Ask the Scholar

{
    "localId": "118564420",
    "label": "Speeches - Governor Ronald Reagan, 1968 [01/01/1968-03/14/1968]",
    "core": "doc",
    "dtoType": "document",
    "citationUrl": "https://catalog.archives.gov/id/118564420"
}

{
    "id": "118564420",
    "sourceUrl": "https://catalog.archives.gov/id/118564420",
    "contentType": "document",
    "title": "Speeches - Governor Ronald Reagan, 1968 [01/01/1968-03/14/1968]",
    "citationUrl": "https://catalog.archives.gov/id/118564420",
    "identifierLocal": "840",
    "collections": [
        "Ronald Reagan's Governor's Papers of the Press Unit",
        "Governor Ronald Reagan's Speeches"
    ],
    "iiifBase": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/reagan/7408624/40-840-7408624-P17-009-2017.pdf",
    "thumbnailUrl": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/reagan/7408624/40-840-7408624-P17-009-2017.pdf",
    "largeImageUrl": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/reagan/7408624/40-840-7408624-P17-009-2017.pdf",
    "imageCount": 1,
    "hasImages": true,
    "source": "import",
    "hasTranscription": false
}

{
    "url": "https://catalog.archives.gov/id/118564420",
    "naId": 118564420,
    "coverageEndDate": {
        "logicalDate": "1975-12-31",
        "year": 1975
    },
    "coverageStartDate": {
        "logicalDate": "1967-01-01",
        "year": 1967
    },
    "levelOfDescription": "fileUnit",
    "recordType": "description",
    "ocrSource": "nara-archive"
}

{
    "seq": 1,
    "pageIndex": 0,
    "type": "document",
    "url": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/reagan/7408624/40-840-7408624-P17-009-2017.pdf",
    "mediaId": "ab4c9b1c67e06d75",
    "ocrText": "Ronald Reagan Presidential Library\nDigital Library Collections\nThis is a PDF of a folder from our textual collections.\nCollection: Reagan, Ronald: Gubernatorial Papers,\n1966-74: Press Unit\nFolder Title: Speeches - Governor Ronald Reagan, 1968\n[01/01/1968-03/14/1968]\nBox: P17\nTo see more digitized collections visit:\nhttps://reaganlibrary.gov/archives/digital-library\nTo see all Ronald Reagan Presidential Library inventories visit:\nhttps://reaganlibrary.gov/document-collection\nContact a reference archivist at: [email protected]\nCitation Guidelines: https://reaganlibrary.gov/citing\nNational Archives Catalogue: https://catalog.archives.gov/\n1968\nP29\nINDEX\n1-9-68\nState of the State Message\n1-17-68\nEconomic Club of New York\n1-27-68\nPacific Mutual Life Insurance Company Banquet\n1-29-68\nNational Automobile Dealers Association Convention\n2-1-68\nGovernor's Conference on Planning for Housing and Home\nOwnership Luncheon\n2-2-68\nCalifornia Newspaper Publishers' Association\n2-5-68\nBudget Message to Senate and Assembly\n2-8-68\nGovernor's Industrial Safety Conference\n2-14-68\nCalifornia Council on Criminal Justice\n2-15-68\nStanford Business Conference Luncheon\n2-19-68\nSeminar on Intergovernmental Relations\n3-4-68\n20th Annual California and Pacific Southwest Recreation\nand Park Conference\n3-6-68\nCalifornia Taxpayers' Association Annual Meeting\n3-14-68\nJoint Sacramento Service Club Luncheon\n3-18-68\nCitizens' Conference on the California Merit Plan for\nJudicial Selection\n3-18-68\nStatement to Senate and Assembly on Lake Tahoe Basin\nPreservation\n3-20-68\nCalifornia Farm Bureau Federation Convention\n3-21-68\nStatement to Senate and Assembly on Welfare\n3-30-68\nCalifornia Republican Assembly\n4-3-68\nRobert E. Kennedy Inauguration as President, California\nPolytechnic College\n4-4-68\nAutomobile Accident Study Commission\n4-5-68\nWomen's National Press Club\n4-9-68\nPhoenix, Arizona Fundraiser\n4-22-68\nGovernor's Conference on Delinquency Prevention\n4-26-68\nBoise College Student Union\n4-27-68\nUniversity of Colorado Student Forum\n5-1-68\nSacramento Law Day Dinner\n5-3-68\nAmerican Women in Radio and Television Convention\n5-4-68\nOroville Dam Dedication\n5-5-68\nSalute to Israel\n5-8-68\nRepublican Governors' Association Platform Hearings\n5-11-68\nWestern Governors' Conference\n5-18-68\nNational Newspaper Association Luncheon\n5-19-68\nTulane University\n5-20-68\nRSCC Fundraising Dinner, Charlotte, North Carolina\n5-21-68\nRSCC Luncheon, Miami, Florida\n5-21-68\nRSCC Dinner, Chicago, Illinois\n5-22-68\nRSCC Finance Dinner, Cleveland, Ohio\n5-27-68\nU.S. Chamber Conference for Businessmen\n5-27-68\nNational Association of Extradition Officials\n6-3-68\nRepublican Rally, Oakland Coliseum Arena\n6-5-68\nJoey Bishop Show\n6-13-68\nIndiana State Fairgrounds, Indianapolis\n6-18-68\nPharmaceutical Manufacturers Luncheon\n6-23-68\nRepublican Congressional Candidates Campaign School\n6-29-68\nStatement Upon