Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
118564420
label
Speeches - Governor Ronald Reagan, 1968 [01/01/1968-03/14/1968]
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
118564420
contentType
document
title
Speeches - Governor Ronald Reagan, 1968 [01/01/1968-03/14/1968]
citationUrl
identifierLocal
840
collections
Ronald Reagan's Governor's Papers of the Press Unit
Governor Ronald Reagan's Speeches
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
118564420
coverageEndDate
logicalDate
1975-12-31
year
1975
coverageStartDate
logicalDate
1967-01-01
year
1967
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
ab4c9b1c67e06d75
ocrText
Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Reagan, Ronald: Gubernatorial Papers,
1966-74: Press Unit
Folder Title: Speeches - Governor Ronald Reagan, 1968
[01/01/1968-03/14/1968]
Box: P17
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
1968
P29
INDEX
1-9-68
State of the State Message
1-17-68
Economic Club of New York
1-27-68
Pacific Mutual Life Insurance Company Banquet
1-29-68
National Automobile Dealers Association Convention
2-1-68
Governor's Conference on Planning for Housing and Home
Ownership Luncheon
2-2-68
California Newspaper Publishers' Association
2-5-68
Budget Message to Senate and Assembly
2-8-68
Governor's Industrial Safety Conference
2-14-68
California Council on Criminal Justice
2-15-68
Stanford Business Conference Luncheon
2-19-68
Seminar on Intergovernmental Relations
3-4-68
20th Annual California and Pacific Southwest Recreation
and Park Conference
3-6-68
California Taxpayers' Association Annual Meeting
3-14-68
Joint Sacramento Service Club Luncheon
3-18-68
Citizens' Conference on the California Merit Plan for
Judicial Selection
3-18-68
Statement to Senate and Assembly on Lake Tahoe Basin
Preservation
3-20-68
California Farm Bureau Federation Convention
3-21-68
Statement to Senate and Assembly on Welfare
3-30-68
California Republican Assembly
4-3-68
Robert E. Kennedy Inauguration as President, California
Polytechnic College
4-4-68
Automobile Accident Study Commission
4-5-68
Women's National Press Club
4-9-68
Phoenix, Arizona Fundraiser
4-22-68
Governor's Conference on Delinquency Prevention
4-26-68
Boise College Student Union
4-27-68
University of Colorado Student Forum
5-1-68
Sacramento Law Day Dinner
5-3-68
American Women in Radio and Television Convention
5-4-68
Oroville Dam Dedication
5-5-68
Salute to Israel
5-8-68
Republican Governors' Association Platform Hearings
5-11-68
Western Governors' Conference
5-18-68
National Newspaper Association Luncheon
5-19-68
Tulane University
5-20-68
RSCC Fundraising Dinner, Charlotte, North Carolina
5-21-68
RSCC Luncheon, Miami, Florida
5-21-68
RSCC Dinner, Chicago, Illinois
5-22-68
RSCC Finance Dinner, Cleveland, Ohio
5-27-68
U.S. Chamber Conference for Businessmen
5-27-68
National Association of Extradition Officials
6-3-68
Republican Rally, Oakland Coliseum Arena
6-5-68
Joey Bishop Show
6-13-68
Indiana State Fairgrounds, Indianapolis
6-18-68
Pharmaceutical Manufacturers Luncheon
6-23-68
Republican Congressional Candidates Campaign School
6-29-68
Statement Upon Signing of 1968-69 Budget
7-1-68
California Exposition Dedication
7-4-68
Fourth of July Celebration - Columbia
7-19-68
Price for Congress Rally - Amarillo, Texas
7-20-68
Little Rock, Arkansas
7-20-68
Charlottesville, Virginia
7-30-68
Winston-Salem, North Carolina
7-31-68
Platform Committee Meeting - Miami, Florida
9-6-68
Sacramento Host Breakfast
10-9-68
State Bar and Conference of Judges Joint Conference
10-12-68
Congressional Medal of Honor Banquet - Seattle, Washington
10-14-68
League of California Cities
10-14-68
Service Center Construction Ceremony
10-15-68
Saddleback Junior College Dedication
10-16-68
California Highway Patrol Luncheon
10-17-68
California Manufacturers Association Award Banquet
10-21-68
Channel City Club
11-13-68
County Supervisors' Association Luncheon
11-20-68
Council of State Governments
12-8-68
California School Boards Association Joint Conference
12-12-68
Governor's Traffic Safety Conference
-
OFFICE OF THE GOVER R
RELEASE: P.M. Tuesday
Sacramento, California
January 9, 1968
Contact: Paul Beck
(PLEASE GUARD AGAINST PREMATURE RELEASE)
445-4571 1.8.68
TEXT OF THE GOVERNOR'S STATE-OF-THE-
STATE MESSAGE TO A JOINT SESSION
OF THE CALIFORNIA STATE LEGISLATURE
Welcome back. It hardly seems like you've been away. I've
missed you--I think?
We meet here today--members of two branches of the California
state government, and members of the two major political parties in
common cause: the people's business.
What we do here--and what we fail to do here--will affect every
citizen of our state. We are, for better or for worse, part of the
life of every man.
The compelling issues which face our people are not partisan--in
nature or solution. The burden of taxation presses down upon Democrat
and Republican alike. The smog we breathe brings disease without
regard to political alliance. The search for a happier, healthier,
more productive life is shared by the vast majority of our citizens.
Those here of good will and serious intent know this to be true.
We alco know that attendance to these issues cannot wait for
another year or another session. There is no time, there is no room,
there is no defense, for the personal squabble or the partisan
obstruction.
There is room--and there will be need--for debate; between our
parties and between the branches of our government. Let there be such
debate; it is a part of the power and the protection of our system.
But let it be on the issues, and on the merits and demerits of programs
and proposals.
So, at the outset of this session and of this message, I issue
a
you an invitation and/challenge:
- -join with me together we can make this a meaningful and a
constructive year for California
-join together in ascribing and achieving the great, the bold,
the compassionate and dynamic dimensions of a California purpose which
-1-
will fit the needs and the dreams of our people.
Only in this way can we be proper partners in the goal and
purpose of every man.
And if this be idealistic, let me remind you that we are here
today in part because of idealism:
- the ideals we carried in campaigns (which should be with us
even now), and
--the ideals the voters placed within our trust when they sent
us here to serve.
It is time for these ideals and this trust to take precedence
over politics; that is the basis and the thrust for the program I
outline for you today.
One year and five days ago I stood on the west steps of this
great Capitol and told the people of California:
"We will put our fiscal house in order. And as we do, we will
build those things we need to make our state a better place in which
to live and we will enjoy them more knowing we can afford them and
they are paid for."
Since then, a great amount of the time and effort of my administra-
tion has been given to keeping this commitment to pulling our state
government from the brink of fiscal catastrophe; austerity was an
essential prelude to progress.
Sometimes to the cries of anguish, sometimes to the cheers of
agreement, but always with responsibility to the taxpayer in mind, we
have "cut and squeezed and trimmed." In the little items, which add
up to the big bills, and in the big items, which help to foster the
nightmare of big government spending, we have reduced costs, improved
efficiency, and installed tighter control.
That job is not yet completed; far from it. There is still much
to be done; it will be done. We will continue to cut and squeeze and
trim so that we get the most for each and every dollar we spend. We
are determined that this government will live within the means of the
taxpayers who pay its costs. We should bear in mind that our fiscal
problems will be just as tough this year as they were last year.
The final 1967-68 budget was approximately within the projected
increase in state revenues due to economic growth. Most significantly,
that budget reduced by 50 percent the previous trend of budgetary
increases.
The budget which I will present for the fiscal year 1968-69
will also be within the limits of expected increases in state revenues.
We cannot take our people, or their government, into debt and we will
not ask for increased taxes, indeed we shall oppose any such suggestion.
Last year we sought, and you approved, a measure which would
enable us to proceed with the reorganization of the executive branch
of state government. This is necessary if that branch is to serve
the people efficiently and effectively. During this session we will
present to you the dimensions and details of that reorganization plan.
It deserves your support and approval.
A further reorganization which I will be sending to you has to
do with the selection of judges. It is time, once and for all, to
take the selection of judges out of politics. Instead, selection will
be based on merit and qualifications. I am pleased to inform you that
this Administration's judicial selection plan has the wholehearted
support of the Judicial Council and the State Bar of California:
This plan will make it possible for Californians to take the pride in
their judicial system which it so richly deserves. I commend this plan
to you and earnestly solicit your support.
Also during the past year, a task force of more than 240 men--
citizens widely recognized for their expertise in efficiency and cost-
control surveyed every department within the executive branch.
These volunteers- men from many areas of enterprise and both political
parties--served without cost to the taxpayer and without special
favor from the government. They reviewed the operations of some sixty
different departments and divisions on the basis of efficiency,
economy, and the best interests of the taxpayer.
-3-
We have already begun to implement some of their recommendations,
based on preliminary reports.
The formal recommendations of the task force are to be presented
to me early in February. At that time we shall review all of the
some 1,800 suggestions made, and determine those which should and can
be put into action.
Those which will require legislation will be quickly brought to
you for consideration and approval. It has been estimated that once
many of these recommendations are in effect, we can save the state
perhaps
$100 million---and much of that on an annual basis.
I understand that some of the excellent recommendations which
the report contains originated with our own state employees; men and
women who at long last were given an opportunity to make creative
suggestions with the knowledge that constructive action would
taken. We owe these employees our gratitude for their cooperat
and concern.
At the same time that we continue cutting the administrative
costs of state government, we must face up to our problems in taxa-
tion.
In the 1967 session we promised that
$155 million
of the
1968-69 budget would be used for property tax relief. We intend to
keep that promise. I will propose to you a method which will direct
this relief to the people through our educational system. One way
is by assuming the local property tax burden of the junior colleges.
Another is through the secondary system.
We are commited, in next year's budget, to include a provision
for special property tax relief for the elderly. This will total
approximately
$22 million and we will honor that commitment.
We will also provide for inventory tax relief. It is not the
proper or productive function of taxation to stimulate the warehouse
industry in neighboring states; it is not the proper or equitable
function of taxation to force the owners of small papa-and-mama stores
to spend their midnight hours doing bockkeeping for the state govern
ment. We must put an end to such harassment.
But all of this, which we intend to do, does not face up to
what really must be done about taxes in California.
There has been no substantial tax reform in this state govern-
ment since 1933. In that year, we were primarily an agricultural
society with a population of about six million. Today we are a
highly industrialized state with almost 20 million citizens.
During those thirty-five years, California has undergone
tremendous change--
--we have known the pressures of depressions and wars;
--we have experienced population explosions, industrial
expansion and the growth of the super-city;
--the cost of our state government has risen from just
under SI billion a year to over $5 billion.
We have been through some of the most sweeping social, economic
and political changes of any state in the nation. Yet through it
all, the continued approach to taxation has been add-ons and gimmicks
and gadgets and unkept promises. We have added patches to the patch-
work until today we have a crazy-quilt structure which is neither
equitable nor effective.
It will come as no surprise to you that I will propose a major
tax reform measure for your consideration during this session. We
final
must overhaul our tax structure; we must do it now. Since the/report
of a citizens' task force studying tax reform won't be delivered to
me until this afternoon, some of the stories on what I will recommend
are a little
-5-
and,
premature / like th report of Mark Twain's de 1, somewhat
exaggerated.
Any significant tax reform program in our state must involve a
reallocation of the functions and tax resources of our governments
at both the state and local level. Just as Washington should return
certain responsibilities and revenues to the states, the states should
continue to return certain functions and tax sources to the cities
and counties. To ignore this fact is to ignore the needs of our citizens
The present patchwork system is incapable of keeping pace with
our economy. To continue it means to continue having to seek new
sources of revenue and to change rates every few years. Orderly
planning by government, business and the citizen is imposs
have a positive business climate which will make our state attractive
to businesses and industries seeking new locations we must eliminate
uncertainty as to future policy, have a record of financial stability
and a settled tax policy that minimizes the need for frequent adjust-
ment of either tax base or rate.
Local or state taxes should not be used to redistribute the
earnings of the citizenry. The federal government has pre-empted
that field. The state's concern should be to see that each citizen
pays the same percentage of his income in state and local taxes after
payment of his federal taxes.
Our property tax is inelastic and highly regressive, amounting
in many instances to a 20 percent tax each year on family shelter.
It discourages buying, retards property improvement and makes it impos-
sible for many of modest income to continue living in and owning their
own homes.
The present retail sales tax, with all its exemptions, still
imposes a disproportionate burden on those of lower income. At the
same time and by contrast, we find that 9 percent of those filing
personal income tax returns pay 67 percent of the total income tax
collected.
Equitable tax reform must be based on a sense of responsiblity
to the individual taxpayer. How much of his income is he willing to
give--can he afford to pay--to state government?
What amount of his
personal resources be spent or saved throug individual decisions--
and how much will he permit us to tax away and spend on his government?
for
This must be a taxpayer's decision--not ours; we work/them, not the
other way around.
Let there be no misunderstanding, no mistake as to what I am
saying.
We do have a concern and rightful responsibility to the unfortunate,
to the ill, and to the indigent. We must fulfill this responsibility,
and we will.
But, there is also another responsibility to which this adminis-
tration will give high priority; that is to the taxpayer, the too-
often forgotten man, who today is working 2½ hours out of every eight-
hour day just to pay his taxes.
This is the citizen who has no special pressure group to lobby
for him. He works and sweats to make ends meet, to pay his bills
and keep his family in clothes and his kids in school. He is the source
from which the blessings of tax-supported programs flow. Before
we can provide special services to others, we must first take the money
from him. If he goes broke, there will be no money for Sacramento.
In all our approach to government, and certainly as we attend to
the matter of tax reform, we must be fully concerned with the measure
of his gain and the size of his loss.
During recent years California's economy has continued to expand,
but not rapidly enough to keep pace with the growth in our population
or the needs of our people. An accelerated and diversified economy
is necessary if we are to have the jobs and job opportunities for
our people; if we are to have a stronger tax base for our governments.
We are in many ways the "brain bank" of the nation. We have the
top scientists, the top technicians, the brilliant and the skilled.
We need more of them to fill the job opportunities which now exist.
But, we do not have enough jobs for the non-technical and the semi-
skilled who can contribute so much to our society. We must work with
the private sector to stimulate job formations for these citizens.
In 1967, 37 percent of our manufacturing industry was defense
connected. This may be economically fortunate, but it is not a
healthy or happy si ation. We pray for peace nd for that day when
our men will be home and when the energies and resources and brain
power now focused on weaponry can be used to extend a peaceful and
productive society. We should prepare for peace; for jobs for those
gallant men who hopefully must soon be returned from that conflict
in Vietnam.
Accordingly, during this session I will inaugurate programs and
submit a series of measures designed to stimulate the economic growth
of California in the years ahead.
I will ask for the establishment of a Department of Human Re-
sources Development. Its major function will be to stimulate job
training and job retraining for those who have the desire, but not the
skill, to find productive jobs. It will also cooperate with and
expand the work of the Job Training and Placement Council which was
created early last year and has been under the guidance of Bob Finch.
A report from the council will be ready soon. The department also
will work closely with H. C. "Chad" McClellan, whose "Management
Council for Merit Employment" has helped place in jobs many thousands
of our unemployed, and has the working cooperation of 20,000 employer
Jobs and job training, not hand-outs---are the meaningful answer
to poverty.
Last year our State Employment Service placed almost 600,000
people inmon-agricultural jobs. Some measure of the success of
Mr. McClellan and the 20,000 employers in voluntarily facing up to the
challenge of unemployment among minority groups is the fact that 30
percent of those placed were members of minority groups.
-8-
A survey con cted by U.S.C. found that ( 13 of those hired
under this program are still employed at an average pay rate of
Thirty percent
$2.75 an hour (including women).
/
have moved into new homes and of
the 1/2 who left the initial job, half of them did so only to take a
better job. None left because of discrimination.
In the near future I will name a Business Advisory Council--
calling on the leaders of business and labor, research facilities
and education institutions--to work with us to find new ways to
attract and create new industries to our state.
Our corporate securities law has needed an overhaul for a long
time. This past year a bi-partisan commission has worked with our
people and has developed revisions which will protect the investor
while increasing the efficiency of the Division of Corporations. I
will submit this legislation to you shortly.
Despite a bad spring and considerable flooding, California
agriculture again exceeded the $4 billion mark to remain a
mainstay in our economy. Still, there are lingering problems. In
gross farm income we are number one, but our farmers are caught in
a price-cost squeeze and we rank only third in net income and many
farmers know great hardship. I am asking Earl Coke, state director
of Agriculture, to name a special task force to investigate a wide
range of farm problems and to report what can be done to mitigate
these problems.
For eight months we have had a blue-ribbon task force studying
the transportation needs of our state, and the proper role of state
government in creating a blueprint for a modern statewide transporta-
tion system. The task force report will be made in March. In the
meantime, I will propose to you legislation which will permit local
voters, through referendum, to determine what types of mass transit
they want and how they want to finance it. (An improved and balanced
transportation network is vital to economic growth.)
In the meantime, administrative savings in our Highway Department
have resulted in more than
$100 million
; worth of highway
building being started one year in advance.
We have already started to work in concert with the private
sector and leading educational institutions to seek new ways to har-
ness the atom and to unlock the secrets of the sea for the benefit
of our citizens. Some of the great minds of the world in these
fields are here in California. We seek their involvement in the
development of these bold new programs.
-9-
Water is. of nstant importance to our onomy, to our agri-
culture and industrial growth. To insure the completion of the
California Water Plan, I will propose that we increase the tidelands
revenue contributions to
$ 25 million
annually,
starting
in
1970-71. At the same time I will ask that bond reserve requirements
beeliminated for those tidelands revenues used to help construct the
California Water Plan.
To insure proper protection for those millions of our citizens
who are members of organized labor, I will again call for legisla-
tion guarantying each member the right to a secret ballot on all
matters affecting policy of his union. So far I have heard no one
in government, no one in labor, advance a sound reason why a citizen
who has the right to vote privately on public matters with only his
conscience as witness should be denied that right in his union.
While you and I wrestle here with budgets and billions, our
citizens wrestle with the day-to-day problems of dirty air and dirty
water and dirty and congested streets. As someone has said, it is
a bit incongruous that while we reach for the stars, we stand knee-
deep in garbage.
The needs of our daily living in this regard are far more com-
plex than the problems of keeping man in space. But many of the
techniques which have been developed for spatial life have immediate
application for a better life on earth. We must apply that research
for the benefit of our people.
I have already charged the reconstituted boards on air resources
and water quality control to pursue this goal. And, in the inevitable
but solvable conflict between the need for great freeways and the
preservation of scenic beauty, the secretaries of Resources and
Transportation have established a joint committee to develop a
balanced approach.
Many of these problems are most aggravating in the great metro-
percent
politan areas where 80 of our people reside. And, many of these
problems can best be answered by resourceful cooperation between our
state and city and county governments. This will involve a restru
ing of function as well as tax resource; and that, of course, further
underscores the need for realistic tax reform.
But, none of our efforts to build prosperity and sustain progres
will be successful unless we also maintain a social climate of maxi-
mum freedom for the individual under the law.
For, while a society can have law and order without freedom,
-10-
no society can lon have freedom without law I order. This is true
whether we are talking about our homes, our campuses or our city
streets. The breakdown of law and order can only lead to chaos and
anarchy and--eventually--to tyranny.
Every law-abiding citizen has the right to expect his government
will insure the safety of his person.
Every parent has the right to expect government to protect his
children from those who deal in drugs and profit from pornography.
Every homeowner and every businessman has the right to expect
his government to protect his property against the criminal, the
arsonist, the rioter and the looter.
I view with respect the responsible efforts of most of our
teachers whose personal and professional values require them to pur-
sue the truth wherever it may lead. They are not like the few who,
in the cloak of a distortion of the meaning of academic freedom, use
the classroom and the campus for the advancement of their own self-
interest. It seems little to ask that the great majority remind their
erring colleagues of the meaning of and the reason for professional
ethics, especially when dealing with the youth of a democratic society
Our colleges and universities were created--and are tax-
4
supported--as centers of education--not staging areas for insurrection.
As I said in January of 1967, I say again in January of 1968; obey the
rules, or get out.
Already we are drawing up legislation which will deal with the
campus disorder--including trespass legislation to keep the disrup-
tive non-student and the trouble-makers from interfering with the
orderly process of education.
In addition, we are calling a meeting of college and university
officials and local law enforcement officers to develop better ways
to work together during times of emergency--and to prevent emergencies
from arising.
We will continue to seek laws to protect our young people from
pornography. A series of decisions by the United States Supreme
Court in recent years has established guidelines for regulating
obscenity; we will ask for measures to stiffen California laws in this
regard, while keeping within those guidelines and avoiding any taint
of censorship.
Together with the attorney general we will ask legislation to
strengthen our fight against organized crime, against the professional
criminal and the narcotics peddler. This will include the right of our
law officers to use electronic survelTiance equipment under the proper
control of judicial warrants. We must provide our law enforcement
officers with scie ific capabilities which ar at least equal to
those employed by the criminal.
And, to protect our cities and our citizens from riots and
mass disorders, we will ask that local authorities be given the power
to issue temporary regulations such as curfews, and restrictions on
the sale of alcohol--to help keep riots from spreading.
To protect our citizens from the drinking driver I will ask
for a presumptive limits law. And, in a further attempt to help make
our streets and highways safe, I will seek legislation to establish
a pilot project to develop the best vehicle inspection system in the
country--using the sophisticated knowledge of the aero-space and com-
puter sciences skills in addition to our resources at the University
of California.
We must also set safety standards and regulations in the sale
of used cars. And, we are vitally interested in and will support
legislation on motorcycle safety.
Finally in this field, we will seek to create a public, non-
profit corporation for coordinated and applied research in traffic
safety. I expect the private and independent sectors to join with
us in this important venture.
There will be-there have been--those who challenge our attem
3
to meet the welfare and medical needs of the ill and the aged and
still fit these programs into the financial capabilities and priorities
of our taxpayers.
Let me say that this administration will never abandon its
proper responsibilities to the needy and the unfortunate in our
society. Working with the resources provided by the taxpayer, we will
continue to attend to those needs with compassion but under the pro-
per fiscal control.
We will help those who need help--and we will expect them to do
their best to help themselves.
In the area of public assistance, one of the very real services
we must provide is to break the chain of dependency which holds so
many of our underprivileged in its own kind of bondage. We will pro-
pose during this session measures designed to turn welfare checks into
paychecks; to help dependent citizens become independent, productive
individuals.
I will also ask for legislation, which will require employable
welfare recipients to accept jobs or job training or be dropped from
the rolls.
12-
A year ago ther were just over 24,000 patients in our mental
hospitals. During the year, in spite of a record number of admissions,
this figure dropped to the present level of only 20,278---a decline
of 3,786. This has to be accepted as testimony to the success of our
out-patient clinics and means these thousands of patients are living
near normal lives in familiar home surroundings. We fully expect to
seek additional funds for these clinics in the next fiscal year.
In recent weeks a number of other governors have talked to me
about the problems they are having with Medicaid. They have proposed
joining together to ask Washington to relax its excessive and inflexi-
ble regulations. New York papers have carried stories about counties
forced to drastically curtail other services to pay for the ever
increasing costs of Medicaid. The Detroit News said Michigan's infant
Medicaid program "could pull the state a long way toward a severe fiscal
bind." I know of no state that is not facing a financial crisis
because of this program.
If we in California engage in a political numbers game with
Medi-Cal when early estimates of overspending change as more knowledge
becomes available, we do a disservice to the people of California. We
all know and have known almost since its inception that this program
must be re-structured or it will bankrupt our state.
Last year the state's share was budgeted at $151 million. A month
before our administration took office, that figure was increased almost
$30 million to $179.7 million. By early spring, we knew it was costing
$202 million and with only a few months to go before the end of the
fiscal year, all of us assumed that was the final figure and budgeted
for the present year accordingly. Now with the fiscal year over as
well as the six-month period in which bills could continue to be
presented, we know it cost $263.7 million, almost $62 million more
than the $202 million appropriated as of last spring.
Administrative changes have made it possible for us apparently to
reduce this year's estimated spending by $31 million, but almost half
of that is temporary since it results from permission by the federal
government to delay upgrading of nursing home standards. You have
already corrected one glaring fault in reducing the time for submitting
bills from six months to 60 days, but other legislation is absolutely
necessary if this program is to be made workable and controllable.
We will continue to press for reform and flexibility.
-13-
There is no re compassion, no integrity 10 vision in any
program which holds people down, and which will inevitably bankrupt the
state government; there is no equity in such programs when they threaten
those funds which are required for other essential services and opera-
tions.
Some have suggested that this may turn out to be a "do-nothing"
session of the legislature:
- -that I will propose and you will oppose;
- -that there will be much rhetoric but little results;
- -that there will be many speeches but few meaningful statutes.
No doubt this pessimism stems from the fact that this is an
election year and, therefore, a session for partisanship. Letting
public problems go unsolved in an election year may be a timeworn
but
political practice, /let us not refer to it as "time honored". There
is little honor in it. The people we are under oath to serve have
a right to expect better of us. They did not elect us nor do they pay
us to neglect their important business in the name of partisan politics.
Crime in the street, death on the highway, pollutionof air and water,
publication of pornography and confiscation of the earnings of our
citizens for wasteful public programs will take no election year
holiday. Nor should we.
We were sent here to serve the people, not ourselves.
What I have outlined today, and what I will present in the days
to come, and that which has already been started and must be completed--
this is admittedly a heavy agenda.
But it is necessary if we are to match the bold dimensions of the
California purpose.
It is not enough simply to accept the future. It is not enough
just to predict it. It is our task to help invent it.
That is part of the history of California--our ancestors invented
the future. As Eric Hcfer wrote, "They eloped with history; they ran
away with it and shaped its course."
Many speakers on many occasions, myself included, have taken the
words from Sam Walter Foss' poem which stride across the entranceway
to State Office Building Number One, here in Sacramento:
"Bring Me Men To Match My Mountains."
There is yet another line in that poem which, together with the
first, sets the tone for the Creative Society;
"Men with new eras in their brains."
Let this be us as we go about the people's business.
-14-
Let this be us S we build tomorrow.
While there is still time, let me wish you a HAPPY NEW YEAR. As
a matter of fact, I might even go farther and ask you for the same
thing for myself.
