George Deukmejian

35th Governor, Republican
1983–1991

State of the State Address

Delivered: January 10, 1983

Lt. Governor McCarthy, Mr. Speaker, Mr. President pro Tem, members of the Legislature, fellow constitutional officers, ladies and gentlemen.

Last year I reported to you that the state of the state was not very good.

Today, I am pleased to tell you, that with your help, with the support and confidence of citizens across the state, and with the use of common sense, the condition of California is much better.

When we gathered here last January, our chief concern was saving the state from insolvency. Out challenge was to pay our bills and to close a projected $1.5 billion deficit.

I appreciate the bipartisan support I received last February to give my 18-month fiscal plan a chance to work. It has worked. By June 30, the last day of this fiscal year, we will have balanced our budget, paid off the deficit, increased aid to our public schools – and we will have done it without raising the general taxes on the people.

Our common sense policies have restored confidence in California as a good place to do business and have helped spur the best economic recovery in decades. California's index of leading economic indicators recently reached an all-time high, and inflation is at a 15-year low.

Most important, when we met here last year, 11% of our fellow citizens were out of work. Today, the unemployment rate is still too high, but it has dropped to 7.9% -- the most dramatic decline in 34 years.

This school year we also began the journey back to educational excellence. We joined together in a bipartisan spirit and provided our Kindergarten through 12th grade schools with an $880 million increase in funds.

Even more important are the reforms we enacted. For 14 years, California high school graduates were not required to complete a basic program of study in math, science and English. We have now put those basics back into our classrooms.

We have also made it easier for school systems to remove incompetent teachers and reward excellent ones. And, we have made it easier for teachers to get the lawbreakers and troublemakers out of our classrooms and away from those students who want to learn.

We have also made strides in improving our highway and freeway system. Few things are more costly and aggravating than roads that are clogged with traffic and in dangerous disrepair. When I took office, we found a seven-year backlog in the filling of potholes and other repairs. To reverse years of neglect, we have started a new, five-year, $12 billion transportation plan that will provide 250,000 construction jobs and the funds for 1,900 new highway projects.

Our success in recent years of removing convicted felons from our neighborhoods and sending them to state prisons where they belong, has led to the problem of overcrowding. With strong legislative support, we have embarked on the first significant prison expansion in over 20 years, a program that will provide over 11,000 additional prison beds by 1987.

Last February we were hours away from paying our bills with IOUs. California was down on its luck. Today, we are standing tall again. But we can't afford to stand still.

I am here today to tell you what I believe we must do in the years ahead to provide greater opportunities for the people of our state. I am here to ask your help in supporting an agenda of opportunity for all Californians.

It is worth remembering that ours was the first nation in history to be founded on the idea that government existed to further the library, prosperity and happiness of the individual. Yet in recent years, government at all levels appeared to forget why it existed. The responsibility of government is to protect its citizens, not itself; to strengthen the individual, not government.

The most important expression of a state's priorities is its budget. We have designed our 1984-85 budget to maximize opportunities for the individual while reducing excessive spending and bureaucracy in government.

The 1984-85 budget is a balanced budget and once again, it contains no tax increases. This budget continues our effort to reduce government unnecessary growth and spend only what we need to spend to provide essential services.

Last year, I asked Californians to do their Christmas shopping early. They did. As you know, we have experienced an increase in revenue, but Christmas is going to come twice a year. We cannot and we will not issue a blank check to every program and agency.

We anticipate general fund revenues for approximately $26 billion and have planned for general fund spending of $25.1 billion. However, there is a critical need to restore our state to permanent fiscal solvency.

Like any successful business or family tries to do, government must be prepared to meet unexpected emergencies such as major disasters, crop infestations, unfavorable court decisions or an unanticipated drop in revenues. Therefore, I have proposed in my new budget that we establish an emergency fund of $950 million to protect the public from these contingencies.

I hope you agree that the most populous state in the nation must have a sufficient emergency fund to make sure that never again do we face the humiliating prospect of IOUs.

This emergency fund is our highest savings priority. Once again, I believe our highest spending priority must be for education.

Combining all funds, I have provided in our new budget nearly $12 billion for K-12 schools, a $900 million increase over this year so that we can fully implement the reforms contained in SB 813.