Signing of 1968-69 Budget\n7-1-68\nCalifornia Exposition Dedication\n7-4-68\nFourth of July Celebration - Columbia\n7-19-68\nPrice for Congress Rally - Amarillo, Texas\n7-20-68\nLittle Rock, Arkansas\n7-20-68\nCharlottesville, Virginia\n7-30-68\nWinston-Salem, North Carolina\n7-31-68\nPlatform Committee Meeting - Miami, Florida\n9-6-68\nSacramento Host Breakfast\n10-9-68\nState Bar and Conference of Judges Joint Conference\n10-12-68\nCongressional Medal of Honor Banquet - Seattle, Washington\n10-14-68\nLeague of California Cities\n10-14-68\nService Center Construction Ceremony\n10-15-68\nSaddleback Junior College Dedication\n10-16-68\nCalifornia Highway Patrol Luncheon\n10-17-68\nCalifornia Manufacturers Association Award Banquet\n10-21-68\nChannel City Club\n11-13-68\nCounty Supervisors' Association Luncheon\n11-20-68\nCouncil of State Governments\n12-8-68\nCalifornia School Boards Association Joint Conference\n12-12-68\nGovernor's Traffic Safety Conference\n-\nOFFICE OF THE GOVER R\nRELEASE: P.M. Tuesday\nSacramento, California\nJanuary 9, 1968\nContact: Paul Beck\n(PLEASE GUARD AGAINST PREMATURE RELEASE)\n445-4571 1.8.68\nTEXT OF THE GOVERNOR'S STATE-OF-THE-\nSTATE MESSAGE TO A JOINT SESSION\nOF THE CALIFORNIA STATE LEGISLATURE\nWelcome back. It hardly seems like you've been away. I've\nmissed you--I think?\nWe meet here today--members of two branches of the California\nstate government, and members of the two major political parties in\ncommon cause: the people's business.\nWhat we do here--and what we fail to do here--will affect every\ncitizen of our state. We are, for better or for worse, part of the\nlife of every man.\nThe compelling issues which face our people are not partisan--in\nnature or solution. The burden of taxation presses down upon Democrat\nand Republican alike. The smog we breathe brings disease without\nregard to political alliance. The search for a happier, healthier,\nmore productive life is shared by the vast majority of our citizens.\nThose here of good will and serious intent know this to be true.\nWe alco know that attendance to these issues cannot wait for\nanother year or another session. There is no time, there is no room,\nthere is no defense, for the personal squabble or the partisan\nobstruction.\nThere is room--and there will be need--for debate; between our\nparties and between the branches of our government. Let there be such\ndebate; it is a part of the power and the protection of our system.\nBut let it be on the issues, and on the merits and demerits of programs\nand proposals.\nSo, at the outset of this session and of this message, I issue\na\nyou an invitation and/challenge:\n- -join with me together we can make this a meaningful and a\nconstructive year for California\n-join together in ascribing and achieving the great, the bold,\nthe compassionate and dynamic dimensions of a California purpose which\n-1-\nwill fit the needs and the dreams of our people.\nOnly in this way can we be proper partners in the goal and\npurpose of every man.\nAnd if this be idealistic, let me remind you that we are here\ntoday in part because of idealism:\n- the ideals we carried in campaigns (which should be with us\neven now), and\n--the ideals the voters placed within our trust when they sent\nus here to serve.\nIt is time for these ideals and this trust to take precedence\nover politics; that is the basis and the thrust for the program I\noutline for you today.\nOne year and five days ago I stood on the west steps of this\ngreat Capitol and told the people of California:\n\"We will put our fiscal house in order. And as we do, we will\nbuild those things we need to make our state a better place in which\nto live and we will enjoy them more knowing we can afford them and\nthey are paid for.\"\nSince then, a great amount of the time and effort of my administra-\ntion has been given to keeping this commitment to pulling our state\ngovernment from the brink of fiscal catastrophe; austerity was an\nessential prelude to progress.\nSometimes to the cries of anguish, sometimes to the cheers of\nagreement, but always with responsibility to the taxpayer in mind, we\nhave \"cut and squeezed and trimmed.\" In the little items, which add\nup to the big bills, and in the big items, which help to foster the\nnightmare of big government spending, we have reduced costs, improved\nefficiency, and installed tighter control.\nThat job is not yet completed; far from it. There is still much\nto be done; it will be done. We will continue to cut and squeeze and\ntrim so that we get the most for each and every dollar we spend. We\nare determined that this government will live within the means of the\ntaxpayers who pay its costs. We should bear in mind that our fiscal\nproblems will be just as tough this year as they were last year.