######
-15-
11/,
L11,
OFFICE OF THE GOVERNOR
MEMO TO THE PRESS
Sacramento, California
Contact: Paul Beck
445-4571
1.17.68
C-O-R-R-E-C-T-I-O-N
In Governor Reagan's Economic Club of New York
speech dated today for release Thursday A.M.'s, please
correct Page 8, last paragraph as follows:
administration should become less centralized.
While the problems
# # #
OFFICE OF THE GOVERNOR
RELEASE: A.M.'s THURSDAY
Sacramento, California
January 18, 1968
Contact: Paul Beck
445-4571 1.17.68
EXCERPTS FROM SPEECH BY GOVERNOR RONALD REAGAN
Economic Club of New York
New York City - January 17, 1968
Gentlemen, you honor me with this invitation to break bread and
the honor is multiplied ten fold by your graciousness in listening
to me, when in truth I could profit so much from listening to you.
My suspicion that your invitation was prompted, at least in part,
not
by curiosity does/ detract from your kindness or lessen the
warmth of your hospitality. After all, someone who has been riding
off into the sunset with the words "the end" superimposed on his
is
back /not supposed to turn up on the statehouse steps with a brief-
case full of something he calls the Creative Society.
I am sure some of you have jumped to the conclusion that title
Creative Society is intended to be a play on words, a counter to the
Great Society. And you are absolutely right.
Since this is a non-partisan gathering let me hasten to say I
have no quarrel with the announced noble aims of the Great Society.
None of us, regardless of party, questions the desirability of
reducing human misery and poverty or making opportunity, health,
housing and education available to all. But just so you won't for-
get which side I'm on, I have serious doubts the Great Society'
can accomplish this and remain a free society and that makes the
price too high.
I have long been concerned about government and what has seemed
to be a relentless inch by inch encroachment on or usurpation of
rights traditionally held to be the proper possession of the people.
Now, I am a part of government, a formally elected member of
the Establishment--a funny thing happened to me on the way to
Death Valley. From the inside looking out the view hasn't changed.
If anything, my concern about government's increased growth and
power is even greater.
Some who have been in government a very long time as a part of
the permanent structure of government seem to develop an arrogance
that leads them to claim jump the inherent right of the citizen to
I
freedom of choice. And/have learned at first hand how savage can
be their angry resistance to any attempt to reduce the size and
power of government. I have also learned that size and power can be
reduced and its reduction will be hailed by the people of whatever
party.
At the moment, there appears to be a panic fear afloat in the
air, partly due to a feeling of helplessness, a feeling that govern-
ment is now a separate force beyond their control, that their voices
echo unheeded in the vast and multitudinous halls of government.
I do not remember a time when so many Americans, regardless of
their economic or social standing, have been so suspicious and
apprehensive of the aims, the credibility and the competence of
the Federal Establishment. There is a question abroad in the land,
"What is happening to us? Where is the country headed?" It is as
if we have lost any sense of national purpose. Particularly if we
subscribe to the belief that our national purpose is to assure the
ultimate in individual liberty consistent with law and order.
In the midst of material affluence on a scale unequalled in
history, we have become a divided people. In many quarters, there
is a defeatist and embittered mood of having been let down. Even
the Secretary of Health, Education and Welfare has admitted out
loud that "we are in deep trouble as a people", and he hinted
darkly at possible repressions to come, unless the anarchists among
us are put down.
-2-
It is not in my mind to blame the government of the hour for all
the evils that presently beset us; for the uncertainties that blur
American prospects; and for the dissensions within that have made
shambles of the American meaning in the world.
The fault lies with all of us. As a nation, we have let ourselves
be gulled into believing that tolerable solutions to our problems would
be forthcoming in good times; that the American productivity and inven-
tive genius would yield the essential means for surmounting all our
difficulties, whether in the city slums of America or in the rice
paddies of Southeast Asia. We were to have an instant tomorrow for a
dollar down and heaven only knows how much a month.
Something called the New Economics was to take charge. Through a
skillful tuning of monetary and fiscal policies, and a sensitive
balancing of wage-price guidelines, the economy was to be orchestrated
into a state of full employment at an ever-rising rate of productivity
which would satisfy all the important national needs without dangerous
inflation, and at a diminishing cost of operating the federal
establishment, relative to an ever-mounting gross national product.
But somehow the music is off-key and one wonders if perhaps the
violinists have just been fiddling around.
not
The economy has / behaved according to the plan. Suddenly the
intended order of things has been reversed. In the midst of what
statistically looks to be the most prosperous period Americans have
everknown, the books have begun to show alarming debits.
Wide circulation is given to the prophecy by Lord Thomas Macaulay
one hundred years ago that in the mid-20th century the destruction of
our society and way of life would occur as it occurred for Rome in the
5th century. Less quoted is his excellent advice to governments
everywhere:
"Our rulers will best promote the improvement of the people by
confining themselves to their own legitimate duties, by leaving capital
to find its most lucrative course, commodities their fair price,
industry and intelligence their natural reward, idleness and folly
their natural punishment, by diminishing the price of the law, by
maintaining peace, by defending property and by observing strict
economy in every department of the state. Let government do this and
the people will assuredly do the rest."
have
We / hardly been observing strict economy in every department
have
of the state and certainly, we'/ failed to let capital find its most
or commodition their fair price
One arm of government has ruled that tobacco is injurious to
health and must so state on each and every package. At the same time
another arm subsidizes the growing of tobacco and a third orders
television to give equal time to those who want to reply to or offer
dissent to advertising protesting the sale of tobacco. Perhaps the
familiar line " we pause one moment to hear from our sponsor" will
be changed to. "pausing two moments to hear from the sponsor and a
fellow who happened by.
The national accounts are out of balance. Government I.O.U.'s
cannot be honored from the reserves immediately at hand. On that
account, the government is now compelled to call for a sharp reduction
in private American investment abroad, for an embargo on foreign
travel by its citizens and for the beginnings of a furtive but none
the less real U.S. military withdrawal from Europe.
As an American I find this embarrassing to say the least. What
is there to be said in defense of a government which, while presiding
over a society capable of producing goods and services in the value
of $300 billion annually and leading all the rest of the world in
technology, no longer is able to let its citizens travel and do busi-
ness freely in the world simply because the government itself failed
to keep its means and its programs in financial balance?
It is fine and necessary for changing generations to dream and
cast up new visions of society. But always at some point the
accountants have to put in an appearance so that the books can be
honestly balanced.
The only sensible course of action is for the government to face
up to and deal bravely with the primary course of the trouble the top
heavy spending programs and the extravagant credit policies that have
brought inflation back.
A few years ago I quoted an historian to the effect that if we
lose this way of ours-this way of freedom--history will record that
those who had the most to lose did the least to prevent its happening.
At that time the business community was under attack by the Bureau of
Internal Revenue. Specifically, the bureau was issuing new regulations
regarding tax deductibility of business travel expense, business enter-
tainment and gifts to employees and customers. The bureau won by
default.
Actually, the issue was one of principle involving the very right
of management to make business decisions. But business sat down with
they debated whether the travelling man could have filet mignon or the
blue-plate special for lunch. Should the limit for deductible pur-
poses on gifts be $25 or $35. Forgive me if I seem presumptious, presumptuous but
I think business should have said to government, "So long as we are
legitimately spending money in the belief that it helps produce a
profit, it is not any of government's business how much we spend."
Those who refuse to defend themselves--who prefer the easy path
of appeasement are only feeding the crocodile, hoping he 11 eat them
last--but eat them he will.
have
So far I / talked about the private sector and its relationship
to the federal government. Believe me, the temptation is to go on
talking on a broad philosophical plane, but some instinct warns me that
the curiosity involved in your invitation was in some measure curiosity
about California, its government and happenings generally in Sacramento.
have
If I / dwelt over long on troubles besetting all of us before
getting to those peculiar to California and California's government,
it was to guard against the experience of a gentleman who departed
this earth from a point somewhere in Western Pennsylvania. Arriving
at the Pearly Gates he was greeted by St. Peter and given an indoc-
trination course during which he learned the heavenly old timers had
a story telling ring and were particularly interested in new comers
who might have interesting earthly experiences to relate. He told
St. Peter he was a cinch to go over big--he was the sole survivor in
his town of the Johnstown flood. Peter took him over to the group
and gave him a flattering introduction and buildup. The Pennsylvanian
stepped forward to begin his exciting story. At which point, Peter
murmurred in his ear: "By the way, that old guy in the front row is
a fellow named Noah. "
You are too well informed for me to cite statistics on
California's industries, problems of urban sprawl or just plain
explosive increase in population although some of the problems I
inherited have to do with the latter.
For the last eight years the government of California justified
every increase in government spending as necessary to keep pace with
the population increase. Unfortunately the budgets were growing each
year twice as much as the percentage that could have been justified
on the basis of growth and inflation. The plain truth was Big Brother
in Washington had a philosophical little brother in California. When
-5-
Mashington sneezed the "gesundheit" was heard in Sacramento. For a
time tax revenues and accumulated surplus kept pace, but then in 1963
the pace was too much and the administration began employing gimmicks
to fuzz up the fiscal picture and more importantly, to avoid or post-
pone the painful choice between reduced spending and increased taxes.
Their timing could not have been worse from my standpoint. The
final desperate gimmick was employed in the election year and as a
result inherited by me in the middle of the fiscal year last January.
The device used to obtain a one time windfall was a switch to an
accrual bookkeeping system, not a bad thing in itself, but when
unaccompanied by any provision to insure cash liquidity, it was nearly
catastrophic.
A budget of nearly $5 billion for 12 months' spending was adopted
to be funded by 14½¹/2 months' revenue plus $190 million of accumulated
cash which was spent as revenue and another $194 million borrowed from
various state funds which by California law could not be carried as a
permanent debt. My predecessor was spending as if he were practicing
to be President.
At one point someone said - "Cheer up, things could be worse."
So I cheered up and sure enough, they got worse.
We of course had to restore fiscal stability and present a bal-
anced budget for the current year with no cash reserve to call upon
and only 12 months' revenue for 12 months' spending.
We did it and without adopting any new taxes-of course we
one
raised the old ones about / billion dollars. But seriously, that is
not our final answer to the excessive cost of government. We believe
government should cost less and the people should pay no more than
they can afford and no more than they are willing to pay.
The Creative Society remains our goal and we pledge its implemen-
tation. Indeed, the beginning steps have been taken. But bringing
simple common sense to bear on the fiscal chaos confronting us was
obviously a first priority, and common sense dictated cutting,
squeezing and trimming to reduce as far as possible the rate of
spending in the few months remaining before the end of the fiscal
year.
-6-
Operancy
V
The state had been increasing its number of employees between 4
and 5½ percent a year for eight years. We thought there were too many,
but how to prove it without a lengthy study? Our decision was to put
a freeze on hiring replacements for employees who retired or quit for
any reason. The screams of anguish curdled your blood. But the wheels
of government did not grind to a halt, there was no loss of efficiency
and the annual 4 or 5 percent rate of increase in numbers of employees
was reversed. There are today 2½ percent fewer employees than when
we started.
Business and government are different we are told, and business
procedures will not meet the needs of government. Being totally
inexperienced I did not know that, so I kept on committing blunders.
We discovered California had no plan for centralized purchase of
automobiles, no central inventory, no plan for selling or trading on
an age or mileage basis. In fact, no one knew how many cars the
state owned. Each department head was on his own and some were buying
retail. We put a freeze on that. Strangely enough by May there was
for the first time in the memory of man a surplus of available cars
in the motor pools and the state's purchase of gasoline was reduced
15 percent. Some of that, of course, might have been due to another
mistake we made.
It seems that many of our employees had a streak of tourist in
them. We put a freeze on out-of-state travel. We did not say they
couldn't go, we said they would have to come in and get permission.
The budget for out-of-state travel has been reduced 78 percent.
Such ordinary, routine business procedures as centralized buying,
standardizing of specifications and competitive bidding have been
instituted and at last report have resulted in savings in excess of
$20 million.
Licenses issued by the state had a common expiration date
resulting in long periods of near vacant office space and short periods
of hectic hiring of temporary employees. We are staggering the expir-
ation dates to even out the workload.
Everyone knows the phone company has a department that will come
in, cheerfully listen to your phone problems and tell you what kind
of setup you need. Everyone knows that except government.
So, we called on the phone company for that particular service
and since we were a $16 million a year customer, they obliged. They
found people at adjoining desks with intercommunication systems. We
have now received notice our phone bill will be reduced by $2 million
a year.
Not all the savings were in the million dollar class. In my own
office there was a sizeable supply of stationery bearing a name other
than my own. Custom decreed it should be burned. Somehow the thought
of all the unused stationery adding to the smog seemed shamefully
wasteful. Now the girls in the office "x" out that other name and
type mine in--and do you know I get a certain amount of pleasure out
of that,
But a Creative Society must do more than this, it must not only
make a solemn declaration of goals and principles, but must effectively
represent each of its segments in the pursuit of the good of all.
Mat the Creative Society will attempt to re-establish is the principle
that in the American federal system, the states in their proper
constitutional sphere are independent from the national government.
Safeguards, however, must be provided to assure that the states
themselves fully assume their responsibilities both social and
economic. The sovereignty of our states has been dangerously eroded
as hard pressed state governments reached eagerly for the handout of
federal money. Our slogan once was "walk softly and carry a big
stick." How on the Potomac shore it's "Malk softly and carry a big
sock."
The Creative Society is concerned with state responsibility.
There are problems in our society which require attention and action.
This action, I believe, should be taken at the state level where a
thorough understanding of the problem exists.
As society grows more complex, administration should become
centralized. While the problems facing agriculture in the Midwest
share common elements with the problems of California's agriculture,
there are great dissimilarities which make rules from Washington
difficult and at times impossible to apply equitably. The same holds
true for our urban problems, our problems of education and other
problems which face the people of the United States.
Finally, the Creative Society to function in the best interests
of the people, requires the participation of the people. It recog-
nizes that no government can possibly find or afford an elite group
of. individuals capable of making the right decisions affecting the
market place, the home and all or even part of the many facets of our
society and our daily lives. It recognizes instead that a society will
be only as great as the potential of its people and, therefore, govern-
ment must call upon the genius and the ability of the people for the
solution of their problems.
Now you ask - does it work? The answer is yes.
Immediately after the Watts riots, a Los Angeles businessman
gathered a hundred of his associates together and challenged them to
join him in fulfilling what he said was industry's responsibility to
provide employment. He pointed out that what he was suggesting was
good business. Jobs were going begging because of a lack of skilled
workers. Workers were going on welfare because of a lack of job skills,
and this was especially true in the minority communities. Along with
the high cost of this situation to both business and government, we
can add the vast waste in economic benefits when more than 10 percent
of the buying public has less than average purchasing power.
The businessmen of Los Angeles followed H.C. McClellan into the
Watts area where they set up an employment office. In sixteen months,
17,800 hard core unemployed were placed in jobs at an average pay of
$2.75 an hour (including women). More than 2/3 of them still hold
those jobs and 1/2 of the other 1/3 have progressed to better jobs.
Thirty percent moved out of the area, proof that the walls of the
so-called ghetto are economic.
After the election I went to Mr. McClellan and asked if he would
do state-wide what he had done in Matts. He agreed and today has a
fulltime working program with 20,000 California employers involved
and cooperating with our state employment office. Incidentally,
foundations and private citizens have picked up the tab for admini-
strative overhead so it is completely independent of tax revenues.
In the months between November and January a year ago, a Blue
Ribbon Committee of citizens took on the task of recruiting for my
administration. I did not think the Creative Society could be run by
personnel of the type usually associated with the political spoils
system. This committee did not screen job seekers; it went out
seeking men and women who could be persuaded to serve because they had
the skill and experience necessary for a particular job. In almost
every instance those who accepted appointments did so at great personal
sacrifice. Employers were persuaded to give leaves of absence to
bright young junior executives-- one refused.
In the appointment of judges, that prize patronage plum of the
governor's office, the same policy prevails because politics should
play no part in the selection of those who administer justice. Joint
committees of the bar, the judiciary and laymen screen and rate
prospective judges and their recommendations are accepted.
Then we come to government itself and the need to make it modern,
regressive and efficient. On invitation, more than 250 of the most
successful people in our state volunteered and put in more than four
months full time, organized into task forces according to their
specialities, they included some of the top exacutives of our
largest industries. These task forces went into every agency and
department of government to see where modern business practices
could be utilized to make government more efficient and more economical.
They ranged from hotel management to data processing. For example,
hotel men looked at prisons and institutions to see where housekeeping
and kitchen chores could be upgraded.
We have received 1800 specific recommendations which we are now
correlating. Some will require legislation--some we have already put
into action by executive order. For example, one team discovered that
no one in state government had ever applied a formula of how much floor
space is required per employee for employees doing similar work. And
yet the state has in process a giant building program in the Capitol.
As a result of this team's effort we cancelled entirely the
construction scheduled for last summer of a ten story building. The
savings, $4.3 million. Total floor space for all branches of state
government is 9 million square feet. By applying normal private
business standards, it is being reduced to 7 million square feet.
In our giant highway building program, $110 million worth of
freeway and highway projects are being started one year in advance of
schedule financed by savings in administrative overhead in the depart-
ments financed by the gas tax.
Another citizen task force has completed a study of our tax
structure and has presented recommendations for a complete overhaul
and tax reform.
For every unsolved problem there are ten people out there eager
to help if someone will only point the way. By "out there" I do not
mean in California - out there all over America. The Creative Society
is government of and by as well as for the people.
An Ohio doctor wrote: "For one shining glorious moment of his-
tory, we had the key and the open door and the way was there before
us. And men threw off the yoke of centuries and thrust forward along
that way with such brilliance that for a little while we were the
light and the inspiration of the world. And now the key has been
thrown away, the door is closing and we are losing the way."
We can rediscover that way. We can remind ourselves and those
in government who have lost faith in the simple verities that the
most profound words in the constitution are but three in number--
"We the people." Government is our creature, established by us for
our convenience and we can leave no more valuable legacy to our
children than the restoration of the American dream.
(Note: Since Governor Reagan speaks from notes, there may be
additions to, or changes in, the above. However,
Governor Reagan will stand by the above quotes.)
12
-
-
OFFICE OF THE GOVERNOR
Sacramento, California
RELEASE: Sunday A.M.'s
Contact: Paul Beck
445-4571 1.26.68
EXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN
Pacific Mutual Life Insurance Company Banquet
Century Plaza Hotel, Los Angeles
January 27, 1968
It is certainly no secret that for more than twenty years I was
involved directly in organized labor as an officer and board member of
a union. During that period I represented the membership at the
negotiating table and I take pride in my record of service. That
pride extends to the rank and file of organized labor--the working men
and women of this country. I know them to be as fair-minded and
patriotic as any citizens of our land.
When one talks of labor it is necessary to differentiate between
the rank and file and the hierarchy of labor, that power elite which
has gradually increased its control over the membership and whose
members now take political stands and make pronouncements in the name
of labor when in truth the rank and file have not been consulted as
to their views.
Never have I felt that labor or any other particular group of
citizens should have an extra or special claim upon government or be
granted favored treatment.
But what is the situation today? At the recent AFL-CIO convention
in Florida, President George Meany made it unmistakably clear that
the ruling clique of organized labor considers itself as much a part
of the administration in Washington as the State Department or the
Department of Defense.
There was visible support for that contention. The President of
the United States, the Vice President, five cabinet members and a
host of lesser officials paraded across the platform. Labor Secretary
Wirtz gave the affair its proper coloration when he said, "I'm
delighted to be here at this first joint convention of the AFL-CIO and
the President's Cabinet".
Labor's public relations director smilingly asked a representative
of one of our largest corporations, "When was the last time a President
of the United States addressed one of your stockholders' meetings?"
Now who will declare that our President, sworn to represent all
of us equally, has not in truth subtracted from some Americans in
order to grant special favor to others? The Quid Pro Quo being
political support.
I have long been concerned about government and what has seemed
to be a relentless inch by inch encroachment on or usurpation of
rights traditionally held to be the proper possession of the people.
Now, I am a part of government, a formally elected member of
the Establishment--a funny thing happened to me on the way to
Death Valley. From the inside looking out the view hasn't changed.
If anything, my concern about government's increased growth and
power is even greater.
Some who have been in government a very long time as a part
of the permanent structure of government seem to develop an arrogance
--2--
that leads them to claim jump the inherent right of the citizen to
I
freedom of choice. And/have learned at first hand how savage can
be their angry resistance to any attempt to reduce the size and
power of government. I have also learned that size and power can be
reduced and its reduction will be hailed by the people of whatever
party.
At the moment, there appears to be a panic fear afloat in the
air, partly due to a feeling of helplessness, a feeling that govern-
ment is now a separate force beyond their control, that their voices
echo unheeded in the vast and multitudinous halls of government.
I do not remember a time when so many Americans, regardless of
their economic or social standing, have been so suspicious and
apprehensive of the aims, the credibility and the competence of
the Federal Establishment. There is a question abroad in the land,
"What is happening to us? Where is the country headed?" It is as
if we have lost any sense of national purpose. Particularly if we
subscribe to the belief that our national purpose is to assure the
ultimate in individual liberty consistent with law and order.
In the midst of material affluence on a scale unequalled in
history, we have become a divided people. In many quarters, there
is a defeatist and embittered mood of having been let down. Even
the Secretary of Health, Education and Welfare has admitted out
loud that "we are in deep trouble as a people", and he hinted
darkly at possible repressions to come, unless the anarchists among
us are put down.
-3-
It is not in my mind to blame the government of the hour for all
the evils that presently beset us; for the uncertainties that blur
American prospects; and for the dissensions within that have made
shambles of the American meaning in the world.
The fault lies with all of us. As a nation, we have let ourselves
be gulled into believing that tolerable solutions to our problems would
be forthcoming in good times; that the American productivity and inver
tive genius would yield the essential means for surmounting all our
difficulties, whether in the city slums of America or in the rice
paddies of Southeast Asia. We were to have an instant tomorrow for a
dollar down and heaven only knows how much a month.
Something called the New Economics was to take charge. Through a
skillful tuning of monetary and fiscal policies, and a sensitive
balancing of wage-price guidelines, the economy was to be orchestrated
into a state of full employment at an ever-rising rate of productivity
which would satisfy all the important national needs without dangerous
inflation, and at a diminishing cost of operating the federal
establishment, relative to an ever-mounting gross national product.
But somehow the music is off-key and one wonders if perhaps the
violinists have just been fiddling around.
not
The economy has / behaved according to the plan. Suddenly the
intended order of things has been reversed. In the midst of what
statistically looks to be the most prosperous period Americans have
everknown, the books have begun to show alarming debits.
Wide circulation is given to the prophecy by Lord Thomas Macaulay
one hundred years ago that in the mid-20th century the destruction of
our society and way of life would occur as it occurred for Rome in the
5th century. Less quoted is his excellent advice to governments
everywhere:
"Our rulers will best promote the improvement of the people by
confining themselves to their own legitimate duties, by leaving capital
to find its most lucrative course, commodities their fair price,
industry and intelligence their natural reward, idleness and folly
their natural punishment, by diminishing the price of the law, by
maintaining peace, by defending property and by observing strict
economy in every department of the state. Let government do this and
the people will assuredly do the rest. n
have
We / hardly been observing strict economy in every department
have
of the state and certainly, we'/ failed to let capital find its most
One arm of government has ruled that tobacco is injurious to
health and must so state on each and every package. At the same time
another arm subsidizes the growing of tobacco and a third orders
television to give equal time to those who want to reply to or offer
dissent to advertising protesting the sale of tobacco. Perhaps the
familiar line " we pause one moment to hear from our sponsor" will
be changed to. "pausing two moments to hear from the sponsor and a
fellow who happened by. "
The national accounts are out of balance. Government I.O.U. 's
cannot be honored from the reserves immediately at hand. On that
account, the government is now compelled to call for a sharp reduction
in private American investment abroad, for an embargo on foreign
travel by its citizens and for the beginnings of a furtive but none-
the-less real U.S. military withdrawal from Europe.
As an American I find this embarrassing to say the least. What
is there to be said in defense of a government which, while presiding
over a society capable of producing goods and services in the value
of $300 billion annually and leading all the rest of the world in
technology, no longer is able to let its citizens travel and do busi-
ness freely in the world simply because the government itself failed
to keep its means and its programs in financial balance?
It is fine and necessary for changing generations to dream and
cast up new visions of society. But always at some point the
accountants have to put in an appearance so that the books can be
honestly balanced.
The only sensible course of action is for the government to face
up to and deal bravely with the primary course of the trouble- the top
heavy spending programs and the extravagant credit policies that have
brought inflation back.
A few years ago I quoted an historian to the effect that if we
lose this way of ours-this way of freedom--history will record that
those who had the most to lose did the least to prevent its happening.
At that time the business community was under attack by the Bureau of
Internal Revenue. Specifically, the bureau was issuing new regulations
regarding tax deductibility of business travel expense, business enter-
tainment and gifts to employees and customers. The bureau won by
default.
Actually, the issue was one of principle involving the very right
of management to make business decisions. But business sat down with
they debated whether the travelling man could have filet mignon or the
blue-plate special for lunch. Should the limit for deductible pur-
presumptions
poses on gifts be $25 or $35? Forgive me if I seem presumptious, but
I think business should have said to government, "So long as we are
legitimately spending money in the belief that it helps produce a
profit, it is not any of government's business how much we spend." "
Those who refuse to defend themselves--who prefer the easy path
of appeasement are only feeding the crocodile, hoping he' 11 eat them
last--but eat them he will.
For the last eight years the government of California justified
every increase in government spending as necessary to keep pace with
the population increase. Unfortunately the budgets were growing each
year twice as much as the percentage that could have been justified
on the basis of growth and inflation. The plain truth was Big Brother
in Washington had a philosophical little brother in California. When
-6-
Washington sneezed the "gesundheit" was heard in Sacramento. For a
time tax revenues and accumulated surplus kept pace, but then in 1963
the pace was too much and the administration began employing gimmicks
to fuzz up the fiscal picture and more importantly, to avoid or post-
pone the painful choice between reduced spending and increased taxes.
Their timing could not have been worse from my standpoint. The
final desperate gimmick was employed in the election year and as a
result inherited by me in the middle of the fiscal year last January.