But let's be clear that more money alone is not the answer. Parents are concerned that their children aren't getting enough instruction in the basic subjects; that schools aren't drug-free and safe from violence; that textbooks aren't up to date; that some teachers aren't qualified to teach; and that test scores have slipped.

It is said that excellence can't be bought, but it must be paid for. Parents and taxpayers are willing to pay for improvements in their children's education – but only if significant reforms and solid results come with it. We will be looking to the education community to deliver as promised.

We can be very proud of our achievements in higher education. But today, these achievements are threatened by problems such as lagging faculty salaries, obsolete equipment, delays in building improvements and in insufficient emphasis on the needs of high technology and other growth industries. To address these problems, I am proposing a 30% increase in general fund support for the University of California and 21% increase for CSU.

One of the most important uses of these new funds will be to attract and retain the very best professors, researchers and scientist in the nation. Faculty salaries at UC now lag up to 16% behind salaries at comparable institutions. CSU salaries lag by 10%. I believe we have no time to lose. So I am proposing that we close the gap this year in one bold stroke.

Yet, excellent institutions, public or private, won't serve their true purpose if the opportunities to attend them are limited to the affluent. I propose that we increase the fund available in the student grant and loan programs by $35 million, which means that we will spend nearly $200 million in the coming year to aid needy students in California.

Last year, students at UC and CSU experienced steep increases in fees while students at the Community College level did not pay similar fees.

I propose that the state cut student fees at the University of California by $70 beginning in the fall, and by $42 at California State University.

I don't believe it is unfair to ask that students and their families, who can afford to do so, be required to defray some of the cost of their Community College education. Therefore, I am renewing my proposal for a $50 per semester fee, along with sufficient student aid funds to assist those who can't afford it. Combining all revenue sources, and proposed fees, Community Colleges will receive an 11% increase in funding. All told, we will be providing the largest real increase in state support for higher education in more than a decade.

All the education in the world won't brighten the future of our young people if those opportunities aren't met by meaningful job opportunities when they complete their education or training. We must do all we can to keep the fires of economic recovery burning brightly in our state.

Here in California, we have learned the lesson that government doesn't produce prosperity. Workers, businesses, farmers and investors do. Government can either help, or it can stand in the way. We intend to help in the coming year by controlling government spending, taxes and unnecessary regulation, and by enhancing our infrastructure, and business and job opportunities.

Economic progress also depends on our ability to generate more trade and attract more investment. This is particularly true for California agriculture, which must have greater access to foreign markets. Our administration will continue to give total support to the work begun this year by our new California World Trade Commission.

I am also recommending new $5 million advertising campaign to bring more tourists to California. Tourism is one of our state's foremost industries, comprised of thousands of small, family-oriented businesses. I believe it's about time California invested in tourism on a statewide basis to capitalize on the tremendous potential of this growth industry.

Rebuilding or state's infrastructure – our roads, schools, hospitals, prisons, parks and environment – is another essential ingredient for growth in the 1980s. I am proposing that we invest $3.3 billion in the coming year to begin the task of rebuilding California's economic foundation and improving our quality of life.

Perhaps the most urgent challenge facing California's infrastructure is the development of additional water supplies.

California has enough water to meet our growing needs and protect our environment, if we use it wisely and if we take the needed actions now. To ensure enough water for all Californians, we should emphasize the following seven points: first, water conservation and salvage of wasted water are some of the most economical ways to meet our needs; second, the quality of our water supplies must be protected; third, we should build additional facilities to store surplus water underground and in off-stream reservoirs; fourth, where feasible our water systems should be interconnected to improve their utility during droughts: fifth, fish and wildlife must be protected; sixth, the water rights of the areas where water originates must be respected; and seventh, technology such as drip irrigation, waste water reclamation and desalination represent important elements in our program.

High on our list is to improve the water transfer system in the Sacramento-San Joaquin Delta. Coupled with that will be increased surface and ground water storage capacity south of the Delta. The Department of Water Resources is working with all interested parties to determine the most acceptable plan. Our administration is looking forward to working with the Legislature to formulate a bipartisan program to develop more water supplies.

Ladies and gentlemen, history has proved again and again that the most successful, broadly-based jobs program ever devised is a growing private sector economy. Yet a society with opportunity as its goal cannot take comfort in economic prosperity alone when so many off our residents face the prospect of being left behind.

