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4. A governor's report card

Jesse Unruh, the famous "Big Daddy" of California politics, speaks with greater authority than most other observers regarding the record of Gov. Ronald Reagan. He was speaker of the State Assembly during much of the Reagan tenure and he lost by half-a-million votes as the Democratic challenger to a second Reagan term in Sacramento.

When Reagan, the self-described "citizen politician", began his reign as chief executive of the nation's most populous state in 1966, he told Californians: "For many years now, you and I have been shushed like children and told there are no simple answers. Well, the truth is, there are simple answers. There just are not easy ones."

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Eight years later, the nearly masterful politician would have found that grappling with the problems of a state that would be the eighth-largest country in the world were it independent had been neither simple nor easy.

Someone once said, "California is just like the rest of the United States, only more so." This was particularly true when Reagan took over as governor in January 1967. In reaction to minority unrest, troubles on university and college campuses, and rising taxes to pay for burgeoning social services, the "silent majority" was becoming increasingly vocal here.

The "forgotten man" had been Franklin Delano Roosevelt's symbolic constituency 34 years earlier. And it was this "forgotten American, the man in the suburbs working 60 hours a week to support his family and being taxed heavily for the benefit of someone else," as Reagan put it, that sent him to Sacramento. Watts, Berkeley, and what one day would be called "Prop. 13" were the symbols of this new movement.

After the first flush of victory in November 1966, it is quickly became obvious to Reagan supporters that (as his press aide Lyn Nofziger put it at the time), "we weren't just amateurs, we were novice amateurs." It took some weeks during the interim between election and inauguration to realize that a new government could not be formed from Los Angeles, that the move to Sacramento would have to be made right away.

To help in pulling together a new administration, Reagan called upon his old friends (successful California businessmen, for the most part) to form a task force that would search for decidedly nongovernment people.

Recalls Holmes Tuttle, a wealthy Los Angeles auto dealer who has been a confidante of Reagan since the mid-1940s: "After we won the governorship, we surrounded him with wonderful people. We helped search out this state -- not for political appointments -- but for people who would give two or three years to go to Sacramento to help him."

Mr. Tuttle's use of the pronoun "we" in this recollection is important to note. He was a member of Reagan's "kitchen cabinet," about 10 close advisers on substantive legislative and executive matters as well as on appointments to government posts.

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For the most part, these unofficial and influential advisers were business executives of considerable financial means. They included Justin Dart (head of Dart Industries), Leonard Firestone Jr. (president of the tire and rubber company of the same name), A. C. Rubel (president of Union Oil Company), and Taft Schreiber (vice-president of MCA, the parent company of several film and recording companies, and Reagan's personal agent in the business). Feet set in concretem

Reagan's first order of business was to "cut, squeeze, and trim" the size and cost of state government. The previous administration had "looted and drained" the California treasury and left the state "bankrupt," he alleged, using the accrual method of accounting as a "gimmick to hide a financial deficiency."

It was true that Reagan inherited a $194 million deficit from his predecessor , Pat Brown, and that accrual accounting (anticipating future revenues) had been used to give the state tally sheet a better appearance. But, in retrospect, the situation was far less serious than the public was led to believe.

"We had a temporary need for funds that happens to all states," recalls A. Alan Post, California's highly respected legislative financial analyst during the Reagan years.

Mr. Post (a Republican and the new governor's first choice for state finance director, but turned down the job) goes on to say: "The state had not been robbed. The state was not broke. We had the highest rating on our bonds. The state had a cash-flow problem, but it wasn't a big problem."

In any case, Reagan began his first term determined to initiate an across-the-board 10 percent cut in the cost of state government. In fact, he had to increase the state budget 10 percent that first year (in order to achieve the constitutionally mandated balance) and over the course of his eight years in Sacramento, taxes and spending continued to climb steadily.

"There was literally only one way out and that was to raise taxes," recalls Caspar Weinberger, who was Reagan's finance director and later held several important Cabinet posts in the Nixon White House. "It was a bitter pill for him to swallow."

There are three important factors with which Reagan had to contend over this period, however; inflation totaling 44 percent during his tenure; costly federal programs mandated by Washington; and a not-too-friendly Legislature that was dominated by Democrats for six of the eight years of his incumbency.

But since Reagan campaign literature today describes him as "the greatest tax-cutterm in the state's history," it is instructive to look at the figures.