The device used to obtain a one time windfall was a switch to an
accrual bookkeeping system, not a bad thing in itself, but when
unaccompanied by any provision to insure cash liquidity, it was nearly
catastrophic.
A budget of nearly $5 billion for 12 months' spending was adopted
to be funded by 14½½ months' revenue plus $190 million of accumulated
cash which was spent as revenue and another $194 million borrowed from
various state funds which by California law could not be carried as a
permanent debt. My predecessor was spending as if he were practicing
to be President.
At one point someone said - "Cheer up things could be worse."
So I cheered up and sure enough, they got worse.
We of course had to restore fiscal stability and present a bal-
anced budget for the current year with no cash reserve to call upon
and only 12 months' revenue for 12 months' spending.
We did it and without adopting any new taxes--of course we
one
raised the old ones about / billion dollars. But seriously, that is
not our final answer to the excessive cost of government. We believe
government should cost less and the people should pay no more than
they can afford and no more than they are willing to pay.
The Creative Society remains our goal and we pledge its implemen--
tation. Indeed, the beginning steps have been taken. But bringing
simple common sense to bear on the fiscal chaos confronting us was
obviously a first priority, and common sense dictated cutting,
squeezing and trimming to reduce as far as possible the rate of
spending in the few months remaining before the end of the fiscal
year.
-7-
But a Creative Society must do more than this, it must not only
make a solemn declaration of goals and principles, but must effectively
represent each of its segments in the pursuit of the good of all.
What the Creative Society will attempt to re-establish is the principle
that in the American federal system, the states in their proper
constitutional sphere are independent from the national government.
Safeguards, however, must be provided to assure that the states
themselves fully assume their responsibilities both social and
economic. The sovereignty of our states has been dangerously eroded
as hard pressed state governments reached eagerly for the handout of
federal money. Vour slogan once was "walk softly and carry a big
stick." Now on the ootomac shore it's "walk softly and carry a big
sock."
The Creative Society is concerned with state responsibility.
There are problems in our society which require attention and action.
This action, I believe, should be taken at the state level where a
thorough understanding of the problem exists.
AS society grows more complex, administration should become less
centralized. While the problems facing agriculture in the Midwest
share common elements with the problems of California's agriculture,
there are great dissimilarities which make rules from Washington
difficult and at times impossible to apply equitably. The same holds
true for our urban problems, our problems of education and other
problems which face the people of the United States.
Finally, the Creative Society to function in the best interests
of the people, requires the participation of the people. It recog-
nizes that no government can possibly find or afford an elite group
of individuals capable of making the right decisions affecting the
market place, the home and all or even part of the many facets of our
society and our daily lives. It recognizes instead that a society will
be only as great as the potential of its people and, therefore,
government must call upon the genius and the ability of the people
for the solution of their problems.
For every unsolved problem there are ten people out there eager
to help if someone will only point the way. By "out there" I do not
mean in California - out there all over America. The Creative Society
is government of and by as well as for the people.
An Ohio doctor wrote: "For one shining glorious moment of
history, we had the key and the open door and the way was there
before us. And men threw off the yoke of centuries and thrust forward
along that way with such brilliance that for a little while we were
the light and the inspiration of the world. And now the key has been
thrown away, the door is closing and we are losing the way."
We can rediscover that way. We can remind ourselves and those
in government who have lost faith in the simple verities that the
most profound words in the constitution are but three in number--
"We the people". Government is our creature, established by us for
our convenience and we can leave no more valuable legacy to our
children than the restoration of the American dream.
########
(Note: Since Governor Reagan speaks from notes, there may be
additions to, or changes in, the above. However,
Governor Reagan will stand by the above quotes.)
621
2
OFFICE OF THE GOVERNO
RELEASE:
11
M., Monday,
Sacramento, California
January 29
Contact: Paul Beck
445-4571
1.29.68
EXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN
National Automobile Dealers Association Convention
Las Vegas, Nevada
January 29, 1968
I would like to talk to you about what we in California are trying
to do it is called the Creative Society. Now, I am sure that hearing
that title may have caused some of you to jump to the conclusion that
perhaps I chose the term "Creative Society" as a kind of play on words
and a play off against the "Great Society." And you are absolutely
correct. But because this is a non-partisan affair, let me hasten to
add that I have no quarrel with the goals of the Great Society.
All of us, I am sure, regardless of Party, oppose human misery and
deprivation. We feel the need to relieve poverty, improve education,
solve unemployment, insure decent housing, and provide medical care and
equal opportunity. But just so you won't forget which side I am on, let
me say that I don't think the Great Society offers the only way or even
the best way of achieving those goals. In fact, I don't think the Great
Society could do any of those things and remain a "free" society. That
makes the price too high.
The problem is not new. Government talks political equality and
ends up trying for economic equality. And in so doing, it moves more
and more toward a centrally managed economy. Lord Thomas Macaulay, the
same Thomas Macaulay who, 100 years ago, predicted the middle of this
century would see this system of ours grind to a halt, gave some pretty
good advice to those who serve in governments. He said "our rulers will
best promote the improvement of the people by confining themselves to
their own legitimate duties, by leaving capital to find its most
lucrative course; commodities their fair price; industry and intelligence
their natural reward; idle and folly their natural punishment, by
diminishing the price of the law, by maintaining peace, by defending
property and by observing strict economy in every department of the
tate. Let government do this and the people will assuredly do the
rest."
A federal agency recently ruled that television must give equal
time for opponents of smoking to reply to the cigarette ads on
television. But the government continues at the same time to subsidize
the production of tobacco. Federal limits are advocated for the size
and shape and weight and the promotional practices of manufacturers.
They are urged by administration leaders at almost every session of
Congress.
-1-
Government follow policies that drain away our gold supply and then
it interferes with private business and the investments that private
business makes abroad---even though private business is at least
responsible for half a billion dollars of the favorable trade balance
that at least is holding up a little bit the outflow of gold.
Under the guise of fighting poverty, a number of programs have
become competitive with the private sector in the field of law and
employment services to name a few. And in one small community recently,
government even set up a newspaper on almost a metropolitan scale with
a staff of 23. Then they bought 20 Polaroid cameras for the staff of
23.
Is government leaving capital to find its most lucrative course?
Commodities their fair price? The federal government has ruled that
the American Telephone & Telegraph rate of return is limited to 7 to
7½ percent. Granted that AT&T is a monopoly, a public utility subject
to government regulation. But the FCC ordered lowered tariffs and at
the same time flatly fixed the maximum over the overall profit percentage
And when government took this action, more than three million share-
holders of the bluest of the blue-chip stocks took a billion dollar
loss on their investment.
Not too long ago the same government whose deficit spending and
deliberate policy of planned inflation now threatens us with wildfire,
runaway inflation asked eight major oil companies to rescind a one
cent a gallon increase on gasoline and they did it "in the national inter
est for stable prices." Well, strangely enough, gasoline before taxes
is cheaper today than it was 10 years ago. But the gasoline tax has
gone up 19 percent in these 10 years.
We once had a slogan, "Speak softly and carry a big stick." Now
on the shores of the Potomac the slogan is "speak softly and carry a
big sock." And what have any of us in government or in business been
doing to prevent this destruction of the freest, the most virile economic
system ever implemented by man?
If we lose this way of ours-this way of freedom history will
record that those who had the most to lose did the least to prevent its
happening. When the Bureau of Internal Revenue made its assault on
business gifts and entertainment expenses, how did business defend
itself? It lost the battle before it started and lost it by default.
Business sat down with government as if at a bargaining table and
debated whether the travelling businessman should be allowed filet-
mignon or be limited to the blue-plate special. Whether the tax
deduction for gifts
the business employee or
spective customer
should be $25 or $35, the issue was one of principle, not amount. Why
didn't business say "so long as we are legitimately spending money in
the belief that it helps produce a profit, it is not any of government's
business how much we spend."
Those who still refuse to defend themselves, who prefer a path of
appeasement, who hope that perhaps by smiling and holding out a hand
they can get a little favor that someone else isn't getting from
government, are only feeding the crocodile hoping it will eat them
last. But eat them it will.
Government has legitimate functions and there is a large area for
public good that is served by cooperation between government and the
private sector. But this does not include government assuming the
privileges and the prerogatives of management.
I ran for office on the theory that government does not rule, it
does not lecture; but it leads, it cooperates, it listens, and instead of
taking power into its own hands, it turns to the people for the answer
to as many problems as the people can provide. And I would like to
give you a little report how well that government "of" and government
"by" the people really works if you set your mind to it.
In the past several months we have done a number of things
consistent with our belief that in a creative society there are many
functions now performed by government that perhaps can be better
performed by using the full genius and the power and the ability of the
people. Often those who classify themselves more liberally-oriented
than I am--and that leaves a lot of room--have accused this administra-
tion of being business oriented. They are correct on the basis of two
facts that some of them never learned. One is that businesses do not
pay taxes, people do. The other is that government does not make jobs,
business and industry do.
For these reasons we are doing everything possible to create
conditions to insure that business and industry can expand and meet
their job needs in a growing population in California. At the same
time, we are trying to give Californians, the taxpayers, the people, as
frugal and as efficient a government as possible. Neither of the jobs
can be done overnight. We inherited government machinery a year ago
that was spending more than a million dollars a day, over and above the
state's revenue. In fact, my predecessor was spending so much money
that I thought he was practicing to be President.
-3-
Now there has al. ys been a lot of controversy as to whether or
not government actually can be run like business. Well, I believe that
government can afford only what it can pay for and should afford only
what the people are willing to pay for. But proving that government
can employ modern business practices is a little bit like rubbing your
tummy and patting your head at the same time. And in these last few
months I have discovered how savage can be the angry resistance of some
in government when you try to make any change or reduce the size and
power of government. But I also have discovered that the size and
power of government can be reduced. You see, being totally inexperienced
I had not learned all the things that you could not do.
In my inexperience I found out that a governor has the right to
veto some of the poverty programs that come across his desk for his
state. Of course, the federal government reserves the right to override
the veto if it wants to, but also in my inexperience, I had not learned.
that you are not really expected to exercise this veto. So I went ahead
and exercised it.
I was told, for example, of one program that was going to put the
hardcore unemployed in a county to work clearing our open park-like
lands in California. I had no quarrel with that goal, but then I
discovered they were going to put 17 of the hardcore unemployed to work
and more than half of the money was going to go for seven administrators
to make sure that the 17 got to work on time. So we vetood it. There
was another program that we vetoed that was going to cost us quite a
sum of money and it looked like it was a training course for picketers
any more of
and demonstrators. And if there is one thing we do not need/in
California, it is demonstrators.
This system of ours was never intended to be monopolized by a
hierarchy of career statesmen or government 01 fessionals permanently
structured by civil service. This unique way of curs was intended to
be constantly scrutinized by the people this is the secret that we
have overlooked too long in this system of ours. works best when
every once in a while from the ranks of the citizenry the inexperiend
citizen just brings the fresh air, some common sense and everyday
thinking to the problems of. government. Now probably nothing has been
so self-evident in this world in the past as the apathy that beset our
people, our willingness to let George do it. New don't read any
endorsement into that for 1968 because this is a nonpartican meeting.
that there is no
But I think that = can safely say after a little more than a year/
apathy now on the part of Californians in regard to government.
We set out to kee our campaign promises and ice the people got
over the shock they kind of took to the idea. Government, to start
with, cannot compete in the market for talent with private business,
but there is a way that government can compete and that is by asking
private business to take a hand in government. One of the first things
we did after the election and in the months before we took office was
to appoint a committee of leading citizens of our state. It was a
recruiting committee and it worked virtually full time, not just
screening applicants. We did not want the kind of people to head up
our agencies and our bureaus and our departments who might turn out to
be empire builders and place an undue importance on those agencies.
We wanted men and women from civilian life who had no intention of making
government their career, and who would if possible discover that maybe
they could do without the agency they were chosen to head. This blue
ribbon citizens committee twisted the arms of employers throughout the
state and came back with one of the finest groups of private citizens
you have ever seen to come in and take over these jobs. Many of them
admittedly came only for a year or two. Then we will let someone else
take a turn at it. But we do have a type of personnel running those
positions in our government that is unequalled in any state in the
union in any time in our history.
At the same time that we assembled this team, we took office and
we had to deal with deficit spending. We set a goal to reduce it by
at least $20 million by the end of the fiscal year a few months away.
We had to grab at the few things we could see immediately as a way
of saving money. We discovered, for example, that common, everyday
business practices so familiar to you in your work were virtually
unknown in government. No one in the state of California knew how
many automobiles we owned. There was no system of disposing of them on
a mileage or an age basis. We found that department heads bought cars
at retail so we put a freeze on the purchasing of new automobiles until
we could find out what was going on. The angry screams would have torn
your heart. And yet in about three months we received reports back that
for the first time in the history of the automobile in California, we
.,ad a surplus of cars in our motor pools, over and above the employees'
demands. Part of this was because we also put a freeze on out-of-state
travel by state employees. We reduced the budget for that particular
function by 78 percent. We also discovered that for eight years our
-5-
state government had Leen increasing its number or employees from four
to five percent a year, five and one-half percent the year before we
took office. So we put a freeze on rehiring replacements for those who
left government service. We wanted to see how far down we could take
it before the cracks began to appear in efficiency. Well, the freeze
is still on. No cracks appeared, we stopped the growth and we have
fewer employees in the state than there were when we started in January
of 1967.
We wondered why a private firm could come in and offer to take
over our building maintenance for us and do it more cheaply than it was
being done by the state. So we decided to do a little digging. In
the end we simply adopted the private maintenance standards that are
used in private business for five of our buildings using our state
employees. As a result of this new procedure, we are now effecting
savings totalling $750,000 a year.
We consolidated buying. We took to more competitive bidding.
We standardized specifications and we saved millions of dollars on the
purchase of supplies. We bought high speed tires for the highway patrol
and the bill was $141,000 less than the previous year simply because we
changed the method of buying.
When I took office there was a great big stack of stationery in
my office. It had another fellow's name on it. I thought the height of
it denoted a certain amount of optimism. But when the janitors came in
one day and decided to burn it, I just couldn't stand it. I have some
stationery with my name on it but I figured there must be a lot of
interoffice correspondence where this can be used. So the girls just
crossed out that name and typed mine in. And you know I got a certain
amount of pleasure out of that. Our state used to put out an official
state map with the governor's picture on at least my predecessor's
picture. Well, this governor's picture will not be on the state maps.
As a matter of fact there aren't any state maps and that saved $192,000.
So if you come to California, stop at your nearest bil station they
will be happy to give you one.
By last June we had trimmed the estimated deficit by 23 million,
but at the same time we were trying to reverse an entire philosophy.
So we gathered the most su dessful professional and business and
industrial men and women in the state of California together and told
them of an idea we had, We told them that up until now, government
-6-
had asked everything of them but blood, and we wer now asking blood,
their blood. We told them what we wanted was not just the serving on
a committee or a name on a letterhead. We wanted the most successful
people in our state in a number of lines of activity to give up literally
their homes, their careers, their businesses, their professions, for
from four to six months full professions ranging from data
processing to hotelkeeping. We wanted them to volunteer for task
forces under a business management-consultant firm and an executive
committee. For the next six months, they worked eight-hour days and
five-day weeks going into every agency and department of state
government to tell us how modern business practices could be put to work
to make government more efficient, more businesslike, more economical.
They also raised the money it took for the administrative overhead so
that it did not cost the taxpayers one penny. Their report--after six
months of work--will be made public early next month.
We are already putting into effect some of the things that they
have found. For example, hotel men went into the prisons--not to tell
a warden how to run a prison, but to look at the kitchen, dining room
and housekeeping chores. As hotel men who had to run these places for
a profit, they could tell us what we were doing wrong.
We discovered, for another example, that many licenses issued
by the state expire on the same date. We had vast office space that
was standing vacant most of the year. Then there was that great rush
for temporary employees and the confusion at the end of the year when the
expiration date came around. We have staggered these expiration dates
throughout the year on a regular basis so that we will have one work
force and a continuous work load throughout the year.
We also discovered that no one in government had ever applied to
government the principle or standards of floor space per employee that
you use in private business. They just went out and built public
buildings or leased them and filled them with people without realizing
low much floor space was needed. So we started applying to state
government those standards that you use in private business and we were
able last summer to tear up the contracts and not construct a $4,300,000
building because by putting the employees closer together in the
buildings we now have, a new building was not needed then or in the
foreseeable future. In a 14-story building already under construction,
the interior was altered a little bit using the same space standards.
I'c now will house 1,051 more employees. By the end of the year we will
have reduced office space held by the state from nine million to seven
million square feet.
-7-
we found out tha our phone bill was $161/2 million a year. No one
had supervised it; no one had ever thought to go to the phone company
for their experts who explain what kind of a phone system is needed.
We found out that we have people with adjoining desks who had
communicating systems. They had lights on their phones so that the
fellow could sit and look at the light and tell whether the fellow beside
him was using the phone. That cost two dollars per phone a month extra.
Now they can turn their head and look. Our phone bill will now be
$2 million less than it was before.
Every year--perhaps it is true in your state as it was in ours-the
papers would report the number of highway and freeway projects that
would be delayed for a year or so because of higher costs of right-of-
way. Last year we were able to announce that on the basis of savings
already affected in the departments financed by our gasoline tax, we
were able to start $99 million worth of highway projects one year in
advance.
Our agriculture department has started a long-needed rabies research
department totally financed by the savings that they affect within their
own budget. We are rotating department heads just as you do in private
business to give a fellow a new slant at someone else's job---to find
out what a new viewpoint might discover. We discovered, for example,
that different processing of licensees' applications will reduce the
time from 39 days to seven to 10 days because someone completely
inexperienced in their field took a new look at it.
We are going to contract out some of our state printing jobs
because we found out the state printing office was not equipped to do
some of the jobs as economically as private enterprise.
As you know, California is engaged in the greatest water program
in the history of mankind and we are moving more water farther than man
has ever done. At the same time, we are going to with multiple use of
the reservoirs created. The largest earth-filled Com is at Oroville and
it is goding to canate a lake with 169 miles of shoustine. We are going
to develop recreational facilities, but not in competition with private
resort operators. In cooporation with private business and private
investors there will be more than two dollars of private capital invested
for every one dollar of state spending. We are going to be able to
cater in the recreational areas to the sleeping bag camper as well as
to the people who want to live in luxury hotels. We are going to begin
instituting this plan in all our recreational and park areas.
-8-
Several years ago alifornia entered into an reement with our
federal aid program to supply technical aid to Chile. When my adminis-
tration took office, the State Department began to throw some roadblocks
in our way until finally we got the hint. Realizing the climate had
changed we discovered Little Brother no longer lived in Sacramento as
far as Big Brother in Washington was concerned--so we just cancelled
out that program. That is, we cancelled only the part sponsored by the
federal government. We are going to continue with our own Aid to
Chile program. We cannot engage in a formal program. We cannot spend
any dollars we do not have. But California does have people with
know-how, so we went the task force route again and I appointed a
civilian task force. We think they will respond with a people-to-people
program. We are going to start with agriculture. Despite the mild
climate, the good soil and enough water, Chile is desperately short of
food. California, on the other hand, has developed the world's richest
agricultural economy and we are going to make our know-how and
technology available to Chile. The people down there will be given
proper incentive and leadership and perhaps this can spread throughout
the states and perhaps we can do a little better with helping our
neighbors across the seas.
Not all of the Creative Society efforts are directed towards
streamlining the bureaus and agencies. When we had the terrible riots
in the Watts area a few years ago, one of our industrialists--Chad
McClellan--went in while there was smoke in the air and gathered
together his fellow industrialists. He said we cannot solve all the
social problems, but there is a problem we can solve. We have jobs to
give so they organized 2600 industrialists in the Los Angeles area and
within a 16-month period these businessmen on their own set up shop and
put 17,800 of the hardcore unemployed in the Watts area into private
enterprise jobs.
I contacted Chad McClellan and asked him if he would take this
over on a statewide basis and this he has done.
We had another task force of financial experts who studied our
entire tax structure with the idea of having a tax structure that just
is not layer after layer that has been piled up over the past but
rather a tax structure that will be geared to our economy. We do not
have a monopoly on the Creative Society. All over the land people are
finding out solutions to problems.
-9-
what are the oth greater unsolved problems chat government has
assumed as its total jurisdiction? Housing is one. I do not offer this
as a solution, but let me just throw it out for thought. We know that
public housing is a failure and we know that in most of our cities the
greatest area of crime is the area of public housing. We know that
in public housing they use the halls and the elevators for toilets.
We know how a man refuses a raise or refuses an improved job because it
will put him above the salary bracket so he cannot continue to live in
public housing.
Why hasn't anyone ever asked how did suburbia succeed? Why hasn't
someone thought. that perhaps the answer is private ownership? Wouldn't
it at least be a try to give the person in public housing a deed to his
apartment unit--give him ownership outright--so when he had the oppor-
tunity to move up to a better job, he had an equity in some property.
And perhaps he could sell his equity by mortgaging and could live in
the suburbs, too. And maybe you would make a lot of citizens kind of
policemen and caretakers that would object to the neighbor that was
defiling the halls and the elevators or throwing bottles through the
windows. It might at least be worth a try.
We know that welfare is a failure. Welfare--to be a success--
should bring people off of welfare instead of always increasing the
size of it. Welfare is supposed to be salvaging people, not destroying
them. In crime, the government's only answer is cure poverty and
you will cure crime." But we had the greatest pcverty we had ever
known in the dark Depression and we had the lowest crime we have ever
known and now we are in our highest prosperity we have ever known and
we have more crime here than in any other place in the world.
Could it be that while government is so busy meddling in things
that are not its proper province it has forgotten that its principal
function is to protect society from the lawbreaker and not the other
way around?
There are so many other areas. Today there isn't a. state in Please
union that doesn't realize that one of the great problems is the
financing of higher education. Each year costs are going up higher than
the tax revenues can expand with the economy and the federal covernment
has stepped in with grants of all kinds to the point that now the
autonomy of the college and university is being threatened. Because
with that money comes certain strings and certain controls and people
are beginning to worry about academic freedom.
-10-
Once again, what bout turning to the privat\ sector? What might
happen, for example, if government would give a tax credit--not a tax
deduction, but credit--to parents who were paying tuition for their sons
and daughters? Thus, perhaps tuition could be raised realistically
because now the parent could afford it because he could deduct that
amount from his income tax bill.
At the same time, industry and business today must find some fund
or some foundation by which to give money to have it deductible. What
if they came to you, and within a ceiling of course, said to every
business concern: "you can take as a tax credit 'X' thousands of
dollars for the tuition that you will put up directly and personally
to talented young people who are needy students and who need help in
getting a college education." That, too, might be worth a try.
An Ohio doctor said "for one shining glorious moment of history,
we had the key and the open door and the way was there before us and
the men threw off the yoke of centuries and thrust forward along that
way with such brilliance that for a little while, we were the light and
the inspiration of the world and now the key has been thrown away and
the door is closing and we are losing that way."
Well, we can find that way. We can find it if you and I are
willing to reassert our right to run our own affairs; to remind govern-
ment that its only power is derived from "we the people"; that these
three words are the most profound words in all of the Constitution.
"We-the-people" government is our creature, created by us for our
convenience only. You can have no greater responsibility today. There
is no greater challenge and you can leave no more valuable legacy to your
children than the restoration of the American dream.
# # #
(Wote: Since Governor Reagan speaks from notes, there may be addi tions
to, or changes in, the above. However, Governor Roagen will
stand by the above quotes.)
-11-
2/1
-
OFFICE OF THE GOVER R
RELEASE: Thu Sday, P.M.'s
Sacramento, California
Contact:
Paul Beck
445-4571
1.31.68
EXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN
Governor's Conference on
Planning for Housing and Home Ownership Luncheon
El Dorado Hotel, Sacramento
February 1, 1968
I am grateful to all those who have participated in this
conference-- the sponsoring groups; the Department of Housing and
Community Development; Nat Rogg, yesterday's keynoter; Congressman
Clawson; and all the other speakers.
The wide representation from private industry, local, and state
governments at this conference indicates the growing interest in and
concern for our state's housing needs. This administration is con-
vinced that many of our housing problems can be reduced, if not
solved, by having those public officials, professional and business
people, concerned with housing, fully discuss the issues.
We were convinced in scheduling this conference that it would
present an excellent opportunity for those of us concerned about
California's physical environment, more particularly its housing,
to discuss our problems and to explore new alternatives for their
solution. Your presence here affirms that belief.
We have called this conference for several reasons: the
legislature passed a bill in 1967 known to most of you as the
"Housing Element Bill", or AB 1952, which the homebuilding industry
sponsored on the basis that it would improve our local planning
process as it relates to housing.
We are hopeful that this conference can give clarity and
direction to that legislation as it relates to California's current
and future housing needs.
Second, while recognizing the need for planning, it seems to
me that a major weakness of planning has been that it has failed to
involve the full complement of local and private resources, and much
more importantly, the needs of the people themselves. In the field
of housing, this weakness has been most obvious.
I signed AB 1952 because I believed it to be potentially a good
piece of legislation. But, if that potential is to be translated
into meaningful results, then discussion of its intent is very much
in order. We have no intention of permitting this legislation to fall
short of success because of failure to adequately involve private
industry and local government.
We also called this conference to add emphasis to this
administration's hope that in the future, planning for housing in
California will make maximum use of the home ownership principle.
Throughout our history, the principle of home ownership has
been a guiding influence in this nation's development. A former
President, Herbert Hoover, said:
"A family that owns its home takes a pride in it, maintains it
better, gets more pleasure out of it, and has a more wholesome,
healthy, and happy atmosphere in which to bring up children.
"The home owner has a constructive aim in life. He works harder
outside his home; he spends his leisure time more profitably; and he
and his family lead a finer life and enjoy more of the comforts and
cultivating influences of our modern civilization.
"A husband and wife who own their own home are apt to save.
They have an interest in the advancement of a social system that
permits the individual to store up the fruits of his labor. As
direct taxpayers, they take a more active part in local government.
Above all, the love of home is one of the finest ideals of our people".
People do not develop a sense of pride in their neighborhoods
when the lawns are mowed for them by public housing employees; the
garbage is taken out by a public housing employee; and everything else
is done for them. Despite all the efforts and fine management of
many local housing authorities, they cannot overcome the fundamental
weakness of most public housing: namely, it fails to give a man a
chance to own his own home.
