George Deukmejian

35th Governor, Republican
1983–1991

State of the State Address

Delivered: January 9, 1989

Mr. Speaker, Mr. President pro Tem, Members of the Legislature, fellow constitutional officers and fellow Californians:

Let me begin by telling you how pleased I am that we are joined today by California's newest constitutional officer – a man of integrity and true professional in the field of public finance. I'd like to thank the Legislature for confirming him without a dissenting vote, and I'd like to congratulate our new state treasurer, Thomas W. Hayes.

1989 is a vital year for our state. It is the bridge that connects the progress we made in the 1980s, with the challenges we must meet in the 1990s.

The purpose of a State of the State message is to inform the public about the general condition of our state. It is to comment upon our strengths and our needs.

California has never been stronger or more prosperous or better prepared to take on the future.

When I delivered my fires State of the State address, unemployment was over 11 percent. Last month, our jobless rate dropped to just 4.7 percent. Over 2,800,000 new jobs have been created. Personal income has increased 60 percent. Housing starts have soared 200 percent, and two-way trade through our ports has nearly doubled.

Taxpayers have been kind to the government as well. During that same period, economic growth has produced a 73-percent increase in total tax revenues.

Together, we have invested that money wisely. We have boosted funding in our Kindergarten through 12th grade schools by more than $800 per pupil, after adjusting for inflation. We have restored excellence to higher education, increased student scholarships and loans, built 13 new prisons, and begun new programs to expand international trade.

Since 1983, the state has acquired and preserved over 82,000 acres of wildlands and 31,000 acres of coastal zone property. We rescued Lake Tahoe from degradation, and tough enforcement of clean air laws has already cut vehicle pollution in the Los Angeles basin by 20 percent.

And in six years, we haven't neglected those who need our special care and concern. We have increased our support for the sick, elderly and disadvantaged by 70 percent.

We have done all of this while maintaining a balanced budget and a prudent reserve for emergencies, providing over $1 billion in tax rebates to the people, and by refusing to raise general taxes on the workers or businesses of California.

Over a year ago, I asked the California Economic Development Corporation, a team, of the state's leading business, academic and public policy experts, to look ahead to the next century and to offer us a road map to an even more livable state, and a more prosperous California.

Their report is called "Vision: California 2010," and it warns us that in just 21 years, California will be home to nine million more people. This growth will add more than 10 million new vehicles to our roads, swell school population by 1.2 million students, increase the retirement community by 1.7 million, and require well over 3 million new housing units. Our people on the whole will be older, and today's ethnic minorities will comprise the mew majority.

At the same time, our economic leadership will be challenged by competition in virtually every field by other states and other nations.

My fellow Californians, if we want a better California tomorrow, we must begin our work today.

First, no society can excel, much less survive, if thousands of young people drop out of school, or graduate virtually illiterate or addicted to drugs.

Therefore, I am proposing that $110 million of the new money going to Kindergarten through 12th grade schools, as a result Proposition 98, be used to increase individual instruction in basic subjects and to reduce class size.

Furthermore, it is time that California adopted a comprehensive drug education program statewide. Saying no to drugs must be part of the basic learning curriculum of every child beginning in grade school.

Then, there is the tragic waster of dropping out. We are now spending $805 million a year on 13 separate programs designed to prevent young people from dropping out of school. Yet last year, an estimated 33 percent of high school students dropped out anyway. I will be calling for a complete examination of dropout prevention programs and the development of a new strategy to stop this terrible waste of human potential.

We not only want to free young minds from ignorance and drugs, we also want to free our economic future from the potential stranglehold of traffic congestion.

I want to unlock gridlock in our state with a two track approach: build more roads where needed, and make better use of the transportation system we already have.

We must not underestimate the impact that ridesharing, mass transit, and better traffic management can have on congestion. If we can increase the average number of riders per vehicle from 1.2 to 1.4, congestion would virtually disappear, without adding a single additional mile of pavement to our system.

To set pace, we have offered state workers financial incentives in order to cut the number of employee trips to and from work by 10 percent. I have asked major private sector employers to do the same.

I also believe it is time to seriously consider restricting commercial truck traffic on our freeways during peak hours in urban areas.

We must also finance and build more highways in California.

We are now taking steps to ensure that sufficient funds are available to continue with our current annual $2 billion road-building effort through the middle of next year. I will soon extend invitations to the legislative leaders, representatives of state and local government, as well as business, labor and highway users, to meet with me to develop a funding plan that we will submit to the people for their approval in 1990.

You know, we Californians throw away nearly 39 million tons of solid waste each year – even after recycling – and we're running out of place to bury it or burn it. As our population continues to grow, so will this problem unless we act now. I have directed my administration to make as a top priority for 1989, the development of an integrated waste management proposal, to work toward the goals of waste reduction and greater recycling.

So great are California's prospects for international trade, that we would not trade places with any other state in the country.

Next month, I will travel to Mexico to take a step that is long overdue. We will open our new California trade and investment office in Mexico City.

We also plan to bolster our marketing efforts in Asia and Europe by establishing, through our Tokyo and London offices, two additional satellite trade offices, one on each continent. California products have an excellent reputation and a tremendous potential to compete overseas. The more we can do to help California producers beat the competition abroad, the more job opportunities we'll create for California workers here at home.

Let's never forget that rural California is the heartland of our great state and it must never be neglected again.

Therefore, I am proposing the addition of $8 million to our Rural Renaissance program, along with changes that will speed up the delivery of these funds to rural communities. I will designate a special coordinator for rural economic development to channel the many existing state resources and programs toward the hard-pressed heartland of our state.

No obligation of government is more fundamental to our residents than protecting their homes and families form violent criminals.

