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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: Press Conference Transcripts -
05/17/1972, 05/31/1972, 06/08/1972, 06/29/1972
Box: P03
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library
inventories visit:
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Contact a reference archivist at:
[email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
PRESS CONFERENCE OF GOVERNOR RONALD REAGAN
SENATORS JOnN HARMER, FRED MARLER and RUBERT LAGOMARSINO
and ASSEMBLYMEN WILLIAM BAGLEY, ROBERT MONAGAN and JOHN STULL
HELD MAY 17, 1972
Reported by
Bèverly D. Toms, CSR
(This rough transcript of the Governor's press conference is
furnished to the members of the Capitol press corps for their convenience
only. Because of the need to get it to the press as rapidly as
possible afterthe conference, no corrections are made and there is no
guaranty of absolute accuracy.)
000
GOVERNOR REAGNN:
We are all here in connection with the
announcement that I am going to make, the legislative leadership
and those who are going to handle the piece of legislation that I am
here to announce.
(Whereupon Governor Reagan read release No. 300)
GOVERNOR REAGAN: Now, I think you gentlemen wanted to add
anything to this before we have Ken go into the details of the tax --
SENATOR LAGOMARSINO: No, Governork only to add that I think --
I think this is a measure that is -- as you say, worth of consideration,
and the support by the legislature. It meets two of the biggest
problems we face, the issue of school finance and of course the issue
that we have had for many years, as you pointed out, of property tax
reform. And the thing that is very appealing to me about it is that
this is able to be donc without increasing the income tax.
ASSEMBLYMAN BAGLEY: I might point out procedurally that since
we have ABe1000 which is a familiar number, the Moretti package, in
the Assembly, we want to start this bill on its course in the Senate.
So that Senator Bob Lagomarsino -- and he and I were together a
couple of years ago, and I have Leroy again with me -- Senator Lagomar-
sino will be the main author of the bill to be introduced very shortly,
within days, in the Senate. I'll be the Assembly co-author. If
necessary, I got a couple of spot bills, too, but the whole point is
we will start in the Senate with this bill. Just by way of conclusion,
I have been on a Serrano kick now for a year or so urging that we meet
the mandate of Serrano, because it is perhaps the most important finance --
government finance issue of the century, and all'I want to do, I really
mean this, is commend Governor Reagan for facing the reality of Serrano,
facing the realities of the unequal educational opportunity that is built
into our system now, and repairing that inequality, and I do commend
-1-
Governor Reagan for that, and I thank kim for his leadership.
GOVERNOR REAGAN: Gentlemen, anyone else? Well, you will all
have a chance at all of us here in just a few moments for questioning,
but first, and this might anticipate some of your questions, I'll ask
Ken Hall and Bill -- I appreciate those words, except I have to turn
and give the credit to my staff and the -- Verne Orr and Ken and all
of the people over in finance who have been working so hard on this
with legislative leadership help.
ASSEMBLYMAN BAGLEY: You want me to move, Kenny?
a
MR. HALL: I just want to try and run through a couple quick
concepts and then maybe cover the general questions with the Governor
and the principles, and then if you have detailed questions I'll be
happy to come back to those. The proposalsis a major property tax
reform proposal balanced upon two different issues. One attempting
to try and provide guaranteed and lasting property tax relief to
Californians beleaguered homeowners and others. And at the same time
to provide an equal educational opportunity program to California
school children. The educational portion is approximately 860 million
dollars of additional money, State support, for schools, of which
210 is a program increase for the poorest school districts. The
balance, 650 million dollars, is a roll back in the property tax
rate currently supporting local education. This will take the State
support to 50-50 sharing in terms of the basic educational program.
The details as to how it works is to take -- build upon the existing
foundation program and expand the support for -- expand the State
support from a present level of a guaranteed of 480 dollars per student
for the elementary school to $687. For a high school student, to
increase the support from the current level of $560 to a $900 level.
The typical school district in California would receive approximately
85 per cent additional state support. 95 per cent of California's
school children would receive additional State support.
The property tax relief portions are as we mentioned, $650
million rollback in the school property tax rate. Plus increasing
the homeowner's exemption to first $1250 effective with this December's
tax bills, and increasing $100 incrementally for a period of four years
to a total of $1550. Also for the property taxpayer to limit property
tax increases for the future to a vote of the local electorate, unlike
Watson which gives a limitation in terms of the property tax that the
voter has no option of going above this proposal, would give the option
of the local electorate to go above that level for cities, counties and
schools. A total 0 property tax relief, $650
the roll back of
the rate, $242 for additional homeowners' exemptions, a total of
$829 million dollars worth of property tax relif within the proposal.
Incomettax relief in three different parts. $84 million for
renters in order to try and balance the sales tax indreases that
would be imposed upon them. Also increasing the singles exemption.
Singles e credit from the current $25 to $35 andgive those who have had
household returns the potential -- the advantage of using and claiming
a credit for their first dependent. Replacement revenues are dedi-
cating $100 million dollars of State surplus that will be announced
tomorrow. A, dedicating that state surplus for property tax relief
rather than for additional spending for state services. Secondly,
the funding is from federal revenue sharing to the extent of $240
million dollars. When the question is raised as to the potential of
federal revenue sharing passing this legislative session, we think
the potential is excellent, but just in case there is a difficulty in
terms of adopting federal revenue sharing, there is a reserve fund
established of other surpluses in the state budget which would offset
the $240 million dollars worth of increase -- of revenues coming from
federal revenue sharing. If this reserve fund is not needed, because
of the advent of federal revenue sharing, then any reserves in this
surplus would be returned to the taxpayer in terms of an income tax
reduction.
The eevenues in terms of tax increases do not include any type
of an income tax increase. Theyare a sales tax going up one per cent
effective next May; luxury tax increases on cigarettes and liquors,
5 cents per pack, 50 cents per gallon, and a gank and corporation tax
increase, 1.4 per cent.
Local government. As we mentioned, property taxes are limited
for cities, counties and school districts to a vote -- vote of electorate.
We are providing cities, counties and school districts with an
increase on additional revenue from the VLF. The Vehicle in Lieu Fee.
The Vehicle In Lieu Fee would be increased .85 per cent and would be
shared equally between the three jurisdictions, counties, cities and
schools. This would be the first time that schools will have partici-
pated in the VLF program. It is a tax on automobiles in lieu of
property tax, automobiles and trucks. At the same time it would
require the State of California to fully fund any new mandated or
increased programs that are mandated by the State of California, tTo
-3-
try and round out the package, the constitutional amendments, some of
which the Governor has mentioned, are three. One is to authorize a
carbon copy for the State income tax returns on -- of the federal tax.
The issue has been in front of the electorate in the past. There
are two -- two new features that we think are important in terms of
that electorate decision. One is the advent of withholding. We
feel that in part maybe the local electorate's changed their mind,
and secondly in the Mills revenue sharing bill the federal government
is proposing to check state income taxes with no administrative charge.
Secondly, that as you will note in your handouts, since the Governor
mentioned an option for the electmrate to choose either a two-thirds
or majority vote for all tax increases, and third, we'd eliminate
basic aid for the highest school districts in compliance with Serrano.
Maybe- that kind of rounds out the package, Govenor, maybe someone has
some general questions that they can
to you and the legislature
and then I'll be happy to come back and respond to specific questions
at the conclusion of that.
Q.
Governor, are we now talking about -- do you have -- are you
able to do this because you now have something like $350 million in
surplus? Is that what enables you to set aside $100 million in
surplus for -- one phase of this and then a reserve fund to make up
for
GOVERNOR REAGAN: Well, now, I'm not going to jump the gun
on the Finance Department, which Tom will be reporting to the legisla-
ture. As nearly as we aan estimate what our situation is -- but I
can ohly tell you that I've been happier than I've been in a long
time. You know, we have been fighting desperately for years to get
government's expenditures to within the fremework of our present reven-
ues.
We have occasionally had single time surpluses, single time
savings. Two instances in which we have rebated them by way of the
income tax, the last one this April because of the additional revenues
from the overlap of withholding. For the first time we now are
reasonably optimistic. Optimistic enough to see that -- two things
have happened. One is the -- evidently the President's programs are
working. In recent months the stimulation of the economy has gone
beyond our estimates of such things that reflect citizen confidence
such as the sales tax. But more important, if you will remember, last
year when we were being told over and over again that we needed $750
million dollars to balance the budget and we insisted we didn't, and
-4-
you will remember tha we were constantly told tr our estimates of
savings from welfare and Medi-Cal were exaggerated, and that we were
phonying them up simply to get the reforms passed, and WE insisted that
not only were they not phony but that we honestly believed that WE were
being modest, that we were being conservative because if we were going
to be surprised we wanted to be surprised on the happy side. Well,
we were right in everything we said. We not only didn't need the
$750 million but our welfare and Medi-Cal reforms are producing as we
ourselves thought they would, far more in savings. We now believe that
we have enough of a view to know that some of thas savings are going
to be ongoing. So, for the first time, not just suggesting a single
temporary rebate, we are able to commit $100 million dollars that we
know will be ongoing and we believe that there will be additional on-
going relief or surplus. And therefore if the federal revenue
sharing plan should go through the State's share over and above the
local and county and cities share -- the State's share would be around
$240 million. We are willing to commit that $240 million to this pro-
gram of tax relief. fTo guard against the possibility of Congress' unpre-
dictability and that they might not pass the revenue sharing we will
hold in trust the additional surplus funds that we are going to have
and use those in place of the -- the federal sharing if that should not
take place. If that does take place, we believe that we are going
to be in the position then to propose for the first time an across-the-
board reduction in the state income tax.
Q.
Governor, why did you change your position, though, as far as
you took the money from income taxpayers, but you are giving it back
to property taxpayers? Who may make up only 55 per cent of the income
taxpayers.
GOVERNOR REAGAN: Right.
Q.
40 per cent of renters, you know, you are not giving the renters
the same property tax, ongoing program.
GOVERNOR REAGAN:
A.
One of the outgrowths of all of our studies has been the fact
that the prorated share of the renter in paying property tax is only
about 30 per cent of what it is for the person who is providing his own
home, and therefore they don't have the same property tax inequity,
the renter does not that the homeowmer has. So the need there is not
as great.
a.
Gobernor, why did you wait SO late in the session to present
this?
They are supposed to wind up by June 39 or thereabouts.
-5-
GOVERNOR REAGAN:
Let me tell you, it wasn't a case of waiting.