What would be wrong with giving a resident of a public housing
unit a one-time deed to that unit? He then becomes a property owner
with the property owner's pride in his possessions. Property owners,
without question, take better care of their property than renters.
With that deed the man in public housing would have the incentive
to keep up his property, and if the chance came along to move to
sell
something better, he could / his public housing unit to make a
downpayment on the house of his choice.
I believe this is something that should be explored in detail.
We, as a people, are not insensitive to the needs of the disad-
vantaged. We are willing to be bold, imaginative, cooperative and
innovative in solving social problems.
But it is not unreasonable to want these problems solved within
of traditional American values. Fundamental to
problem--solving mus be the re-establishment of _aw and order, of
safety in the home and the streets.
I believe home ownership can help solve these problems.
This administration has been accused of being business-oriented.
It is, but not in the sense of offering special favor to any segment
of society over others. It is business-oriented in the application
of sound business principles to the solution of public problems. It
is also a staunch supporter of home rule. There is no field where
these tenets can better be tested than in the field of housing and
home ownership. Local government, acting responsibly under its home-
rule powers and in partnership with the California home-building
industry, can make major strides in this field. I am confident this
can happen.
There are those who imply that administrations which use business
principles and practices as bench-marks in the operation of government
are without "compassion" and do not recognize social values. They
seem to harbor the belief that government obtains its financing from
some extra terrestrial source. They fail to recognize that it takes
a healthy economy to make it possible for society to do those things
which must be done for its less fortunate members.
This is why this administration is doing everything possible to
keep that promise to improve the business climate of California--
because the factors making up that climate are so inter-related that
a detrimental effect on one invariably affects the other. By the
same token, the strength of one frequently accrues to the benefit
of others.
Let me tell you about some of the things we are doing which are
having effects on housing and home ownership in California.
Early in 1967 we established a Task Force on Building Construction
which held many meetings during the year. The committee is composed
principally of private builders and developers, finance and real
estate men, and has as its objective the finding of new ways to
improve California's building climate. The task force works in con-
junction with the various state commissions involved in this broad
field.
It is attempting to determine where and how we can cut government
red tape that might be part of our building and development problems.
It is investigating areas where the private sector can be encouraged
to participate more in solving housing problems.
The director of the Housing and Community Development Department
between the committee and our administration.
Several recommendations have been made by the committee which
we are now exploring. In fact, one of them is well on its way to
implementation. This involves the development of meaningful research
and statistics which would be of benefit to local government and the
home-building industry.
Last June, when I addressed the Pacific Coast Builders Conference,
I promised that the Department of Housing and Community Development
would be restructured in such a way that this research capability
would be provided by the Department. I am pleased to report that
promise is being kept.
The committee also pointed out the need for more current informa-
tion on the condition of our housing inventory. Thanks to the
cooperation of the California Real Estate Association and many other
private organizations, a very useful and unique report has now been
published highlighting the condition of California's unsold housing
inventory.
Third, a series of fact finding hearings have been held by the
Department and Commission on Housing and Community Development to
review and re-define principal housing and community development
problems which should command our attention during the next few years
We know that property taxes have in some cases acted as a
deterrent to the development and preservation of low cost housing.
As you know, we are working on a tax reform program. I have asked
that this reform program produce some type of an incentive which
help
will/stop the creeping blight in our cities. Too many potentially
good homes are being lost to the bulldozer because the owners have
found it more profitable to let these homes run down than to keep
them in good repair.
One possibility is a tax moratorium that would be instituted
on increased assessed valuation resulting from home repair and
improvement. The common complaint is that the first person to con-
gratulate you after you have improved your home is the tax assessor.
We are studying a proposal to delay that increased assessment for
five years, with the thought that more people will be encouraged to
upgrade their homes, and the valuable asset that we have in existing
housing will be preserved and maintained.
It takes money to build homes. Unfortunately, home building
activity is one of the first victims when money gets scarce. There
are signs already that unless new sources of money are found, and
within, the next two to three vears one of
the greatest housing shortages this nation has experienced since
World War II.
One relatively untapped source for home financing is the billions
of dollars in our various pension trust funds. To cite examples of
groups taking a progressive approach in this area--the Public Employees
Retirement System and the California Carpenters Pension Trust have
shown their faith in California development by pledging considerable
percentages of their available funds for home building.
Our task force on building construction is concentrating its
efforts to provide answers in this field. If we can show fund
trustees that real estate represents a sound investment and yields
excellent, direct returns, we can at least partly solve the money
shortage. Many builders say they can build sound attractive homes
for $8 to $10 a square foot, and shall make a profit if the proper
community climate exists.
That climate starts right here in Sacramento, Now we know that
red tape is one of the biggest deterrents to economical subdivisions
and home building. Our Commissioner of Real Estate, Burt Smith, has
worked to cut subdivision processing time in half through stream-
lining of procedures.
Many communities, cities and counties, knowing that time is
money to the developers, are finding ways of speeding their approval
of plan checks and inspections.
We know that outdated specification codes add unnecessary costs
to building, and much effort of late has been spent by more pro-
gressive building officials on updating codes to take advantage of
new products and new materials.
But much, much more work and push is needed in this area if we
are to enjoy the full fruits of the genius of American industry's
research and development efforts. The Department of Housing and
Community Development is taking a leadership position by shifting
emphasis from enforcement to updating of codes and regulations.
Any discussion of housing must analyze federal involvement. You
know, we are living in what might be called a program era". The
federal planners in Washington have a program for every social pro-
blem, real or imagined.
A rock is thrown in a Texas suburb and a national "program" is
established as a part of the so-called creative federalism. The only
"creative" thing about the program, however, is that it represents
yet another federal creation that by-passes the states and takes away
individual initiative
Another outgrowth of the "program era" is the false hope created
in people whose expectations of a better life rise but are never
filled. Low income people see and read press releases, pretty
brochures, and noble promises by the thousands that flow from the
offices of federal agencies. When the promises are not kept, the dust
gathers on the brochures and the press releases become yesterday's
news, the "credibility gap" intensifies and "the long hot summers"
become a way of life.
To those who interpret these words as lacking in social conscience,
let me remind you that the federal government entered the housing
field in 1937 with a public housing program. Thirty years later that
same federal government says 26 percent of our population remain ill-
housed.
Thirty years later the streets of our cities are unsafe. Thirty
years later most of that housing created under the 1937 program fails
to meet the social and physical needs of the people living in it.
Is this the best we have to offer? We think not. Public housing
has not and cannot solve the housing problems of California and the
nation.
In recent months there has been increasing momentum and effort
to involve the independent sector in social problem solving.
American industry has the know-how, the resources, and the motive
to solve many of our problems. The motive--and it is a good motive--
is profit, under a competitive system. A few housing units may be
built out of compassion, but the major needs will be met because of
improved technology utilized by our private enterprise, profit-making
system.
After all, profit is not a dirty word. The building of homes for
profit creates jobs for the groceryman, the painter, the gardener, and
we could go on-but the:álternative is clear that profit must be con-
sidered in the production of housing.
California still has relatively few slums. The sordid tenements
of the East have been avoided, thanks to an active home-building
industry and a progressive home rule approach to government.
The excellent speakers and panelists you have on this program
have discussed many of the problems facing home building.
I will not restate those problems. However, there is one which
seems to stand out as a principal factor--land. Although it is not
yet the most costly item in home production, it is rapidly reaching
Land is a primary factor in influencing site selection, design
of dwellings, and most important, the direction of California's growth.
Good planning and land utilization, therefore, assume great importance
in the field.
Local officials should thus ask themselves:
1. Do our regulations unnecessarily affect the availability of
land for housing and impede development of homes?
2. Are we setting aside an adequate supply of land to meet the
needs of California's present and future people?
3. Are corrective actions needed for any aspects of the land
economy?
You know, this administration already has had a great deal of
success in utilizing the talents of those in private industry to
analyze some of California's more difficult problems and come up with
creative solutions to them.
I would commend this approach to the city councils and county
boards and suggest that each of the 58 counties and 403 cities estab-
lish its own blue ribbon task force on building and housing. We have
found the task force works best when all segments--financial, home-
builder, labor union and local officials--are involved. Working
together, they should be encouraged to express their observations and
recommendations through such a task force on the following subjects:
1. Codes and their application;
2. Land utilization;
3. Financial innovations with emphasis on private housing for
low and moderate income families.
The League of California Cities, at its conference late last year,
placed the objectives of this conference in perspective when one of
the League reports urged:
"Let us turn for the moment away from the problems of today and
face squarely the challenge of tomorrow, to shape our communities so
that each community of California will make a maximum contribution not
only to the good life for its own citizens but for the society as a
whole. For, in the words of George Leonard of Look Magazine--
'California presents the promise and the challenge contained at
the very heart of the original American dream; here, probably more than
at any other place or time, the shackles of the past are broken. In
helping to create the society of the future, a man is limited only by
the strength of his ambition, the dimension of his concern, and the
depth of his courage to face the dangers of his own creation'
#
#
#
(Note: Since Governor Reagan speaks from notes, there may be additions
to, or changes in, the above. However, Govemor Reagan will stand by
2/2
2
-
the
&
OFFICE OF THE GOVERNOR
Sacramento, California
Contact: Paul Beck
445-4571 2.2.68
EXCERPTS OF SPEECH BY
GOVERNOR RONALD REAGAN
CALIFORNIA NEWSPAPER PUBLISHERS' ASSOCIATION
LOS ANGELES, FEBRUARY 2, 1968
Thank you very much. You are very gracious.
Mr. Chairman, I want you to know that it was kind of a shock to
me to discover that those pickets were yours and not mine. I have
gotten so used to them, I don't ask whether they are going to be
here, I just ask which ones? One of my most joyous moments of last
year was vetoing an OEO program that was going to set up a training
school for more demonstrators.
If there is one thing that we do not have a shortage of, it is
demonstrators. Incidentally, I am sorry if there was any confusion
as to whether or not I would be here. You told me last year that
it was a tradition, and if there is one thing that I do not break,
it is tradition, I am even observing Washington's andLincoIn's birth-
days this year. Here we are after a year's on-the-job training.
The redwoods are still standing and the search goes on for the Eel
River.
I suppose we have all made some mistakes in Sacramento, but
sometimes that just proves that somebody stopped talking and tried
to do something, One thing for sure, there is one mistake we will
not be making UP there, I doubt that we will see the state of
California get into the same situation as Iowa found itself recently.
When the state of Iowa's Conservation Department returned a citizen's
$23 dollar gift for a small lake project--saying, we appreciate the
gesture, but such a gift has to be processed through too many offices--
they sent it back, We are here to testify that in the opening months
of our administration, we received a great many gifts--small gifts,
checks and sometimes bills-from people in California who said that
they wanted to help out in the financial situation of our state.
I'll tell you something else that we have learned up there too,
a lesson that another fellow had to go to Alaska to learn. He was
up there as a young boy in an earlier day. They began teaching him
how to drive a dog team. They told him that it was possible of course
to pat the dogs on the head and they would be friendly, but not to
fall down, or they will tear you to pieces.
Now, with regard to protocol, I did not really put down some of
my notes here with protocol in mind. I only know that Frank Jordan
has to be mentioned first by me because he and Nancy are in collusion
right now on how to get somebody to paint a couple of the corridors
in the state house up there that are a rather sickly shade of green.
And there seems to be a lesson in that someplace--as to why Frank
went to Nancy and not to me. I haven't figured it out yet, but I
will tell you that, after a year up there, all of us understand
better why he has been elected and re-elected time after time through
the wisdom of the people of California. We are most happy that he
is there. I do not know if it is protocol, since Frank is absent,
I think that I should refer to the absent member--Tom Lynch--who
has been proving to us why the two party system lends strength to
our way of life.
He has served the state and this administration without partisan-
ship and has cooperated to the fullest in trying to help us with
legislation that will solve the problems of crime and pornography.
Now, I do not know where the next person comes on the protocol
list, but because there is such a wrong impression around, a feeling
about me and education, I want to make it perfectly plain that it
"just ain't true that I got no respect for book learning". Max
Rafferty, of course, is the constitutional officer who is non-partisan
in a friendly sort of way. He continues unceasingly to upgrade
education every day.
Then, there is our controller, Hugh Flournoy. While Hugh has
been denied the legislation he wanted in order to solve the problem
of the inheritance tax appraisers' system, he has proceeded on his
own to reorganize that particular branch of government, not only to
make it more efficient, but to make the criteria for those who would
serve in that capacity, by test and examination, proof that they
have the knowledge and proficiency necessary, instead of simply
having to demonstrate an excessive amount of political zeal at
Then, of course, there is our den mother, is woman who has
handled more money than any other woman in the history of the world
and she is proving to us that "mother knows best". She has marketed
$600 million dollars worth of California's bonds this year, inspite
of a bad bond market and until it got too bad, many of those bonds
were marketed at lower rates of interest. This bespeaks confidence
on the part of a great many of the financial people in the country
in Ivy Baker Priest Stevens and also in this state of ours. Now,
one of her functions is to invest state funds so they will earn
revenue until the time has come to use them. And this year, she had
an average of $18 million a day less to invest than in the previous
year. Yet, with that reduced amount her investment earned this
state $11 million more than had been earned in the previous year.
The $67 million in earnings is enough to run her department for 150
years.
It is hard to know what to say about the Lt. Governor. He just
lulls around presiding over the Senate, when he isn't a college
trustee or a regent of the University, or on the State Lands Commission,
or holding a meeting of the Commission of the Californias, or being
chairman of the Automatic Data Processing study that is being under-
taken to bring us some of the management tools we need. Then, of
course, he also is chairman of the Bicentennial Commission, the Job
Opportunities Board, and certainly, of great importance, is his
liaison with H.C. McClellan in that great program that is going on
in our state with regard to employment.
There are a number of other things that he has to do. He is the
only first term Lieutenant Governor ever to be appointed to the
Executive Committee of the National Council of Lieutenant Governors.
He is busy.
But just to prove though that he has some spare time-since I
have to leave town tonight--he will be making the awards in the
morning which I understand his predecessor was never allowed to do.
Some months ago I was attending a Governors' Conference. We
thought that it was a very important Governors' Conference and one
at which California should be represented. After arriving there
it seemed that a piece of the long hot summer might erupt. In fact,
it was about to erupt in California. There were some who thought I
should climb into the plane immediately and head back to California.
I said, "Well, Bob's there isn't he?" They agreed that the situation
was well in hand. So I just stayed at the Governors' Conference.
He is a teammate. I told all of you people last year he would
be just that--and we are.
We operate in that way--a kind of board of directors with the
Cabinet Officers and these Constitutional Officers who regularly
meet once or twice a week. At these meetings we roundtable the pro-
blems we have in California.
It was just a year ago that I interrupted what I was told was
my honeymoon to be with you and incidentally, I've learned since then
that it wasn't a love match. I reported to you then what we were
going to try to do as well as some of the first steps that had al-
ready been taken to meet the fiscal problems of California--problems
which we had just been uncovering. Those problems could not have been
worse if this state had gone to Las Vegas. At that time I told you
we had set a goal for the six months before the end of the fiscal
year to try and reduce the expenditures by some $20 million dollars.
Well we made it by June 30th, and with a number of millions of dollars
to spare, thank heaven. While we were busy economizing wherever we
could by trimming our sails, there was one run-a-way program in the
area of welfare called Medi-Cal that was spending so excessively that
we were only able to balance the books and balance the budget by
dint of the savings that had been made in the economies during that
six months period.
We submitted a budget shortly after coming into office a year
ago that was 7% higher than the previous year, which meant that
it was within the ability of the then new tax structure to cover.
Our taxes produce about 7-8 percent in increased revenue each
year. This 7 percent increase represented a little less than half
of the increases we had come to know during previous years. Of
course it was referred to as a record budget. But all California
budgets are record budgets and will continue to be record budgets
as long as we increase in population and as long as we have inflation,
because the combination of these two factors amounts to between 7-8
percent increase in the cost of government. That figure is predicated
on the higher price of materials, the higher wages that must be paid,
the growth that must take place in certain departments to match our
own state growth, and so forth.
This year's budget, which will be announced next week, will
be 7.1 percent higher than the previous budget.
Had it not been for the economies that had taken place this
last year, in spite of last year's tax increase, we would have had
to ask for $130 million in new taxes simply to finance this budget
this coming year. Now this doesn't mean that the cost of Government
has to be as big as it is. As a matter of fact, the story that I
just told about the coming year's budget is a little more attractive
than what I presented because, within that 7.1 percent tax increase,
there is some $200 million that is actually for tax relief. It is
going to be returned to the citizens at the local level in some
practical form to help alleviate the tax burden at the local level
and at the county levels. In addition to that, it also includes
$90 million for capital construction, largely at our universities and
colleges. This is a first because, heretofore, this construction
has been financed out of bonds. Now we're going on a pay-as-you-go
basis just as far as we can, so the budget also represents that increase.
I believe that we should continue to reduce the cost of govern-
ment. This will require the help of the legislature, since we will
come to the point where there is nothing further we can do administra-
tively. During this session we will need the help of the legislature
with regard to welfare and the program I mentioned earlier, Medi-Cal.
There has been some confusion about this but in this last year we
began to discover the run-away tendencies of Medi-Cal.
Our first estimate was some $210 million in excess of the
budgeted amount. But this was not $210 million of state money.
This was the $210 million total of state, federal, and county funds.
This means that there was something less than $100 million in excess
spending at the state level.
There has been some comment we have been loose and careless
with figures. This is hardly true when you stop to think that
Medi-Cal wound up the year spending $63 million in excess of what had
been budgeted. And $63 million is not too far away from the $100
million that was projected several months before, when we had to
guess at what was in the pipeline. And part of that reduction was
not just a mistaken estimate. It was because of administrative
improvements made in the program by Spencer Williams' department,
some with the help of the legislature who allowed us to change to a
modified accrual bookkeeping in this field, and also allowed us to
shorten the six month period to a two month period for submitting bills.
Now, Alan Post, the Legislative Analyst told us and told the
legislature that in spite of the administrative savings that we have
made and are continuing to make in that program, we cannot continue
Medi-Cal as it is presently structured without having a tax increase
almost every year simply to pay for this one program.
Incidentally you all know that for several years the counties
have been storming the gates of Sacramento demanding that the state
take back the administration of welfare, take it off their hands.
You might be interested to know that this year there has been a
complete turn-around and the counties do not want the state to
administrate it. This comes as a result of the efforts that have
been made at the state level to free the county administrators from
undue regimentation, regulation and the red tape that has bound them
heretofore. As a matter of fact, in less than a year, Spencer
Williams trimmed 2500 pages of regulations enforced on the counties
by the state to one manual of 200 pages. Now this is just one
example of the sound business principles that are being put to work
as we promised a year ago.
And more to follow, particularly when we begin implementing the
task force reports you are all familiar with.
Some 274 of your fellow citizens--perhaps that includes some of
you--have been serving the state for about six months and have given
us 2,000 specific recommendations for making government more efficient,
will require logislation Others can be out
into effect simply by administrative order. Last year I told you
we were going to put a freeze on the hiring of replacements of employees.
Every year for the last decade the number of employees in government
has increased 4-5½ percent a year. We put a freeze on simply hiring
replacements. By June 30th, at the end of the fiscal year, we had
not only stopped that climbing trend but had reversed it by 2.3
percent fewer employees in the state than there were when we started
in January, 1967. It has been somewhat reduced in the last few
months about 1.8 percent. That's simply because we have recently
been implementing legislation of two years ago which calls for
tripling the size of the state highway patrol.
We are nonetheless continuing our efforts to make government more
efficient and a little smaller in size.
We have one particular department, as a matter of fact, that has
almost doubled in staff simply because they are switching to auto-
mation, and in the switch-over they must have a large number of
temporary employees. But when this is finally completed and the
temporaries are dropped, the permanent structure of that department
will be reduced. Public Works has reduced its budget positions by 11
percent through employing better buying procedures and using more
modern business practices. From February to October of last year
Public Works saved $22 million in the purchase of supplies and
equipment for the state. We have a need to install in every department
adequate cost controls. This would be in a simple, uniform format.
Business management practices would enable us to push a button to
find out how we are spending throughout the year, how many employees
we have, and so forth. At present you would be surprised at the
amount of snooping that it takes to find out how many people are
on the payroll.
In the division of corporations such a procedure is now being
employed. This is one of the divisions that is self-supporting.
Money comes into the department and excess money is turned over to
the general fund. Bob Volk estimated last year, shortly after he
had taken over this assignment, that in this coming year the general
fund would reap an estimated profit of $163,000. By the end of the
-7-
first six months of this fiscal year, the profit has reached $892,352
and it will top $1½ million by the end of the year. Cost reductions
due to eliminating unneeded work, strict controls and a business
approach to government were all responsible.
The division administrating savings and loan could not save the
state any money, but it did save some of the citizens some money
because they are financed completely by assessments leveled against
the savings and loan institutions. They have reduced those assessments
by $300,000 a year, simply in economies through modern business
practices in that department. Of course this is not reflected in a
reduction of the budget. There is also another great savings I would
like to tell you about. It is not reflected in the budget because
it is in the area of those departments financed by the gasoline tax.
Now, here the money must be spent in those areas for highways.
There is no way to turn this back. But you might be interested to
know that over in that department they have exercised such controls
and made such reductions by means of modernizing and streamlining
their operations that I believe I can say we are starting, one year
in advance, 44 highway and freeway projects totalling $110 million.
This is red tape translated into concrete and steel, The fact is,
$110 million comes almost entirely from administrative savings.
How many of you drive down a street that has been newly serviced
and three days later they are digging it up to put a pipe under it.
Don't they talk to each other? Well we do. This round table set-up
I mentioned--the constitutional officers, Gordon Luce, Spencer
Williams, Ike Livermore and Earl Coke--has helped the administration
reduce departmental requests for this year's budget by a total of
$500 million.
In San Joaquin County, a canal which is part of the water program
is going through the delta. We also have a freeway called the west
side freeway. They are both going to be routed across the west side
of the county. This was going to entail two right-of-ways. It was
going to entail a water project buying land on which to dump the
dirt which they take out of the canal. It was also going to entail
the highway department buying land from which to get 7 million cubic
feet of fill for the freeway. Instead, they came into the office
the other day to sign an agreement--an agreement for one right-of-way
which both the canal and freeway will share. The highway is going in
first. This will provide the rough digging for the canal. The dirt
that comes out of the canal will, in turn, provide fill for the
freeway.
But the excavation will create pools. So, Fish and Game got
into the act and is stocking the pools with warm water fish. The
savings on just the fill alone and the grading will amount to
$5 million. But, it doesn't stop there.
Down through the years we have read about the conflict between
the highway department and those who look at the aesthetic values
of the state: the park and recreation people, the people who want
to preserve beauty. We know the horrible battle that took place
up north with regard to putting--or trying to put--a freeway through
the redwoods a few years ago. Well, here they are talking together.
For example parks and recreation and the highway department have a
six man commission, a team that is up in the Tahoe area right now,
choosing the right-of-way for the freeway that will be going around
the lake, to make sure that it in no way interferes with, or harms,
the beauty of that area. And they are going to continue along this
line so that wherever possible we can keep the aesthetic values, the
natural values, the beauty of our state.
There is more to this administration than just trying to practice
economy. Although I know we talk so much about it--because it is
such a problem--I am sure some people think that we are completely
negative in what we have done. Sometimes whenthey complain, I wonder
if they have a picture of us sitting up there in Sacramento on a
treasure chest, just being stubborn saying, "we're not going to give
it to you, we won't spend it." And of course the truth is if someone
gets all the money they want for their department it's got to come
from somebody else's department, because there is just so much to
spend, and it's all going to get spent. At the same time I think
we're taking as much money away from the people of California as any
government should take. I'll tell you now this administration is
pledged to not ask, and will not ask, for an increase in taxes. But
we haven't over-looked the services we have to perform.
We have a transportation task force for the first time in this
state. It is headed by William Pereira a noted architect. It covers
every type of transportation from rapid transit, to highways, to air,
to water. In this way, all of the problems of transportation can be
put together under one group qualified to discuss it, to try and get
some overall plan for our transportation needs. We have the same
basic type of commission to appeal to the problems of pollution,
not only of air, but earth and water.
In the area of conservation, with all the water needs that we
have in the state, we have already succeeded in protecting one wild
river along a fifty mile stretch in northern California. We are
going to protect others where we can so they will remain the scenic
wonders that they are.
I have always been disturbed flying over some of the great lakes
that have been created in our water system. On one portion of the
lake there is usually a piece of brown with some concessions that
have been created there, or which the state has commandeered, and if
someone wants to use the lake for recreation, he must come in through
that one particular entrance. But the rest of the lake shore stands
vacant and idle with a fence around it--assuring that no one can have
access to it. Well, in Oroville we are filling up behind that greatest
of all earth filled dams a lake that will have 169 miles of shore
line. Bill Mott, in Parks and Recreation, has embarked on a plan
whereby that lake is going to be opened up to private investors and
we are going to provide resort recreational facilities for everybody
from sleeping bag camper to the person who wants a luxury hotel.
Included will be housing developments that will be created around the
lake, lake shore developments, lake shore homes, and SO forth. In
fact, there will be $2 of private capital invested for every dollar
the state has put in and we are going to spread this to other areas
because again we believe that the resort operators in our state are
the best qualified to make use of these wonders and to make them
available for the people of our state.
We haven't neglected human resources. In the first six months
of this year three times as many of the physically disabled were
rehabilitated and put out into self-sustaining jobs as in the previous
period a year ago. One of the great programs in human resources, and
Bob (Finch) should be telling you about it because he has been
dealing closely with it, is one by Chad McClellan. Right after the
Watts riots he moved into the area and got 100-150 industrialists
to go in with him with the idea of providing jobs for the hardcore
unemployed. And in a 16-month period they put 17,800 of the unemployed
in that area into private enterprise jobs. They put them to work
and 2/3 of them still remain with jobs. Half of the remaining third
are only out of these jobs because they were promoted to better jobs.