\nThe final 1967-68 budget was approximately within the projected\nincrease in state revenues due to economic growth. Most significantly,\nthat budget reduced by 50 percent the previous trend of budgetary\nincreases.\nThe budget which I will present for the fiscal year 1968-69\nwill also be within the limits of expected increases in state revenues.\nWe cannot take our people, or their government, into debt and we will\nnot ask for increased taxes, indeed we shall oppose any such suggestion.\nLast year we sought, and you approved, a measure which would\nenable us to proceed with the reorganization of the executive branch\nof state government. This is necessary if that branch is to serve\nthe people efficiently and effectively. During this session we will\npresent to you the dimensions and details of that reorganization plan.\nIt deserves your support and approval.\nA further reorganization which I will be sending to you has to\ndo with the selection of judges. It is time, once and for all, to\ntake the selection of judges out of politics. Instead, selection will\nbe based on merit and qualifications. I am pleased to inform you that\nthis Administration's judicial selection plan has the wholehearted\nsupport of the Judicial Council and the State Bar of California:\nThis plan will make it possible for Californians to take the pride in\ntheir judicial system which it so richly deserves. I commend this plan\nto you and earnestly solicit your support.\nAlso during the past year, a task force of more than 240 men--\ncitizens widely recognized for their expertise in efficiency and cost-\ncontrol surveyed every department within the executive branch.\nThese volunteers- men from many areas of enterprise and both political\nparties--served without cost to the taxpayer and without special\nfavor from the government. They reviewed the operations of some sixty\ndifferent departments and divisions on the basis of efficiency,\neconomy, and the best interests of the taxpayer.\n-3-\nWe have already begun to implement some of their recommendations,\nbased on preliminary reports.\nThe formal recommendations of the task force are to be presented\nto me early in February. At that time we shall review all of the\nsome 1,800 suggestions made, and determine those which should and can\nbe put into action.\nThose which will require legislation will be quickly brought to\nyou for consideration and approval. It has been estimated that once\nmany of these recommendations are in effect, we can save the state\nperhaps\n$100 million---and much of that on an annual basis.\nI understand that some of the excellent recommendations which\nthe report contains originated with our own state employees; men and\nwomen who at long last were given an opportunity to make creative\nsuggestions with the knowledge that constructive action would\ntaken. We owe these employees our gratitude for their cooperat\nand concern.\nAt the same time that we continue cutting the administrative\ncosts of state government, we must face up to our problems in taxa-\ntion.\nIn the 1967 session we promised that\n$155 million\nof the\n1968-69 budget would be used for property tax relief. We intend to\nkeep that promise. I will propose to you a method which will direct\nthis relief to the people through our educational system. One way\nis by assuming the local property tax burden of the junior colleges.\nAnother is through the secondary system.\nWe are commited, in next year's budget, to include a provision\nfor special property tax relief for the elderly. This will total\napproximately\n$22 million and we will honor that commitment.\nWe will also provide for inventory tax relief. It is not the\nproper or productive function of taxation to stimulate the warehouse\nindustry in neighboring states; it is not the proper or equitable\nfunction of taxation to force the owners of small papa-and-mama stores\nto spend their midnight hours doing bockkeeping for the state govern\nment. We must put an end to such harassment.\nBut all of this, which we intend to do, does not face up to\nwhat really must be done about taxes in California.\nThere has been no substantial tax reform in this state govern-\nment since 1933. In that year, we were primarily an agricultural\nsociety with a population of about six million. Today we are a\nhighly industrialized state with almost 20 million citizens.\nDuring those thirty-five years, California has undergone\ntremendous change--\n--we have known the pressures of depressions and wars;\n--we have experienced population explosions, industrial\nexpansion and the growth of the super-city;\n--the cost of our state government has risen from just\nunder SI billion a year to over $5 billion.