This morning I will speak with you informally. I wish to lay out an agenda not coming just from the executive branch, but rather a list of those things that we can do together to build for the future. I am concerned about the over-consumption, the focus on the present and the failure to recognize that the future is coming upon us and we must prepare for it. And we prepare for it by building and expanding the productive assets of our economy, building capital assets. And I divide that capital into three forms; our human capital, our environmental capital, and our technological capital. Those are the three forms that constitute the basis of our strength as a state and as a people.
First of all, our human capital, the most important of all. Our people, their minds, their bodies, their ability to contribute to their community, and to walk proudly as citizens of our state. We confront the paradox in the State of California that in the year 1978 we created more jobs in an absolute sense and on a percentage basis than at any other period during peacetime in our history. We created well over a half million new jobs, and yet alongside of these new jobholders we confront the paradox of hundreds of thousands of people who are still out of work, Many of these people are in the central cities. Many are minorities, young people, who have not all the experienced this great wave of prosperity that swept across the State of California. In fact, many of those jobs went to people who twelve months ago were not in the State of California. They have come from other states and other places. Some with greater skills, some with less. And I see in that paradox the fundamental requirement that we make sure as we extend job opportunity principally in the private sector, that state government redouble its commitment to affirmative action and those programs that will assure an equal opening of the job markets to all the citizens of our state. And I place a very strong emphasis on our affirmative action policies, both in the schools, in government service and in the private sector.
Last year you passed one of the most powerful civil rights measures in the country, and I intend to fully utilize it in the coming year, to make sure that we as we expand our economy we expand it in a way that extends an open hand to all the citizens of our state.
Next I would propose five million dollars in new money for on-the-job training and apprenticeship programs. We see in the electronics industry, in the health professions, the paradox of jobs going begging in the same areas where workers are seeking jobs. And toward that end I will direct new funds for job training and redirect existing funds into a program that will focus on specific job training.
We spend over a half a billion dollars on vocational training in the State of California, but not enough of it is focused on specific job skills to relating with the private sector and our educational programs to provide people the skills and the equipment, the discipline to function in our very complicated and technological society. At the same time I would like to see licensing restrictions that are not job-related be reformed in such a way that our on-the-job training can be linked with our licensing system so as to assure that those who must go to work immediately upon high school, although they begin with lower paying jobs, ca n begin in a career ladder of upward mobility through structured programs of on-the-job training and apprenticeship.
Next, I intend to fully utilize the federal tax credit that will serve as an incentive to the private sector to hire those who have been left in the back waters of our society. Private business has reaped large tax breaks because of Proposition 13, and in the face of that it is not acceptable to offer the tens of thousands of new jobs to those who are coming from other states, while at the same time neglecting the people who fill our cities and suburbs of California. Those individuals, whatever their skills and whatever their background and whatever their color, must be welcomed into the mainstream and that federal tax credit can serve as a special emphasis if state government works with business and business meets its responsibility to hire those who have been passed over. As we bring new people into the work place, we must also be sure that work place is safe for the working men and women of our state. We found out last year of the dangers of DBCP and how it can affect terrible health hazards on the people of California. We still dangerous substances such as arsenic and other substances that affect workers. The full magnitude of these toxic dangers has not fully been disclosed. But I intend to have as a major part of my program in the coming year an effort by our Division of Industrial Relations and Department of Health to make sure that the work place is as safe as humanly possible. The work place is often the early warning system for the general environment, and as we identify dangers and hazards, we not only protect the workers of California, but we also protect the general environment from the hazards that often come out of our industrial process.
Next, we have to increase our benefits in Workmen’s Compensation and unemployment insurance and bring them into line with the inflationary realities of today. There are reforms that should be forthcoming at the same time, but there’s no doubt that this is the year to retool and augment those two programs that help the working people of California.
I also wish to put into the general fund of California a significant program to enforce the labor standards. These standards of minimum wage, worker safety and other work rules are the surest and sometime the only protection of the working poor. Those people who often do not have representatives to come here to Sacramento or to go to Washington, who toil in the most thankless jobs at the lowest wages. These are the people that I wish to see our Labor Commissioner protect, and toward that end we will be fully staffed to enforce3 those regulations and laws that are a part of California.
Finally, I support efforts before the California Legislature to augment the Fair Employment Practices Act to include prohibitions against discriminations based on sexual preference. I think the time has arrived where this society is sophisticated enough to welcome into its midst the full plentitude of people and human spirit that is here in this state. We have to put aside the myths and anachronisms of the past as we build for the future.
Next, health costs. They have been doubling. Doubling at twice the rate of inflation. We now spend almost twenty billion dollars on health costs in California. And the time is drawing close for appropriate cost containment. I have set up a commission. It will be coming in with recommendations and I will seek to have the most prominent of those regulations put into effect.
Certainly some form of prospective budgeting, a reduction in the excess hospital beds, and a great utilization of the allied health professions. All this will go a long way toward reducing the rate of growth while at the same time we make health care available to all the people of California.
At the same time, our Medi-Cal program is in need of reform. It is just under four billion dollars. It’s the fastest growing item in the state budget and it is time that we very carefully change the standards so as to assure access, quality and cost containments. This should not be done at the expense of the participants in the program, the poor that look to the state to have their health care provided. But constitutional right to all the Medi-Cal dollars that they would wish to have. The number of providers will be reduced so that we can ensure greater accountability and greater access. It will not be easy. It will not be done overnight, but the Medi-Cal program can be reformed and can be improved over time without hurting the beneficiaries and in fact getting a great deal more for the money that we are now putting in.