Thirty percent of them have moved out of the area to better homes,
proving that the walls of the ghetto--if there are such--are economic
and can be broken down if you give a man the price to go through
those walls and to choose where he wants to live. Chad McClellan
agreed, at our request, to do this on a statewide basis. He has
organized, in all our leading cities throughout the state, a program
aimed directly at the minority communities, and underpriviledged
areas. Today there are 20,000 employers in California signed up and
participating in this program. They are putting the unemployed in
those areas to work.
Now, I talked a great deal during the campaign about turning
to the great welth of manpower and womanpower that we have in the
state. Incidentally I should add that in Chad McClellan's effort,
as they continue to put thousands of people to work, those who are
already at work are averaging $2.75 an hour, including the women.
Here too there is a great staying power. Once given jobs they are
proving what so many of us have said. Government should stop being
in the business of destroying human beings by way of the soul
destroying dole. On the contrary, we should be salvaging and helping
human beings.
I suppose you think I should stay away from a subject like mental
health, but I'm not. Here again I am happy to tell you that in spite
of all the furor that was raised and all of the somewhat confusing
-11-
information that came up, we will again this year, as we did last
year, be increasing the budget for local health care, the regional
health care centers for the mentally ill, to further stimulate the
reduction in the patient population in our mental hospitals. Just
a few years ago that population numbered 37,000. We believe that
in the next few years it will be down to a hospital population of
about 13,000 which will really represent the irreducible minimum
because these will be custodial cases that will have to be hospitalized
for the rest of their lives. The others represent an actual gain,
in that they are returned to their communities and are able to live
normal lives.
You might be interested to know that in spite of all you have
heard, California is spending more per patient in the area of mental
health than any other big population state in the nation. But what
is more important is that you are getting your money's worth, because
we also lead in the percentage of patients who are taken out of our
hospitals and returned. They are then able to live a normal life and
live on the outside.
At Camarillo Dr. Nash recently announced that for some time he
has had two retired executives from industry here in California.
They are volunteers at that hospital. He gave them carte blanche.
He admits that he took the cue from our task forces. He gave them
carte blanche to come in and look at the business operation at the
hospital and make recommendations. They have been engaged in every
one of these efforts doing a fantastic job. We are going to continue
to find uses for these prematurely retired people because we think
they are only too happy to serve if only someone will ask them and
point the way.
We are seeking a program in tax reform in an attempt to give
our tax structure economies SO that we don't have to keep coming back
for a tax increase; so that we can have a flexible tax structure that
will fluctuate with the economy. We have again introduced legislation
to control pornography and crime. We are going to actively get into
the area of welfare reform.
Incidentally, and I should have said this While I was back on
that subject, perhaps we just started too soon with some of the
things that we are doing with Medi-Cal.
You know, for a time it was kind of lonely out there. Then in
the last few weeks it began to get brighter. I got a phone call
from the Governor of Maryland who said that he would like to talk
to me about some of the problems of Medicaid because he had just
discovered that Medicaid was just about to throw his budget out the
window. And the next call I got was from Massachusetts. And we found
was
out that our good neighbor over here in Nevada / : asking the legis-
lature to cancel Medicaid entirely and start over. They George
Romney called to say that if they implement a next step to Medicaid
in Michigan they would be $50,000,000 in debt.
When Nelson Rockefeller called, he told me that he was asking
the legislature to schedule permission to drop 600,000 people from
the Medicaid rolls in New York. The plain truth is that federal
government foisted on the states a program which will in truth
bankrupt any state in the country that tries to operate without the
proper controls. But let me, because there has been so much confusion,
make one thing plain about this--there is no desire on our part and
no intention of doing anything to see that those who need medical
care and can not provide it for themselves are denied such care. We
believe that it is our responsibility to provide it and we will pro-
vide it.
However, we believe that we shouldn't be bound in any adminis-
trative monstrosities that make it impossible to control the program.
I'd like to cite the example of a family here in California that was
late in getting to the doctor. The whole family was coming in for
shots and examinations and SO forth on Medicaid. They apologized
cheerfully to the doctor for being late. They said that they had
had another errand on their way to the office that took longer than
they thought. They were picking up their tickets for Honolulu. I
suppose the shots were to enable them to go.
Well, I just have taken more time than I intended to. I noticed
that the tradition that prescribed -13- my being here also said that this
was something in the nature of a report. I thought that because last
year we started off by telling our troubles, you had a right to read
the scoreboard and find out what we're doing and we shall continue
to do along this line. I believe that California can be as great as
its people. I think that its people have just been greater than
anyone could believe they would be. I don't believe that there is
any apathy in California on the part of people about their government.
I might also tell you we have quite a tourist trade out here because
this is where the action is and they want to see what is going on.
We hope that in another year we shall be able to make a report
that will contain less predictions of things in the future, and will
include some of the answers in the form of the continuing task force
reports. We hope that we will be able to tell the success of the
newly instituted tax reform.
I can tell you now that we are going to continue along the
course that we have set for ourselves. We are going to continue
reducing the cost and the size of government. We believe that this
can be done without impairing the efficiency of government. We
believe that there is still more leeway and more fat to be trimmed
away. But we also believe that we can keep this state in the fore-
front as it is today:
--In the areas of providing highways for our people to travel
the length and breadth of the state.
--In providing recreational land and providing parks for our
people.
--In the areas of caring for the needy and those who require
our help.
--In the area of preserving what is one of the finest educational
systems and higher educational systems in the nation today.
For we are not only going to carry that on, but we believe that
the educational system should be more available to those who are
disadvantaged and come from the lower income groups. We believe they
should not be prevented from getting an education in our public
universities because the cost is too high. That is why we are doing
our best to institute a plan that will provide the where-with-all
for deserving students who are denied an opportunity for an education
today.
We' 11 continue, that is Nancy will continue, to look for a
place for us to live. We've done that, too, since we were here the
last time.
Again I want to thank you for the opportunity to report to you,
and to tell you that in the days ahead, also, I hope I have an
opportunity to meet with you on some of these projects; to brief you
in advance and hopefully enlist your support on the things we are
trying to do.
There's one other promise I'll make at this particular place
to this audience. Our's is an administration that believes, without
any question, in the people's right to know. And that means your
right to tell them, and you will be kept informed of all that we are
trying to do.
#######
NOTE: since Governor Reagan speaks from notes, there may be additions
to, or changes in, the above. However, the governor will stand by
the above quotes.
X
2
5
OFFICE OF THE G ERNOR
RELEASE:
(
or PMS of February 5, 196
Sacramento, California
Contact: Paul Beck
445-4571
2.1.68
BUDGET MESSAGE OF GOVERNOR RONALD REAGAN TO THE
SENATE AND ASSEMBLY OF THE LEGISLATURE OF CALIFORNIA
ON FEBRUARY 5, 1968
In accordance with the provisions of the State Constitution,
I submit herewith the budget of the State of California for fiscal
year 1968-69.
I want to make my position on fiscal policy absolutely clear
at the outset of this message. I do not seek, nor will I support,
any increased taxes for Californians in the coming year. Neither
will I support the adoption of any programs that are beyond the
capacity of the State's revenue system to fund in the foreseeable
future, and which would in effect dictate an increase in taxes in
the following year.
Total expenditures for 1968-69 are listed at $5,699,536,034,
an increase of $379,351,028 or 7.1% above the revised 1967-68 budget.
These proposed expenditures are financed from three sources: 69% is
derived from General Fund revenues, 23% from Special Funds and the
remaining 8% from Bond Funds.
Examining these three principal budget categories in reverse
order, it should be noted that Bond Fund expenditures are projected
at $465,031,711 for a reduction of $184,788,586, or 28.4% below the
revised 1967-68 level. The reasons for this reduction are threefold:
(1) utilization of $38.5 million of tideland oil revenues for higher
education capital outlay, (2) a reduction in the overall State
building program, and (3) the transfer of
our building program for State institutions from bond funds to
current revenues.
The level of expenditures projected for Special Funds will
remain almost unchanged. The projected level for 1968-69 is
$1,336,424,700, and is 0.4% below the estimates for the current year.
It should be noted that 43% of the expenditures from Special Funds in
1968-69 will reflect shared revenues collected by the State and
returned to local governments for use by them.
The remaining two-thirds of the budget for the coming year
is financed from the General Fund. These expenditures are projected
at $3,898,079,623, for an increase of $569,810,193, which is equal
to a 17.1% increase above the 1967-68 revised spending level. However,
a total of $216 million of this nearly $570 million increase will be
set aside to provide local property tax relief in the coming year,
leaving a balance of $354 million to finance the added costs of the
State government and local support programs for the coming year.
Adjusting for property tax relief, we find the General Fund
budget increasing by approximately $354 million or 10.6% above the
revised budget for 1967-68. It should be noted, that if Canital
Outlay for 1968-69 had not been shifted to pay-as-you-go, then the
General Fund increase would have been 8.8% Included in the $354
million increase are five items that total $303 million. These
are: (1) education subventions, up $69.3 million; (2) higher
education, up $67.8 million; (3) Medi-Cal, up $62 million;
(4) State employee salaries, up $57.3 million; and (5) welfare
programs, up $46.6 million.
-2-
The remainder for financing the General Fund increase in State
operations, after allowing for the foregoing five high-cost items,
totals only $51 million. Therefore, adjustments within and between
programs were required in order to strengthen this small margin to
meet priority services, growth needs, and to provide the base for the
conversion to a $90 million capital outlay pay-as-you-go program.
This, then, is a capsule account of the budget which is presented
to you today.
The following paragraphs, will, offer some pertinent background
on our budgeting procedures, emphasize some of our budget proposals
and summarize the fiscal challenges facing us for the coming year.
Budget Background
The continued practice of overspending the State's annual
revenues and covering yearly deficits by "one-time" tax accelerations
during the first half of this decade reached a climax in fiscal year
1966-67. That was the year when the State, in recognition of the
fact that it would be spending more money during the year than
12 months of revenue could produce, turned to a full accrual accounting
system in order to achieve a balanced budget. In fact, the State
Controller's financial statements now show that the State of
California in 1966-67 spent $112 million of its reserves plus $334
million of revenue collected in the following year in addition to
the revenue collected during the normal 12 months' period.
Moreover, the adoption of the accrual system depleted the
1966-67 year-end cash operating position to the extent that, for the
-3-
first time since the depths of the depression, the General Fund
entered 1967-68 in the red by having to borrow $194 million. This
condition if it had been permitted to continue, would have violated
the constitutional provision prohibiting continued debt without a
vote of the people.
It should be recalled that the original budget proposal for
1966-67 contained a request that $132 million be set aside as a
reserve to overcome the obvious detrimental effects of the then-
proposed accrual accounting. Unfortunately, this provision was
discarded and until this year the cash problem remained unsolved
along with the greater problem of how to finance a deficit budget
after no more "one-time" tax adjustments were available.
In 1967 I asked the Legislature to work with me in
solving the State's financial problems, and together we took the
initial steps towards reality by tightening up on State expenditures
in all departments and by adopting a badly needed tax increase
program for 1967-68. This tax program provided funds for five
major purposes:
1. To finance the State's current level of
expenditures on a realistic basis by
providing adequate revenue.
2. To set aside $194 million in 1967-68 for
restoration of the General Fund to a
minimum position of cash liquidity
following the depletion of this cash
position by the advent of accrual
accounting.
-4-
3, To provide $216 million for an ongoing
property tax relief program in 1968-69.
4. To increase funds for support of local
schools by $145 million, again on a
continuing basis.
5. To allocate $90 million to a pay-as-you-go
capital outlay program, thus reversing a
long time trend of piling debt upon debt to
provide for the annual needs of state
construction.
However, even with these new funds available there remain some
very important financial problems for us to solve.
Last year, we did not legislate an answer to the problem
of controlling those major programs which are increasing at a rate
much greater than our rate of tax revenue increases. It is obvious
that we cannot long continue programs that outpace our revenues
without eventual, tax increases. Nor can we adopt new programs
financed by "one-time" tax windfalls without regard to costs and
sources of revenue for ensuing years.
Government has an obligation to look beyond the down payment
stage, when it adopts a continuing program.
In answer to this need, I am today asking the Department of
Finance, with the cooperation of all State agencies, to prepare
five-year forecasts of revenues based upon our existing tax
structure and five-year projections of operating costs based upon
-5-
our existing programs. These projections will be updated annually
and will provide the taxpayers of the State, as well as the State
government itself, a blueprint of our future commitments. For
years our capital outlay budget has been projected on a five-year
basis, while our operating and support budgets, which are many
times larger than capital outlay, have been routinely considered
on a year-to-year and too often on a crisis-to-crisis basis.
Also we need a realistic operating reserve to absorb revenue
and expenditure fluctuations. Since a drop in General Fund reve-
nue of just 1% would create a fund shortage of almost $40 million
during the next fiscal year, I strongly favor the reestablishment
of a reserve figure, equal to at least 2% of our annual General
Fund budget, at the earliest possible date. Such action could
eliminate the need for emergency program reductions resulting from
normal economic fluctuations during a budget year, as well as pro-
vide some protection against unforeseen overspending such as may
happen this year in the School Fund, wherein the statutory spending
limit exceeds the funded estimates of school apportionments by
over $60 million.
Budget Proposals
Governments throughout the United States today are feeling
the pinch of limited financial resources. The Federal Government
is faced with an annual deficit in the magnitude of $20 billion
as well as severe program reductions. In California, our cities
and counties are finding it imperative to establish and enforce
tough priorities in order to fit their services to their revenues
in the coming budget year. At the state level, throughout the
-6-
Nation, the probl m is much the same. Eithe state spending
programs must be controlled or taxes must again be increased. The
State of California is confronted with the same predicament, but
I am convinced our problems can be solved without imposing additional
taxes.
In fact, in keeping with our promise to support property
tax relief, later in this Session I will present a plan to reduce
property taxes through the application of State revenues.
I firmly believe that we, the Legislature and the Administration,
have the joint responsibility to enact a state budget within the
limits of existing income. This, however, can be accomplished only
through coordinated administrative economies and legislative actions.
The budget I submit today reflects economies in administration
and anticipates specific legislative action to control the spiraling
costs of Medi-Cal and welfare programs.
In preparing this budget, we were faced with many decisions.
Program priorities had to be determined within departments and
between departments. Administrative controls, which we adopted
last year, were supplemented by further savings as we reexamined
each departmental proposal. In our budget hearings and related
budget review procedures, all State programs were analyzed in
detail. Staffing patterns were challenged, and operating expenses
broken down for better scrutiny.
Early in this process, I established certain priorities.
One was for higher education. Although revenue limitations preclude
granting all that was requested, I am proposing a General Fund
operating budget of $280 million for the University of California
and a corresponding budget of $224.3 million for the State Colleges.
This represents an increase of $36.6 million for the University,
-7-
including restoration of the $20.8 million one-time reduction
(Regent's funds) of last year, and an increase of $27.3 million
for the State Colleges. In addition, salary increase funds will
add another $14.1 million to the University budget and $13.5 million
to the State Colleges' budget.
A second priority was salary adjustments for the balance of
all California State employees. Here we have set aside a total of
$47.6 million to provide salary increases that will average 5.85%.
This is based upon an allowance of 5% for across-the-board increases,
as recommended by the State Personnel Board, and 0.85% to be used
for equity adjustments. Additionally, $2.2 million has been reserved
for increased salaries for judges and justices in accordance with
Sec. 68203 of the Government Code.
Due to projected savings in other areas, I am increasing the
funding of the Short-Doyle local mental health programs by $3.6
million in State funds. This will enable us to provide full
75% - 25% matching to all counties for the first time, as well as
allowing for program expansion.
As I stated earlier, some programs have had to be curtailed
in order to provide dollars for areas of greatest need. Although
we find we can meet the State's requirements for capital outlay,
we do not have the resources to continue granting funds to local
public and private hospitals for construction and remodeling.
This will in no way affect the Federal allocation to California
hospitals, but will require the individual hospitals to provide
two-thirds of the project cost in order to qualify for the one-third
Federal share.
-8-
Medi-Cal and Welfare
Our projections for the State cost of Medi-Cal during the
current year total $274 million. Unless necessary program changes
are adopted, this cost will soar an estimated 46.7% to $402 million
in 1968-69. However, I propose a Medi-Cal budget of $336 million
for next year. This represents an increase of $62 million or 22.6%
over the current year. During this Session, I will request
legislation to enable us to administer the program within this limit.
We cannot continue to fund a program of this magnitude and extreme
growth rate from a revenue source that is increasing at only 7%
to 8% a year.
In the State's welfare program, we also are faced with a serious
problem of expansion. State welfare costs are approaching one-half
of a billion dollars annually. This year, for example, the State's
share of welfare expenditures will reach an estimated $409,387,600.
If left unchecked, this would climb to $466,048,100 in 1968-69--an
increase of 13.8%, or $56,660,500. However, I propose a welfare
budget of $456,048,100 for next year. This provides an increase
of $46,660,500, or 11.4%. In keeping with the proposed reduction
in the rate of welfare spending, I will request specific changes
in welfare laws.
Budget Summary
In addition to the curtailments and program augmentations
already mentioned, we have provided for other program adjustments
and new programs within the limit of existing revenues.
For example, we are making available funds for the creation
of a new unit within the Department of Justice to direct the State's
-9-
fight against organized crime, while at the same time expanding
the staff in the Department's Bureau of Narcotic Enforcement.
We are providing funds to meet the needs of a cost of living
adjustment for retired State employees.
We are boosting our allocation of funds to the counties to
help defray the costs of employing public defenders.
We are adding $3.3 million to our State scholarship program
in accordance with Chapter 1659, Statutes of 1967.
From the Motor Vehicle Fund allocation, we will be able to
employ 500 new highway patrol officers and support their related
costs at an estimated $7.3 million. In addition, $1 million has
been set aside to continue the work of improving the communications
network of our highway patrol system.
One-half million dollars will be made available for new
positions in our Parks and Recreation Department to provide improved
maintenance and services in the recreation areas throughout the State.
Although it is not practical at this time to list all of the
many detailed proposals contained in this budget, I want to assure
you that we are fully dedicated to a continuing analysis of every
State program. Consistent with this policy, we shall take
determined administrative action and actively sponsor legislation
necessary to fulfill our obligations in those fields where we
find the State's greatest need as reflected by our growth and the
requirements of our citizens.
Last year, the Legislature and the Administration took those
actions which were necessary to restore the State's financial
-10-
solvency. This year, our tasks will be equally demanding as we
adjust expenditures to meet the limits of our tax resources. And,
we must jointly develop the basis for progress in our programs of
the future.
Therefore, once again I ask the Legislature to join with me
in these efforts to provide the State of California with a budget
based upon sound fiscal policy and dedicated to providing that
balance of public service which will best meet the needs of all
of the people of California.
-11-
-
and
2/8
2
OFFICE OF THE GOVERNOR
RELEASE: Thursday P.M.
Sacramento, California
Contact: Paul Beck
445-4571 2.7.68
EXCERPTS FROM SPEECH BY GOVERNOR RONALD PEAGAN
Governor's Industrial Safety Conference
Fairmont Notel, San Francisco
February 8, 1968
Like you I have a personal interest and concern in the reduction
of accidental injuries in California. The size of the attendance here
is a direct indication that interest in this important work of saving
lives and preventing industrial injuries is growing.
There is no question that reduction of industrial injuries can
best be made in a climate of understanding among management, labor,
and government, with goals defined and good programs of action. I am
more than a little self conscious talking to you with the knowledge
I have that everything I say is known to you already and believed
by you. I can only excuse taking your time on the theory that it
bears repeating. In the last year we have endeavored to institute
economies in state government wherever possible. Now there is some-
thing I did not really have to say. The screams of anguish from
those whose pet programs have been cut are ringing in our ears.
Today I would like to discuss with you briefly one area where I
believe highly beneficial savings can be made, first and most important,
by preserving lives and limbs through the prevention of accidents,
and then by reducing unnecessary and unproductive costs which always
accumulate when serious mishaps occur.
Seventeen California workmen were trapped for a day by a caving
tunnel. No expense was spared in rescuing the entrapped men, and
this is as it should be. But how much better if the accident had
never happened. How much less the cost in worry, anquish and money.
We are a large and growing state. Civilian employment surpassed
the seven and one-half million mark for the first time last September.
These millions work in about 400,000 places of employment. Many are
exposed to on-the-job work hazards in varying degrees--and unfortunately
these hazards take their toll each day, in the form of unexpected and
unwanted accidents. Last year in California, there were approximately
195,000 industrial injuries and 669 deaths. The direct cost of
injuries in the form of workmen's compensation benefits paid was
approximately $500,000,000. That is almost one-half the states total
revenue from income tax. This figure does not include the indirect
accident costs. Depending on the type of industrial environment
of
production
failure to meet contract schedules, damage to facilities and equipment,
and many other intangibles, including morale of employees, will make
the total loss from three to four times higher. In California we are
use to big numbers and are trying to make most of them smaller. This
is one we can and should make smaller.
Between 1950 and 1958 California had a healthy twenty-five
percent reduction in disabling industrial injuries. Since 1958,
however, there has been only slight improvement in the percent of
accidents. Obviously there is genuine need for a renewed effort to
get the accident graph started downward again. This is true especially
in the manufacturing industry which has shown a significant increase
in its disabling injury rate during the last few years.
On the bright side, a recent estimate released by the Division
of Labor Statistics and Research in the Department of Industrial
Releations indicates the overall industrial injury rate for 1967 will
be at an all time low of 30.7 disabling injuries per 1,000 workers,
down almost three and one-half percent from 1966. Fatalities in 1967
were down seven and one-half percent. We can take considerable
satisfaction from these figures, and we can all hope that this down-
ward trend will continue.
Traffic safety is a vital part of our accident prevention effort.
About one-third of our industrial deaths each year are attributable to
vehicles--most of them to operators involved in collisions while
driving on our public streets and highways. To truck drivers,
travelling salesmen, and thousands of others, our highways are a
place of daily employment. In view of the vehicle's critical
relationship to the industrial death problem, I would like to review
some of the decisions and goals established at the Traffic Safety
Conference held last December.
California has more than 164,000 miles of roadway in daily use,
a figure that is growing steadily. Me have 12 million licensed anto-
mobiles, trucks, and buses travelling more than 90 billion miles
each year on those roads, streets and highways. But the cost was
high. There were 4,286 traffic fatalities during the first eleven
months of 1967. Another 211,000 were injured. The death rate was
down 1.9 percent from 1966, but this was offset by an increase of
2.1 percent in the injury rate. Regardless, both fatality and injury
figures are far too high and this administration is taking action to
reduce them.
The drinking driver is one of our most serious problems.
Alcohol is involved in approximately thirty-five percent of all fatal
auto accidents. We are seeking a way to stop issuing drivers'
licenses to chronic alcoholics, and I am hopeful that a three year
trial program now underway will prove effective. Additional legislation
will be proposed this year to establish a presumptive limits law to
provide new protection from the drinking driver.
We also will support legislation which will require special
licensing procedures and special protective equipment for motorcyclists.
While we continue to work with the negligent driver we must also
focus more of our efforts on the "average driver" through improved
education programs, and better licensing standards and techniques.
We are hopeful schools will be able to expand driver education
and driver training programs.
More lives can be saved by improving emergency medical service
and providing better transportation to hospitals or emergency stations.
Along with the tightening of licensing standards for drivers,
we must also improve the standards for vehicles. We cannot allow
unsafe vehicles to operate on our highways.
There are other sources of off-job injury and death that need
attention. The fact that home accidents cause twice as many deaths
as work accidents is important to everyone here. Many of those injured
at home are members of our industrial work force and thus a loss to
our productive capacity as well as to their families when unable to work.
Falls and burns are the most frequent causes of home deaths. These
can only be reduced through stepped-up public education programs.
It is obvious that there is much work to be done in all fields
of accident prevention. Such work demands leadership from you here
today and others like you.
Your interest in preventing traffic and home accidents along with
those in industry is in keeping with a trend toward a broad, public
spirited move for accident prevention in all human activities.
As an example, labor unions in recent years have teamed up with
the National Safety Council and other organizations in a campaign to
make Labor Day a safe day.
The matter of off-the-job injuries whether on the highways, at
home, or elsewhere, is especially important to those who work for
wages, and to those labor officials and employers who concern them-
selves with the welfare of such workers. Even with the help provided
by workmen's compensation, industrial injuries are a serious blow to
the security and well-being of the working man and his family. Off-
the-job injuries cause even greater financial problems since there is
no assurance that such injuries will b) covered by payments corresponding
to those provided by workmen's compensation.
I would urge that you continue to expand your safety efforts in
all areas so that your knowledge and experience in the industrial
safety field will be helpful in preventing injuries everywhere.
Fortunately, many of the methods of accident prevention effective in
industrial operations are equally effective at home and on the highway.
Employers these days are also paying more attention to off-the-
job safety, not at the expense of industrial accident prevention,
but as an extra effort to avoid job disruption from injuries wherever
they might occur. Industry is aware that its strength and its ability
to earn a profit rests with the strengths and abilities of its
individual workers--workers who are on the job and free from injury.
Society has an obligation to do what it can to reduce accidents
in every area. Industry especially must take a lead role since it
has a moral responsibility to send its workers home at night in good
physical condition--tired, perhaps, but at least healthy. In order
to do this, industry must make employment and places of employment
as safe as humanly possible.
New techniques in manufacturing processes, some of which require
the use of inherently hazadous' materials, now form a part of the
industrial complex. Industry is dealing with higher temperatures
and pressures. The use of radioactive materials is increasing. New
chemicals and solvents are being developed. Techniques are becoming
more sophisticated, requiring in some cases specialized knowledge to
prevent accidents including fires, explosions, and collapse. The
safety problems encountered today are far different from those found
in industry just a few years ago, and I do not pretend to know the
answers. I have faith, however, in your ability to solve these
problems for the future welfare of our workers.
Government, of course, also has a responsibility especially in
California where laws require that minimum standards of safety be
maintained. It is government's job to see that these standards are
appropriate, reasonable, and up-to-date. Procedures must be maintained
for their enforcement in accordance with the law--a responsibility
of our Division of Industrial Safety. Fortunately there are many
employers who willingly follow safety standards well above the
Industrial Safety to devote a larger portion of its time to the
educational and training aspects of safety.
The theme of this conference is safety education. Widespread
education is indeed an essential ingredient in stimulating proper
safety attitudes and interest. Over half of our industrial injuries
are preventable by the avoidance of unsafe acts. Of course this is
not the whole story, and it is not the easy answer to all our safety
problems. But it is worth the big push that this conference group is
capable of launching. It may be the means by which the industrial
injury rate is again started on a trend of definite decline.