\nWe have been through some of the most sweeping social, economic\nand political changes of any state in the nation. Yet through it\nall, the continued approach to taxation has been add-ons and gimmicks\nand gadgets and unkept promises. We have added patches to the patch-\nwork until today we have a crazy-quilt structure which is neither\nequitable nor effective.\nIt will come as no surprise to you that I will propose a major\ntax reform measure for your consideration during this session. We\nfinal\nmust overhaul our tax structure; we must do it now. Since the/report\nof a citizens' task force studying tax reform won't be delivered to\nme until this afternoon, some of the stories on what I will recommend\nare a little\n-5-\nand,\npremature / like th report of Mark Twain's de 1, somewhat\nexaggerated.\nAny significant tax reform program in our state must involve a\nreallocation of the functions and tax resources of our governments\nat both the state and local level. Just as Washington should return\ncertain responsibilities and revenues to the states, the states should\ncontinue to return certain functions and tax sources to the cities\nand counties. To ignore this fact is to ignore the needs of our citizens\nThe present patchwork system is incapable of keeping pace with\nour economy. To continue it means to continue having to seek new\nsources of revenue and to change rates every few years. Orderly\nplanning by government, business and the citizen is imposs\nhave a positive business climate which will make our state attractive\nto businesses and industries seeking new locations we must eliminate\nuncertainty as to future policy, have a record of financial stability\nand a settled tax policy that minimizes the need for frequent adjust-\nment of either tax base or rate.\nLocal or state taxes should not be used to redistribute the\nearnings of the citizenry. The federal government has pre-empted\nthat field. The state's concern should be to see that each citizen\npays the same percentage of his income in state and local taxes after\npayment of his federal taxes.\nOur property tax is inelastic and highly regressive, amounting\nin many instances to a 20 percent tax each year on family shelter.\nIt discourages buying, retards property improvement and makes it impos-\nsible for many of modest income to continue living in and owning their\nown homes.\nThe present retail sales tax, with all its exemptions, still\nimposes a disproportionate burden on those of lower income. At the\nsame time and by contrast, we find that 9 percent of those filing\npersonal income tax returns pay 67 percent of the total income tax\ncollected.\nEquitable tax reform must be based on a sense of responsiblity\nto the individual taxpayer. How much of his income is he willing to\ngive--can he afford to pay--to state government?\nWhat amount of his\npersonal resources be spent or saved throug individual decisions--\nand how much will he permit us to tax away and spend on his government?\nfor\nThis must be a taxpayer's decision--not ours; we work/them, not the\nother way around.\nLet there be no misunderstanding, no mistake as to what I am\nsaying.\nWe do have a concern and rightful responsibility to the unfortunate,\nto the ill, and to the indigent. We must fulfill this responsibility,\nand we will.\nBut, there is also another responsibility to which this adminis-\ntration will give high priority; that is to the taxpayer, the too-\noften forgotten man, who today is working 2½ hours out of every eight-\nhour day just to pay his taxes.\nThis is the citizen who has no special pressure group to lobby\nfor him. He works and sweats to make ends meet, to pay his bills\nand keep his family in clothes and his kids in school. He is the source\nfrom which the blessings of tax-supported programs flow. Before\nwe can provide special services to others, we must first take the money\nfrom him. If he goes broke, there will be no money for Sacramento.\nIn all our approach to government, and certainly as we attend to\nthe matter of tax reform, we must be fully concerned with the measure\nof his gain and the size of his loss.\nDuring recent years California's economy has continued to expand,\nbut not rapidly enough to keep pace with the growth in our population\nor the needs of our people. An accelerated and diversified economy\nis necessary if we are to have the jobs and job opportunities for\nour people; if we are to have a stronger tax base for our governments.\nWe are in many ways the \"brain bank\" of the nation. We have the\ntop scientists, the top technicians, the brilliant and the skilled.