Next, housing. In this post-Proposition 13 era, we have to recognize that the local bond issues and funding that we often have used to spread the urban and suburban sprawl is a thing of the past. We will have to focus development in the cities and in the older suburbs, and as we do, inevitably we will have to increase the density. We will have to change some of our regulations and the State of California will have to play a more ambitious role in working with the private sector to increase the supply of affordable housing.
Next, bail reform. We haven’t heard too much about that, but here is an obvious tax on poor people in California. Thousands and thousands of people languish in the jails of this state even though they have been convicted of no crime. Their only crime is that they cannot make the bail that our present law requires. I think we should move closer to the federal system so that the 10 percent non-returnable premium is changed in such a way that more people who have not been found guilty and who can meet the proper standards can be put out on a bail system that is as just and as fair as we can make it.
Next, I want to move on from human capital to what I would call out environmental capital. We think of our wealth as represented in the accounting books by economists and described on Wall Street. But our true wealth rests in our natural systems. Our land, our soil, our forests, our fishing industry, our water, our weather, that is the fundamental basis. We are basically a Mediterranean climate and if we look to the past, we see what happened to those who did not prepare for the future. There is a very interesting comment by the author of a book called “The Mediterranean.” It goes as follows: “The desert lies in wait for arable land and never lets go.” There is another comment that I would wish to bring to your attention, written about forty years ago. It is about our soil. “Below that thin layer comprising the delicate organism known as soil is a planet as lifeless as the moon.” And that is in California today. We see in our own San Joaquin Valley the salts accumulating in our prime agricultural lands, and if we do not find a way to remove them and take them out of the soil, then the same fate that confr4onted the civilizations of Northern Africa and of the Tigris and Euphrates will confront us here in California. It will cost hundreds and hundreds of millions of dollars, but it is investment in the future. We have to find a way to transfer the accumulated toxic salts that will surely take away the productivity of our soils. And as we do that, we must also complete our water plan. We will build transfer facilities, storage facilities, and as we, we link with that ambitious program ground water management. The Commission on Water Law Reform will be coming forth shortly with some very sound recommendations. I don’t expect them to be accepted overnight, but we have to build for the future by assuring an adequate water supply for not only those in the cities, but for those in the agricultural areas of California. It is not going to be easy. We have lived with abundant water. We haven’t had to worry about it, but recognizing that the state must play a significant role.
I mentioned the forests. Our estimates show that we could increase the productivity of our timberlands by 50 percent. You have already passed a law calling for reforestation and I will suggest ways to finance that program in the months ahead.
One final point on our natural systems. We have looked at our salmon and steelhead resources and we find out they can be doubled and even tripled by expanding our investment in hatcheries and by restoring the streams of California. The California Conservation Corps can provide the person power to restore our streams in such a way that both the commercial and recreational industries that rely on fishing can be expanded. We are talking about several – many millions of dollars to the economy and jobs for California.
Next, I want to talk about our technological capital and in particular solar energy. I have mentioned that before. You passed a 55 percent tax credit. We are leading the nation in the development of solar energy, but a great deal needs to be done. It is one of the greatest investments that we can make. A solar path will increase our energy independence, reduce the outflow of energy dollars abroad, all us to export solar technology for peaceful uses, and create jobs at home and reduce energy consumption. Our SolarCal Council has put forth a series of recommendations and I will be suggesting a significant number of them to implementation both by the way of financing, by regulatory activity and by legislative enactment. Solar is both active and passive. It comes in many forms, not only just solar collectors, but in the way we build our homes, in the way we develop our technology. Tremendous possibilities. But again it will require the kind of investment that we must make for the future and that I stand very much behind.
Next, I intend to push for a restructuring of our government finance at the local and the state level. We have to determine what shall the state do and what shall the local governments do. It will take at least two years. We will need, again, a temporary bail-out, but the following year should be the last year. We must find a way to share our revenue sources where appropriate with local government, assume those burdens that we can better handle and provide the mechanisms for responsive local government.
The Commission on Government Reform will come in. It will be a divided set of recommendations and I will choose those that I think will merit your support and work with the leadership of both houses to set in motion this year the statutory changes that must become effective next year.
Finally, I want to make some mention of civil service reform. I am going to call upon the Little Hoover Commission to examine ways of making our state service more flexible, more productive. And as I say that, I wish to commend the people that work for the state of California. They are the most honest, the most effective and the most productive of any state employees anywhere in the country. But I think that with the use of newer forms of technology and better management, that the good will and the tremendous energy that we already enjoy can be expanded to the satisfaction of those who constitute the voters of California. The year ahead will be a very challenging year. It is going to be interesting. There will be conflict. The aftermath of Proposition 13 has not been fully sorted out. The economy is uncertain. Inflation will probably rise. Many economists are predicting a subsequent recession. It is hard for laymen to be sure exactly what the experts are telling us. But in this state we are enjoying a very widespread prosperity. The way to maintain it is to invest in our human capital, our people; our environmental capital, our natural systems; and our technological capital that provides the productive assets of the future that will ensure the kind of standard of living and quality of life. I have talked in the past about the era of limits. I have talked this year about balanced budgets. I very strongly believe that the economic myths of the past will not serve us in the future and that as we struggle through the uncertainties of the days ahead it is not a time for partisan carping, it is not a time for the executive to square off against the legislative branch, but for all of us to try to work together, recognizing that the period in which we live is very uncertain and our future is by no means guaranteed. It will be up to us to inaugurate the programs, to introduce the discipline and to expand the opportunity that a just and decent society requires. Thank you very much.