Safety to be effective must be constant, and if it is to be fully
effective, we must work at it every day. William Wrigley was once
asked why he devoted so much of his advertising budget to billboards.
lie replied that "If you tell people often enough about something some
of it is bound to sink in."
The individual cannot be overlooked; his work procedures must
be examined to eliminate faulty habits and unwise short cuts that will
eventually lead to an accident. Supervisors have a responsibility
to teach and train workers the safe way to perform industrial tasks
and to augment their safety program with periodic safety meetings or
discussions.
Our labor organizations also have an important part to play in
this endeavor--by promoting and by endorsing safe work practices in
cooperation with business and industry.
Let me say I have enjoyed being here with you today. I know
your discussions and deliberations will prove to be effective in this
important battle that must be continually waged against needless
accidents.
#
#
#
#
#
NOTE:
Since Governor Reagan speaks from notes, there may be additions
to, or changes in the above. However, Governor Reagan will
stand by the above quotes.
-5-
my
$
65
2/14
2
OFFICE OF THE GOVERNOR
Sacramento, California
Contact: Paul Beck
(Not distributed to Press Corps
445-4571 2.14.68
REMARKS OF GOVERNOR RONALD REAGAN
California Council on Criminal Justice
Sacramento
February 14, 1968
It is a great pleasure to welcome you here today at the initial
meeting of the California Council on Criminal Justice. As you know,
the creation of this council was one of the principal objectives of
all of us during the 1967 session of the legislature. I am greatly
indebted to many of you here for your efforts in securing the passage
of that legislation, and particularly the cooperation shown by Attorney
General Tom Lynch and Senator George Deukmejian.
The report of the President's Commission on Law Enforcement and
the Administration of Justice, released in February 1967, recommended
that each state establish a state wide body with the responsibility
for planning and development in the field of criminal justice. We
feel that this council, which was already on the "drawing board"
before that report was published will ably fill this requirement.
With the many problems of crime and disorder which daily face
the public officials and the citizens of our state and our nation, the
prevention and control of crime is clearly our number one problem.
It is appropriate, therefore, that we recognize this priority in
establishing this Council on Criminal Justice, composed of leading
representatives of all agencies and levels of government which are
involved in the criminal justice process.
As you will note from the composition of this council, your
membership will continue and enhance the partnership which has tradition-
ally existed between state and local government in the handling of law
enforcement matters. Under this partnership, the primary responsibility
for maintaining law and order rests with the local community. The
state serves to provide that support and assistance whichis beyond the
scope of city and county government. Together all levels of govern-
ment cooperate in forming a strong and effective means of combatting
criminal activity wherever it may occur in the state.
-1-
As defined in legislation which created this council, you
have five major responsibilities:
First---to develop plans for the prevention, detection and control
of crime, and for the administration of criminal justice.
Second--to encourage coordination, planning and research by law
enforcement and criminal justice agencies throughout the state and to
act as a "clearing house" for proposals and projects in this field.
Third--to develop plans for the dissemination of information on
proposed, existing and completed research and development projects.
Fourth--to advise the various governmental agencies charged with
responsibility in criminal justice matters.
Fifth--to provide a vehicle for the implementation of federal
crime control programs that are applicable to this state.
This is a broad mandate for action. We cannot be content with the
ideas and concepts of past decades. Our ability to cope with crime
and the criminal must include the most modern facilities which science,
technology, and education can furnish. Only by careful planning and
coordinated effort can new horizons in criminal justice be discerned
let alone achieved.
Your work should encourage every police department and sheriff's
office, every court, and every correctional agency to attain new
heights of accomplishment in serving the citizens of our state. You
can be a catalyst for advance thinking and improved techniques, so
that we as a state can begin to catch up with the ever increasing
crime wave, and hopefully to begin to reduce it.
This council is not just another "paper organization," nor is
it just another "committee." Each of you was selected because of your
expertise in your area of ciminal justice. We feel that the
combination of this talent, and the utilization of this council as
the focal point for progress and development, will produce results
that will benefit every city and county in California.
In carrying out your work you have the authority to utilize the
existing resources of any department or governmental agency. I hope
you will operate in this manner, so that you will provide the planning,
the coordination and the guidance. and will then call upon such groups
as the Board of Corrections, the Commission on Peace Officers Standards
and Training, the Judicial Council and the Department of Justice, and
other similar agencies, to provide the detailed studies and proposed
solutions to our problems.
As you begin your work I would particularly call your attention
to certain areas which appear to pose immediate and grave problems
for our state. These include:
1. The increasing incidence of narcotic and dangerous drug use,
particularly by young people;
2. The continued threat of organized crime;
3. The increase in violent crimes, particularly assaults;
4. The need for crime prevention programs which will involve
virtually every citizen in helping to deny to the criminal the oppor-
tunity to commit his crime;
5. The long and short range correctional requirements of our
state, and the need to reduce recidivism.
6. The need for bringing together our scientific and educational
resources through improved programs to prevent and control criminal
activity.
This is an imposing list of objectives, but I feel that the members
of this council are equal to the task that I pose for you. I want
to express my firm support of your work and my continued cooperation
in all of your activities. You have the opportunity to render a great
service to the state of California. as well as to provide a model for
the rest of the nation to follow. The results of your actions will
certainly benefit every citizen of our state, if by your efforts he is
able to live in a better and safer community.
#
#
#
#
#
#
RELEASE: Thursday P.M.'s
OFFICE OF THE GOVERNOR
February 15, 1968
Sacramento, California
Contact: Paul Beck
445-4571 2.14.68
EXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN
Stanford Business Conference Luncheon
Fairmont Hotel, San Francisco
February 15, 1968
Of 853 recommendations submitted by the task force, 137 have been
implemented to date. One hundred twelve of these recommendations have
been referred for further study and evaluation, and 604 are already
scheduled for implementation. Of the 604 which have been scheduled
for implementation, 505 can be effected by administrative action, and
99 will require legislative implementation.
Of those recommendations already implemented, a total of just under
$7 million in annual savings has been achieved.
Future implementations will provide the state of California with
annual savings in the millions of dollars, and this is only a part of
the dynamic influence the application of sound business management
techniques is having in California.
My administration has waved no magic wand over the halls of govern-
ment in order to arrive at a more realistic approach to the management
of government and its affairs in California. Instead, we have had out-
standing business-oriented men to administer the program of the
administration.
We have sought to eliminate unnecessary work, consolidate operations
wherever possible, refused to replace departing personnel unless there
was a strong justification for doing so, enlarged existing responsibili-
ties; we have been decisive instead of bureaucratic, and we have not
been afraid to make changes even with "sacred cows."
By following this plan of action, the yield has been significantly
encouraging.
In Public Works we operate with 17,924 employees, down from
20,079 authorized positions, or 11 percent under the 1967-68 budgeted
figures--and, in many cases, handle a greater workload with an improved
work product. The quality of our service has increased with our
efficiency.
-1-
In General Services, purchasing techniques have been changed in
order to provide for more competitive bidding, and more product com-
petition and volume discounts. As a source of General Services'
actions, better space utilization is being made by reducing square
footage allowances per employee. Savings from this department are at
a level of $22 million. Additionally, the Cal Expo project is a
primary example of private enterprise working with the state for public
benefit.
In terms of investments, we found that by law state highway
funds could only be invested in government bonds. A change in that
law, suggested by us, which allows the investment of these monies in
banks and federal agencies' securities wi 11 result in an increase of
$500 thousand in increased revenue to the state each year.
In the Drivers' License Division of Motor Vehicles, we were
able to save $164 thousand by the application of sound business
procedures, and, as Hubert Humphrey once said, "A billion here and a
billion there
it all adds up!"
But--the application of sound business practices to government is
only one important part of the story. There is another very meaningful
part to the story of business and government. This second part is one
to which you are all addressing yourselves in this conference- that is,
the role business can play in helping to solve some of the great social
problems with which we are faced today.
My administration views the application of sound business practices
to government as a process through which government can better do the
job it must do. But government alone cannot solve all the problems
of our society without great personal sacrifices on the part of every
individual in society. Instead, we must also turn to the collaborative
efforts of business and government to seek solutions to these pressing,
demanding, and challenging problems.
Many of California's public needs are not responding adequately
to present approaches by government. Many of these public needs are
intertwined and are unresponsive to the fragmented, undersourced,
unimaginative, and shopworn approaches designed by people in govern-
ment who are far removed from the actualities of the problems. Many
of these public needs approach crisis proportions-- if they are not there
already--air pollution, traffic congestion, crime and delinquency,
dependent children and broken families, urban blight, racial unrest,
unemployment and underemployment.
California must turn to its most talented, resourceful, and
innovative sectors--not just to government-- to provide solutions for
these problems. We must organize a total systematic effort to analyze
and attack these critical needs. Not government alone, and not business
alone, but the imaginative collaboration of the public, private, and
independent sectors of our society.
If you reach any decision at this conference, it should be a
decision that the opportunity for business to engage in social action
problem-solving is the most needed and challenging task which is
before any of us today.
Just as government cannot "create" jobs for our unemployed and our
unemployables--sc it is that government, without the help of the
independent and business sectors, cannot run efficiently, nor can it
satisfy the needs of our citizenry. Indeed, without the input of
business, government would be full of sound and fury, and signifying
nothing.
Beyond this, without a combined thrust by all the sectors of our
society, this may well be the sad commentary of our society.
I am confident this will not happen--as I am confident the
business sector will see their responsibilities and accept these
challenges.
NOTE: Since Governor Reagan speaks from notes, there may be
additions to, or changes in, the above. However, the Governor
will stand by the above quotes.
2/15
2
51
OFFICE OF THE GOVERNOR
RELEASE: Thursday P.M.'s
Sacramento, California
February 15, 1968
Contact: Paul Beck
445-4571 2.14.68
EXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN
Stanford Business Conference Luncheon
Fairmont Hotel, San Francisco
February 15, 1968
Of 853 recommendations submitted by the task force, 137 have been
implemented to date. One hundred twelve of these recommendations have
been referred for further study and evaluation, and 604 are already
scheduled for implementation. Of the 604 which have been scheduled
for implementation, 505 can be effected by administrative action, and
99 will require legislative implementation.
Of those recommendations already implemented, a total of just under
$7 million in annual savings has been achieved.
Future implementations will provide the state of California with
annual savings in the millions of dollars, and this is only a part of
the dynamic influence the application of sound business management
techniques is having in California.
My administration has waved no magic wand over the halls of govern-
ment in order to arrive at a more realistic approach to the management
of government and its affairs in California. Instead, we have had out-
standing business-oriented men to administer the program of the
administration.
We have sought to eliminate unnecessary work, consolidate operations
wherever possible, refused to replace departing personnel unless there
was a strong justification for doing so, enlarged existing responsibili-
ties; we have been decisive instead of bureaucratic, and we have not
been afraid to make changes even with "sacred cows."
By following this plan of action, the yield has been significantly
encouraging.
In Public Works we operate with 17,924 employees, down from
20,079 authorized positions, or 11 percent under the 1967-68 budgeted
figures--and, in many cases, handle a greater workload with an improved
work product. The quality of our service has increased with our
efficiency.
-1-
In General Services, purchasing techniques have been changed in
order to provide for more competitive bidding, and more product com-
petition and volume discounts. As a source of General Services'
actions, better space utilization is being made by reducing square
footage allowances per employee. Savings from this department are at
a level of $22 million. Additionally, the Cal Expo project is a
primary example of private enterprise working with the state for public
benefit.
In terms of investments, we found that by law state highway
funds could only be invested in government bonds. A change in that
law, suggested by us, which allows the investment of these monies in
banks and federal agencies' securities wi 11 result in an increase of
$500 thousand in increased revenue to the state each year.
In the Drivers' License Division of Motor Vehicles, we were
able to save $164 thousand by the application of sound business
procedures, and, as Hubert Humphrey once said, "A billion here and a
billion there
it all adds up!"
But--the application of sound business practices to government is
only one important part of the story. There is another very meaningful
part to the story of business and government. This second part is one
to which you are all addressing yourselves in this conference--that is,
the role business can play in helping to solve some of the great social
problems with which we are faced today.
My administration views the application of sound business practices
to government as a process through which government can better do the
job it must do. But government alone cannot solve all the problems
of our society without great personal sacrifices on the part of every
individual in society. Instead, we must also turn to the collaborative
efforts of business and government to seek solutions to these pressing,
demanding, and challenging problems.
Many of California's public needs are not responding adequately
to present approaches by government. Many of these public needs are
intertwined and are unresponsive to the fragmented, undersourced,
unimaginative, and shopworn approaches designed by people in govern-
-2-
ment who are far removed from the actualities of the problems. Many
of these public needs approach crisis proportions--if they are not there
already--air pollution, traffic congestion, crime and delinquency,
dependent children and broken families, urban blight, racial unrest,
unemployment and underemployment.
California must turn to its most talented, resourceful, and
innovative sectors--not just to government--to provide solutions for
these problems. We must organize a total systematic effort to analyze
and attack these critical needs. Not government alone, and not business
alone, but the imaginative collaboration of the public, private, and
independent sectors of our society.
If you reach any decision at this conference, it should be a
decision that the opportunity for business to engage in social action
problem-solving is the most needed and challenging task which is
before any of us today.
Just as government cannot "create" jobs for our unemployed and our
unemployables--sc it is that government, without the help of the
independent and business sectors, cannot run efficiently, nor can it
satisfy the needs of our citizenry. Indeed, without the input of
business, government would be full of sound and fury, and signifying
nothing.
Beyond this, without a combined thrust by all the sectors of our
society, this may well be the sad commentary of our society.
I am confident this will not happen--as I am confident the
business sector will see their responsibilities and accept these
challenges.
NOTE: Since Governor Reagan speaks from notes, there may be
additions to, or changes in, the above. However, the Governor
will stand by the above quotes.
2/19
2
OFFICE OF THE GOVERNOR
RELEASE: Immediate
Sacramento, California
Contact: Paul Beck
445-4571
2.19.68
EXCERPTS OF REMARKS BY GOVERNOR RONALD REAGAN
Seminar on Intergovernmental Relations
Senator Hotel, Sacramento
February 19, 1968
It is a great pleasure to extend greetings to participants at this
seminar on intergovernmental relations. This is one of a series of
statewide conferences in which representatives of government, education,
and the private sector come together to discuss and seek solutions for
the problems facing our state.
Some of you recently attended a very excellent conference on housing
where state and local government officials were joined by representatives
of business and industry in a significant review of the problems
involved in providing adequate housing for all the citizens of
California.
I am sure that this conference will likewise be successful in
identifying the major challenges which face state and local governments,
and which will require the joint efforts of all these groups represented
here. You can help provide the citizens of this state with the quality
of life they need and deserve.
Too often we are all necessarily concerned with the day to day
problems and crises which demand immediate resolution. Yet we cannot
afford to overlook the equal, but sometimes less apparent, necessity for
long range planning. We must look today at the problems of California
5, 10, and even 20 years in the future so that we can begin to develop
a blueprint for the type of California we wish to achieve.
We have already started this in state government by initiating a
five-year projection of information on needs for state services and
facilities and the availability of resources to meet these needs.
Your conference today is certainly consistent with the idea of
taking a long-range view of California's future, establishing goals and
bjectives, and bringing together the talents of a variety of disciplines
and backgrounds, to formulate solutions and recommendations.
As we look toward the California of the 70's and 80's, one of the
traditions and strengths of our state which we certainly wish to pre-
serve is the partnership and concept between state and local government--
and the strong concept of "home rule" which has reserved to cities and
counties a high degree of governmental authority.
-1-
This administra recognizes and seeks to strengthen the role
of local government as a vital force in our society. The cities and
counties of California daily fulfill the most essential needs of the
people. These functions, carried out at the local level, give our
citizens the greatest opportunity to exert strong and constructive
influences over their government.
The growing national trend towards centralization of government
$
done much to remove political decision-making from the people. This,
in turn, has too often sapped their sense of responsibility fcr the
course of government. To counteract this trend we must build strong
local governments that are responsive to local needs and which allow
their citizens to directly shape the policies which affect them.
While we are talking about keeping government close to the people,
I also want to talk about involving people--private citizens--directly
in government itself. I am sure you are all aware of the many ways in
which the private sector has been involved in many of the programs of
this administration.
The recent reports submitted by our Survey on Efficiency and Cost
Control are examples of this. Other groups have worked on legislative
recommendations, environmental quality, fiscal and revenue management,
and a variety of other projects.
I know that at the local level there is a similar willingness on
the part of public officials to obtain the ideas and efforts of citizens
who are not regularly a part of the governmental structure. I certainly
want to encourage such involvement and to indicate that the dividends
which will be gained--both in good suggestions and in a renewed sense
of participation in the processes of government--will be beneficial to
government and to the citizens alike. The fact that so many of you are
here today as representatives of the independent sector attests to your
agreement with this principle of citizen participation and responsibility.
I spoke earlier of the partnership between state and local govern-
ment, because, to me, this certainly characterizes the working relation-
ship which we seek to promote in California. Intergovernmental
problems are perhaps the most complex issues that we face in Sacramento.
Virtually all action taken by the state affects local government in one
way or another, and likewise the views and actions of cities and
counties have a great influence on the policies and programs of the
state.
-2-
We have therefore felt the need to expand and improve the techniques
and the organizational means for managing intergovernmental relations.
We seek the most effective vehicle for relating the needs of city and
county government, of schools and other local agencies to state programs
and planning.
I am therefore happy to discuss with you today some of our ideas
for enhancing the state's capability of working with local government
in achieving our common objectives.
As you know, we recently submitted to the legislature a plan for
the reorganization of the executive branch of state government. Within
this reorganization we are instituting a new concept designed to
provide a vehicle for handling intergovernmental problems. It is our
plan to expand the role of the Intergovernmental Council on Urban
Growth, and give it the capability for exercising an advisory overview
of all problems mutually affecting state and local governments, and to
engage in long-range planning in these areas.
This concept does not accept the idea that we can compress into a
single department of state government the problems of local governments.
Indeed, virtually every department of state government is concerned with
some subjects which affect cities and counties. Therefore, we need a
council which can cut across the governmental structure and provide a
comprehensive and coordinated approach to the common problems of a
variety of governmental agencies.
We propose, therefore, to create a Council on Intergovernmental
Relations which will give all of us the best possible means for working
together. We hope this council--reporting directly to the governor's
office--will serve as a sounding board for new ideas and new programs
and recommendations for implementation at the state and local level.
Rapid growth and economic development have seriously affected the
quality of California's natural environment and there is an immediate
need to provide effective waste management controls. Legislation has
already been introduced which will approach this problem. I will ask
a group of outstanding citizens to determine an appropriate course of
action to preserve and enhance environmental quality on a long-range
basis.
Public service manpower shortages are critical now and will intensify
by 1975. Changes in urban growth patterns have created the need for a
new dimension in public service. Last week I authorized the creation by
Executive Order of the California Public Service Education and Training
Advisory Council. Their charge will be to develop creative plans and
cooperate and assist in the development of programs for the training of
public servants for all levels of government.
The Council on Intergovernmental Relations also will be called upon
to assist in the implementation of certain federal grant programs and
to provide assistance in local planning and community development
efforts.
One direct result of the intergovernmental approach has already
been achieved. That is the creation of the Intergovernmental Board on
Electronic Data Processing which is concerned with the development of
information systems as an essential part of long-range data collection
and planning.
But mere recognition of the importance of local government is not
enough. We must be aware that an increasingly complex urban society--
with the problems of the core cities and sprawling suburbs--creates new
and difficult problems.
We believe the answer to these problems is to strengthen, not to
abandon, the basic concept of local government. It is to find new
solutions which will promote greater efficiency and effectiveness, while
at the same time retaining local decision-making and responsiveness to
individual citizens.
There are certain immediate problems to which the Council on
Intergovernmental Relations might direct its efforts:
1--To review the allocation of governmental services and resources
between state and local governments and to make recommendations for
changes where necessary.
2--To give local governments the opportunity to develop fiscal
programs and sufficient revenue capabilities to finance local services
without having their taxing capacity pre-empted or reduced by excessive
federal and state taxation. In this regard, our recent action in
proposing to the legislature that certain sales tax revenues be allocated
to the counties for property tax relief is a first step in this endeavor.
3--To solve the problem of the prcliferation of special taxing
districts and to develop a plan for strengthening local government by
improving its efficiency in providing the various services which are too
often fragmentized in small and costly local taxing agencies.
These have been some of the ideas developed by this administration
concerning the problems of California and the programs which will ful-
fill our future needs. It is no exaggeration to say that the quality
of life which will be enjoyed by Californians of the future depends
to a great extent on efforts such as yours today.
# # #
(Note: Since Governor Reagan speaks from notes, there may be additions
to, or changes in the above. However, Governor Reagan will
stand by the above quotes.)
-4-
-
3/
3/4
4
OFFICE OF THE GOVERNOR
Sacramento, California
Contact:
Paul Beck
445-4571
3.4.68
C-O-R-R-E-C-T-I-O-H
In Release of Excerpts of Speech By Governor Ronald Reagan 20th
Annual California and Pacific Southwest Recreation and Park Conference
to be released for P.M.'S today, please correct Page 2, Paragraph
number 5 to read:
Occasionally, a property in our park system can function better
if it is not state owned. This is true of our Squaw Valley ski area.
So we are going to sell it.
PB
OFFICE OF THE GOVERNOR
RELEASE: P.M.'S MONDAY
Sacramento, California
Contact:
Paul Beck
445-4571
3.1.68
EXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN
20th Annual California and Pacific Southwest
Recreation and Park Conference
Community Concourse, San Diego
March 4, 1968
It is a pleasure to be here among such a large group of fellow
conservationists. I recognize that one of your primary interests is
in the conservation and preservation of America's natural resources so
that they can be used and enjoyed by future generations of Americans.
I share that interest with you because it is part of the con-
servative philosophy to preserve the best of our heritage--including
our natural resources. But the conservative philosophy also demands
that the best use be made of those resources we preserve.
In California we are proud of the record we have made in
preserving our natural heritage and this administration is striving
to build on and improve that record.
We are proud, also, of the recreational use we are making of
park lands and our great natural resources. And of the innovations
our Parks and Recreation Department is bringing into this broad field.
At the same time, we recognize that what we are doing today
is not enough. We must prepare for tomorrow-- to make parks and
recreation even more readily available to the increasing millions
of Californians and others who need to share and who have a right to
share in all that California has to offer.
We must examine and plan for our environment and how it properly
relates to economic progress of our state.
I don't suppose a governor can be expected to be a technician
or an expert in specific fields of resources--but he can be held
responsible for the appointment of experts and outstanding leaders who
can provide imagination and advanced thinking. In the language of my
former occupation, we have done a good job of casting and I am par-
ticularly proud of the team we have put together. The captain of this
team is Ike Livermore, a noted conservationist. With him are
Bill Gianelli, director of the Department of Water Resources, an
acknowledged expert; Jim Stearns, director of the Department of
Conservation, a life-long dirt farmer experienced in soil conservation
and timber management; Admiral Ned Sprow, director of the Department
of Harbors and Watercraft, with his Coast Guard experience;
Walter Shannon, director of the Department of Fish and Game, a noted
and experienced leader; and William Penn Mott, Jr., director of the
Department of Parks and Recreation, world-famed in conservation and
park management.
Conservation people tell us that there are few departments 0⁻
parks or resources as free of political interference as those of this
administration. It is going to stay that way.
Under Bill Mott's guidance the department last year added
more than 12,500 acres to the park system, including more than 2, 500
acres of redwoods (no, I don't believe if you've seen one redwood,
you've seen them all).
But, while we added parklands, we do not think that just adding
more land is the answer to all of California's park and recreational
needs.
Occasionally, a property in our park system can function better
if it is not state owned. This was true of our Squaw Valley ski area.
are going to sell
So we sold it at a profit.
In addition, we think that developed park properties should
undergo regular re-evaluation to make sure that they still meet the
needs for which they were originally required. If they do not, then
they should be disposed of and new lands should be acquired that do
meet current needs. In other words, we do not think a park system
should be static, and in California, it is not.
Let me digress here just a moment to point out that about half
of California is federally owned. Most of that land is mountain and
forest land in the Sierras. We are working to persuade the federal
government to make more of these lands available for recreational
development and use.
We think that it is possible to evolve an integrated program
with the federal government, letting it concentrate on the mountains
while we concentrate on providing recreation along the coast, in the
desert and in the interior valleys.
But, since there seems to be a determined effort to portray this
administration as only interested in saving money, let me get back
to a brief report of our accomplishments and progress during 1967.
Working with Bill Mott, we started out by adopting a 13-point
"action program for the state park system." This included reorgani-
zation of the denartment development of a master nlan for the nark
system, more utilization of private capital in park and recreation
development, development of a more realistic user fee schedule and
institution of a camping reservation system.
Then we went one step further. We lifted the ban on pets.
We figured, "love you, love your dog."
One of the things we did was increase park fees, not to deprive
people of the use of our parks, but rather to charge a larger pro-
portion of the costs of maintaining parks against the park users
instead of the general taxpayer. But, we also cut them in half for
the fall and winter months in order to stimulate off-season use.
A major advance has been the establishment of communications
between departments. I am pleased to tell you of the progress being
made by the special committee which I appointed to resolve problems
between highways and parks, an interdepartmental committee made up
of representatives of the Resources and Transportation agencies.
This committee has, in its short life, resolved many problems and
resolved them not on engineering values alone, but has looked at the
problem in a total environmental planning process considering all of
the values, not just the economical ones.
For instance, a special technical task force made up of
planners, ecologists, landscape architects and engineers is now
studying the problem of locating an all-year-round road on the west
side of Lake Tahoe. This will be done by environmental planning so
that the unique resources of the area will be protected, at the same
time providing for the transportation of people and things. Quality
and creativity are being emphasized in all of our planning efforts.
As part of that emphasis, we intend to take a strong look at
possible ways of bringing parks to people. Everybody does not have
the time or the money to travel to the desert or to the mountains or
to the wilderness areas.