It was a case that, as I told you, I guess, last week in the press
conference, that as we have gone on through these several years of
attempts and -- we started out with, as you know, quite complicated
programs, trying to cure every problem across the way that we could,
We have learned a lot, and what we learned revealed that the problem
was more complicated and the more we knew the harder the problem became.
We also faced, this year the fact that very much a major part of any
tax reform had to be the solution to the school financing. It was
ridiculous to talk about altering the tax structure and ignore Serrano
hanging over you. So this has been the result of an awful lot of
work and a lot of different proposals that we have debated and --
and burned the midnight oil on and turned down. And so finally I
just have to tell you this, this was as quick as we could come up with
something.
I would point out that the only other alternative to Watson
that the legislature has is really only being introduced -- well,
tomorrow, as a matter of fact.
Q.
Governor, this freezing of the tax rates, the '72-73 level,
isn't that more in the spirit of Watson than Serrano?
GOVERNOR REAGAN: Well, no, we feel that if Be are going to --
and we recognize that this is going to be -- not received joyously
by local government, it never has been, the idea of controls -- but
we are not keeping the controls in the hands of the state ourselves,
we are putting them in the hands of the people. But we believe
that by freezing for a brief period that it is only fair to the people
who from then on are going to have the responsibility and the right
to raise those property taxes, that they should have time to see
those bills come in and reflect this difference in the property tax.
See if the structure is working before someone should start trying
to induce them to go ahead and raise their own property tax.
ASSEMBLYMAN BAGLEY: The Watson initiative doesn't allow --
takes the right of the voter away. Cannot raise the local rate even
if he wants to enrich the program.
GOVERNOR REAGAN: Fixed in the constitution.
ASSEMBLYMAN BAGLEY: That's the difference.
Q.
Governor, how do you accomplish this rollback of local property
taxes and which taxes will be done and who will decide that?
-6-
GOVERNOR REAGAN: Ken or somebody.
ASSEMBLYNAN BAGLEY: Let me try to indicate --
COVERNOR REAGAN: Bill.
ASSEMBLYMAN BAGLEY: -- let me try to indicate, we are talking
about a rollback only in the school tax rates. We are talking about
a rollback inthis -- in this sense. As the chart showed the present --
and let's take an elementary district. The present elementary district
guarantee is a program of only $355. That goes up to $687. Let's
take a district that is now spending $1,000 but has an assessed valua-
tion that's low enough to -- to benefit from the increased state
monies, and let's assume that it gets a couple of hundred dollars
of new state monies out of the -- almost -- well, $210 million that
we have gr.t per child. So what you do is to the extent that the
present district is above the foundation program, i.e. 687, and to
the extert of new money, they are forced to roll back their rates,
let's say, of $3.50 to $2.50 by the amount, if that's how it works out,
of the new state money. Those districts that are below the foundation
level now will not have to roll back. So we are rolling back those
districts that are -- have a high tax rate and have a program which
is above the foundation basis. However, you are not forcing program
rollback because you get an exact commensurate amount of money for the
rollback that is caused.
Q.
Well, now, just to pursue that a little bit further, if you
have an impoverished school district, as far as assessed value is
concerned, and they are taxing high to reach the minimum level, now,
so the state increases that guarantee of the minimum level, but that
school district still has to -- to stay up there, still has to maintain
its high property tax --
ASSEMBLYMAN BAGLEY: No, sir. No, sir, because the lower
the assessed valuation the more on those charts -- the more new state
money you are going to get and therefore the -- the more tax rate
reduction. But they will stall stay at their -- at their high rate
because that's what the people have voted. Not their high tax rate,
but their high expenditure rate.
Q.
How far will this go to equalizing school property tax rates
betweenddistricts which now vary from $1.00 to $7.00?
ASSEMBLYMAN BAGLEY: The other way to answer it is that more
than 95 or 97 --
KEN HALL:
95.
-7-
ASSEMBLYMAN BAGLEY: 95 per cent of the districts of California
will be equalized. There will still be those few districts that have
the unique very high assessed valuation, which will be able to rely
upon that assessed valuation without any state monies. And that, we
maintain, is quote, unquote, substantial compliance with Serrano. And
we would say that if that's what the legislature enacts and when the
legislature finds a specific series of facts which will add up to a
basic foundation education and we make a finding that that is basic
education, then we go back to the courts. Then the court is on the
hook. Are they going to say, you didn't do enough, the whole system
is still unconstitutional, and risk the system blowing up in the
State's face? I don't think SO.
Q.
Can you identify those few districts?
ASSEMBLYMAN BAGLEY: Oh, I can't by name.
a.
Is San Francisco one that has an urban factor in the program?
ASSEMBLYMAN BAGLEY: In addition to the monies we are talking
about the elementary district, for example, at 687, high school at 900,
all of the present categorical programs, compensatory ed, special ed.,
dontinue and are in addition to these monies because they are specially
budgeted programs.
Q.
These 90 Oer cent -- 95 per cent that are equalized, is this
absolute equalization or is it --
ASSEMBLYMAN BAGLEY: Not in terms of dollars, because the
public in those various districts has voted a varying enrichment of
their own programs. But 95 per cent of the districts will have the
basic foundation program or more. All of the basic foundation program.
P.
What about tax overrides?
ASSEMBLYMAN BAGLEY: Well, we will eliminate all of the per-
missive overrides that presently skew education financing and provide
only for -- only for overrides permissive without a vote of the people
on
financing and earthquake safety. The rest
of
the
present
override will be eliminated and everything abovetthe rate of spending,
not the tax rate, but the rate of spending, i.e. $1,000 a month, if
that's the present rate, from this point in the future will be subject
to a voter override with the exception that the State guarantees cost
of living whichi is not now the case.
Q.
Governor, the school district is but one of the local govern-
mental agencies which use the property tax. Do you have any concern
that as the school property tax is rolled back that, say, county
-8-
supervisors may feel reer to raise their proper tax?
GOVERNOR REAGAN: They are covered by this same voting provi-
sion.
All property tax will require a vote of the people to increase
it.
This was the only way finally, after years of trying, that we
felt we could come down to a -- a system of control that would keep
the State's nose out of -- of actually dictating local policy. We
couldn't -- we couldn't find the control that applied to local govern-
ment without tt being state dictating, so we gave the power to the
people and we figured that that was asdemocratic às you possibly could
get, democratic, small d.
Q.
Have you considered next year, instead of cutting back the --
cutting theincome taxes, of rolling back the sales tax?
GOVERNOR REAGAN: That what?
Q.
If you are able to cut some tax next year, had you considered
instead of -- you said you might -- you would aut the income taxes,
but did you consider instead rolling back the sales tax?
GOVERNOR REAGAN: I didn't close my mind to anything. But
we have found that with the people -- the one is, believe me, much
less popular than the other. All of our -- we haven't done this
blindly without trying to find out the feelings of the people, and
we have found out that there has been -- in just the last year or so
an increasing feeling about the income tax as compared to the property
tax.
Q.
Governor, what does Senator Bradley think about your program
this year?
GOVERNOR REAGAN: What's that?
Q.
Senator Bradley.
ASSEMBLYMAN BAGLEY: He likes sales tax.
GOVERNOR REAGAN: I don't know, I haven't had a chance to inter-
view him.
a.
Governor Reagan, you indicated Mr. Moretti's bill is coming
up tomorrow in the Assembly. Now, you have some similarities here
between his bill and yours. What are the fundamental differences
as you see them?
GOVERNOR REAGAN: Fundamental differences from that -- that
he has no control. There is no way to keep property taxes after
the one time reduction or the first reduction from going right back on
up.
The second basic difference is that he has about two-thirds of
a billion dollars in tax increase in that bill, and where we are
reducing net income taxes by these changes in exemptions about $14
million dollars his bill increases the state income tax $800 million.
ASSEMBLYMAN BAGLEY:
And lastly, no Serrano solution proposed.
GOVERNOR REAGAN:
That's right, no Serrano solution proposed.
VOICE: Thank you, Governor.
Q.
As one of the previous questions indicated, a number of local
agencies depend on theproperty tax for revenue. Isn't this asking
for a -- a morass of ballot proposals every time some agency wants --
asks to raise the property tax?
GOVERNOR REAGAN: Well, as I say, we are giving them an
additional source of income that they haven't had with the Vehicle in
Lieu Tax. We have taken away once and for all that big sore spot
that has -- that has soured relations between state and local government
and that is the state mandating things on local government, without
providing the revenues. We have now -- we will now fix by law that
the state can't mandate anything additional on local government without
providing the revenut itself. So it would be us who would be faced
with the problem of funding revenues more than they are. I don't
think that -- you see, they still have, of course, the growth that
comes from increased assessment. There is no effort to try and say
that property has to stay the same value and that is -- that is an
appreciable growth for local government in its property tax revenues
every year. The building development and simply the added value
of these things. If any of you do have any special or specific or
technical questions, Ken will be very happy to stay after we return
to our duties here and answer yours on the details of the program.
Other than hhat, no one else has anything to offer for the good of
the community, thank you very much.
000
-10-
5/31
PRESS CONFERENCE OF GOVERNOR RONALD REAGEN
HELD MAY 31, 1972
Reported by
Beverly Toms, CSR
(This rough transcript of the Governor's press eronce is
furnished to the members of the Capitol Press corps for thoir con-
venience only. Because of the need to get it to thepress as rapidly
as possibly after the conference, no corrections are made and thero
is no guaranty of absolute accuracy.)
o0o
GOVERNOR REAGAN: I thought maybe I might anticipate a
question in view of a recent happening here, and also because there
still seems to be a certain amount of confusion in people's minds
about just what happened.
(Whereupon Governor Reagan read Release Number 334)
Q.
Have you signed it, Governor?
A.
What?
Q.
Have you signed it?
A.
Nancy wouldn't let me in the house until I signed it.
&
Governor, do you think by simply failing to sign this and
saying in effect they accept the Supreme Court's decision, they
are speaking -- we are speaking in a loud, clear voice?
A.
Oh, I'm sure that this is true. Although this is such an
amateur operation that there are -- I don't know how many thousands
of people -- hundreds of thousands of people who don't even know
that even yet that the petitions are being circulated or where to
sign them. I know Nancy has been getting calls and the unusual
thing is that she has people with no hesitation who tell her they are
opposed to capital punishment, agree completely that it should be
on the ballot and they sign the petitions to get it on the ballot.
