Davis Pledges No Tax Hikes in State Speech

Gov. Gray Davis delivered his final State of the State address of his term Tuesday evening, promising to protect education and other programs while vowing not to propose new taxes to close an anticipated $12-billion budget shortfall.

Appearing on television statewide, Davis laced his election-year speech with references to Sept. 11, and proclaimed that no state has done more to protect itself against terrorism. Then, he urged even more: broader wiretap authority, higher pay for National Guard troops posted around California and additional spending to stimulate the economy.

In the budget proposal he will release on Thursday, Davis told lawmakers and other officials he will increase education spending, boost after-school programs by $75 million and expand health care for 100,000 additional children of low-income parents. At the same time, he said he “will not increase taxes.”

But Davis was careful not to say that he would block all tax hikes pushed by legislators. Several key legislators already have expressed support for tax increases to pay for various state programs and fill the multibillion-dollar deficit.

“I will not advocate raising taxes,” Davis said. “That would further burden individuals and businesses struggling to stay afloat in these difficult economic times.”

Davis’ remarks amounted to an opening of his reelection campaign, and he used much of his speech to enumerate his successes: expanded spending on schools, transportation and health care, and $4.6 billion in tax cuts, most of which were enacted during his Republican predecessor’s final term.

Davis’ Republican foes--and some fellow Democrats--viewed the speech more as a campaign event than as a traditional opening of the legislative session.

“It was a good campaign speech,” said Senate Republican Leader Jim Brulte of Rancho Cucamonga, adding that Davis “took a lot of credit for a lot of things he had nothing to do with.” Brulte said the governor’s promise that he would not be an advocate for new taxes was “a little less than forceful.”

Senate President Pro Tem John Burton (D-San Francisco), who missed all but the final five minutes of Davis’ speech, said the governor announced his support for new programs just months after he vetoed bills that would have created them.

“Now, it’s an election year,” Burton said.

Several legislators said Davis equivocated on tax hikes.

Assemblywoman Carole Migden (D-San Francisco) said Davis’ statement on taxes was “clever phraseology to be sure. But I think he is sincere. He is sending messages to us as legislators [who support tax increases] to tread with caution.”

The Legislature must approve the budget by a two-thirds majority, meaning that some Republicans must join with the Legislature’s overwhelmingly Democratic majority in order to approve the document. That is an especially difficult challenge in an election year.

Few Republicans are likely to vote for a budget that includes significant tax hikes, while many Democrats will oppose one that cuts deeply into social programs.

Despite the difficult budget debates ahead, Davis’ speech was largely upbeat, emphasizing the underlying strength of the California economy and arguing that the state is well-positioned to bounce back from any downturn.

Davis gave few details of the budget he will release Thursday.

But he said public education “will be protected above all else,” and added that he will push to boost spending on schools and public safety, while also expanding the Healthy Families insurance program for 100,000 additional children and ensuring that state financial aid to local government continues.

He offered no specific prescription for closing what could be a budget shortfall of as much as $12 billion other than to say: “I will call on you to close the budget gap with a combination of cutbacks, deferred spending, internal borrowing and accelerated revenue.”

He also called on lawmakers to cut $2 billion from the current year’s budget: “Failure to act quickly on these cuts will only increase the pain for our fellow citizens who depend on the state for vital services.”

In a move aimed at stimulating the economy, Davis promised to send lawmakers a $678-million bond package to speed construction of public works projects. He also renewed his call on lawmakers to place $30 billion in school construction bonds on statewide ballots, with votes starting this November and continuing in 2004 and 2006.

The governor called for a Cabinet-level labor secretary and reorganization of the state’s $4.6-billion job training system, saying it now is composed of 34 separate programs in 13 different agencies. He promised to streamline the programs and “achieve greater accountability and efficiency.”

Additionally, Davis said he will offer legislation to address the nursing shortage, an issue that affects the state and nation. However, he did not provide details, other than to say he seeks to “remove barriers to qualified licensed nurses moving to California from other states and other countries.”

Last year, Davis’ State of the State address focused on the energy crisis and steps he was proposing to solve it. This year, the governor cited his handling of the problem as a success, pointing out that several new power plants had been built, and that the state averted blackouts last summer that had been predicted.

“By doing so, we protected public health and safety, prevented a meltdown of our economy, kept businesses from leaving the state--and even created new jobs through expansions that were put on hold earlier in the year,” Davis said.

This year, the speech revolved around terrorism and its impact on the state.

In addition to the security-related proposals he offered on Tuesday, the governor used the address to single out some of those most affected by the Sept. 11 attacks.

Davis acknowledged six survivors of victims of the attacks on New York and Washington, D.C., who were in the gallery overlooking the Assembly chambers as he delivered the speech. He also singled out Ingrid and Al Solhaug, the mother and stepfather of Army Staff Sgt. Brian Cody Prosser, of Frazier Park, who was one of three Green Berets killed last month in Afghanistan by an errant U.S. bomb.

Davis pointed to other guests, including five county sheriffs, representatives of police organizations, and a fire chief who coordinated the California search and rescue teams that helped look for survivors at the World Trade Towers.

Noting that more than 100 Californians died in the Sept. 11 attacks, Davis said: “Tonight, we dedicate ourselves to building a future worthy of their sacrifice.”

He urged lawmakers to make retroactive to Sept. 11 a $100-a-week increase in unemployment benefits for people who lost their jobs after Sept. 11. Davis signed legislation raising the benefits. The increase went into effect this month, but applied only to people who have filed for benefits since the start of the year.

In a proposal that already has stirred debate, Davis called for expanded wiretap authority for state and local police, allowing them to use “roving wiretaps” so they can eavesdrop on any telephone used by a suspect, rather than specific phones as is currently permitted. The governor did not flesh out his proposal. But his aides said it would grant state and local police power to intercept e-mail and eavesdrop on Internet sites, similar to authority granted federal law enforcement in the USA Patriot Act signed by President Bush in October.

California is one of 25 states that use wiretaps--but while lawmakers in other states have proposed allowing roving wiretaps, no other states have adopted such an expansion.

The Davis administration erroneously stated on Monday that New York approved the use of roving wiretaps. But in fact, while the New York Senate has approved such a measure, the Democrat-controlled Assembly in New York has yet to act on it. Lawmakers in Florida and Illinois did expand wiretap authority after the Sept. 11 attacks, but no state has gone as far as sanctioning roving wiretaps.

In Los Angeles, Dist. Atty. Steve Cooley said Tuesday Davis’ proposal mirrors new wiretap legislation that his office has been working on for months. Cooley’s proposed legislation, like Davis’, would let police use wiretaps on any phone that targeted suspects use, rather than specific phone numbers as now permitted.

The idea, floated by Davis aides earlier this week, is opposed by some civil libertarians and Democratic lawmakers, including the influential Burton.

Testifying before the Assembly Judiciary Committee, USC law professor Erwin Chemerinsky said Tuesday that the problem--suspected criminals frequently change phones, while warrants authorizing wiretaps are limited to specific phone numbers--could be solved by creating “a more expeditious procedure for the police to use to add new numbers to an existing warrant.”

“The reaction to Sept. 11 has been completely understandable,” said Assemblyman Darrell Steinberg (D-Sacramento), who held a hearing on anti-terrorism legislation earlier Tuesday. “But . . . let’s make sure we are deliberative and analytical.”

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Times staff writers Miguel Bustillo, Carl Ingram, Julie Tamaki, Jenifer Warren and Robin Fields contributed to this story.