\nWe need more of them to fill the job opportunities which now exist.\nBut, we do not have enough jobs for the non-technical and the semi-\nskilled who can contribute so much to our society. We must work with\nthe private sector to stimulate job formations for these citizens.\nIn 1967, 37 percent of our manufacturing industry was defense\nconnected. This may be economically fortunate, but it is not a\nhealthy or happy si ation. We pray for peace nd for that day when\nour men will be home and when the energies and resources and brain\npower now focused on weaponry can be used to extend a peaceful and\nproductive society. We should prepare for peace; for jobs for those\ngallant men who hopefully must soon be returned from that conflict\nin Vietnam.\nAccordingly, during this session I will inaugurate programs and\nsubmit a series of measures designed to stimulate the economic growth\nof California in the years ahead.\nI will ask for the establishment of a Department of Human Re-\nsources Development. Its major function will be to stimulate job\ntraining and job retraining for those who have the desire, but not the\nskill, to find productive jobs. It will also cooperate with and\nexpand the work of the Job Training and Placement Council which was\ncreated early last year and has been under the guidance of Bob Finch.\nA report from the council will be ready soon. The department also\nwill work closely with H. C. \"Chad\" McClellan, whose \"Management\nCouncil for Merit Employment\" has helped place in jobs many thousands\nof our unemployed, and has the working cooperation of 20,000 employer\nJobs and job training, not hand-outs---are the meaningful answer\nto poverty.\nLast year our State Employment Service placed almost 600,000\npeople inmon-agricultural jobs. Some measure of the success of\nMr. McClellan and the 20,000 employers in voluntarily facing up to the\nchallenge of unemployment among minority groups is the fact that 30\npercent of those placed were members of minority groups.\n-8-\nA survey con cted by U.S.C. found that ( 13 of those hired\nunder this program are still employed at an average pay rate of\nThirty percent\n$2.75 an hour (including women).\n/\nhave moved into new homes and of\nthe 1/2 who left the initial job, half of them did so only to take a\nbetter job. None left because of discrimination.\nIn the near future I will name a Business Advisory Council--\ncalling on the leaders of business and labor, research facilities\nand education institutions--to work with us to find new ways to\nattract and create new industries to our state.\nOur corporate securities law has needed an overhaul for a long\ntime. This past year a bi-partisan commission has worked with our\npeople and has developed revisions which will protect the investor\nwhile increasing the efficiency of the Division of Corporations. I\nwill submit this legislation to you shortly.\nDespite a bad spring and considerable flooding, California\nagriculture again exceeded the $4 billion mark to remain a\nmainstay in our economy. Still, there are lingering problems. In\ngross farm income we are number one, but our farmers are caught in\na price-cost squeeze and we rank only third in net income and many\nfarmers know great hardship. I am asking Earl Coke, state director\nof Agriculture, to name a special task force to investigate a wide\nrange of farm problems and to report what can be done to mitigate\nthese problems.\nFor eight months we have had a blue-ribbon task force studying\nthe transportation needs of our state, and the proper role of state\ngovernment in creating a blueprint for a modern statewide transporta-\ntion system. The task force report will be made in March. In the\nmeantime, I will propose to you legislation which will permit local\nvoters, through referendum, to determine what types of mass transit\nthey want and how they want to finance it. (An improved and balanced\ntransportation network is vital to economic growth.)\nIn the meantime, administrative savings in our Highway Department\nhave resulted in more than\n$100 million\n; worth of highway\nbuilding being started one year in advance.\nWe have already started to work in concert with the private\nsector and leading educational institutions to seek new ways to har-\nness the atom and to unlock the secrets of the sea for the benefit\nof our citizens. Some of the great minds of the world in these\nfields are here in California. We seek their involvement in the\ndevelopment of these bold new programs.