But this is -- she hasn't run into any refusals -- well, one, she
told one incident, and incidentally she has gottenea great many
petktions signed, but -- this is -- I think that the big problem
has been that without any commercial public relations firm handling
this as handled so many of initiative propositions, it's just there's
been no advertisements, there is no widespread knowledge of this.
Q.
Governor, have you been asked to sign the coastline initiative
or if you are asked will you sign it?
-1-
A.
The coastline nitiative.
Well,
now,
y
have me in that
in that position here of my saying the right of the people to vote
on something. I would be inclined not to on the basis that we do
have a legislative solution that is being advanced. I've always
recognized the petition or the initiative as something that when the
legislature fails to act this is the people's recourse. There is
a bill moving in the legislature, we ourselves have sent the
Coap (phonetics) report up. And I would think that the time for
the initiative on the coastline would be if the legislature took no
action.
3.
Well, Hasn't the legislature still got a proposal on capital
punishment, it isn't dead yet, it is still alive.
A.
Well, unfortunately we ran into a deadline date there on this.
For the November ballot.
I don't -- the author himself has joined
this initiative, in fact is in charge of this initiative move,
because he does believe it is right.
Q.
Governor, on the cutbacks -- welfare cutbacks for April were
announced, they showed that 300 blind people were cut off the rolds.
What happened to these people?
A.
Now you are talking about the -- the decline of 11,000 in the
welfare rolls for this last month. I haven't gotten into the details
of -- of what these people have been. But I would assume, knowing
the department, that they were -- then probably these -- possibly
these could be people who did not meet that qualification. Or these
could be people who have been rehabilitated and -- because our
rehabilitation program has been operating at a level about ten times
as high as the level several years ago.
8.
How do you rehabilitate a blind person?
A.
Oh, --
Q.
What's that mean?
A.
Oh, there are a great many who are totally self-sustaining
and you see some of them are working right here in this building,
who have never let this interfere with their ability to earn a living
and be independent. I would also suspect that -- you have interested
me now, I think I'll try to find out what this is, but I don't think
anyone who is helplessly blind and couldn't provide for themselves
was thrown off the rolls.
Q.
Governor Reagan, before we meet you again there will be a primary
election in the state. I wonder if you'd like to try the role of
politicat forecaster and tell us what you think we will see in the --
in our own races and perhaps in the presidential race as well.
A.
Well, I don't
now.
The Jnne ballot
course I'm quite
sure that the Republican nominee for President is going to be the
incumbent president. And that doesn't exactly take a crystal ball
to figure out. On the Democratic side I wouldn't guess between
Humphrey and McGovern.. I think they are very close, and they are
staging their run down the stretch now. I think there again it is
easy, going to say it is going to be one of the two of them. The
great chorus of the candidates we have had, it seems to have narrowed
down, at least in California, to those two. If I were at the track
and had to choose between two of them, I'd bet both of them to place.
(Laughter)
Q.
What is your reaction, Governor, to the debates between Senator
Humphrey and McGovern?
A.
Well, I don't think any earth-shattering facts came out. I
watched last night and there was disagreement, but you had to take
your choice on which fellow you thought was the more pronounced in
his disagreement because neither one of them seemed to prove his
point with any facts or figures on the disagreement as to whether it
had to do with defense or whether it had to do with taxes. I was
interested when Mr. Novack tried to pin down the tax potential
contained in some of Senator McGovern's proposals, and he came up
about a hundred billion dollars short of having enough money to do
it. Now maybe he's counting on making bum dimes in the basement
of the capital if he gets in, I don't know. But there was never
any answer that spelled out and said yes, this is how we will fund
all these grandiose plans. But if it was a pilot, I don't think
it will have a long run.
Q.
Governor, abere's one ballot measure that affects you directly
and I haven't heard you comment on it yet, that is Proposition 5,
which would give the Senate the right of review over appointment of
Regents.
A.
Bless you. That's true, with everything that's been going
on. I think the people should reject it. I think the system has
worked for about 90 years under governors, Democrat and Republican.
It has worked to create what all of us agree is the greatest univer-
sity system in the country, if not the world. And actually I could
see injecting politics into education, not removing it. The terms
are long enough that no governor, or very seldom does a governor
and perhaps through tragedy or a set of circumstances, manages to
get an unusual number of appointees. But right now with the politics
that are being plaved upstairs in the Senate with regard to some
appointees reveals what would happen with the university itself.
Q.
Well, by the same token, governor, would you then support a
move to have the trustees -- the method of appointing trustees the
same as the method of appointing Regents?
A.
Yes, I doubt that the legislature will ever give that up, but
I think we would be better if we had that. Let me just propose one
thing that could take place in the last couple of years of a
Governor's regime. Since the people can serve on the board by
the Governor's appointment without being confirmed by the Senate, it
would be possible for an opposition party to refuse confirmation.
In those last few years, knowing then that at the end of a Governor's
term the incoming government, if it should be of their party --
well, whichever party, would have virtually a clean slate to make
appointments because then all of those who had keen riding on the
Governor's appointment without confirmation would lose their posi-
tions.
Q. Governor, lookingtbeyond next week's primary, do you antici-
pate campaigning for any VOP legislative candidate for the November
election in order to boost the GOP's margin in the election?
A. Oh, sure. As a matter of fact, there is a fund-raising dinner
tonight in Los Angeles that I'm going down and speak to. Yes,
I'd like I had just one brief taste once, and I liked it, having
a legislature of my own party up here, and I didn't know when they --
when I got elected governor that it was an obstacle race. And I
enjoyed it so much that I'd just like another crack at it before
I get out of here.
Q.
Governor, what do you think of the State Social Welfare's
board decision that a third child be taken away from a welfare
mother?
A. Oh, that goes back a long time ago, and I remember when that
was proposed. I know what they were trying to point out, and I think
it is of great coneern to a lot of people, is government subsidizing
just the promiscuity and the careless having of illegitimate child
after illegitimate child add yet you always run into the other problem
of do you punish the children. I think that the laws that we have
regarding the fitness of a household, the ability to take a child
away from a household on the basis of moral unfitness, is sufficient
if it is properly enforced.
Q.
Governor Reag
on your major tax reform
lan,
does
70
per
cent of the property tax relief go for business and commercial relief?
A.
No, that's some more of that new math we keep hearing upstairs.
No, it is true that a postion of our property tax relief is a rollback
of the school tax on all property. Now, this was because part of
our problem in all the efforts of tax reform has been trying to
avoid dividing of the tax rolls. It sounds simple at first to say,
well, let's have a different rate of taxation for homes than we
have on other property. And then you find yourself with a situation
like Minnesota, I think they have 44 different classifications of
property for taxation purposes. So we have tried to avoid that.
But then we have in addition the increase of the -- of the exemption:
on the homeowner, which increases his property very much. This
figure was taken just as a careless and a very inaccurate statement
that on the rollback that a majority of the property is -- is
business or commercial property. I think that figure is exaggerated
but it also ignored the fact that the -- that business pays between
30 and 40 per cent of the sales tax that we are going to increase.
It ignored the fact that we are increasing the bank and corporation
tax at the same time that they would be getting some rollback and
it also ignores the fact that much of business -- great fleet opera-
tors of tfucks and automobiles and so forth, and we are increasing
the in-lieu tax which would affect them.
a.
Could you explain the rollback, I'm not sure I understand.
You mean rolling it back to the same level that the house owner pays
or to a previous level?
A.
Well, there is -- on the education portion of the property
tax there will be a rollback in the level that schools -- that
school districts can apply and the state then makes up with these
other taxes the money, so that we can equalize the school districts
and guarantee $745 every student in elementary school, and $930 for
every high school student. And then on top of that our tax relief
is going to increase from $750 to $1250, the exemption -- property
tax exemption, and each year as our revenues grow that's going to
be on up, so in five years the exemption will be $1550.
Q.
What porportion does go to business and commercial property
tax relief?
A.
Well, the only proportion which -- would be that percentage
of property tax relief that comes from the -- just the rollback to
a kind of equalizing tax for schools.
That will cover all property,
-5-
farms, apartments, business as well as homes. Now, it is true that
more than half of property is owned by business. But then the
exemption thing would only apply to homes. So the figure of 70
per cent is way off, when youfigure in the other increase in taxes.
Business is probably going to get some minor break out of this,
but it would be very minor.
Q.
Governor, your Finance Department experts project that the
impact of your tax reform program would be to deprive San Francisco
schools of $9 million dollars. If the local taxpayers have to make
that up, that would be a boost of 377cents on the tax rate. How
do you propose to modify or do you, in order to give San Francisco
taxpayers a break?
A.
Well, we know that there are certain urban areas and certain
problems that we are looking at because we don't want to penalize
anything, but let me point out something about San Francisco also.
San Francisco has one of the richest property bases for taxation
of any place in California. And San Francisco with a fairly low
school tax rate on all of that is spending more than $1400 per
student in their school system. Now, for point of comparison,
Los Angeles only spends $860. It is possible that San Francisco
could find some of the answers to their problems within their
own school system, and the way they are operating it. But we are --
we are not just saying we are going to throw them to the wolves,
we want to look at this problem, we don't want to penalize anyone,
as I said before.
Q.
Do you definitely plan to put in an urban factor for subh
school districts in San Francisco?
A.
All I can tell you is that we are studying this and studying all
elements. We'd like to be able to give everybody a tax -- a
property tax relief.
&
Governor, on another subject --
Q.
Same subject. Samessubject. Governor, yesterday a large
group of about 50 legislators, because of a study in surplus, suggested
putting -- I think the figure was a hundred -- $250,000,000 in the
budget to aid school districts. Could you live with that figure?
Is it too high?
A.
No, I think that we are apart on the figure. We ourselves are
talking in the neighborhood of a hundred million dollars earmarked
for the school districts that are disadvantaged, that are in trouble.
-6-
But then we also, as we pointed out to these legislators -- the
answer to their problem is the type 6f thing that we have included
in our tax reform program upstairs, which will go allong way toward
meeting the Serrano decision and equalizing schools. IVf we are
just going to dump another couple of hundred million dollars intone
the present archaic and outmoded formula. we already have, no guarantee
that we are going to improve the quality of education, no attempt
to equalize, that is not a solution to the problem. Now, part of
the big problem over and above the hundred million dollars new money
that we can see for schools for this purpose, Los Angeles which has
a very real problem has within their hands a possible solution that
would bridge any time gap until we could get this equalization in
because Los Angeles teachers will join the State Retirement program
which will be advantageous to them as individuals. There is anywhere
between 100 and 140 million dollars in Los Angeles that some teachers
are insisting is theirs, but it shouldnot be. It is taxpayer's
money that was paid in excess of their needs. And wehave been
talking to the Superintendent of Schools in Los Angeles and he's very
much in agreement about the idea of yes, giving some of that money
to buy into the State system for the teachers over about a five year
period, using some of that money to return to the taxpayers and then
using the balance to meet the school problems of Los Angeles until
we can get this new system operating.
