Share this story
Close X
Switch to Desktop Site

California '82: 'bellwether' state faces challenging year

California came of age in many ways in the 1970s. It overtook New York as the most populous state; it caused a shift in the political center of gravity of the United States; its highly productive and diversified economy made it the bellwether of the surging Sunbelt region; it expanded its influence in the fields of education and technology.

Californians seemed to enjoy a cushion against the nagging inflation and rising energy costs besetting residents of many other states.

About these ads

But the 1980s have brought change. This year the Golden State will have to deal with a number of pesky problems - some the result of decisions made in the prosperous '70s.

Gov. Edmund G. Brown Jr. and the Democratic-controlled Legislature have ceremoniously moved back into the beautifully and expensively restored State Capitol in Sacramento. But their recent week-long celebration of the $67.7 million restoration of the grand old building was shadowed by the necessity to either find new money or cut programs to rid the current budget of a projected $ 700 million deficit. Then they can turn to the task of avoiding what some have projected as a possible $2 billion gap between revenues and outlay in the fiscal year beginning next July 1.

The governor, delivering what was generally described as his most upbeat address to the Legislature since taking office, evoked the pioneer spirit and declared: ''By any measure, there are few places on earth to compete with this dynamic confluence of diverse people and resources.'' Absent was the rhetoric about an ''era of limits'' with which he greeted the legislators after his first inaugural in 1974. To counter threats to its high-techology leadership, Mr. Brown said, the state should emphasize ''the three C's'' - computing, calculating, and communicating - at all levels of public education.

Turning to the immediate fiscal problem in his annual budget message Jan. 8, the governor proposed a $27 billion budget for fiscal 1982 - with no new taxes or increases in existing levies. Clearly, Brown had retained his optimistic mood: The new budget assumes voters will reject ballot measures next June which would result in tax cuts totaling $325 million. The governor also hopes to bring in more revenue by speeding up tax collections, hiking interest penalties for late tax payment, eliminating a provision under which oil companies deduct federal windfall payments from their state taxes, and forcing utilities to pay the cost of running the state Public Utilities Commission.

As they wrestle with the budget problem, legislators will be thinking about the prospect of running for renomination next June in districts that might be rendered illegal in the same election. Here's how that could come about: The Democratic majority last fall pushed through a plan redrawing legislative and congressional districts in the wake of the 1980 US Census. Republicans, crying ''foul,'' collected enough petition signatures to place a challenge on the June primary ballot.

The California Supreme Court is expected to rule soon on the validity of a legal challenge to the redistricting plan. If the court upholds this challenge, legislators will run in the old districts; but voter turndown of the ballot question would make the newly drawn districts legal. The question then arises - who's qualified to vote for whom to run for the Legislature or Congress from where?

Another electoral complication: Governor Brown is running for the Democratic senatorial nomination in June. So far the opposition is not formidable, despite Brown's sagging ratings in the polls. But the condition of the state budget, and what he may have to do to balance it, could make him a highly visible target for the Republicans. And there are a few other issues - on and off the June ballot - that could make November a sweaty month for usually super-cool Jerry Brown.

About these ads

One is the peripheral canal, the long-planned project that would divert water from the Sacramento-San Joaquin Delta to make up for Colorado River water that southern California will soon have to give up to Arizona. The governor could have scheduled the canal referendum for the November general election, but set it for the June primary - probably because it might be less damaging to him at that time. Brown is on record in favor of the canal, which is seen primarly as a north vs. south issue. It is likely to have a major impact on the gubernatorial election, in which many expect Los Angeles Mayor Tom Bradley to be the Democratic candidate.

California also has utility problems - electricity and natural gas. Rates for both these resources are going up in very large increments. Pacific Gas & Electric, which supplies energy to the San Francisco area and much of northern California, had just been granted an increase by the state Public Utilities Commission. Customers' bills will go up an average of $9 a month.

Complicating the utility picture is the continuing controversy over PG&E's twin-reactor nuclear power plant at Diablo Canyon on the central California coast. Governor Brown is a bitter opponent of the project, but the company's own mistakes have done more to delay and raise the cost of the project than the protests of the governor and others.

Then, there's the ''Medfly'' - the Mediterranean fruit fly, which caused much financial loss to fruit and vegetable growers last summer, enabled Brown's foes to ridicule him (though it may not have hurt him in his normal constituency), and is almost sure to reappear shortly before the voters make up their minds about how to vote in the June primary.

California, like other states, is suffering from the current recession. Even the much-touted boom in ''Silicon Valley'' south of San Francisco has been somewhat deflated. The electronic firms are revising their estimates of growth and the number of people they will hire in the coming year.

But the state, whose leaders are fond of saying that if it were a nation it would have the world's eighth-largest economy, has a basically strong economy.

It had an $8 billion surplus in 1978 when voters gave themselves a present by passing Proposition 13 - the Howard Jarvis antiproperty-tax measure. That surplus was quickly used up to make up for the subsequent loss of local revenue for financing schools and other services. Meanwhile, a generous Legislature made some cuts in state taxes, including the temporary indexing of income taxes to allow for inflation.

Meanwhile, a new Jarvis initiative and a referendum backed by the California Teachers Association could have major impact on tax policy. Mr. Jarvis and his followers seek to make state income-tax indexing, now temporary, permanent. The CTA proposal, while continuing the benefits of Prop. 13 for homeowners, would place industrial and commercial property on a separate tax role, reassessing them at current market value.

If full income tax indexing is made permanent - in place of the partial indexing that the current law would revert to in 1983 - the effect would be to make it difficult for the state government to keep pace with inflation. The CTA package, if passed, would add an estimated $1.3 billion to state revenue in its first full year.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.