When this administration came into office, we found that with ten percent of the country's population, we were paying out at least 19% of the AFDC benefits and granting the largest benefit checks of the ten most populous states. Yet there is no evidence that the tragedy of poverty is being changed for the better.

This year, we are proposing 2% inflation adjustment to help maintain the buying power of the benefit check. But the time for substantial welfare reform is long overdue. We propose not to reduce benefits or eligibility but to help recipients break out of the cycle of welfare dependency.

There's nothing cruel or undignified about asking an able-bodied person, without very young children, to work for his or her benefits. We plan to continue to seek a bipartisan approach to replace dependency with productive work.

Effective job training is essential to achieve this goal. Combining all sources of funding, we are spending a total of $873 million this year on a broad range of programs to train the disadvantaged, handicapped, minorities, youth, veterans and displaced workers for rewarding jobs. This commitment must always be one of our highest priorities.

We will also continue to pay close attention to the unique economic challenges faced by women. Many women have now chosen to pursue careers outside the home or they have sought employment due to economic necessity. Society has no right to stand in the way of these dreams, aspirations and needs. I am very proud of the fact that our administration has, in its first year, appointed more than 180 superbly qualified women to key posts in state government.

California's senior citizens also deserve our respect and our support, and the opportunity to live with dignity and independence. To further this goal, we will spend $50 million additional dollars in 1984-85 on programs which emphasize service to the elderly – particularly, those programs that help seniors maintain their independence. For example, we will spend 4% more for meals, 6% more for in-home support, and 21% more for Senior Citizen centers.

I urge the Legislature to enact a major initiative to improve the care and treatment of the mentally ill. I am proposing to transfer to local government the control and responsibility for community-based mental health services. In this way we can reduce the costs to the state and directly rechannel those savings into better care for the patients.

We are further proposing sufficient funds to maintain our certified and fully –accredited hospitals for the developmentally disabled. And with the mental health policy I am prosing, by 1987 we will be one for the few states – perhaps the only state – whose state hospitals for the mentally ill are certified and fully-accredited.

It is also essential that the state improve its response to the foremost environmental challenge facing us today: the safe disposal of hazardous wastes. In addition to placing more responsibility in our Toxics Substances Control Division, I am proposing the funds for an additional 67 ‘watchdogs' to increase permitting, surveillance and enforcement activities.

Controlling future disposal of toxics is critical, but it's not enough. It's time we cleaned up the most hazardous dump sites around the state. To do that, I propose that the state sell $300 million in General Obligation bonds for the clean-up of toxic wastes.

No society can offer its citizens a good quality of life and the hope of a prosperous future if it remains threatened by criminals.

Our budget includes an increase in funds for additional public safety personnel – just as this year's budget does. I have also had the opportunity to appoint a new kind of common sense judge to the bench. To date, I have named 54 judges, and I can assure you they will be as concerned about the rights of victims of crime as they are about the rights of the accused.

I would also like to take this opportunity to say a few words about our state employees. The overwhelming majority of these public servants perform their tasks with pride, excellence, courtesy and dedication. It is not their fault that some agencies in state government are overstaffed, while others are undestaffed. We are making the necessary adjustments to ensure that state employees are able to deliver essential services to the public. While we are increasing personnel in some departments, the total number of positions will be reduced by approximately 4,900 in the budget year. We intend to accomplish this through attrition and retirement.

Yet, state employees need and deserve a fair compensation package. I am proposing a pay and benefit package increase up to a maximum of 10%, to be negotiated in the collective bargaining process. I believe that is a generous increase, considering the low rate of inflation.

Finally, our efforts to improve government services and increase opportunities for individuals will be frustrated if don't act soon to establish a New Partnership between state and local governments. The derails of our plan are contained in the budget I have submitted to the Legislature today. Citizens depend on our cities, counties and other localities for some for the most important services in daily life. It's time to unshackle local governments and let them do their jobs.

Ladies and gentlemen, I have used this occasion to outline some of the ideas I have to increase opportunities for every Californian.

I believe in this responsibility very deeply because I know I would not be standing here today if there not a land of hope, ideals and opportunities for the individual – regardless of his or her background. With your help, we can rebuild our state and make California golden with hope, golden with ideals and golden with opportunities once again.

It's time for California, her leaders and her people, to ask a penetrating question: What legacy will we leave to our children? If anyone questions where we stand, then let it be said, we stand for opportunity.