\n-9-\nWater is. of nstant importance to our onomy, to our agri-\nculture and industrial growth. To insure the completion of the\nCalifornia Water Plan, I will propose that we increase the tidelands\nrevenue contributions to\n$ 25 million\nannually,\nstarting\nin\n1970-71. At the same time I will ask that bond reserve requirements\nbeeliminated for those tidelands revenues used to help construct the\nCalifornia Water Plan.\nTo insure proper protection for those millions of our citizens\nwho are members of organized labor, I will again call for legisla-\ntion guarantying each member the right to a secret ballot on all\nmatters affecting policy of his union. So far I have heard no one\nin government, no one in labor, advance a sound reason why a citizen\nwho has the right to vote privately on public matters with only his\nconscience as witness should be denied that right in his union.\nWhile you and I wrestle here with budgets and billions, our\ncitizens wrestle with the day-to-day problems of dirty air and dirty\nwater and dirty and congested streets. As someone has said, it is\na bit incongruous that while we reach for the stars, we stand knee-\ndeep in garbage.\nThe needs of our daily living in this regard are far more com-\nplex than the problems of keeping man in space. But many of the\ntechniques which have been developed for spatial life have immediate\napplication for a better life on earth. We must apply that research\nfor the benefit of our people.\nI have already charged the reconstituted boards on air resources\nand water quality control to pursue this goal. And, in the inevitable\nbut solvable conflict between the need for great freeways and the\npreservation of scenic beauty, the secretaries of Resources and\nTransportation have established a joint committee to develop a\nbalanced approach.\nMany of these problems are most aggravating in the great metro-\npercent\npolitan areas where 80 of our people reside. And, many of these\nproblems can best be answered by resourceful cooperation between our\nstate and city and county governments. This will involve a restru\ning of function as well as tax resource; and that, of course, further\nunderscores the need for realistic tax reform.\nBut, none of our efforts to build prosperity and sustain progres\nwill be successful unless we also maintain a social climate of maxi-\nmum freedom for the individual under the law.\nFor, while a society can have law and order without freedom,\n-10-\nno society can lon have freedom without law I order. This is true\nwhether we are talking about our homes, our campuses or our city\nstreets. The breakdown of law and order can only lead to chaos and\nanarchy and--eventually--to tyranny.\nEvery law-abiding citizen has the right to expect his government\nwill insure the safety of his person.\nEvery parent has the right to expect government to protect his\nchildren from those who deal in drugs and profit from pornography.\nEvery homeowner and every businessman has the right to expect\nhis government to protect his property against the criminal, the\narsonist, the rioter and the looter.\nI view with respect the responsible efforts of most of our\nteachers whose personal and professional values require them to pur-\nsue the truth wherever it may lead. They are not like the few who,\nin the cloak of a distortion of the meaning of academic freedom, use\nthe classroom and the campus for the advancement of their own self-\ninterest. It seems little to ask that the great majority remind their\nerring colleagues of the meaning of and the reason for professional\nethics, especially when dealing with the youth of a democratic society\nOur colleges and universities were created--and are tax-\n4\nsupported--as centers of education--not staging areas for insurrection.\nAs I said in January of 1967, I say again in January of 1968; obey the\nrules, or get out.\nAlready we are drawing up legislation which will deal with the\ncampus disorder--including trespass legislation to keep the disrup-\ntive non-student and the trouble-makers from interfering with the\norderly process of education.\nIn addition, we are calling a meeting of college and university\nofficials and local law enforcement officers to develop better ways\nto work together during times of emergency--and to prevent emergencies\nfrom arising.\nWe will continue to seek laws to protect our young people from\npornography. A series of decisions by the United States Supreme\nCourt in recent years has established guidelines for regulating\nobscenity; we will ask for measures to stiffen California laws in this\nregard, while keeping within those guidelines and avoiding any taint\nof censorship.