Q.
Governor, with the disagreement over this tax package and
other major issues, are you and the legislature heading for the same
partisan impasse that you reached last year to prevent any accomplism-
ments this year?
A.
I hope not. I have talked to all of them. We briefed them
completely on our plan. We told them the things that we still feel
in our shop adamant about, which is that the guarantee that the
tax reduction will remain, that it wonld be a usury and just disappear
the first time somebody wants to raise their taxes. That is the
biggest single item. There are some differences with regard to the
substitute taxes, what we use to -- to get the money to afford the
property tax reduction. But I told the Speaker the other day in a
meeting that as far as I was correrned they were now two proposals.
We didn't attack his proposals, we provided the votes, the Republicans
did, to get his proposal before the Senate as we introduced our own
to the Senate, and it would seem to me in the normal legislative process
-7-
now that the legisl ors ought to get together id find out how
cdose we can come to solving this problem.
a.
Governor, the program didn't include any open space money this
year.
What was the reason for that?
A.
No, we simplified it, we just decided that much of what we have
been trying to do in the past was trying to cure too many problems.
And to solve every program into one package. This is not the end
of the line with a thing of this kind, we can treat with other
problems as we go on, but the principal problem -- well, is double.
It is school financing and the equalization and it is the relief
of the homeowner.
a.
Governor --
a.
Governor, is the hundred million dollars you are talking
about over and above the 65 that you had in the budget?
A.
No.
Q.
Originally.
A.
No, that includes -- that's the 65 and now -
Q.
35 more?
A.
-- we see our way clear, yes, we believe that we can do that.
Q.
Governor, did the Assembly Republicans vote for Moretti's tax
proposal at your request, you ask them to vote for it?
A.
No, except that in -- in meeting with them and talking with
them made it plain that -- that we had no intention, we did not
believe that we were entering our bill or introducing our bill
in some way to kill his, beauause that would just be a fruitless
exertise, and then they'd kill ours, that we thought it should move.
Q.
Governor, the Riverside City Council yesterday passed a resolu-
tion at a special meeting asking you to declare a state of mmergency
because of smog in the greater Los Angeles air basin and order the
conversion of all vehicles in the basin to non-polluting fuel, such
as propane and natural gas over the next two and a half years.
And they are coming up to especially see you on that in a couplesof
weeks. What is your response to that, do you have the power to
do that and would you do it?
A.
Well, I'd have to check very -- all the things out that you
have asked me. Yes, I'll see them, of course. I'm very happy to
see them. I don't know, first of all, that what they have proposed
is practical. I remember when the first experiment came up with
natural gas in automobiles, I was informed by the gas company that
if everybody did it there isn't that much gas. They just couldn't
provide it. And I'd have to check on the mv legal ability to
declare this.
Q.
The Mayor said he doesn't think that Governor Reagan realizes
the plight we are in. They are sort of charging you with not being
too excited about the smog situation down there.
A.
Well, you know, I don't know -- I could go out and I suppose
beat the side of the capital building every day to prove that I am
concerned. The best thing I can tell you is that I own some
property in Riverside County and so I know something about the
problem. I know that Los Angeles is probably the ++ climatically
and geographically the worst spot in California regarding the control
of smog. When you get a certain weather condition it doesn't make
any difference that we have made gains, and we have made gains in
reducing the emissions from automobiles and standing sources. You
are going to have bad smog and it is going to go through that pass
out there. The answer to it is, of course, and they have pointed
a finger at it with their proposals, whether it is a valid proposal
or not, and that is you have got to continue with everything we can
do to reduce it at the source, to see that the automobiles and the
plants that are upwind of them do not release the same amount of
pollumants they are releasing.
Q.
Governor, to return briefly to the elections, do you see any
surprises in our own state legislative races, perhaps incumbents who
may not be among us?
A.
Oh, I wouldn't want to talk about that. I think that -- I
think these are confusing times. I don't know, I think there's
been some animus toward the legislature as a whole on the basis of
some things like tax reform. However, that's going to be carried
into the polling booth. I don't know, and of course we have got a
great many races that are up for grabs with no incumbents, so it is
confusing the air.
Q.
Governor, I'm curious about the comments you made earlier
about the two leading candidates, your comments and criticisms
seem to be a lot more subtle than the term "extremist" you are
reported as having used for Senator McGoverno. Did you use that
term?
A.
Yes, I -- as a matter of fact, I was quoting several other
Democratic candidates who said that of him, but I said to the --
the other night to the Republican State Central Committee, "If I
-9-
sounded more gentle today it's because I learned never murder anyone
who is commiting suicide. "
Q.
Were you quoting someone else or were youusing your own
term when you caleed him an extremist?
A.
What?
Q.
Were you using some of your own words or were you quoting --
A.
Well, they have been used by other candidates, and I -- and I
have to say, I think his views are, and Mr. Humphrey is making it
rather plain, our Senator Mumphrey right now, that Senator Humphrey
believes that he is far more extreme, McGovern, in his views than the
Senator believes the party will follow. And I think that when you --
when you start advocating some of the drastic resharing of revenues --
income at a $12,000 line, you are going beyond something that anyone
has ever proposed in the Democratic party before.
Q.
And, too, I'm curious, it seems a bit ironic, since when you
first ran for public offices five years ago, the term "extremist"
was a -- a smear term used foryyou. Do you feel a bit uncomfortable
using the same term?
A.
No, because you see, I wasn't an extremist.
(Laughter)
Q.
Governor, what percentage of the vote -- Republican vote will
Congressman Ashbrook have to get to indicate or sound a note of
warning to the party regulars that there was great dissatisfaction
with Mr. Nixon in California among California Republicans?
A.
I think a lot larger than he's going to get. I would think
that if he got up there in a sizable -- around a third of the vote
or something, this would be of concern. Now, I don't know what --
what might happen now in the changes -- well, I guess it is too
late for anyone to reregister from, say, the Wallace side, if they
would decide to turn their intention to him -- I guess itis too
late for them to do that in the primary. The polls have indicated,
and I assume they are somewhere reasonably close, some place less
than ten per cent, and I think that -- that's just normal. You
expect in any election -- history shows that about ten per cent of
any party always goes another way.
JACK: Thank you, Governor.
000
-10-
6/8
PRE
CONFERENCE OF GOVERNOR RONALD REAGAN
HELD JUNE 8, 1972
Reported by
Beverly Toms, CSR
(This rough transcript of the Governor's press conferense is
furnished to the members of the Capitol press corps for their conven-
ience only. Because of the need to get it to the press as rapidly
as possible, after the conference, no corrections are made and
there is no guaranty of absolute accuracy.)
000
(Governor Reagan read Press Release No. 351.)
Q.
End of statement and you are on your own.
Q.
Governor, aren't these people going to compete with the 60 --
more than 600,000 people who are out of work? Shouldn't they get
first priority?
A.
Now, you see, you haven't read the latest news items here
because it isn't 600,000, it is down to around 440,000 because as of
this week we have announced a reduction in unemployment in California
down to 5.9, when one year ago it was 7.4. But also none of these
jobs, remember, in this particular program, are to compete with the
regulatory market. We wanted to work closely with organized labor
and to -- with our own government employees to make sure that this
is not some kind of a cheap substitute for regular jobs. These are
things that are not now being done because of lack of funds and man-
power, and they would not -- they aren't jobs that you caid possibly
afford at the present time, they just -- they wouldn't call for that
kind of payment that people would go out seeking these jobs. We
have a long list of community projects that could be made available
to you, as I think already were, but you can get again if you have
mislaid it, of the type of projects; playground monitors, crossing
guards, that sort of thing.
Q.
Will this require a structure of administrators to put them
in work and see that they keep working?
A.
No, no, the only additional cost to this program is one that's
going to be borne by the federal government, which is an evaluation
of it, because this is a demonstration project. And so they are
going to bear the cost of evaluating to see whether this is a success-
ful way of getting people back to work.
Q.
Governor, how can you start this program in Ventura County
until you have gotten some sort of court ruling in Los Angeles that --
-1-
on this waiver the you are asking for.
A.
No, no, you see, it's been blocked by court actions and we have
won in those court actions, and it is not -- it has now been declared
that we can go forward, but we just -- we have been harrassed by
these -- these actions so much that now that it is declared valid and
we can go forward, we are asking for this Meclaratory judgment to
keep someone from simply holding it up while they test this again
with some other case.
Q.
What are these people going to be doing in Ventura County?
Can you outline a little bit the jobs that are --
A.
As I say, they are -- the list is almost endless, and we do have
information and you can get it from the Press Department on the long
list of the jobs that have been -- that have been proposed. for this.
And I wouldn't be able to tell you right now how they break down or
just what the nature of the jobs would be, but this -- a great many of
them are in the category of what would be called aide jobs. Like
in other words, a regular worker that is presently employed -- this
person would become a helper to that individual. Now, wait a minute,
you.
Q.
Governor, is this similar to the program that was initiated
in New York, the WIN Program?
A.
No, we have the WIN program and the same as they have, and
an experiment was started in certain areas in New York based on our
idea sometime ago, but the difference in that case was that New York and
HEW had agreed upon a plan of this -- of 8 similar type of employment
but with additional funding provided by the federal government to
simply take them from welfare and put them on a -- on a salary.
And this is a case of the person actually working in return for his
welfare grant.
Q.
Governor, wasn't there a provision in the Welfare Reform Act
last year that said there could be no new programs until the WIN
program and the New Career Programs were filled?
A.
No, this was a part of the Welfare Reform that was passed,
and scheduled for implementation and -- before it could be done
the state and the national welfare rights organizations started legal
actions and kept interfering.
Q.
But didn't the other two programs have priority?
A.
Well, yes, but there's been no slowdown or this does not in
any way interfere with those -- those programs continue.
MR. HALL: This complies completely with that requirement of
-2-
the welfare reform act which means that you have to refer the recipient
first to a WIN slot if it is available. That's the provision in the
law.
