s needed to let California and California companies compete and win jobs. They get the job done. And if they can’t, I want to hear about it. Please call me or call Julie Wright, our new secretary of trade and commerce.

But saving the jobs of the present isn’t enough. We must look ahead to the industries and jobs of the future, from biotechnology to the many offspring of defense conversion.

We must take advantage of fiber-optics, a new technology that can link classroom, office, library and home; one that can free our highways of congestion and bring more jobs to California.

So I’m asking the Public Utilities Commission to develop and implement new policies. And I ask them to report to us by Sept. 1 on how California can take full advantage of this new breakthrough, so we may take action this year.

Environmental Technology

Environmental technology is already a $25-billion-a-year business in our state. Cleaning up environmental degradation throughout Europe and Asia is a gigantic effort worth hundreds of billions of dollars more and tens of thousands of more jobs in California.

That’s why I have directed Cal-EPA and the newly created Trade and Commerce agency to work as a partner with California business, to assist in marketing our environmental technology around the world--and bring more jobs to California. . . .

I respectfully but strongly urge President-elect Clinton to follow his instincts and let us benefit from the North American Free Trade Agreement. If ratified by Congress, it promises vast new markets and new jobs on both sides of the border.

Few challenges to our future are as great as those posed by our relentless population growth.

If we are to bequeath to our children a robust economy and a healthy environment, we must strategically shape our growth. I will shortly release a plan, two years in the making, that will do just that. And I invite the leaders of the Legislature and all who have drafted bills on growth management to sit down with me, to compare our plans and then to take action.

We must shape our future, not suffer it.

One way our generation is failing to keep its promise to the next relates to shelter and has two profound impacts. The first is to deny the prospect of affordable housing to our children, many will not live in homes as good as those they grew up in. The second is to deny construction workers jobs in building homes. I refuse to accept either.

To assist both first-time home buyers throughout California and the residential construction industry, I have asked California Housing Finance agency to initiate and insure home loans up to 97% of the purchase price. Present FHA mortgage limits fail to reflect the reality of California’s much higher home prices. And this effectively denies too many young California families the chance for home ownership.

I’ve also asked this agency to address the critical need for housing construction financing, to become a housing partner. . . .

I’ve talked this afternoon about how we can get the job done in California. There are many Californians who are impatient for change. They’ve already tried to get the job done by undertaking the arduous task of bringing initiatives to the ballot. To be blunt, these folks are more than skeptical. Based on years of evidence, they just don’t believe that we are capable of enacting even the most obviously needed reforms.

Well, my friends, there is a way to prove the skeptics wrong: It is to enact the reforms that people need and deserve.

California can have a magnificent future, provided you and I in this chamber work together to undo and cure all the costs, the delays, the burdens, the regulations, taxes and lawsuits that kill jobs in California.

To make these desperately needed changes, we must work together. Two years ago in my first State of the State message, I said to you, my colleagues in the Legislature, that if we do the people’s business and make state government work, we’ll find there’s ample credit to share.

I can’t do it without you. And you can’t do it without me. But together, we can get the job done.

Together, let us begin today to keep our promise. Let’s get the job done. And let the great California comeback begin today. Right here in this chamber.