We think there should be a way to give our city and slum
dwellers the advantages of parks on as nearly a daily basis as they
wish. The quiet and tranquility of the great city parks such as
Central Park and Griffith Park can do much for modern man in today's
hurried and harried living.
toward
And, the small neighborhood parks can go a long way / keeping
our boys and girls off the streets and channeling their energies into
worthwhile activities. As our cities and urban areas continue to grow,
the need for new parks grows greater and the strain on existing
-3-
facilities mounts ever higher.
I am asking Bill Mott to look into ways and means of helping
our urban areas develop and expand their park systems to meet the
needs not only of today but also of next year and the next 50 years.
One possibility is to look at freeways and their rights-of-way
with the idea of multipurpose use of the land around them and perh
S
even the space above them. It is possible that freeways can be more
than merely the shortest distance between two points. They can be
focal points for parks, recreation, even industry and shopping centers.
Our parks and recreation people, along with our highway and
public works officials and representatives of cities and counties are
being asked to sit down together and study closely the existing
possibilities we think are here.
Thus, the challenge to the Department of Parks and Recreation
is clear. Its responsibility is not only to protect the environmental
quality of California, but also to provide for the recreational needs
of our people. In reorganizing the department, it was not our
intention to give greater emphasis to these recreational needs than
to preservation of the natural resources of this state, but rather
to provide an organizational structure that would recognize not only
the preservation and conservation responsibilities that the department
holds, but also to accept the challenge of constructively providing
for the leisure-time demands of our citizens.
We recognize also that good conservation practices go beyond
merely preserving what we have left. We must also be in the business
of reclamation, as well as that of protection. We must not only
protect our rivers, lakes, bays and beaches from pollution; we must
reclaim and purify those that have been polluted.
And, we must do the same for our air. These major problems
will not be solved this year or next. But Californians are deter-
mined they will be solved, and we are working in that direction.
Referring to Tahoe again--that very unique beauty spot we
share with our neighbor state, Nevada--years of frustration were
ended with the establishment by our legislature of the Tahoe Regional
Planning Agency which will move toward protection of the unparalleled
beauty of the area while insuring balanced recreational and economic
development there. In the best spirit of neighborliness and coopera-
tion, Governor Paul Laxalt and the legislature of Nevada enacted
similar Tahoe legislation so that both states can move forward together
I have asked the Resources Agency to lend full support to the
Bay Counties Development Council which, this year, will complete a
comprehensive study of protection of the natural attributes of
San Francisco Bay along with proper respect for its economic develop-
ment.
We are concerned with the problems of coastal development and
conservation. We know too little of the enormous values for mankind
of proper understanding and use of our coastal resources and the sea.
But, we are going to know more, thanks to the fine work and informa-
tion provided by the Advisory Committee on Ocean Resources. Through
their efforts we have created the Interagency Council on Ocean
Resources, with Lt. Governor Finch as chairman. Here is an advisory
commission of experience which will probe the problems of coastal
development and conservation.
Legislation has already been enacted creating the Middle Fork
of the Feather River as a wild river. This fifty-mile stretch of
nature will provide a primitive area where man can enjoy the outdoors
as it was before he arrived.
California is also progressing in the area of open space
protection as it relates to land usage and the tax base. Few realize
the extent to which green grass is giving way to blacktop, but the
threat is real and serious. Open land in Southern California is
being converted to urban uses at a rate of 70 square miles per year.
You can get some idea of what that means if you think of the city
of San Francisco occupying only 44 square miles.
Legislation was passed last year to provide tax relief for
agricultural lands which remain as open space. A broader study by
the Legislative Joint Committee on Open Space Lands and its advisory
committee will clarify our direction with regard to this complex
problem.
Though we are moving in these many specific areas of resource
protection, all of it and more must come together to produce an
environment which will provide the people of this state a healthy
and exciting place to live, next year, ten years hence and in the
year 2000--just 32 years from now when as many as 50 million people
may live in our state.
Environmental protection study legislation is now before the
legislature and I have instructed our Resources Agency to provide all
leadership and technical assistance for its passage.
-5-
We must come to grips now with the total environmental needs
of people and their enjoyment of life as it pertains to the quality of
air and water and its availability; to the proper protection and use
of the land and the rivers and streams, lest there be none; to the
creation of a balanced transportation system, lest we be overwhelmed
by autos and freeways, aircraft and airports, rails and terminals--a1
gobbling up the land, without plan or coordination. We must study
noise and its effects on people, the potential of thermal and nuclear
pollution, and we must have adequate parks, recreation areas and
space, and peace and quiet for people and living.
I have asked Director Mott also to concentrate upon the prep-
aration. of the master plan. This will define state responsibility
so that it is clear to other agencies and groups who must supply
city, county and regional recreational areas. This plan will define
the needs for scenic and historical areas and for recreation. Updated,
regularly, it will give us a solid five-year look ahead as well as a
longer vision into 25 years for park and recreational needs, and the
private sector will participate. Not only is the recreational
industry, on its own, becoming most significant in the state, but we
are assisting by review of statutes which unduly restrict or dis-
criminate against such development. There must be no double standard
which places higher requirements on private development than on
state-owned
public or
parks where supervision, sanitation and density
are equivalent.
Wherever possible, we are seeking private capital expansion of
concessions in state parks--stores, cabins, roadside camping areas,
boat launching--perhaps even golf courses in state recreation areas.
The Department of Parks is seeking a partnership with the
local communities adjacent to state park monuments by the appointment
of citizen advisory committees. We need the imagination and enterprise
by which, for example, in Coloma, at the John Marshall Gold Discovery
Site, local citizens helped rebuild Sutter's Mill--as it was that day
in 1848. Or self starters of the "Save the Redwoods League" who
recently helped us acquire the final major addition to the Avenue of
the Giants, in Humboldt County, or the enterprise of the Sierra Club,
whose members recently planted 10,000 seedling trees in one of our
major redwood park watersheds.
It is possible that we will see a Redwood National Park in
the next year or two. And this is well and good. But
that we do not need a national park to protect our redwoods.
California has already done that. Most of the remaining virgin
growths of the redwoods are already protected in state parks. And
let me point out that any national park, to be meaningful, will have
to enconpass at least two state parks.
Desirable as a Redwood National Park may be, we are insisting
that at the same time the economy of our Northern California timber
areas be protected.
And we are also insisting that the federal government, in
return for our redwoods, give us beach and mountain lands that can
be developed by California into useable recreational areas.
We recognize that the future is in the hands of our youth. The
youth of today will either be the protectors or the destroyers of our
land. Our schools are doing a magnificent job with conservation
education--but we must help. We have created a Resources Agency
Conservation Education Committee of Fish and Game, Parks and
Recreation, Water Resources, with the lead from the Department of
Conservation, to work with the State Department of Education in this
all important program development. I asked every school, service
club, the press, T.V., radio and news media and every citizen to help
emphasize Conservation Week, March 7-14; to bring home the message
to youth and adults alike: "Understand the value of our land, streams
and countryside; protect it from litter and degradation; leave it
unsullied for future generations because if it is destroyed, it is
lost forever." We are determined not to let that happen.
# # #
(Note: Since Governor Reagan speaks from notes, there may be addi-
tions to, or changes in the above. However, Governor Reagan
will stand by the above quotes.)
3/6
3
76
OFFICE OF THE GOVA NOR
RELEASE:
hursday, A.M.'s
Sacramento, California
Contact:
Paul Beck
445-4571
3.6.68
EXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN
California Taxpayers Association Annual Meeting
Fairmont Hotel, San Francisco
March 6, 1968
It is a pleasure for me to be here today. This is not the first
taxpayers group I have appeared before, but we made certain at the
last session of the legislature it would be the largest--if not in
numbers, at least in terms of taxes paid.
Regarding that tax increase, I feel like the mother spanking
her lovable but recalcitrant child--it hurt me more than it hurt you.
You know what happened. I spent a year campaigning for fiscal
responsibility and against new taxes.
a
Then/little better than a year ago, when I took office, we
found the fiscal affairs of California in such a state that it was
impossible to have both fiscal responsibility and a balanced budget
without new taxes.
So we had to raise your state taxes. Those of you who have
already paid your tax bill know this all too well.
The tax increase amounted to $855 million.
I want you to know just why that tax increase was necessary--
how it came about and where the taxes are going.
Of the $855 million in tax increases. $690 million went to pay
for left-over programs and debts. These were debts incurred but never
paid during past years:
--First, a $194 million debt which was a carry-over from the
last year before our administration took over. We took the position
that this debt had to be paid off. The attorney general agreed,
saying that a continuing deficit was unconstitutional in California.
--Second, we had to raise $496 million to pay for programs and
spending projects which had been started by the previous administratic
Some of these programs may have been worthwhile, but the hard fact
is that the money should also have been raised on a continuing basis
at the time the bills were passed. This was not done and we had to
do it--we had no other choice.
So, these two items--$194 and $496 million, which total $690
million--came due and payable last year. The taxpayer charge account:
-1-
which had been piling up over the past several years caught up with
us and you had to pay.
In addition, your state government decided to help offset the
spiraling costs of the local schools and the increasing pressures
on the property tax. This amounted to $145 million, To have failed
to do this would have been to jeopardize the educational system and
would have increased the pressures on the local property taxes even
more.
Twenty million dollars out of the total tax increase--that is
the request my administration asked for to meet the needs of a grow-
ing state. That $20 million was less than 0.6 percent of the total
tax increase. We asked for that amount because the programs were
started and we believe in a pay-as-we-go policy. We will not duck
hard decisions and we will not try to hide the costs of government
from you.
Let me also point out that if it had not been for the economies
we put into effect during the early months of this administration,
the tax increase would have been $130 million greater--in other words
$985 instead of $855 million.
If it were not for the economies we have achieved already--not
counting those that we are now also working on--if we had allowed the
growth of state government spending to continue at the same rate as
the Brown-Unruh administration during the last five years of the
previous administration--we would have to increase your total state
taxes at a rate of about four percent per year.
We cannot allow this to happen. Now that we have paid off the
debts and straightened out the accounts we inherited, we are determined
that this government will live within the means of its taxpayers,
and will live within the revenues which are now projected--without
any tax increase.
When I took office I pledged that we would cut and squeeze and
trim. We have done that. We will continue to do that.
When we did cut back on some of these programs, the cries of
anguish were loud and long. But I heard no great storm from the
taxpayer whose dollars were being discussed. Now we hear from them
as the tax bill comes due. And I want to point to those who have
made a career of buying gifts for the people with the people's money,
it is their turn now to listen; it is their turn to hear the anger
and the wrath of the taxpayer.
lf they did not hear it in their budget meetings when they refused
to cut costs or when they passed more spending bills, let them hear
it now. Keep it in mind the next time they ponder the spending of
millions of dollars.
In face of all these problems--the absolute necessity to raise
taxes to cover past debts and inherited programs--and the need to
adopt a budget of $5.7 billion for the coming fiscal year--in face
of all this, there are those in the legislature, there are those on
our campuses who complain that we are not spending enough of your
money. They demand that you spend even more through taxes.
Despite the fact that we increased the budget for the University
of California by $30 million over. the last year, there are those who
demand that we increase that budget even more. Despite the fact that
we increased the budget for the state colleges by $39 million, there
are those who demand that we increase it even more.
It is the same in some areas of public assistance--Medi-Cal,
social welfare, etc. There are those who want to spend more and
more.
Where, I ask, is this money coming from? From the taxpayer?
He cannot afford it. He just cannot afford it. And, we cannot con-
tinue to confiscate his earnings--raising the state's take, year
after year.
Almost every day in the legislature bills are passed which
demand more of your money
some would take millions of your dollars.
The votes are cast--and the bills passed--by those legislators who
know full well that if the taxpayers were voting, the bills would
be turned down. Yet, too many legislators continue to vote to take
or mortgage more of your money.
The time has long since passed to put an end to this.
We must have a new set of priorities, a new agenda for state
government. We must place more emphasis on cutting costs. The tax-
payer must be permitted to keep more of what he earns.
Let me say that from a strictly political viewpoint, trying to
hide the heavy costs of state government and ducking the wrath of
the taxpayer, it would have been expedient for me to go along with
withholding. This might well have been easier for some of you, too,
but the credit-card approach somehow makes it seem as though we are
spending less when we are actually spending more.
But, I have refused to go along with this easy way out--it would
-3-
bela disservice to the taxpayer under the present circumstances.
It is important that you know just what state government is
costing you. It is time that all of us realize the grinding load
which is imposed upon each one of us, that we know the actual cost
of government on our income, our lives and our futures.
The tax increase should make you angry. I hope it does make
you angry. It makes me angry.
But, focus your anger on those who caused it--those who first
spent your money without telling you what the bill would be--and
without making clear to you that you would have to pick up the check.
Focus your anger on the politician who uses your money to buy
his votes and then tries to shift the blame when the bills come due.
An angry taxpayer is the best weapon we have for keeping down
the costs of government.
The lesson of April 15, 1968 will be a harsh one. It should
serve as a reminder that government is not free--not even when the
costs are hidden and sugar-coated and dribbled out through gimmicks
and slogans, which may sound good, but which only delay the day of
reckoning.
But now that I seem to be in a complaining mood, let's talk
about the numbers game that is being played with Medi-Cal. According
to some, we made a false and horrendous estimate of Medi-Cal over-
spending and then had to readjust and blushingly admit we had been
guilty of crying wolf until, finally, according to these financial
sooth-sayers, we actually turned up with a surplus. After listening
to them, I am better able to understand the record of the past
several years.
The numbers game is not limited to Medi-Cal. When we are
successful in effecting economies, those economies are loudly
denounced as surpluses resulting from our miscalculations. Well,
those surpluses for the most part are hard-earned through the careful
business practices of those we have appointed to head our various
departments. They accrue to the benefit of the taxpayer and, as far
as I am concerned, those department heads have my thanks. If they
are to be censured, let those who have no regard for the public
treasury do the censuring.
Of course, we do not always find surpluses. We have found a
couple of deficits--the last one for $70 million--due to miscalcu-
lations in a piece of legislation adopted last year. May I say it
was not a part of our legislative program.
The last error will be compounded by another $82 million next
year unless the legislature acts to rectify the legislation--AB 272--
which is at the base of the trouble,
I have invited the Speaker of the Assembly to sit down with me
and members of the staff this week to see what we can work out. In
the meantime, we are hopeful that continued economies may give us
enough funds to meet at least part of this year's deficit. Just as
last year's economies paid for the excess spending in Medi-Cal, I
have promised already, and I will repeat it here, we will not go to
the taxpayers for more money to rectify that error.
I have not changed my belief that we are already paying too much
for government.
I am still convinced we can trim the fat out of government and
then base our tax rates on what government should cost rather than
on what it costs now.
We are also working on the premise that taxes can be spread
more equitably. Centainly the hodgepodge, crazy quilt tax structure
California has now can be improved upon.
As you know, tax reform is a major goal of this administration.
We had hoped to be able to present a comprehensive tax package this
year for the legislature to consider.
It appears now that we may have been overly optimistic. Never-
theless, our own people are continuing to work diligently with the
California Taxpayers Association and others toward this end.
We are taking full advantage of a report turned into us after
nearly a year of study by a special Tax Task Force I appointed early
last year.
We are examining the merits and demerits of a number of proposals
and suggestions all aimed at simplifying and making more equitable
our tax system.
I should like to discuss some of these proposals in detail, but
I have noticed that it is easy for the press to mistake our examina-
tion of propossis for adoption of policy. For teat reason I will
not go into any specifics here tonight. But, when we are ready to
make a proposal fox tax reform, the people of California will be the
first to hear what those specifics are.
Now. just as you have an interest in our tax system and our tax
take, so should you have an interest also in where and how your tax
money is spent.
You not only have a right to demand maximum efficiency in those
existing programs we spend your money on, you also have a right to
know what programs are being contemplated and why.
And just as you have a right to these answers, so do you have
a responsibility to ask questions, to keep an eye on your government,
to insist that it function properly and efficiently.
Let me warn you here that if you--if all of us--do not accept
that responsibility, government will not long function properly and
the blame will rest on your shoulders as well as on the shoulders
of those in government.
An indifferent electorate paves the surest read to bad govern-
ment.
Today, more than at any time in our history, we cannot afford
bad government. The demands on government by society and the com-
plexities of society itself are too great.
Government at every level must be aware of the problems we face
and must seek to deal with them within a framework that preserves
the rights and freedom of the individual, and calls into play the
genius of those who make up our society.
No government, however large or however powerful, has at its
command the resources and the brainpower to find the answers to
society's problems and to apply them equitably.
Too many in government today at almost every level fail to
recognize this. As our nation has grown in population and in
technology, those within government more and more have tended to
believe that only they have the answers, and they have attempted to
foist their answers onto the people with an increasing "father knows
best" arrogance.
Somewhere in our nation somebody has found an answer to almost
every problem that besets us. Those answers are more available than
ever before, to be used wherever they are applicable.
Government must not be too proud to turn to those with the
answers, to use them, to help with them, to provide the encouragement
and the incentive to make them work.
We are trying that at the state level in California. We turned
to the business community to help us streamline our state government.
We turned to Chad McClellan, and he has more that 20 thousand
industrialists and businessmen organized and working in cooperation
with government to provide job training and job placement for our
unskilled minority citizens. We turned to a citizens' task force
and the California Medical Association to look at our mental
hospitals and recommend changes and improvements. And, as I mentioned
earlier, we have turned to many people, including your organization,
to help us with our tax programs.
We will listen to anyone who may have the solution to one of
our problems, who can help us not only attack the symptoms, but also
the root causes.
It is easy to point to the pressing problems of our time:
The awakening discontent with their lot of the poor, the under-
privileged and the minorities
-Crime against individuals in the form of increased violence,
and against society in the form of new uses of violence.
--The plight of our cities, racked by crime, stifled by traffic,
smothered in air pollution, infested with slums, afflicted with urban
sprawl.
The solutions to the problems come less easily. There are some
who would have government preferably big government take over.
There are others who believe that solutions begin at the grass
roots-where the people are--that local government knows its peculiar
problems best and can solve them best, that state government must do
what local and regional government cannot do, and that the federal
government must do what states cannot.
In recent years this approach to government has been out of
fashion.
For 35 years the federal government has been usurping the powers
of the state governments, the state governments have been taking
power from the local governments and all governments have tended more
and more to limit the options of the individual citizen.
Compulsion has become a way of life in our land--all in the name
of problem solving.
And yet, too often we fail to reach the root cause of the problems
We deal only with the symptoms.
I an not foolish enough to say we shouldn't deal with the symptoms
We must, of course. We cannot and will not tolerate rioting in
the streets or on the campuses. We will make a determined effort to
make our streets safe from those who would murder and rape and rob;
we will work to unclog our streets, purify our air, educate our
children.
-7-
But beyond all this, we must seek to determine and correct the
causes of our failures. Why have the cities decayed; why have crime
and dope addiction increased; why have not our minorities of this
generation escaped from the slums?
And, at the same time that we seek answers to these present
problems, we must look to the future and anticipate new problems.
Already we have people looking down the road to see how
California can adjust to the problems of a peacetime economy, looking
at new approaches to our water problems, studying the possibilities
offered by our ocean resources. We must anticipate a state park
system that will take care of a California population approaching
50 million persons; and work on a plan for an integrated transporta-
tion system.
Most of these projects are going on at minimal cost to California
taxpayers and are depending on the involvement of leading citizens
throughout California. But more of them can be carried out by a
government always on the brink of insolvency due to excess and fiscal
irresponsibility.
The fact remains that California must maintain a stable and
prosperous economy.
And that takes us right back where we began. A stable and
prosperous economy goes hand in hand with a sound and equitable tax
system. We are determined, with your help, to give the people of
California such a system and to have the courage to say no to living
collectively beyond our means.
#
#
#
#
(NOTE: Since Governor Reagan speaks from notes, there may be
additions to, or changes in the above. However, Governor
Reagan will stand by the above quotes.
3/4
OFFICE OF THE GOVERNOR
Sacramento, California
Contact:
Paul Beck
445-4571
3.20.68
TRANSCRIPT OF SPEECH BY GOVERNOR RONALD REAGAN
Joint Sacramento Service Club Luncheon
Old State Fairgrounds, Sacramento
March 14, 1968
You do me a great honor by inviting me to break bread with you.
One of the first things that happened to me as Governor was to be
immediately shipped off to Washington to a conference that was going
on there. I left the Camelia City as a brand new resident, had two
hours with Ev Dirksen and discovered that flower you're wearing is
a marigold.
Seriously, I appreciate the opportunity to report to you on the
doings of one of the major industries of your community. And, in
this case, I'm reporting also to the stockholders. And if some of
you haven't become aware of that, you'll find out when you get the
bill from your broker on April 15.
I've had the opportunity to get around the state since the
election some. I was up in one of our more spacious but less populated
counties in the North and an old fella accosted me and said, "You're
from the Capitol." He says, "They got some smart fellas down there."
And I said, "That's SO. II And he says, "They got some that ain't so
smart. 11 I allowed that was SO. He says, "Pretty damned hard to
tell the difference, ain't it?"
One of the first things I learned in this new job was the truth
of an old story that has to do with a newcomer in the gold rush days
to Alaska. And one of the first things he had to learn was how to
drive a team of husky dogs. And they showed him how to harness them
up and then they told him, "These dogs are all right. You can pat
them on the head and they won't hurt you
unless you fall down,
and then they tear you to pieces. =
A couple of days ago, I heard a fellow on the radio here in
town. I don't know who he was, but I have a deep affection for him.
He was on the radio and for some reason or another he said, "Every
man should have a wife, 'cause sooner or later something will happen
that you can't blame on the Governor.'
But I'm sure that a part of your hospitality in extending this
invitation to me must have been prompted by curiosity. After all,
it isn't every day that a fellow who, for a number of years, has
been riding off into the sunset with "The End" superimposed on his
back, turns up on the State House steps with something called "The
Creative Society".
Briefly and informally for the next little while, let me open
this stockholder's meeting. This Creative Society that I have talked
about is based on a belief in the people's ability to manage their
own affairs and, in cooperation with government, solve the vexing
problems that have plagued us for SO long. It's based also on a
belief of mine that government tends to get hidebound and the hides
are laced together with red tape and the story of government is
usually, and too often, written in red ink.
Now, let me give you an example of this and of what seems to be
some strange philosophy that government and people in government
have.
I know it's kind of like the sergeant. The young rookie was
asking him why he was doing something a certain way, and the sergeant
said to him, "Son, let me ask you something. If you were starting
a brand new country and one of your first chores was to create an
Army and you got the first division of that Army organized, what
would you call it?" The kid said, "I'd call it the First Division."
He says, "In the United States they called the first one the Second
Division, and if you can understand that, you'll understand everything. 11
Well, with regard to the red tape and the red ink of government,
in 1920 it cost $20.75 to phone from New York to San Francisco. And
for that amount of money, you could mail 1,037 letters. Today it
costs $1.00 to call from New York to San Francisco, and for that
amount you can only mail 16 letters. So, the government is investi-
gating the Bell System.
The one thing the Creative Society isn't and can't be is a
magic wand. Taxes had to be raised. The budget is an enormous
5.7 billion dollars. The budget is too high. Taxes are too high.
And I have discovered that there is a savage resistance on the part
of some to reducing either the size or power or cost of government.
There's a defeatism on the part of too many of you with regard to a
belief that nothing can stay the growth of government.
Now, I'm here to tell you that, while we have a long and hard
road ahead, the power and the size and the cost of government can be
reduced, that we made this start, and that now we have reached a
point in which we have to have the help of the people of California
from here on.
I won't go into the story that you know already about the fiscal
mess that we were in. I'll just tell you something of our approach
and the results so far.
We had quite an awakening when we first arrived in Sacramento.
It seemed that with every drawer we opened, the story got worse.
One day when I was shuffling through the papers on my desk, thinking
there must be a letter of resignation in there someplace, somebody
came in and said, "Cheer up, things could be worse. If So I cheered
up, and sure enough, they got worse.
But 4410 of our budget goes back to the county and local govern-
ments. That's fixed by law. Eight percent is in the use of the
bond funds and California is the biggest marketer of bonds in the
United States. Fourteen percent of them marketed by us--about an
average of 600 million dollars a year. That's, of course, specified
and controlled by law. Twenty-three percent are special revenue
funds, and again, these are fixed by law.
But at least here we can do something. We can exert an effort
to see that you get a better buy for your dollar. Only 22% is the
amount of that big budget that goes to pay for the administration
and the running of the government of the State of California. And
here we can make an effort in the way of economy.
I would like you to know that if we could cut-you can do a
little bit of arithmetic and figure it--if we could cut the cost of
operating the State of California in two, we would only be reducing
the overall state budget by a little more than ten percent. Which
will give you some idea of how tough the job is.
However, I didn't set out to discourage you. We made our first
start. We realized that we had to start effecting economies very
quickly. We looked around for the immediate ones.
In the last ten years, while we've increased the population of
California 39%, the number of state employees has gone up 70%-so
one of our first efforts was to put a freeze on the hiring of
replacements for employees who left the services of state government.
And I am able to tell you now that, after that continued growth and
size of government here, there are today 1.8% fewer employees in the
State of California than there were a year ago last January. But
even here we've been handicapped. We could only apply this to the
administration of the State of California.
Higher education was a different matter and we couldn't exert
that freeze or have an effect on them. You'll recall, incidentally,
that the state University was going to be put out of business by the
reductions we made in the budget for the University.
But somehow they've not only managed to stay in business, they've
managed to increase their number of employees by 8.4%. Even with
the limited budget, that wiped out some of the gain that 've made.
-2-
Now our gain, incidentally, was made also in spite of the fact
that we're increasing the California Highway Patrol to keep up with
our expanding network of highways. There is a bill introduced in
the Legislature to provide radar for the California Highway Patrol.
It is an established and proven fact that by the use of radar
each radar set is the equivalent of a great many highway patrolmen.
It is also a proven fact that, in the country, with the use of
radar, you protect the lives of citizens on the highways and you
can reduce automobile deaths and accidents.
highway safety
But I will predict that before the week is out, that bill will
be killed in committee. It'll be killed because one particular
lobby is exerting a great deal of pressure on the Legislature, and
that lobby isn't within a tenth of being as powerful as the people
of California could be, whose money will be taken and whose lives
will be lost in highway accidents. But, unfortunately, the lobby
is here, and the people have not made their will known to the
Legislature.
Now we had another thing something in the nature of a freeze.