It is true that Reagan was able to return $5.7 billion to Californians in the form of tax relief. This included property-tax reductions of $2.4 billion, abolishing the personal property tax on household effects, reducing the business inventory tax, and providing renter and senior citizen assistance.

However, every major form of state tax collection rose over the same period. Sales taxes were boosted from 4 percent to 6 percent. The maximum income tax rate went from 7 percent to 11 percent. The banking and corporate tax rate rose from 5.5 percent to 9 percent. Between Brown's last year in office and the end of the Reagan administration, the annual state budget had climbed from $4.6 billion to $10.2 billion.

To put all of this in personal terms and adjust for inflation, the total real per-capita tax load in California went from $426.26 to $5556.84 (an increase of 31 percent) over this same period.

"He was the biggest tax increaser in history," says Post (who otherwise calls Reagan "a reasonably competent and good governor"). Others say Reagan was "over-reacting," causing a "roller coaster" effect of tax hikes and rebates.

Until 1971, Reagan had been opposed to a "minimum tax bill." In that year, however, it was reported that he had paid no state income taxes himself through various legal loopholes. This may have prompted him to sign legislation requiring that at least a minimum state income tax be paid.

He also had fought against state withholding taxes. He argued that "taxes shouldm hurt," that withholding softened the blow, making it easier for politicians to spend more. "My feet are set in concrete on this issue," he proclaimed. When the state faced a serious cash problem in 1971, however, he reversed himself and told reporters: "The sound you hear is concrete breaking up around my feet."

This latter incident says two things about Reagan as he matured in office. First, that he could be pragmatic when necessary; and second, that he had a sense of humor that even hard-bitten journalists appreciated. In this case, the State House press corps presented him with a pair of his old shoes (which Mrs. Reagan had provided), set in cement.

Reagan always has been an advocate of decentralizing government. He prefers state, over federal, control and thinks where possible local control is best of all. Raising state taxes and assistance to local governments, however, had the opposite effect. During the Reagan years (when the state was gathering more and more income from Californians), assistance to local governments rose from just over half to nearly two-thirds of the state budget.

Some observers think this shift in control, together with the general rise in state spending and taxation, helped precipitate the "taxpayer revolt."

"It increased the tax burden on the citizenry to the point where it led to Proposition 13. There's no question of that," says Post, who held his bipartisan fiscal advisory post from 1949 to 1977.

There can be no question that Governor Reagan left California in relatively good financial shape, however. He turned over to his successor (Edmund G. Brown Jr.) a $554 million budgetary surplus, a triple-A state bond rating, and a more progressive state income tax system.

On the size of state government (as contrasted with its cost) there is more general agreement about Reagan's accomplishments. He imposed an early hiring freeze, and during his two terms in Sacramento the number of state Civil Service employees rose just 6.1 percent. This occurred during a time when California's population was growing at nearly twice this rate and government services continued to increase.

William Clark, Reagan's cabinet secretary and now associate justice of the California Supreme Court, says the governor's principal disappointment was not being able to reduce the size and cost of government "to the extent he felt possible."

It is worth repeating that Governor Reagan, during most of his incumbency, had to work with a legislature dominated by Democrats as well as a state that continued to grow faster than the rest of the nation.

"He certainly left the state in marvelous financial condition," observes Ed Salzman, editor of the California Journal, a serious and respected nonprofit publication whose board of directors is studiously bipartisan.

Probably Ronald Reagan's greatest disappointment regarding the size and cost of government while he was in Sacramento was the rejection by voters of a ballot measure that would have put a 7 percent cap on the state income tax. While the 1973 measure gained 46 percent of the vote, the taxpayers revolt would have to wait five more years for a man named Howard Jarvis to accomplish what Reagan could not. A 9-to-5 executivem

As Reagan's grasp of the financial workings of the enormous state government grew in depth and refinement, he developed a style of governing that was distinctly his own.

He often has been described as a "9 to 5" executive who delegated broadly, liked to spend his evenings at home with his family, and had little use for the back-slapping give and take necessary to work effectively with a diverse group of legislators.

"In the office it usually was 9 to 5," says former cabinet secretary Clark. "But he frequently took work home with him."

But another man who held a high post in the Reagan administration says that "even 9 to 5 was sometimes stretching it."

"During the budget period, he would work late. During the veto period, he would work into the evening. He would certainly work into the evenings on speeches, if that's work," recalls this source. "But he was not a hard worker in the burning-the-midnight-oil sense."