Q.
Another subject, Governor. Next Saturday is the first meeting
of the California delegation in the -- the Nixon delegation in Los
Angeles. Is there any actual business to be performed there, election
of --
A.
Yes, there will be the election of the officers of the delega-
tion.
a.
And what about national committeeman and committeewoman?
A.
Well, those are part of the officers that are elected at this
time.
Q.
Is there any kind of competition for these positions or are
in fact these -- are the recommendations of the party going to be
accepted?
A.
I don't -- I actually don't know. All I know is --
Q.
I understand the name of Ed. Mills and Janet Johnson has
already been proposed for committeeman and committeewoman
respectively.
A.
Yes, there are a number of hames have been suggested for all
the officers, but I haven't heard of any -- anyone that has suggested
any other names, but -- the meeting will be open for nominations.
Q.
Governor, another subject. In view of the outcome of the
Southern Crossing proposition vote, do you think that plebiscite
was really necessary?
8.
What?
Q.
Do you think that plebiscite was really necessary?
A.
Was it really necessary? I think -- yes, this thing has
been so controversial for so many years, that as you recall this was
the legislation that I asked for, and I said I would be willing to
sign, to let the people in the Bay area make the decision, and they
have evidently made their decision.
Q.
But, Governor, didn't the legislators in the Bay area tell
you that that would be the outcome if it were put to a --
A.
Well, they predicted this and yet, as I say, the issue was
one in which the entire state by way of the legislature was trying
to make the decision. It seemed to me that this was one that
certainly wasn't of too much interest to the people of Los Angeles or
San Diego and that the people around the Bay should make up their own
-3-
minds and decide W ther they wanted this bricod across the bay.
Q:
Governor, getting back to the delegation, you do expect to be
the Chairman of the delegation?
A.
Well, not if somebody should decide I shouldn't. It is --
I would think that it is somewhat customary, yes.
Q.
You expect then to be -- you are campaigning mostly in California
for the President?
A.
Well, I'm the Chairman of his campaign out here.
Q.
I realize that, but you think your efforts will be concentrated
in California as opposed to some other region of the United States?
A.
Well, yes, this will be number one priority. I have no
doubt but that along with a lot of other governors I will -- when
I can make a foray out of the state for fund raisers and that sort
of thing in otheraareas, but this is -- this is the priority target.
Q.
Governor, can youclarify your remark of yesterday to the
foreign newsmen that are ready to retire to a ranch in two and
a half years? Does that rule out any other public office again?
A.
No, I've told you -- I've told you many times that I keep all
my options open, but when they were getting down to specific plans
as to probably taking some position in the administration following
this election, is what I interpreted, and I told them now that I'd
be looking for a ranch. But I -- I haven't ruled out anything or
made any decision as to what I'm going to do two and a half years
from now. Incidentally, I couldn't help but wonder, that is a non
sequitur, I don't mean to pick on you fellows, but when that whole
battery from all of those various countries conducted a press
conference in the language of our host country here, our own language,
I couldn't help but wonder of the similar American press delegation
how many countires they could go in and conduct press conferences
in the language of the country. Now, I expect all of you to enroll
in the nearest Berlitz school in case that's going to --
Q.
Governor, do you read the California Republican's rejection
of John Ashbrook and John Schmitz as any swing away from the conserva-
tive position the party's appeared to have had in the recent years?
A.
Oh, I had -- no, the only analysis I've had on the national
level, the Ashbrook candidacy, and he has now withdrawn, I say I
think this was -- it was obvious to all Republicans that Ashbrook
was carrying a message and was really not seriously contesting for the
office. He's made that plain today by his withdrawal from the race,
-4-
and I think that it howed the solid support tl the President has
in the party, aa great party unity. What has happened in the several
races in California and both parties wherein incumbents -- in our case
the only one who lost in a primary was Congressman Schmitz; Democrats
lost the senior member of the delegation, and one that does give you
some cause to think is the chairman of the Space Committee there
which is very important to California. They also lost the primary
with regard to one of the legislative incumbents. I don't know, I
think -- I don't think there is any way to read those unless you go
into the area and do a survey and find out what was the reason.
Q.
There has been a struggle, has there not, among California
Republicans, sort of a moderate wing VS. a conservative wing, or
adherence to either
, do you believe the rejection of Schmits
and Ashbrook indicates a move toward center on the part of the
Republican party?
A.
No, I think it is a continuation of the unity that -- well,
I can't include Schmitz in this Because I don't know what happened
there in a local congressional district race. There have been
changes in that district, the shape of the district. It was the
plan that I vetored, but it was in force or put into operation,
reapportionment, bu the court. And whether that was a factor or not,
the -- the changed lines in the district, I don't know. But on
the national scene, I just think, as I say, that it is an evidence --
divergence in the party prior to 1966, we had a Republican party
so split you couldn't get them in the same building, let alone the same
healed
room. And we have he/o that, and I think this is evidence that the
healing has taken.
Q.
With the convention having moved to Miami do you anticipate any
of the delegates will not be able to afford the trip there and any
efforts by the party to help them pay their way out to Miami?
A.
Yes, most delegates are expected to -- and do pay their own
way. But our delegation this time, we went out of our way, as you
know, to try and make it more youthful, to get participation in the
actual delegation by young people. That is who -- in other words,
are not just the normal beneficiaries or rewards for long party
service. And we recognize that we now may have imposed -- well,
even going to San Diego would have imposed a burden on some of these
people, so yes, we are -- as a matter of fact, the honorary delegation
and regular delegates who can are themselves contributing to help
-5-
and provide the -- he means for some of these eople.
Q.
Governor, why do you think Senator McGovern defeated
Senator Humphrey?
A.
Well, here again, how to analyze -- I think he had -- he
had more money, he had a -- as a result a great organization, quite
an organization. I think it was significant that what was estimated
to be a very wide lead began to diminsh and I think that reflects
Senator Humphrey's pointing attention to some of the fallacies
in the -- in the McGovern proposals. And people were beginning
to find out that some of the rhetoric that sounded so impressive
was ignoring the details of the -- of the promises for the bright
new America. And I think that this is -- they should be --
this is going to be, I think, much more prevalent come convention
time, that the many people in the Democratic party are going to want
to really pin down some of these ideas. I myself have been pricing
some of them out, and that it comes out that he'd been adding
upwards of 150 billion dollars a year to the cost of government,
to the cost of the federal government.
Q.
Sir, where do you get that figure?
A.
What?
Q.
Where do you get that figure?
A.
From his figures. You seep not contained in his advertise-
ments or in many of his speeches, he has position papers. For
example, he has spelled out, as you know, in about a 36 page paper his
defense plan. And he claims that for this great reduction in the
cost of defense that he can provide a defense that is adequate for
this nation and he spells it out, how many ships, how many men in
the army, how many airplanes, how many missiles and so forth. The
Pentagon has already priced this out and found he made a ten billion
dollar error there. It will cost more than ten billion dollars
extra to have what he claims he can have for his amount of money.
P.
Governor, does your 1968 Sherman-like statement on the Vice
Presidenty still stand?
A.
Uh-huh.
Q.
Governor, which candidate of the two do you think would be
more difficult for President Nixon to defeat?
A.
I just knew that question would come up. That's the question
I never want -- if I knew the answer I wouldn't want to give the
answer.
I don't want to help the other side. I hope they will
-6-
choose the wrong an, the easiest man to beat.
Q.
Which one is that?
A.
As I say, no, I won't -- I won'g give the answer. I
could, you know, play games, and -- and name the strongest man hoping
then that this might influence someone, but I won't do that. I'll
just -- it is going to be a tough election. We are a minority party,
it is going to be touch, whichever way they go.
Q.
Do you think there is that much difference between the candidates
it really would make a difference which one ran?
A.
Oh, yes, I think -- there is a wide factionalism in the
Democratic party, I think it was evidenced right here in the state
in this primary and I think we are going to see a little blood
letting at their convention, which I eagerly look forward to, not
because I like blood, but because I just like to see the enemy
in a shambles.
Q.
How would you assess Senator McGovern's chances of carrying
California against President Nixon based on his performance in the
primary election?
A.
Well, again California is a tough state for the Republicans.
We are outnumbered better than three to two. But we are going --
going to stage a fight and I'm confident that we will carry California.
8.
Governor, what are your -- what, as his campaign chairman
in California -- what do you think the President will hit McGovern
on? The same issues that Humphrey did?
A.
Oh, I don't know whether the President will hit on those.
I have a hunch that the President will campaign mainly by being
present. I think that -- and this is usually true of an incumbent,
I think you'll find the President largely doing what has to be done
as he's been doing so well so far. But a number of the rest of us
the
will be -- will be doing/campaigning and I know one of the things
I'm going to do is what I've already started going, is point out
whoever the candidate is on the Democratic side, point out the
mythology that all of this pretense that these are brand new people
who just rode out of Sherwood Forest to save the poor from the rich --
they have been around for a long time, and if they had all these
miraculous cures, why didn't they do them for 38 out of the last 40
years? They have had a majority in the Congress. There wasn't
anything they couldn't have done if they wanted to do it. And now
they have suddenly discovered all the ills of the world. In the
-7-
meantime I think the President in these three and a half years has
gone allong way toward curing some of those ills. I do not know in
my entire adult lifetime a period when unemployment was going down
as we went from a war to a peacetime economy. The only time that --
under Democratic rule that we have been abletto have full employment
or an increase in employment has been by the -- by virtue of revving
up for a war and we have unemployment going down at this very moment
that we have also cut inflation more than half. We are winding down the
war.
And I think the people have the common sense to see this sort
of thing.
Q.
Governon, do you want Nixon to keep Agnew as his running mate?
A.
Yes.
Q.
That was my question.
A.
Oh.
Q.
Governor, you frequently said that opposing parties need
all its members. What appeal, has Chairman, will you make to reclaim
the Ashbrook kinds of Republicans in your party? How will you get
them back into the fold?
A.
Oh, I told those gentlemen here from those -- ladies and
gentlemen from the foreign press yesterday that I've got the front
door wide open, a lamp in the window, and I've got a pig on the fire
roasting. I'm --
(Laughter)
A.
Should it be a fatted calf, whatever. it is, he's welcome. And
we will make every effort. As a matter of fact, I know that a number
of us will probably be talking to -- not only the Congressman, but
реорые who have been in his camp, and we not only want them just to
join the parade and march in our parade, we want them to actually
take positions of importance in the campaign.