Yet it now costs over $19,000 a year to house and feed a state prison inmate. I think it is time that the criminals themselves worked and paid for their own upkeep.

I know some are concerned that putting more prisoners to work will take jobs away from law-abiding Californians. Yet even if every single inmate were working, they would account for just one-half of one percent of the total state workforce. And, many of the tasks that they can perform are jobs that would otherwise be lost anyway to cheap labor overseas.

Therefore, I will propose that a constitutional amendment be presented to the voters to put into place a system where all able-bodied inmates are required to work and are charged for their room and board.

While we're speaking of criminals, the thief that threatens our society the most is drugs, because drugs are stealing our future.

I am proposing legislation to require that large-scale importers of heroin or cocaine receive a minimum of 25 years in prison without the possibility of parole.

In addition, I will seek legislation to specifically authorize the death penalty for first-degree murder committed during drug-related crimes.

Tomorrow, I will submit a new budget to the legislature. Even though our economy is booming and revenues are up, some programs will receive big increases, while others will receive no increases or even actual reductions.

Let me explain how this has happened.

Over the years, statutes, constitutional amendments, court orders and other legal requirements now mandate how we must allocate 89 percent of our tax revenues for specific items.

That means that we have discretion over approximately 8 percent of the budget.

Now, those of you who brought your calculators may have noticed that so far, I have only accounted for 97 percent of the budget. That's because the remaining 3 percent must be set aside in reserve.

Proposition 98 and the State Constitution now require a prudent reserve. Common sense requires it too. We must be prepared to absorb a foreseeable reduction in federal funds, to meet unanticipated reductions in revenues or increased expenses, and be prepared to help residents who are so often devastated by fires, floods or earthquakes.

This year and last year, we have needed virtually every dollar in our reserve. And so on this point, we must not waiver. A 3-percent reserve is hardly excessive, but it is essential to maintain a Triple A credit rating and a prosperous economy. If the Legislature fails to set aside a sufficient reserve, then I will have to use my blue pencil to give Californians the rainy day fund they voted for and deserve.

Some may not be happy with all the decisions I have had to make to allocate our funds in accordance with the very severe restrictions we now face. May I suggest that rather than shout at each other or make intemperate remarks to the media, that we sit down together over the next five months to develop a budget plan by June 15th that is balanced, fair and compassionate to all Californians.

One thing is certain. With just 8 percent of the budget open to our discretion, and with some programs facing great hardship even as we enjoy another year of prosperity, I believe it is time for comprehensive budget reform.

I will invite the legislative leadership to sit down with me to thoroughly review the state budget process. Included on the table for review and possible reform should be all mandated entitlements, automatic cost-of-living adjustments in spending programs, as well as a complete reexamination of the continued usefulness of the Proposition 4 spending limit.

In addition to budget reform, I would welcome the opportunity to work with the Legislature on other reforms that will restore the public's confidence in the integrity of the legislative process.

I'm also willing to join with you in moving up the date of California's presidential primary. And, I hope you will join me in convincing federal legislators to enact a uniform poll closing statute in time for the next Presidential election.

In addition, I am proposing that California adopt a practice that works well in 22 other states and is long overdue here – joint election of the Governor and Lieutenant Governor on the same ticket.

My fellow Californians, to the rest of America and the world, California is no longer a state that just registers on the Richter Scale. We are a state that registers – and registers high – on the opportunity scale.

If anyone thinks that the level of services and opportunities we offer, and the quality of life we promise, are not among the very best, then how do they explain the fact that in 1987 alone, our population increased by 680,000, with half of that increase due to migration?

It may still be a secret to the chronic complainers in our state, but to millions of hopeful people around the world who aspire for a better life, the word is out. There is no place like California. We're not just the golden state, we've become the gold at the end of the rainbow.

Yet we are not satisfied with California being the best state there is. We want California to be the best state it can be.

We want to replace classrooms overflowing with students, with young minds overflowing with knowledge.

We want reading and writing, and math and science to be at the core of every young person's curriculum – and not alcohol, marijuana, heroin or crack.

We want freeways that move goods and services quickly to market, not traffic jams that move motorists to violence.

We want the label "Made in California" to be the label of first choice for consumers across American and around the world.

We want to see criminals start working and earning their keep just like the rest of us, recognizing that the dignity of an inmate working an 8 to 5 job today, may help him prevent the repeat of a 5 to 10 sentence tomorrow.

We want a government that's as innovative as our people and as respected as our state, with the flexibility to meet the changing needs of our growing and diverse population.

From the air, to the wildlands, to the coast and to our parks, rivers and lakes, we want to continue to improve California's environment, clean across the board.

And we want it said of our scientists, researchers and doctors – those folks in California did it again. They found the cures for the diseases of Alzheimer's and AIDS.

Will California be a good place to live in the year 2010? Or will it be a place our children and grandchildren want to move away from?

Will the growth and competition choke off our prosperity and strangle our dreams? Or can the diversity of our people and the drive of the competition be harnessed to propel us up new peaks of excellence?

These questions will not be answered in the year 2010. They must be answered starting today. These choices will not be made by future generations. They rest in the hands of you and me.

If I may speak more personally, I said last week that I hoped we would find a window of opportunity during the last two years of my administration. And why not? With peace breaking out all over the world – with Reagan talking to Gorbachev and with the U.S. talking to Arafat, and with Speaker Willie Brown talking to the Gang of Five – surely we ought to be able to work together, peacefully and productively, here in the State Capitol.

I thought of suggesting a second honeymoon, but I can't seem to recall the first.

So let's work together, for the people of this state, to ensure that in a new decade and a new century, California's bright star of hope and opportunity continues to shine just as brilliantly for future generations as it indeed shines for us today.

Thank you and Happy New Year.