Wilson Says He Will Urge Income Tax Cut

By DAVE LESHER

Jan. 6, 1995 12 AM PT

TIMES STAFF WRITER

SACRAMENTO — Gov. Pete Wilson, who today kicks off three days of celebrations marking his second inaugural, said Thursday he will recommend that the Legislature cut income taxes 5% or more and that if lawmakers don’t, he may put the idea on the ballot.

Wilson has been widely expected to join the national tax cut fervor in his State of the State speech Monday ever since an economic advisory panel he commissioned last year recommended that a 15% across-the-board cut in personal and corporate income taxes, phased in over three years, would boost the state’s economic recovery.

Wilson seemed to refer to the plan Thursday when a guest host on Rush Limbaugh’s nationally broadcast radio talk show asked the governor if he was planning a 5% a year cut in income taxes.

“Yeah, that’s what we are hoping for and asking the Legislature to do this year,” Wilson said in the telephone interview from his home in Sacramento. “And if they don’t do it, why we will probably have to go to the ballot to do it.”

Wilson did not elaborate and aides would not say what he might propose.

It’s unclear how the Legislature will react to a tax cut proposal. Republicans probably would support it. But Democrats, who still hold a slight majority in the Senate and are locked in a battle for control of the Assembly, have warned against any plan that jeopardizes the state’s budget. And some have blasted the idea as political opportunism.

Assembly Ways and Means Committee Chairman John Vasconcellos, the Democrats’ leading budget expert, said Thursday that the idea is a pathetic effort engineered by advisers to former President Ronald Reagan. “They bankrupted the country under Reagan, and now they’re trying to bankrupt California,” he said. “. . . Where’s the excess revenue? We cannot balance next year’s budget as it is.”

Wilson’s advisory panel--headed by Reagan’s former secretary of state, George P. Shultz--calculated that the $9-billion cost of the tax cut would be offset by a projected $37-billion increase in state revenue that would be generated by an improving economy.

Senate President Pro Tem Bill Lockyer (D-Hayward) said, however, that he was skeptical of Wilson’s long-term economic predictions and uncertain whether a tax cut was wise. But he also did not slam the door on the idea.

“I don’t want to be unfair to him, but what I can tell is that he starts with a politically popular idea and then makes the economic analysis fit the politics,” Lockyer said Thursday. “I want to deal with the economic and program analysis first and then deal with the political consequences. If that means we can do tax cuts, hooray.”

Wilson’s announcement Thursday set an ambitious and optimistic tone for a weekend when the governor will formally celebrate his own come-from-behind reelection and his second inaugural. The high hopes contrast with the problems Wilson found when he first arrived in Sacramento four years ago and recommended a record tax increase to resolve a $14-billion budget shortfall.

“In the first term, the story of California was a sequence of crisis,” political analyst William Schneider said. “I mean this guy faced the most adverse conditions since Job. He survived, he thrived and he prospered. That is a political miracle. And that is what commands political attention.”

The inaugural festivities--with the theme “California, Forging America’s Future”--are expected to be somewhat smaller and receive less attention than the extravaganza Wilson threw when he arrived in Sacramento four years ago. Then, the governor spent a record $2.5 million in private contributions on a five-day marathon of parties that drew about 7,000 people. This time, organizers are expecting as many as 5,000 people for a celebration budgeted at about $2 million.

The 1995 events begin today with an open house at the governor’s office for the public--which Wilson is not scheduled to attend--followed by an evening reception and then a nighttime gala featuring Grammy-award-winning singer Natalie Cole. About 4,500 invited guests, paying at least $125 each, are expected to attend the gala at Sacramento’s Arco Arena.

Wilson, 61, will take the oath of office as California’s 36th governor at 11 a.m. Saturday in the Sacramento Convention Center. Plans to hold the swearing-in on the Capitol steps were scratched Thursday when forecasters predicted a strong chance of rain for Saturday--the same problem Wilson faced in his first inaugural.

Organizers said the convention center’s limited seating will probably make it impossible for the public to witness the event. Instead, loudspeakers will be placed outside and local television stations are expected to broadcast the ceremony live.

The swearing-in, conducted by California Chief Justice Malcolm Lucas, is more ceremonial than legal, however, because the governor officially took his oath of office during a private session last Monday in accordance with a schedule required by the state Constitution.

Wilson will give an inaugural address after his swearing-in Saturday, but aides say the speech will be more thematic than politically substantive because his annual State of the State address to the Legislature is scheduled for Monday. The governor also will release his fifth state budget Tuesday.

First, however, Wilson will set the stage for his new plans by declaring during the inaugural ceremonies that he believes the worst is over for California and that the state is headed back to its glory days as a national trendsetter.

“In the campaign, we talked about how California was coming back,” said Beth Miller, spokeswoman for the inaugural. “Now we are back. California has been enduring changes not only making it healthier, but putting it on the cutting edge of innovations and policies. It’s the dream state, going back to the Gold Rush.”

Organizers also distributed a letter from state Librarian Kevin Starr explaining the inaugural’s theme.

“California has become the prism through which the United States is glimpsing the era awaiting the nation,” Starr wrote. “In virtually every area of public life--preventive government, economic recovery, public safety, education, multiculturalism, globalism and new technology--California is pursuing an agenda that contains within itself not just a California question, but an American question as well.”

The theme is expected to be illustrated on giant video screens, in musical entertainment and works of art decorating the site of the traditional inaugural ball Saturday night. Organizers said they have sold $125 tickets for as many as 5,000 people to the black-tie event.

Walt Disney designers masked the walls of the cavernous California Exposition facility where the ball will be held with some familiar scenes from around the state borrowed from old Hollywood movie sets. In one setting, guests will be able to sip state wines near a towering backdrop of California redwoods they might remember from the Ewok village in the last “Star Wars” sequel.

Two days after Wilson presents his budget on Tuesday, he is scheduled to leave for a two-week vacation. That will put Democratic Lt. Gov. Gray Davis in charge of the state for the first time.

Davis, the retiring state controller, was sworn into office Thursday. During his comments to the Senate chamber he joked that there was “no truth whatsoever to the rumor that I have stationed air traffic controllers up and down the border of California to alert me the moment that the governor leaves California air space.”

California’s other newly elected constitutional officers have also been holding their own inaugural ceremonies all week.

Two new officials are to be sworn in today--Republican Bill Jones, the new secretary of state, and Supt. of Public Instruction Delaine Eastin. Republican Matt Fong, the new treasurer, held the first inaugural Tuesday night in Los Angeles. Thursday, in addition to Davis, Controller Kathleen Connell took her oath of office on the Capitol steps.

Connell, a Los Angeles Democrat who financed most of her own campaign, promised during the campaign to fight government waste by launching a massive “performance audit” of government agencies. She said Thursday that she has begun the task with her own office and soon will seek bids from independent auditors to scrutinize operations of the state controller.

Republican Atty. Gen. Dan Lungren was scheduled to wrap up the official ceremonies with an inauguration Saturday, shortly after the governor’s.