Q.
Governor, if Mr. Agnew is retained on the ticket, figure then
he would be in the best position to be the Republican's standard
bearer
in 1976. Do you think he has the qualities to be President
of the United States?
A.
Well, I have said from the very beginning, as a Vice President
that, God forbid, any tragedy should occur, knowing him as a governor
as I did, I have full confidence in his capacity to handle that job.
Q.
Governor Evans N. Novack had a call earlier this week in
which they indicated that national Republican officials were hopeful
that you would do mostof your campaigning for Nixon outside California,
in areas where, as they put it, you are considered a Republican folk
hero, and the inference geing that you are not as popular in
California now as you might be. Would you comment on that?
A.
Well, yea, I sort of -- I sort of thought that maybe Mr. Novack
who was responsible for that, I thought, maybe he was doing pennance
for that kind of conservative sounding speech he made at a college
back east a few weeks ago, he had to do something to get back on his
normal side, because I was not shocked when he appreached me with
that matter as he said I was. As a matter of fact, I was amused.
I don't think there is any foundation for it and there's never been
any evidence of it and it is as simple as this. If they felt that
way, I don't know why they came out here and asked me to be the State
chairman for the President's campaign.
Q.
Governor, two legislative committees have already decided
to investigate the San Francisco vote foul-up. Do you think the
legislature is the proper agency to investigate that? Would you
like to see the Secretary of State or the Attorney General investigabe
it?
A.
Well, I think -- as far as I can read in the separation of
powers, that's a legislative function and proper for them to do it
if they -- if they want to. Sometimes looking at it, I don't know
whether it should be investigated or that we ought to just shake our
heads and try to forget it and walk away. Certainly there must have
been evidence to those responsible, including the Secretary of State,
that such a foul-up was possible, that there was a potention for it.
And they with a little leadership had plenty of time to do something
about it in advance, until waiting till election night.
Q.
Governor, it was announced this week that the number of abortions
in the state have now reached 116,000 a year under the bill you signed
in 1967. I wonder if you are satisfied with the way that law has
worked out or would you favor any restrictions to be made in it?
A.
Well, I haven't thought about specific restrictions. No, I
am distrubed by the way the law has worked out because the law was
based on policing by the profession itself, committees, medical and
psychiatric, to determine whether the individual wanting the abortinn
met the requirements of endangered health, life, mental health and
so forth. And I think it is very apparent that people are literally
getting abortions on demand. And since about a third of these are
being paid for by the taxpayers on MediaGal, aarid since more than a third
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of them are under the age 19 -- as a matterof fact, we have quite a
sizable number last year that were between the ages of 10 and 14 in
this state, I would -- I had confidence that we could depend on the
profession itself policing this bill. They failed in that responsi-
bility.
Q.
Governor, last week Speaker Morotti accused you of not follow-
ing up on your environmental policy address of last April. He said
the Democrats don't really know, for instance, what you want in the
way of coastline protection, is that correct?
A.
No, that is not correct, and every once in a while the Speaker
plays fiddler on the roof, off key.
(Laughter)
A.
No, this administration, and the record is very plain -- it
seems that the constant repitition of the failureof certainbbills,
and therefore the resultant disappointment of the author of that
bill to either pass -- or those bills to pass, and then be vetoed by
me, has been taken as apathy on the part of the legislature and
the administration -- or not even apathy, but opposition to environ-
mental programs. That's not true. To veto or vote down in the
begislature a bill that does not do the job, because you have in mind
a betterwway to do it should not be interpreted as being opposed to
the goal. And this is true of coastline protection. The voting
down of this I don't think reflected on anybody's part a resistance
to coastline protection, but somebody had pro -- made a proposal
that was -- was similar to Proposition 9, that it wouldn't do the
job and it would probably bause more harm than good. But this --
the legislature andtthis administration, I think, has gone forward
without question. The record speaks for itself. There isn't any
state in the union that can match the actual programs that we have
in operation. Two years ago there was a great score taken of the
failure of -- oh, about 100 or more environmental bills in the
legislature, and that was meant to imply to the people that the
legislature had refused to treat with the matter of environment.
Now these were bills that had been introduced by various pressure
and special interest groups from without the state, I'm sure they
were sincere and they believed in their bills, and their bills did
go down to defeat because they were not well thought out bills, but
no one paid any attention to the fact that 77 bills introduced by the
Department of Natural Resources, by the administration, by government
-10-
here in Sacramento aimed at the very same prot ems did pass. And
were signed into law. Our standards are tremendously high.
Our
programs are going forward. We still have reorganization proposals.
There is still a coastline protection bill before the legislature,
and one that incorporates many things that our own findings agree
with. And we want coastline legislation. But we don't want some
of the -- the bad bills that have been proposed.
Q.
Same subject, Governor.
A.
All right.
Q.
Does that mean that you are putting your name behind the bill
by Senator Carpenter on coastline legislation?
A.
Well, that's a bill that is going forward and let me just say
we are watching that bill very closely with regard to some of the
amendments as they come along in that.
So don't pin me down.
Q.
Thank you, Governor.
A.
You had two people in the back row with their hands up.
I've got to abide by him, it is your party.
Q.
All right, let's have them.
A.
Just the two.
Q.
Last month you referred to certain demagogues in the legisla-
ture, whr were blocking your program. Specifically who were you
talking about and what were the programs?
A.
Oh, I wish you could give me more surrounding things.
a.
Was it Cal Expo talking to state workers, we will say?
ED MEESE: Maybe if you will see Ed he will give him a
detailed list.
A.
Maybe you look it up and --
Q.
You mean Democrats?
(Laughter)
A.
Why, in all my life I'd never met a Republican demagogue.
Q.
Governor, what is your reaction to the recommendation yesterday
that the Ecology Corps should be called something else, it should be
raised to federal minimym wage and conditions changed? And also
calling it the Ecology Corps was misleading.
A.
I don't think it is misleading. I think that, as I have said
before, that sometimes an individual with his hands getting blistered
doing a job has a hard time reconciling this with probably what was his
dream of preserving butterflies. And he doesn't see the big picture.
But I don't know where any name would -- name would be better than
that or not. We have upgraded it ourselves with regard to salary and
-11-
other provisions. it was a brand new effort by us. And it had to
be -- it was done, as you know, as a replacement for types of things
that previously had been carried on by young juvenile offenders in
our honor camps, and now with probation system working so well those
camps are non-manned. But we have upgraded a number of things,
including salary. I would have to -- to look at specifically what
the proposals are and what we could afford and what we could do.
VOICE: Thanks, Governor.
o0o
-12-
PRESS CONFERENCE OF GOVERNOR RONALD REAGAN
HELD JUNE 29, 1972
Reported by
Beverly Toms, CSR
(This rough transcript of the Governor's press conference is
furnished to the members of the Capitol press corps for their conven-
ience only. Because of the need to get it to the press as rapidly
as possible after the conference, no corrections are made and there is
no guaranty of absolute accuracy.)
o0o
GOVERNOR REAGAN: I don't have any press release on the one
subject that I'm quite sure would be one of the first ones that would
come to your mind this morning, so let me just tell you this is with
regard to the U. S. Supreme Court decision on three cases before it,
three particular cases. We haven't had time to go into the whole
matter of the decision, so perhaps there are points on which I would
not be able to comment. But apparently two members of the -- or
three members of the Supreme Court -- U. S. Supreme Court ruled
basically against the constituionality of the death sentence or
penalty. Four justices ruled in favor of the constitutionality.
And the two additional justices ruled that the death penalty was
constitutional apparently under certain -- within a certain framework
to be decided by legislatures. Now, since these were decisions
involving three specific cases and the penalty with regard to those
particular cases, we happen to believe that this makes the initiative
on the ballot more important than it was even before, and we believe
that the people of Valifornia once and for all should make their
feelings known on this particular issue by their votes on that issue,
and then I would say that from there on it is a matter of us finding
out within what framework we would believe here as a state -- and our
legislature would determine that the death penalty should be invoked.
Now, that's as far as we have been able to interpret it. Apparently,
as I understand, there were about 11, even though there are only 9
justices -- different statements that were made because of the fact
that it involved three -- more than one case.
Q.
So you will still urge a yes vote on that initiative then?
A.
Yes, I think even more SO, More than ever now.
Q.
And have you heard from Mrs. Reagan on the subject?
(Laughter)
-1-
A. No, but I have a hunch that when I see her she will be asking
me for an explanation of what it means.
Q. Governor, your interpretation then of the Supreme Court decision
is that it has not struck down the death penalty?
A. That is my interpretation now. You have, as I say, four who
voted on -- who said it was constitutional in the cases they were
discussing. And three others who said that they believed that the
death penalty as such was constitutional within certain - framework
to be set by legislatures. It means there must be some crimes that --
in which it could still be invoked.
Q. You feel then it makes a possibility that the death penalty
could be outlawed rather brighter?
A. I -- now we are getting into the area that I haven't seen a
full analysis of the -- of the whole matter. But again I reiterate,
I think that what we -- we had here was a decision that was based on the
the crimes committed by these different individuals and the assigning
of the death penalty for those crimes.
Q. Another subject, Governor. Are we through with this?
Q. Governor, if the initiative passes, what would be the next legal
step to be taken?
A. I think the next legal step then would be for the legislature
of Calffornia to determine as these other justices have pointed out
the framework within which it would be invoked. In other words,
what crimes would be liable to the death sentence. Because this
seemed to be basically the issue -- the determination, not of whether
you could or could not in any circumstance have the death penalty,
but the determination in these cases seemed to be on the basis of the
crimes to which it was assigned, that it was cruel and unusual punish-
ment for those particular crimes.
Q. Wouldn't this await some kind of guidelines from the Congress,
federal guidelines?
A. No, because this still lies in the -- at the discretion of the
states.
Q.
Governor, do you have any thoughts along those lines about what
types of crimes perhaps should have the death penalty?
A. Oh, I think they should be very definitely limited, and I think
we do have limitations in California, always have had on them. But
I'm not a member of the legal profession on this and I think that
the -- I think it should be very careful. I've always felt that there
-2-
should be a defini limibation. Certainly the area of cold
blooded premeditated murder, this is one of the things we talk about.
But one of these cases, for example, was a crime committed against
another person in which -- in which death was not involved. There
was no murder committed. And I think this is where there has to be
some very definite and well thought out provisions that would recognize
that this is the ultimate penalty and therefore the crimes for which
it should be exacted should be very limited.
