In State-of-State Talk, Gov. Wilson Calls for Focus on Job Growth

HOW to reverse the trends that have cost California 800,000 jobs since 1990 - and have left 1 in 10 state residents out of work - was the central theme of Gov. Pete Wilson's third state-of-the-state address here Wednesday.

"All public programs begin not in this chamber," Governor Wilson told a packed Assembly at the Sacramento statehouse, "but in the sweat and toil of working men and women. Jobs make all else possible. That's why we must rebuild California ... job ... by job ... by job."

Taking a more conciliatory stance that many observers said was a return to the more amiable chief executive of two years ago, Wilson called for a new era of bipartisan cooperation. In an abbreviated address that lasted perhaps half the length of previous state-of-the-state speeches, Wilson noted that small businesses led the state out of the previous recession by creating three-quarters of all new jobs.

To encourage a similar recovery in 1993, Wilson called on legislators to begin easing the burden on job-creators. He asked the Legislature to, among other things, increase the tax credit for research and development of new technologies, pass a small-business investment tax credit, and expand a loan-guarantee program for small businesses.

"Our goal should be to provide up to $300 million in credit for these job-creating entrepreneurs," he said.

To better compete for federal defense-conversion funds, the governor called for a restructuring of the state's competitive-technology program. And he announced a new Council of Economic Policy Advisors to be headed by George Shultz, the former United States secretary of state and Treasury secretary.

Returning to a familiar theme of the past two years, Wilson lashed out at the "costly and terribly unfair system of workers' compensation" that he says is resulting in a loss of jobs in California.

Underlining similar conclusions of his own economic task force and those spelled out in a Democratic commission report, Wilson said: "We all agree that government must stop being an adversary to job-creators and start being a partner."

As an example of the silver lining in the state's cloud of recession woes, Wilson noted that environmental technology is already a $25 billion-a-year business in California. He called on legislators to more aggressively compete for the state's share in cleaning up global environmental degradation - worth tens of thousands of jobs - and to build on the success of the state's world export trade.

Interviewed by phone after the speech, Democratic State Rep. John Vasconcellos, who is chairman of the Assembly Ways and Means Committee, said the speech "was almost a paraphrase of our own [Democratic] ADEPT committee report calling for collaboration in all these matters.

"I appreciate the speech and hope it signals a return to the correct operational model [Wilson] abandoned last year, which is collaboration," he said.

State economists said they were encouraged by Wilson's abandonment of negative posturing, but that none of the speech's proposals were new.

"He seems to be clearly attempting the same regulatory reform of his past two years, but with an upbeat veneer," says David Friedman, a former RAND economist who is now a Los Angeles lawyer. "He seems to have finally gotten the message that devising protections for large aerospace firms is not where it's at."

But Mr. Friedman says the level of specific services and supports for smaller businesses needs to be vastly upgraded. It is not enough just to have investment tax credits, he says. States must have long-term plans of technical assistance, training, and financial assistance that are tailored to individual businesses.

"California is about 10 years behind the country," Friedman says. "The speech is a step in the right direction, but it doesn't go far enough."

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