Usually spending his weekends at his home near Los Angeles or on the Reagan ranch in southern California, the governor frequently left work early on Fridays and returned late Monday mornings.

In Sacramento, he reorganized state government to reduce the number of broad-based agencies from eight to four. Under his tight cabinet structure, he would meet three times a week with the agency heads who, along with other top staff members, would present the well-known "minimemos."

On these one- or two-page sheets were listed the issues, facts, choices, and recommendations to be considered. As recounted by some who sat in on these sessions, each man around the table would offer his opinion or observation, then the governor (seldom waiting longer than overnight) would make his decision.

His supporters say Reagan actively sought opposing views and was quick to recognize when someone was withholding information or was less than fully informed.

"He himself did a lot of independent reading and checking of facts to the point where he was always well-versed on these issues," says Edwin Meese, who was Reagan's executive secretary and now is staff chief for the Reagan presidential campaign. "I can't remember an issue on which his viewpoint was so narrowly manipulated that he didn't have a pretty wide range of options."

This broad delegation of authority (what Clark calls "the Army theory") to a relatively small number of "superagency" heads and staff members leaves others wondering if Reagan was, in fact, susceptible to too much influence -- if not manipulation -- by those who worked for him.

"He was given exactly the range of options that the staff wanted him to have, " says a former top aide who favored other Republicans in this spring's primary elections. "But can Reagan be manipulated? On political matters the answer is yes, but I don't think Reagan is subject to very much manipulation on what I would call substantive or ideological grounds. If he comes to a conclusion with respect to an issue of policy or legislation, it takes a great deal to break him loose." Some surprising appointmentsm

On Reagan's working relationship with the Legislature, there is general agreement that (in the words of a former staff member) "his first two years were a disaster."

"I think that's correct," says Mr. Meese. "I think that the governor himself says he learned a lot in the first two years." Reagan's relations with lawmakers continued to be standoffish. But a degree of mutual (if grudging) respect and cooperation developed over the succeeding years.

"Initially, it was one of [his thinking that] the legislature didn't exist. They were a bunch of heathens, not to be courted and not to be treated as peers, " recalls veteran assemblyman Willie Brown, one of the few blacks in the Legislature. "After one or two very rocky sessions and confrontations, even with members of his own party who disagreed with his course of conduct, he altered that. . . . He never did have a buddy-buddy relationship, but he did develop a reasonably smooth working relationship with the Legislature."

Reagan's ability to deal with other constitutional officers whom Californians had independently chosen appears to have been somewhat better.

"In all fairness, I have to say that my relationship with him was a positive one," says Wilson Riles, California Superintendent of Education and the only black holding statewide office. "You had to convince him, but he would compromise. When you really got down to his operations, they were far more reasonable than you would expect from his rhetoric."

Regarding those he named to staff positions and judgeships, Reagan's appointments were of general quality while reflecting a not-surprising bias toward his own brand of Republicanism and political philosophy. He had criticized Pat Brown for appointing so many Democrats to judicial posts, but, in fact, named a higher percentage of members of his own party during his first two years in office than had his predecessor.

But, as Pulitzer prize-winning journalist Lou Cannon points out in his book about Reagan: "This hypocrisy of proclaiming merit while practicing partisanship should not be confused with the qualitym of Reagan's judicial appointments, most of which were high."

He had a tendency to name to staff positions and commissions persons with a strong business background. In an interview with the Los Angeles Times some years ago, Verne Orr (who became Reagan's finance director when Caspar Weinberger left to join the Nixon administration) said: "It is natural that the type of special interest group that puts you [in office] is the one that you're going to listen to more closely. In our case, it was the conservative groups, the business groups that put this administration in. They are our constituency."

Yet, as with so many things, there could also be surprising Reagan appointments that satisfied those beyond this narrow constituency. He named a member of the Sierra Club as chief of natural resources and appointed another conservationist (who had fought the public utilities to expand parks) as recreation director.

Nearly one-fifth of Reagan's initial top 100 appointments were from minority groups, and he named California's first black department head (in charge of veterans affairs). His overall record in this area was better than any previous California governor, but it would remain for Jerry Brown to name substantial numbers of minorities and women to the most influential of government posts.

Next: Welfare, the turbulent campuses, and more on the Reagan record as governor.

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