Q. Are you saying then, Governor, that the people of California
should put the death penalty back in the constitution and the
legislature could decide --
A. Yes, the thing that we are determining in the ballot here is
not the U. S. constitutionality. We are determining the State
constitutionality and therefore what this -- on the basis of these
three decisions at the federal level, I think we should determine once
and for all how does California feel with regard to its own constitu-
tion. Remember, our ballot has hothing to do -- this case was not
based on the federal constitution, it was based on is the death
penalty within or without the state constitutionand I think that
decision should be made by the people.
Q. Governor, if you should remove murder, however, from the death
penalty, then what crimes could you see under the death penalty?
A.
Oh, I said --
Q.
Wasn't one of these cases involving a death, a murder.
A.
One of these cases did not involve a death.
Q.
One of them did.
A.
What I'm talking about is, I said no, that I would think that
one ofthe basic crimes would be the one that has always been considered
for this, would be the cold blooded premeditated, planned murder, would
be one of the issues, but I don't want to get into -- go into that too
far. I think this is one that calls for people with legal training
as to when you would invoke the ultimate penalty.
Q.
Governor, do you also think the death penalty should be
administered more swiftly and if so how would you do it?
A. Well, here again, this has been one of the things that the
Council on criminal justice has been studying for a long time. It
doesn't -- it is not alone to do with the death penalty. But with
all of It. -- over the recent years the time has increased enormously
between arrest and conviction and the carrying out ofthe sentence.
There was a little misunderstanding in some remark of mine recently
with regard to tha and with regard to the are of hijacking, and I
used the word "execution" and evidently someone misunderstood and took
that to mean that I was suggesting a capital penalty. What I had
said was that along this same line was that there must be swift
execution of the sentence brought. Brought to trial as quickly as
possible and the carrying out of this. Swift and certain justice
is the greatest preventive of crime. We once had it to a far greater
extent than we have it now.
Q. Is it your understanding that if it should by any chance be
restored legally in California that it would not be retroactive in the
sense that those who have already been placed in --
A. I'm looking at my -- my legal adviser over here with his head
nodding. It's been my understanding that whatever we do now does not
apply and cannot applyrretroactively to the people now on death row,
that that decision has been made by the court.
Q. Governor, with regard to skijacking, do you think that that
should be one of the crimes that should have the ultimate penalty?
A. Oh, I'm not in a position to -- as I said, I don't have legal
training. I would leave that to legal minds.
Q. Governor, you have to sign a bill if that were to be the case.
A. Yup. And I'd be surrounded by legal advisers when I did it.
Q. You have suggested in the past you thought skijacking O-
A. What's that?
Q. I halieve you have suggested in the past, have you not, that
skijacking should perhaps be a capital punishment?
A. No, this was the misunderstanding that I just mentioned, that
I was a little disturbed when I saw in the press -- and then I
realized that I was partly to blame for using the word "execution."
I used it as a verb after saying that what was needed was swifter --
not only apprehension, but then swifter trial and swifter -- I should
have said -- used that word, I guess, of carrying out bf the penalty.
And because I said, " and execution of the penalty", I can see where
someone got confused and interpreted execution to mean execution,
and said that I had recommended it. No, I've never made a decision
as to what the penalty should be. I don't feel qualified to do that.
Q. How do you get swifter execution of the sentence? Could you
reduce the number of appeals -- but how would you do that since we
have a problem --
A. This is why we have got the criminal justice -- council on criminal
justice studying this matter, to see how it can be done and yet we
have got to have full protection of the rights of the accused, no
question about that. That's been the basis of/american judicial
system since our beginning and it was because in the earlier days,
prior to the American Revolution, the accused was virtually -- in
most areas was guilty until proven innocent. It was not given
all of the safeguards that we now have. But it's just been in recent
years that increasing amount of legal technicalities have been
invoked to prolong and get additional trials. Some countries have
managed to overcome this and yet with apparent protection for the
accused, and I think we can, too. But don't ask me for the answer
or I wouldn't -- I wouldn't have to have counsel studying it.
Q.
Are you blaming the lawyers then or the courts for these legal
technicalities that come accross?
A. Well, again the study will probably reveal that although I do
think that -- that there has been a tendency in recent years to -- to
make this kind of like a game of -- a matching of wits, not aimed at
arriving at guilt or innocence, but seeing can you save someone on a
technicality regardless of guilt or innocence.
Q. Governor, if I cankind of sum up what your opinion is so far
on the basis of what you know of today's decision, is in effect that
the proposed initiative is broadly worded enough so that it apparently
would not be automatically nullified by today's Supreme Court
decision. Is that in effect what you feel?
A. That's right. My interpretation, as far as we have gone, is that
you haveggot three justices who ruled yes without question the death
penalty is unconstitutional. You have four judges -- justices
who have ruled that it is constitutional. And you have the
additional two justices who have said it was not constitutional in thos
three cases, but that they do believe that within framework set by
state legislatures in certain circumstances the death penalty can be
carried out.
Q. Governor, can we switch from death to taxes?
Q. One more question.
(Laughter)
A. Both inevitable.
to
Q.
Those are the opinions that come/the votes -- the vote itself
amounts to a simplied form of --
A. Yes, but it was with regard to three specific cases as to whether
the death penalty in those three cases was constitutional.
Q. Governor, 1f the initiative passes and the legislature fails
to acg we would have a dormant death penalty, is that right?
A. Well, now, wait a minute. Now, let me try one and see if I
can win legal approval on this. I'll give a layman's opinion. It
-5-
seems to me that 1 the people of California r ffirmed that the --
that und er the California constitution the death pemalty is valid and
we do have presently statutes by the legislature as to -- in what
cases it can be applied, it would seem to me that the death penalty
would be valid in California until the U. S. -- and unless the U. S.
Supreme Court on some appeals ruled with regard to each one of those
particular cases when it came before them. They would rule, in
other words, on this same basis, that if -- if convicted criminal
"x" sentenced to death, was the death sentence proper in his particular
case. And then if they ruled no, then they -- we would know that
they have ruled ungonstitutional at the federal level one of our
state statutes and that would have to be disappeared from the books.
Q.
Didn't you say that the legislature has to prescribe the crime
subsequent to the initiative passing?
A. Well, I wouldn't --
ED MEESE: They said it could be set by state legislation,
but certainly the people acting themselves would have the same force
and effect.
Q. But how does the initiative read, would it reinstate all state
statutes?
ED MEESE: It reinstates statutes and it would be my guess
only that they would find probably that those where there was no
death, such as we have of kidnapping statute -- it is a death penalty,
they might in a subsequent decision rule that unconstitutional,
but rule the penalty against murder constitutional.
Q. State court or the U. S. Court?
ED MEESE: U. S. Supreme Court.
A. Couldn't we foresee from here on anyone sentenced under California
statutes to the death penalty would undoubtedly on the basis of
these three cases appeal his case all the way, if he could, to the
U. S. Supreme Court on the basis that -- that the particular statute
under which his client had been sentenced was outside the provisions,
that he would test that before the court.
Q.
As a practical matter, however, with the waythings have been going
in this state and the country and around the world, can you actually
foresee anyone being executed in California again, ever?
A. Yes.
Q.
No matter what happens intthe election?
A. Well yes, I could. Because you -- if you analyze the opinions
-6-
you have a majority of the U. S. Supreme Court that said that they
do believe in the constitutionality of this under certain circumstances.
And I would think that -- I don't think they have given any indication
they have changed their mind on that. So, yes, I could -- I could
see where they might rule some of our statutes invalid, that the penalty
was too severe for that particular crime.
Q. Governor, if it should turn out that the court ultimately does
rule against the death penalty in a blanket fashion, would you support
a move to amend the U. S. Constitution to reinstate --
A. Well, you are asking a hypothetical question here. It would
involve whether -- what the changes were or whether it was hopeless
or not. Let me just say that I believe that the majority of the
people intthis country do support the death penalty.
Q. Governor, I'm curious. Your comments so far at this press
conference on the court have been very -- very subdued compared to the
comments you had this morning on the court. I believe you referred
to them as acting kind of irresponsible. You used terms such as
that. You suggest the court had overstepped its bounds.
A. What, this court? No, I made no statement about this decision
at all. I didn't know about it until I -- until I arrived here
this morning and one member asked me, and at that point knowing
I'd be meeting with all of you later, I said that I hadn't had a
chance to -- to know more than that they made a decision. I didn't
even know what the count had been or anything else. So I -- I had
no answer. No, I haven't commented on them. I would say that
from what I -- little bit I have seen now of the decisions of some of
the justices, they have been pretty critical of their own court.
There have been some opinions by some of the justices themselves
that the -- the court overstepped its bounds.
Q. Can we get back to that question on the taxes now?
A. Taxes.
Q. Can you tell us the nature of your agreement with Speaker
Moretti on school finance and tax reform and whether it is really. an
agreement or a consensus or what?
A. Well, there seems there's been a great deal of misinformation
and I suppose it's grown out of the kind of rumors and gossip that go
up and down the halls of the -- of a capitol. Let me say that what
is taking place is what -- I suggested would take place, when we
introduced our own tax reform and school financing bill and I said
there was one already introduced by the Speaker. We had introduced
-7-
ourspandtwe believ that the normal legislati' process -- our hope
was that these two would come to some acceptable meeting ground where
we could finally resolve this issue. But what has been taking place
is that normal legislative process at the staff level, and our own
staff people. have been involved because of our own legislation, and
just recently our staffs reported back that as staff members they
believe they had worked out something which they on both sides could
recommend to their principals, as an answer to the problem. And
this was presented to the Speaker, was presented to me. There was
one meeting then in which a few little points were explained in
detail and a few little things ironed out as to what it was, and
then it was simply a case of the -- no agreement. This is up to
the legislature. The Speaker said that he could recommend this
staff plan to his side, and I said that I certainly found the staff
plan acceptable and would do my utmost to see that -- whatever I could
do to see that it would be accepted by our -- our side of the legis-
lature. But there has been no negotiations or meetings or flat
agreements of the kind that we sought in the 16 days of negotiations
last year. Quite to the contrary, this was a staff plan, two staffs;
one representing the legislature and our own people involved that
recommended this plan back to us and it is my undeßstanding that from th
single meeting we have had that the Speaker has found it acceptable
and -- and I certainly can accept it.
