Wilson Faces Tough Year As California Struggles

Governor to address budget shortfall in annual state-of-state speech

WHEN Gov. Pete Wilson took office last January, he was lauded in some circles as the first California governor in a generation who cared about government - a pragmatic, dealmaking Republican uncommonly adept at forging compromises. Talk quickly turned to his presidential prospects in 1996.

Then came the worst budget crisis in state history, the fifth year of drought, squabbles within his own party, and a host of other problems natural and man-made. Mr. Wilson's popularity plummeted. At year's end, even some GOP wags were suggesting he might be a one-term governor.

Such predictions reflect the politics of the moment. But on Jan. 8 the former marine, mayor of San Diego, and US senator will outline his plans for the next year in a state-of-the-state message that will go a long way toward shaping his long-term political future and the short-term vitality of the nation's most populous state.

In his address, Wilson will propose a range of initiatives that will be fleshed out Jan. 9 in his annual budget submission.

Among the themes likely to be stressed: growth management, improving the state's business climate, welfare and education reform, and a reemphasis on "preventive" government - tackling health and other problems in early childhood before they multiply into costly government dependency.

"Once again the budget is driving decisions," says a gubernatorial aide. "It is a matter of economic realism."

This is expected to be a confrontational year for Wilson and the Democratic-controlled Legislature. For one thing, it is an election year - and an unusual one at that, with term limits and redistricting causing so much turnover, anxiety, and animosity in the capitol.

At the same time, the flagging economy continues to produce sequoia-sized budget problems. Although the state is looking at a revenue gap this year that is below the $14 billion deficit that had to be closed in 1991, current projections suggest there will still be a $3.4 billion to $6 billion shortfall. That will mean plenty of haggling over cuts.

"It is going to be an ugly year - junkyard ugliness," says one Democratic staff aide in the state Assembly.

Wilson has already said he won't go along with any new tax increases. Last year he did, a move that put the moderate governor at odds with the right wing of his own party. Unlike last year, he has decided not to seek suspension of a law that assures public schools 40 percent of the state budget - the largest outlay. Thus, with education funding likely to be left largely intact, there will be even fewer areas where cuts might be achieved.

To help deal with the fiscal mess, the governor is expected to propose lumping the rest of this year's budget in with next year's - making it an 18-month budget cycle. The hope is that by then the state will have recovered from the recession.

High on the governor's agenda will be welfare cuts and reform. In November, he proposed a ballot initiative that would dramatically roll back grants to needy mothers and children, restructure incentives in the welfare system, and limit the benefits of newcomers to the state. While some analysts think the initiative would do little to solve the state's budget woes, the idea appeals to many in the middle class, though others consider it anti-immigrant and a burden on the poor.

"Electorally, it is quite powerful," says Bruce Cain, a political scientist at the University of California at Berkeley.

In education, Wilson will be pushing merit pay for teachers and granting parents the right to choose where their children will go to school. Other ideas on his 1992 wish-list that will be contentious: no-fault auto insurance, changes in health care, and a logging compromise aimed at protecting the ailing timber industry while preserving some forest lands.

Politically, Wilson faces enduring hostility from conservatives over last summer's tax increases, a recall drive from teachers and public employees over budget cuts, and anger from gay activists over his veto of a bill outlawing discrimination against homosexuals. Democrats chafe at a likely redistricting plan he helped engineer that benefits the GOP.

Still, the feisty, hands-on governor seems undaunted either by the ruckus around him or the state's seemingly intractable problems and near universal pessimism. He notes, with some truth, that other governors are faring worse in the polls than he is. He and his handlers also know that it is early in his tenure and that an economic recovery would erase much of the ill temper.

Political scientist Sherry Bebitch Jeffe of the Claremont Graduate School says everything that could go wrong in the first year did. But Wilson does have one advantage this time around: There is no Gulf war to deflect attention from his initiatives.

"If he has the opportunity to articulate an agenda, he could be strong," she says.

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