We discovered that our state employees were tourists at heart.
They were all over the place. We didn't tell them they couldn't
leave
we just told them they had to come in and tell us where
they were going and why. And that reduced the budget for out-of-
state travel by 78%.
By last spring we had reduced the amount of gasoline the state
had to buy for the state cars by 15%. Incidentally, we discovered
also that nobody knew how many of those cars we had, so we put a
freeze on buying them. And that's made some changes. But one of
the weird changes is, suddenly by stopping buying them, we got a
surplus of automobiles in all the state motor pools.
We did something about the beautiful four color reports that
were being circulated from department to department each year. They
formed a stack that was half as high as I am. We found that mimeo-
graphed reports will do just as well.
We discovered that we had a phone bill of 16½ million dollars,
so we brought the phone company in. Somehow someone had overlooked
that they have a department that will come in and survey your needs
and tell you what kind of a phone system you need. And we brought
them in.
They found people sitting at adjoining desks with inter-
communicating systems. They had phones on their desks with lights
on them so they could look at the light and see if the fellow
sitting alongside was using the phone. Those cost two dollars per
month extra per instrument. Now they turn their heads and look at
each other and the phone company tells us the bill will be reduced
two million dollars this year.
We consolidated buying, indulged in competitive bidding,
standardized specifications. For example, have bought this
year's high-speed tires for the California Highway Patrol at
$141, 000 less than they cost a year ago. All in all, from February
First a year ago to October 31, we reduced the cost of supplies and
equipment purchased for the state by 22 million dollars.
You know, the state used to be in the pheasant breeding
business for restocking of our countryside for the hunters. Weire
not against that- but we found that we could go out of the breeding
business and buy them from private enterprise and save $3300 a year.
So now we buy them instead of raising our own.
We found out there were a number of jobs being done by the
State Printing Office that they were not equipped to do, and that
we could actually get them done cheaper from private enterprise.
We are now contracting this work out.
Incidentally, in one of those task forces we had going through
the state government, they just happened to be in the State Printing
Office on En occasion when they were getting ready to scrap one of
the presses. A great many thousands of dollars were involved. But
somehow the press just wasn't equipped to do the particular job.
It had to be done. And one of the members of the task force just
-3-
happened to be in the printing business and he showed them how. If
you just went around in back and made some minor adjustments, you
didn't have to scrap that printing press--and that saved a few
hundred thousand dollars.
We sold the Grizzly for $204,000 and now occasionally have to
travel by charter, but most of the time we travel commercial. That
saved the state $116,000 a year on the Governor's Office traveling
expense. I did draw the line, however, when some of our eager
beavers suggested I start traveling by "Flying Nun".
We're taking an inventory of the lands We're selling the
biggest white elephant we found. We've had it since that famous
Olympics--the state's holdings in Squaw Valley.
But also now, particularly in our mental institutions, as we've
declined in population and as there's been a change in the type of
patient involved--because the patients who could be rehabilitated
are now being sent back to regional health care centers--we're
inventorying the farm land that used to be kept for mainly re-
habilitation around those as well as other state institutions, and
they are going back on the market and going to be sold.
With regard to investment of funds, we have gotten a change in
legislation giving us more flexibility in investing state funds.
And they are invested up until the time they have to be spent or
have to be used. This has added hundreds of thousands of dollars
to the earnings on those funds.
We have a program, a merit program, in the state--have had for
years--whereby employees are given bonuses when they suggest things
that will result in increased efficiency or economy. We're paying
out three times as much in those bonuses now as had been paid out
previous to this administration, because the fine employees of this
state--and there are a great many thousand of such employees who
take great pride in their work and are dedicated to their tasks--
they discovered that someone is interested.
A couple of weeks ago I awarded two bonuses of $11,500 each
to two young men who had, on their own time, worked out a system
for speeding up the delivery of funds such as the federal grants and
getting them invested and, as a result of their plan, the state is
getting an additional $309,000 a year on return on just the brief
investment of those funds.
The Savings and Loan Department is financed by assessments
against the savings and loan industry, which may not cut someone's
taxes in the immediate run, but certainly it's a return of money
where it should be. We've reduced the cost of operating that
department by $300,000 a year.
Throughout this country our business climate has not been the
best. And one of the drawbacks in the business climate was our
Corporation Commission. And down through the years, businessmen
throughout the country and here in California have known that here
was a great hold-up and a great, massive bureaucracy that was
hindering what we were trying to accomplish. But we have a self-
supporting Corporation Commission now.
The Corporation Commissioner told us at the beginning of the
year that he had begun effecting some economies and efficiencies
and he believed that he would be able to hand the General Fund,
by next June 30, a $163, profit over and above the running of his
department. Well, a short time ago he was in to tell me that that
$163,000 was a wrong estimate--it's already a million and a half
dollars, and by June 30 expected to be a $2 million profit. Around
one half million of that is a reduction in the cost of his department.
Throughout the country, as I've had occasion to get out, I
have found that the increased efficiency and improvement in the
Corporation Commission here in California is the talk of the
business community in the nation.
Have you ever wondered in government whether people ever talk
to each other? You know, you drive down a newly surfaced street
and three days later they're tearing it up to put a pipe underneath?
Well, we've got people that do talk to each other. Some of them
are here today.
I can see Bill Gianelli out there. Bill is heading up our
great Water Project. Bill came into my office the other day with
Sam Nelson, who is in charge of our Highway Department. They had
an agreement. They just thought I'd like to have them sign it in
my office. I was delighted.
I'll tell you what the agreement does. As you know, the Water
Project is going on down through the Valley. There's a peripheral
canal going around the Delta. You know also that the West Side
Freeway is also going down through the Valley. Well, across San
Joaquin County, there were two rights-of-way. The highway needed
land from which it could get seven million cubic yards of fill, and
the canal needed additional land where it could dump the excavation.
Well, those two rights-of-way are now very closely parallel. It
means that less land will be taken off the tax rolls of San Joaquin
County.
The highway is going first. They do the primary grading or
digging of the canal first. That digging will provide the seven
million cubic feet of fill at a savings of five million dollars and
they won't have to tear up any of the county's roads because the
trucks bringing the dirt will simply go from the site of the canal
next door to the freeway. And, incidentally, Fish and Game even
got in the act.
As you know, if you dig a hole that big and let it stand for
a while down in the Delta, you're going to have a lake. So Fish
and Game is stocking the pools of water in the primary digging
area until it's time to finish the canal, and the people will have
fishing holes there.
But this taught them something else--out of this has come a
program whereby as they go on down the two hundred miles of the
Valley, they are going to use one administrative headquarters for
both the Water Project and the Highway Program. They are going to
use the same areas for equipment, for servicing, for repair, for
fueling. They are going to use the same staff and the same equip-
ment for emergencies, such as for slides and so forth.
And this has now spread over into permanent structures. For
example, a forestry camp had space and utilities already in. With
the addition of only a little office space, we found we could use
that same location at a great savings for both the offices of the
Highway Project and the Water Program. This has all come about
simply because in government we now have some men, like these
gentlemen I just mentioned, who believe that their function is not
to build an empire, but is to run government as if it were their
own business in the way a business should be run.
With regard to the gasoline tax, since I've touched on highways,
this is one of the areas where we can't reduce the budget. The
money there has to be spent. Spending is based on the amount of
gasoline tax which comes in.
But we can make sure that you get a better buy for your dollar.
A few months ago I was able to tell the people of California that
as a result of savings in administrative overhead in the use of the
gasoline tax, we were starting forty-four highway and freeway
projects--$98 million worth--one year ahead of schedule.
In fact, I am now pleased to tell you that I spoke too soon.
The figure is now $194 million--translated from red tape and
administrative overhead into miles of concrete highway for the
State of California. This is the equivalent of a 2½ increase from
your gasoline tax.
We are reducing our office space and believe that within a year
we will have it accomplished. The office space occupied by state
government offices will go from 9 million square feet to 7 million
square feet. And all that it took to do this was to simply apply
the private business standards for square foot of space per employee
for those doing similar work. That same standard applied to
government workers made this reduction possible.
I'm sure you already know about the four million, three hundred
thousand dollar building that was to have been started last summer
for one of our state departments. It will not be built. We simply
tore up the contracts without signing them because by applying these
same standards we found that we have no need for that building, now
You received your notification for the rene~I of your auto-
mobile license a lit\ e early this cause we got word
of the postal increase and we saved $110,000 in postage by sending
them out early. You're going to get them even earlier next year.
And we had some sideline benefits. We discovered that by
sending them out early we reduced the amount of overtime and the
number of temporary employees needed for this rush period. So
we are going to put them out about another month earlier next year
and reduce it even farther. Renewal time for license is 40 days.
We have already reduced this by five days, and we're in the midst
of a planned phase out which, by July, at the time for renewing
licenses, will be ten days.
Incidentally, having men of this kind who ask questions, as
businessmen do, Verne Orr over in this particular department took
note of the fact that when you lose your driver's license you go into
one of the Motor Vehicle Bureau offices. You give them your name
and address and they hand you a certificate. That certificate is
good for sixty days, as a license. And Verne got wondering how we
really know who the people are and whether they're who they say
they are when they come in and get those certificates.
So we changed the rules. If you go in now with a lost driver's
license, they tell you it will be put in the mail the next day, and
you'll have it. And in the first 23 days of the change of the rules,
we received back 551 of those certificates, all of them sent back to
us by people who said we didn't lose our licenses, we don't know
why we've been sent this. Maybe one indication is a woman who
wrote us to say she received it. She didn't lose her license
because she never had one. She can't drive an automobile. But she
said also that in the same week she received the license, a check
was stolen from her mailbox. Those certificates are as good as a
driver's license for credit and for identification for cashing checks.
So, we're sending those letters and those returned certificates as
they come in to local police throughout the state.
Now, some of our economies and our attempts at economy were met
with great screams and dire predictions. In addition to the one
I've already mentioned, another was that the colleges and the
Universities were going to disappear and the quality of higher educa-
tion would sink to an all-time low because of the economies we made.
Increases in the budget for higher education are based in part
on higher prices we all have to pay and on increased enrollment.
But with the cuts that were made last year and this year in the
budgets which higher education asked for, you might be interested to
know none of the dire things happened because, even with the cuts
required this year, our budget provides the highest increase per
student of the average of the last ten years.
And, in addition to this, believing that a program-type budget
is good business, we have in our budget this year, made proposals
that will give the college system more flexibility than they have
ever had in being able to use their money.
We knew of an incident a few years ago with this tight-line item
budget where one state college wanted to buy some motion picture
cameras and some very intricate lenses for scientific research.
Under the system previously in effect, somebody in Sacramento blue-
penciled the cameras and not the lenses. The college is sitting
there with shelves full of lenses and no cameras to put them on.
So we are giving them a program-type budget to the best of our
ability.
You have heard, of course, that with the changes we have made
in the mental health program--and here the screams were especially
loud--we were going to destroy this program which was admittedly the
leader of the nation.
California, with the exception of one or two small states that
don't have the great problems of the large states, is the leader in
the mental health field. I don't see some of the same critics rush-
ing into print to acknowledge, now that the year is over, that we
have increased our lead over the rest of the nation.
We are spending more per patient than is being spent in any other
state of the Union. We are enlarging the floor space per patient
to the 70 square feet we always wanted instead of the 55 square feet
they've always had. We've accelerated the pace of putting patients
that can be cured or rehabilitated into regional and local health
care centers. We are moving toward the day when we'll have only the
custodial patients there for whom there is little or no help or
improvement.
We have improved the mental retardation program. We're working
toward the day when we can stop operating these large hospitals for
the mentally retarded with their thousands of unfortunate young
people and to get more of them into the local centers where they
can live in more normal surroundings and be taught to have a more
useful life. We have given them a flexible budget which they have
requested but never had before, and there will be an increase in the
nurses compared to the number of patients.
In the midst of this fiscal crisis, some of those who must
share the responsibility for the financial plight we were in have
been the most vocal critics, not only of our efforts to economize
but, of course, of our efforts to increase the taxes in order to get
out of the debt position we were in. But at the same time they
continue to propose spending measures.
Indeed, they introduced enough spending measures last year to
increase the budget by 43 million dollars at the very same time
they were complaining about the economies. And I blue-penciled
$432 million out of that budget.
We're unhappy with the tax situation. It doesn't reflect our
thinking on the kind of tax system we should have in this state.
So we have a task force that's been working for the better part of
a year, and we are now working to put into legislative form proposals
for complete reform of our tax structure, to see if we can't have a
tax system that will be geared to our economy, that will go up with
our economy so that we don't have to keep changing the rules on you
and coming back every couple of years and telling you we're going
to take a higger percentage out of your earnings.
In that connection, I've made a suggestion and I'd like to
make it again right here, because in the days ahead I'd like to
solicit your thinking. You know that the corporation and insurance
tax can only be raised in California by a 2/3 vote, a 2/3 majority
of the Legislature. I see no reason why the individual taxpayer
should not have the same protection. And I am going to seek a Con-
stitutional Amendment that will make it necessary to have a 2/3 vote
of the Legislature to increase any tax in the State of California.
Maybe I can take a minute here and mention something there's
been a great deal of discussion about, particularly in view of
April 15 coming up. It has to do with withholding. I have taken
a position against it. I believe this reflects the feeling of the
majority of the people of California. I personally am opposed to
withholding.
I would like to point out that there are some people who are
dropping us letters to tell us they've changed their thinking since
receiving their tax bill. They changed their minds about it
they want withholding. I can understand that and I have said and will
say again, if this is widespread and the people of California have
changed their minds and want it, certainly I cannot stand in their
way.
But before they make that decision, before perhaps some of you
make that decision, I want you to know that the greatest proof that
withholding is a sedative and not a cure for the ailment is the fact
that, had we put withholding in, with this present increase in the
personal income tax there wouldn't have been a peep out of anyone.
They wouldn't have noticed it.
Here is the greatest proof that when the poeple become conscious
of the size of the tax, withholding then becomes a convenience for
government. It puts in the hands of government an easy method for
increasing the tax.
Also, before the people make any change in their thinking, I
want them to know, I want them to understand, the main convenience is
for government. It makes it easier for government to manage its
funds. It makes it easier for government to collect. But 1t is an
increase in your tax.
We have today a record of collection in which there is only
about a 1.8% loss by way of people who either make errors or cheat
or leave the state. And there is no proof at all that withholding
would correct that.
I don't think the federal government has that good a record and
they have withholding. So forget any idea that there are hundreds of
millions of dollars being lost to the pcople of California by others
not paying their taxes. There are some, to be sure, but the biggest
increase that the state would get from withholding is going to come
out of your pockets.
Even without increasing the rate, there would be anywhere from
60 to, in a couple of years, a hundred million dollars under with-
holding. This would represent the state's ability to take advantage
of increased prosperity the minute it happens and get more out of
your pocket without waiting a few months before catching up with that
increased prosperity.
Also, for whatever ability this would give the state to cure
cheating on the part of some individuals, it would just put the
state in the business of cheating, because they have a happy term.
They say the state would get about $20 million from what they
call a "recurring windfall". Now isn't that a nice sound? A "recur-
ring windfall". That means, $20 million a year that you don't owe,
but you pay and you don't know that you don't owe it, and the
state gets to keep it. I don't think the state should be in the
business of cheating.
Well, enough about that. Now, I don't want you to think that
because we've placed a great deal of emphasis on money matters that
we've neglected the area of people, the people's problems.
Our programs of state subsidies to the county probation depart-
ments have substantially reduced the number of commitments to the
state's correctional institutions. There are nearly 1500 less than
were anticipated nearly a year ago.
For the first time in the history of the Youth Authority there
are empty beds in the institutions where a short time ago they were
talking about the need for new building.
We are now working on a special program with regard to the
young women who are in our correctional institutions. And if this
works out, it will save $170,000 a year and mean that here, too,
there will be adequate space. This program has been hailed nationally
by others who are in this field.
In the Division of Apprenticeship Standards, we have set up 30
new programs. We have adopted a new code to insure that minority
races have an equal chance to take advantage of these programs.
With less personnel in the Division of Industrial Safety, we
have increased the workload and the results. We've increased the
number of safety inspections. We have vastly increased the condi-
tions that have been corrected and the net result is that our rate
of disabling injuries is at an all-time low in this state.
At the same time, in the program to rehabilitate the physically
and mentally handicapped, we have doubled the rate who are being
aided, rehabilitated, and put out into private self-sustaining jobs.
Over a year ago I went to Chad McClellan, who had gone into
the Watts area right after the riots with a program in which he
had enlisted the support of his fellow industrialists to provide
jobs in the minority areas. I asked him if he would take this on,
on a state-wide basis. He did. It is at no cost to the state and
today, in some 16 major areas in the state, he has set up a program
in which thousands of businessmen and industrialists are engaged in
cooperating with the government on job training programs, putting
these people in the minority areas to work.
And, I might add, we have the lowest rate of unemployment that
we have had in well over a decade--right now, in the state of
California.
On the subject of the task force, composed of almost 300 of
your fellow citizens that went into 60 agencies of state government
and came back to us with 2000 recommendations for economies and
efficiency controls, I had to laugh about an editorial in a certain
local paper. It was to the effect that this report, like all the
others in the past, would be warehoused, gather dust, and nothing
would ever happen.
Well, we've only had those for a few weeks. Yet, 206 of their
recommendations have already been put into operation for an $8 million
a year savings. I have approved another 600 that can be put into
effect simply by administrative decision, and 99 that will be sub-
mitted to the Legislature because it requires their approval.
If and when the bulk of these are implemented, they can reduce
and will reduce the cost of government in the neighborhood of $200
million a year. They will cancel out the need for $153 million in
capital construction. They will save on a matching basis $67 million
a year to the counties and local communities and they'l even reduce
the federal funds that we need by $92 million. When you can save
money for the federal government, you have performed something of a
miracle.
Very shortly a lake, with a 169 mile shore line, will be filled
to capacity behind the dam in Oroville. I don't know about you,
but every time I fly over some of those multiple-purpose lakes of
the water system and see them with a dam and one little civilized
patch where the state has condemned some land and given a concession
it recalls to my mind that if you want to get on the lake and fish
or boat or anything you've got to go through that small patch,
because the rest is cut off by a chain link fence. It says, in
effect, don't you dare dabble your hands or feet in the water.
Well, it's not going to be that way anymore. Up at Oroville,
Parks and Recreation has worked out a plan whereby in the lake be-
hind the dam at Oroville we are going to the private sector, to
resort promoters and to builders, on plans which will give us con-
trol.
We are going to develop the lakeshore by private means for re-
sorts all the way from luxury hotels to campsites and to building
of lakeshore homes around the lake. And when this is done there,
we're going to spread this system to the other areas that the state
controls in the same way.
In the area of judicial selection, we have a bill before the
Legislature, and it's going to have hard going unless you make
your desires known. I don't believe that judges should be appointed
on a basis of political favoritism. I think what they do is too
well nigh sacred.
We have a piece of legislation which will take, once and for
all, the appointment of judges out of politics. This is a program
whereby on the highest level of the court there will be a statewide
commission appointed: two judges, two members of the bar, two
citizens. And this board will take all names of possibilities for
judgeships and screen them.
The board will then submit the names to the Governor, who must
make his selection from among them on the basis of character and
ability and experience.
There will be five regional boards of the same texture, made up
of local people of the judiciary, the bar and the citizenry around
the state for the lower court levels. And there will be advisory
members from each local area that will be appointed to help those
boards even though they don't have a vote.
And in this way, governors henceforth will be handed the names
of people chosen by their peers and their fellow citizens as being
qualified, both personally and by experience, to be judges. I am
doing everything I can to see that this is approved, but, as I say,
it is going to require the support of the people to let government
know that that's exactly what you want.
Over a ten-year period the population of our state has in-
creased 39%. Welfare spending in California went up 247% in constant
dollars over the same period.
We are bound in and limited by what we can do by federal regu-
lations as far as reforming the program until we can get help from
the federal government. We have done what we can for the local coun-
ties. We have reduced 2500 pages of state regulations to one 200-
page manual.
But we've gone farther than that. We have just announced that
in Fresno, we will have an experimental program. In Fresno we're
starting a pilot program where all of the multitude of welfare
agencies are going to be formed under one director, into one program,
to funnel people in at this end and funnel them out at the other
end into jobs they're trained for in private enterprise.
We're going to break the dependency cycle and have a goal of
making people independent of welfare instead of the other way around.
I'm running over my time and I didn't intend to. But I'll just
take a minute or two more, if I may.
A challenge of our society, of course, goes far beyond what we
in government are attempting to do. There is a challenge to you
here as the leaders in your community, and this challenge extends to
service club members throughout the state and throughout the United
States. You have a great and personal stake in what happens in your
state and your nation.
The challenge is simply this: If our system of government is
to work the way it was meant to work, we must reverse the tren
turning more and more authority and control over our lives to
government. We must accept our responsibility as free men and as
concerned citizens.
Now it is easy enough to say, "Well, I vote and I pay my taxes
and I obey the laws. " But, we are kidding ourselves. This isn't
enough, and you know it. Otherwise, you wouldn't be members of
service clubs--because by their very name they imply that they're
of service to fellow citizens.
What can you do? Well, the answer is as easy as it is varied.
The problems lie all around you. And, only you can provide the
lasting solutions within the framework of a free society.
What are you as businessmen doing, for example, to prevent
juvenile delinquency? You, as individuals or your clubs, can do
a great deal. Most kids old enough to get into serious trouble would
rather work than play if we gave them half a chance. Where are the
summer jobs and the after-school jobs that you and I used to have?
Well, most of them are gone and the excuse is government regulations
and government paperwork. And that excuse has some validity.
But, if we're interested in keeping the kids off the street and
out of trouble, we can make an extra effort. If there's some way
that the state government can get out of your way, let us know and
do it. The alternative is to keep criticizing the younger
generation while we turn our backs on them.
Now you can make your complaints about the high cost of govern-
ment meaningful by demanding fiscal responsibility at the city and
the county levels where your tax dollar doesn't buy as much as it
should in most cases.
You can work in the poor areas and the slum areas through govern-
ment programs or through privately sponsored and financed programs.
It's not enough to just give to the Community Chest or the Red Cross
or the Salvation Army, although this, too, is vital.
Today's problems demand your time and your energy as well as
your money. They demand your personal involvement and that again
is the meaning of the Creative Society.
Money may seem like an answer in Washington where the slogan
used to be "Walk Softly and Carry a Big Stick" and now it's "Walk
Softly and Carry a Big Sack", but if money is the answer, how do
we explain that California ranks third in the nation with the
number of poor and first in the amount of federal anti-poverty funds
that we've been alloted. Since mid-'64 we've spent $288 million in
this program in California.
And we didn't alleviate poverty, we created an administrative
nightmare. Follow ; Watts, millions of dolla were funneled into
that area as a hot spot. They had to solve it. For a time there,
I can assure you that the poverty program administrators outnumbered
the residents. And then a national magazine doing research found
out that more than 50% of those funds went for administration.
This is why I vetoed a number of poverty programs in the
state. One in Fresno was set up to teach people how to demonstrate.
If there's one thing we don't need in California, it's more demon-
strators!
There was another one down in Ventura County
it was a pilot
program. It was going to put 17 of the hard-core unemployed to
work clearing up our park lands. I vetoed the program because they
were going to have seven administrators to make sure the seventeen
got to work on time. But it wasn't enough. The seventeen were
expected to travel 12,000 miles doing this job and there was no pro-
vision made for their transportation or their housing.
The general accounting office has said that there is one Job
Corps Training Center in California with 1,860 enrollees and a
staff of 1,078.
But even this pork-barrelling has been topped by one in Chicago.
They had an organization that was awarded $872,000 to teach basic
arithmetic and reading to dropouts. Well, that's a worthy purpose.
Kind of curious, a reporter for the Chicago Tribune went down one
day to see how they were doing in school. And he interrupted a crap
game. They explained to him that it was a recess.
But then he started looking at the teachers--they got $3840 to
$6500 a year--not an excessive amount, but neither was their work.
He found that two of them were in jail--one charged with murder, one
charged with conspiracy to commit murder. Three were out on bond--
waiting trial for rape. Another was waiting trial for aggravated
battery, and still another one was on probation for a burglary con-
viction. And the director said it was too early to say whether the
program had been successful.
Incidentally, the teachers were paid $5 a head for each dropout
they could bring in. And since they were able to offer the drop-
outs $45 a week plus a family allowance, the best recruiting place
was the nearby school, where they were talking the kids into drop-
ping out.
Well, there is a better way. Not only you, but those who work
for you, could be encouraged to be involved. Ours is a world of
increasing leisure
leisure to play golf, go boating, go skiing,
and leisure to help those who need help and can profit by it.
You can be minimal good citizens--doing what the law requires
and little more, or you can become involved--if you want to save our
society and build a better society. There is a demand that you
become involved. The alternative is a continued drift to big govern-
ment
to bread and circuses
yes, and to riots and bloodshed
fomented by those who've been promised much but have received very
little.
You have a very definite stake in what we're attempting here
in Sacramento, We have proven, I believe, already, just showing a
little light at the end of the tunnel, that government can employ
common sense and can employ business practices.
We've proven that the people can participate in government and
can lend their abilities to the solution of the peoples' problems.
We've proven that the size and the power and the cost of government
can be reduced. We've brought hope across this land that government
of and by as well as for the people is still a practical possibility
and is still the basic American dream.
Chad McClellan, who I mentioned a short time ago, has received
invitations from 20 Governors, Democrat and Republican, and he has
gone to those Governors and today there are 13 programs in 13 differ-
ent states started because of him, all similar to ours.
Ken Pryor, who was chairman of the citizens' task force, is on
the same circuit at the invitation of other Governors. He has just
returned from Maryland where they are now going to put a citizens'
task force to work in their state
to bring about the same
No, we haven't totally accomplished all we intend to do or all
that we've tried to do. But we've made a start and we have reached
the point now where we cannot continue without your support.
Because from here on, to make the real reductions, we need changes
in the laws. We need the backing of the Legislature to give us
the flexibility.
If those who place their faith in ever more powerful govern-
ment succeed as they are trying to succeed in stopping what we
have started here, then each one of us will have to ask, where,
if ever, do we think it can get such a start again as we have give.
it here in California. We must succeed, or I believe it is pro-
bably the last chance for that American dream. Thank you.
#
#
#