Q. Does your statement that you find it acceptable mean that you
would sign it into law?
A. If the thing -- if it came down to us from the staffs, yes.
If this is passed by the legislature I would sign it into law, I
think it would be to the great benefit to the people of California
and certainly it would be -- it would resolve to a great extent --
in fact should cure the school financing problem.
Q. I think this is still on the subject of taxes, Governor. The
other day you gave a speech ontthe subject of what are called loopholes.
You said that the public receives benefits from these loopholes.
I'm wondering specifically on the Reagan Cattle Corporation and
the Oppenheimer Industries what benefit does the public derive from
that.
A. Well, the benefit that the public derived from that, from what
you call cattle holdings, are a few bulls that I own that are leased
out and which were not any part of a loophole at all, because I
actually made a few bucks on the cattle. And so I had to report
it
as income. Now, I don't know of any loophole that involves that.
What I was speaking about the other day, and I'm going to continue
to speak about it, 18 the cheap demagoguery that has been so prevalent
in recent months from a number of sources regarding what are termed
loopholes that are legitimate deductions that the Congress of the
United States down through the years has seen fit to pass simply
because they were necessary and they were vital to the economy, are
not loopholes, when we are trying to stimulate the buying and the
building of homes by the working menpand women of this country, to
allow a citizen to deduct the interest on his mortgage and to deduct
the property tax payments that he makes; to suggest that that is a
loophole as some political cnadidates have been suggesting, is
ridiculous. It is also ridiculous to suggest that citizens who want
to contribute, as they do, $14,000,000,000 a year to hospitals, to
schools, to libraries, to educational and charitable foundations,
that this should be taken away from them. The end result is inevi-
table. If you take that deductibility away from the individual
contributor you are going to wind up with total federal financing
of all charitable institutions, of all medical research, of all
medical institutions, of all schools, because the individual will
no longer be able to support those things or afford to support them.
And the figures I used indicate that it is not at some level of
rich who are getting some benefit by giving their money away. That
the greatest amount of thos e contributions and those deductions
are taken by the working men and women of America.
Q. But specifically even under the Reagan Cattle Corporation and
the Oppenheimer Industries, it is advertised notheir brochures
as being a tax shelter, you said a moment ago in this answer hhat
you disn't know it was a loophole. If it is called a tax shelter and
it is advertised and it is offered for that for people who have
incomes of $500,000 or more, 75 per cent tax bracket, what is it?
A. No, no incomes it was 50 per cent tax bracket or more.
Q. O. K.
A. And let me just point out something, an a technicality in that
this is not advertised as a tax shelter. The Securities Exchange
Commission orders and forces certain investment opportunities in the
country to specify the amount of risk involved. And cattle breeding
is enough of a risk that the Securities Exchange Commission has to --
orders any corporation of the kind -- I don't have a corporation.
I bought through a corporation bulls and they lease out these bulls
for breeding purposes. But this is such a risky business that they
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are ordered by law to warn anyone that unless they are in a 50 per
cent bracket this might not be the safest investment for them.
But if they are in a 50 per cent bracket and they lose, as you can
easily lose, it only takee one blizzard and you can be out of business
out there in the prarie states that if you are in that tax bracket,
you had a loss, if youhad one, it would of course be ameliorated
because as a business loss it would be deductible. Now, that is forced
on them by law, that is not some venal corporation advertising oh
goody, we have a tax shelter and I am not in a position to go out buying
tax shelters. I am in a pesition where I kind of like farming. As
I said, when I couldn't run them myself I wanted to have a few cattle.
Q. You have never seen your cattle.
A. What?
Q. Have you ever seen your cattle?
A. That's right, but it makes me feel good to get the reports, and
I get them. I get the weekly reports and it makes me feel like I'm
still a farmer. Now, can't I indulge myself that much?
Q. Are tax shelters the same thing as loopholes?
A. These terms -- let's get those terms straight. Well, the nick-
mame sax shelter has -- has grown out of this same thing. There
are risky investments and if a person is faced with giving -- well,
where they really came into being was back when the tax ceiling --
the highest tax rate was as much as 94 per cent and people, athletes,
entertainment figures, whatever, people with that high an earning
had a choice of paying 94 per cent of the additional dollars they
could earn to the government, now it is 70 cents that they can pay
to the government, or they can say here are some investment Spportuni-
ties that have a high risk rate, but maybe I could take the gamble
and I could invest some money in this over here, and if I lost, since
it is a tax deduction at that high a bracket, I'm only losing a frac-
tion of the amount of money, but they don't go into it to lose the
ToHey, because they still lose, some of their own money. They go
into it with the ope that it is going to become a worthwhile asset,
a valuable possession. And that is the so-called tax shelter.
Let me give one last figure, then get some other hands here.
This whole demagogic thing all over the country we have heard the
last year that a hundred people with $200,000 incomes didn't pay
any income tax. Now, number one, I'm not one of those with $200,000
incomes. So I'm not -- there is no personal Conflict of interest
here. Actually, there were 106 people in the country last year.
The last year of the Johnson administration there were 300. Now, if
this means that there is some flaw in the tax structure at the
upper income level, then you have to ask yourself what about the other
15,200 people because there were 15,300 people last year in this country
who earned $200,000 a year or better. And 15,200 of them averaged
paying $177,000 apiece in income tax. So if there was some great
flaw in the tax structure you cald expect the 15,300 people would
have taken advantage of it. The Treasury Department has made
perfectly plain without releasing the names, the 106 cases. They
are available for all of you in a Treasury Department report.
And
they explain that the 106, there were legitimate reasons. Some of
them had suffered great losses through lawsuits and litigation.
Some of them had paid 77 per cent of their income because -- to foreign
governments because their earnings were from outside the country
and that's why they didn't own any tax in this country. There was
a legitimate explanation for that little handful of 106 people.
Everbody else paid their tax.
Q. I still have some questions.
Q. Governor, the Democratic National Convention Credentials
Committee votedathis morning to split up Senator McGovern's
California delegation, and to award proportional shares of the delegates
to Senator Humphrey and the other candidates. Realizing this is
a different party's problem from your own, do you have any comment
and can you see a situation under which the Republican party might
go against the winner-take-all concept in California?
A. Well, that would be up to the party to make that decision.
Of course in the Democratic party I'm surprised how much we have in
common because we are counting on splitting up a lot of his votes.
But the party would have to make the decision to do that. I think
the primary as it has been run in the past here in California makes
a lot of sense. Each candidate sets out to -- to win the convention
delegates of the state on a majority rule basis, and he goes to the
convention with those to -- I don't -- I don't see very much the --
what you do other than just simply postpone the decision until the
convention add then the delegates and the same proportional numbers
continue to fight it out at the convention, after you have once
made that decision on the basis of all the voters at the state level.
Q. Well, under -- under Democratic reform procedures they say --
they intend in any event to end the winner-take-all situation four
years from now. Do you think the Republicans should do the same?
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A.
I don't know, I'd have to -- I'd have to be shown some very good
evidence that this was an improvement. First of all, the whole
primary thing has become somewhat ridiculous with the variety
of rules and all. For example, here is Senator McGovern profiting
from a great number of delegates from the State of New York and his
vote was less than 6 and a half per cent of the Democratic party of New
York. You know, this is not -- that's not exactly a landslide.
Q.
Governor, we have a man all the may from New York here who would
like to ask you a question. I said I'd get your attention for him.
Q. That's very gracious of you.
A.
I hope you are an immigrant and not a visitor.
Q. Thank you, sir. Nave you any comment to make on your --
your European itinerary? I've seen no details released as yet.
A.
No, I've left all those announcements to Washington because
it is at their request. There are several countires to be visited,
and I will be having this week-end before departure for rather
extensive briefing. So I don't have very many answers. I know
that it is -- it is going to be an arduous trip and I know that there
are going to be a number of specific assignments for me. I look
forward to that.
Q. Is it largely western Europe?
A. Pardon?
Q.
Will it be limited largely to western Europe?
A.
Yes, all Western Europe.
Q.
Governor, since the President has dropped the import quotas on
beef, what do you think the effect will be on the California cattle
industry?
A. Well, I expect the cattle industry is going to be unhappy and
they have got a reason to be unhappy. Generally, with the whole
situation and not just with this decision. I can understand what the
President is trying to do. Food prices recently, and a number of
things from drought to bad weather to floods to infestations and the
old outlaw, supply and demand, this is what has always affected the
food market. Some other things are affecting it right now. The
plain truth is that the -- that the man growing cattle today is
selling his cattle at the farm level for less money than he received
in 1958. And the difference in the price of meat is from leaving
the farm -- between the farm and the kitchen and what happens in
between there is what has accounted for the great increase in prices.
We do have an emergency situation in which inf atinn must be brought
under control, and I think that there are going to be some hardships
in this. There are going to be probably, when you look back in
retrospect after it is all over -- there will be some things that
will be unfair to some individuals. But the over-all problem must
be solved, and I think the President has been -- his plans have been
solving it and the inflation rate has been reduced -- is being reduced.
And food seems to be one of the things that is -- is inte fering with
that right now, slowing that reduction of inflation. But the -- I
just wanted to get in a lick for the cattle raiser and the people
would know that he doesn't get a dime of subsidy, he's never been
a part of the government agricultural problems, he gambles every year
on -- on his business, and he's one of the few fellows in the United
States that's not getting any more money. He's getting less than
he used to get.
Q. Governor, are you going to call a special legislative session
on reapportionment this year?
A. I don't know, no decision has been made on that or no decision
apparently has been made upstairs as to what they are going to do.
Q. Governor, on this tax plan, you said it was acdeptable to you.
What is it anyway? What is in the tax plan?
A. Well, now since --
Q. Just four or five --
A. I don't think it would be proper for me here to give you details
since we are still on both sides briefing our own legislature --
legislators on what's in the tax plan and I think that we'd better
wait until they have been informed before they pick it up and read it
in the paper.
Q. Governor, there is one more question in the back.
Q. There's only one more automobile no-fault bill barefly alive in
the legislature. Would you like to see that pushed on through?
A. The Fenton bill?
Q. Yes.
A. Yes, I would. This bill certainly meets most of the criteria
that we ourselves felt should be included in such a bill and I think
it should be passed.
Q.
Did you talk to Mr. Marler or Senator Marler about it?
A.
No, but I'm going to do what I can to -- to help it along the
way.
Q. Will you be talking to him?
A.
I probably will.
SQUIRE: Thank you, Governor.