\nTogether with the attorney general we will ask legislation to\nstrengthen our fight against organized crime, against the professional\ncriminal and the narcotics peddler. This will include the right of our\nlaw officers to use electronic survelTiance equipment under the proper\ncontrol of judicial warrants. We must provide our law enforcement\nofficers with scie ific capabilities which ar at least equal to\nthose employed by the criminal.\nAnd, to protect our cities and our citizens from riots and\nmass disorders, we will ask that local authorities be given the power\nto issue temporary regulations such as curfews, and restrictions on\nthe sale of alcohol--to help keep riots from spreading.\nTo protect our citizens from the drinking driver I will ask\nfor a presumptive limits law. And, in a further attempt to help make\nour streets and highways safe, I will seek legislation to establish\na pilot project to develop the best vehicle inspection system in the\ncountry--using the sophisticated knowledge of the aero-space and com-\nputer sciences skills in addition to our resources at the University\nof California.\nWe must also set safety standards and regulations in the sale\nof used cars. And, we are vitally interested in and will support\nlegislation on motorcycle safety.\nFinally in this field, we will seek to create a public, non-\nprofit corporation for coordinated and applied research in traffic\nsafety. I expect the private and independent sectors to join with\nus in this important venture.\nThere will be-there have been--those who challenge our attem\n3\nto meet the welfare and medical needs of the ill and the aged and\nstill fit these programs into the financial capabilities and priorities\nof our taxpayers.\nLet me say that this administration will never abandon its\nproper responsibilities to the needy and the unfortunate in our\nsociety. Working with the resources provided by the taxpayer, we will\ncontinue to attend to those needs with compassion but under the pro-\nper fiscal control.\nWe will help those who need help--and we will expect them to do\ntheir best to help themselves.\nIn the area of public assistance, one of the very real services\nwe must provide is to break the chain of dependency which holds so\nmany of our underprivileged in its own kind of bondage. We will pro-\npose during this session measures designed to turn welfare checks into\npaychecks; to help dependent citizens become independent, productive\nindividuals.\nI will also ask for legislation, which will require employable\nwelfare recipients to accept jobs or job training or be dropped from\nthe rolls.\n12-\nA year ago ther were just over 24,000 patients in our mental\nhospitals. During the year, in spite of a record number of admissions,\nthis figure dropped to the present level of only 20,278---a decline\nof 3,786. This has to be accepted as testimony to the success of our\nout-patient clinics and means these thousands of patients are living\nnear normal lives in familiar home surroundings. We fully expect to\nseek additional funds for these clinics in the next fiscal year.\nIn recent weeks a number of other governors have talked to me\nabout the problems they are having with Medicaid. They have proposed\njoining together to ask Washington to relax its excessive and inflexi-\nble regulations. New York papers have carried stories about counties\nforced to drastically curtail other services to pay for the ever\nincreasing costs of Medicaid. The Detroit News said Michigan's infant\nMedicaid program \"could pull the state a long way toward a severe fiscal\nbind.\" I know of no state that is not facing a financial crisis\nbecause of this program.\nIf we in California engage in a political numbers game with\nMedi-Cal when early estimates of overspending change as more knowledge\nbecomes available, we do a disservice to the people of California. We\nall know and have known almost since its inception that this program\nmust be re-structured or it will bankrupt our state.\nLast year the state's share was budgeted at $151 million. A month\nbefore our administration took office, that figure was increased almost\n$30 million to $179.7 million. By early spring, we knew it was costing\n$202 million and with only a few months to go before the end of the\nfiscal year, all of us assumed that was the final figure and budgeted\nfor the present year accordingly. Now with the fiscal year over as\nwell as the six-month period in which bills could continue to be\npresented, we know it cost $263.7 million, almost $62 million more\nthan the $202 million appropriated as of last spring.\nAdministrative changes have made it possible for us apparently to\nreduce this year's estimated spending by $31 million, but almost half\nof that is temporary since it results from permission by the federal\ngovernment to delay upgrading of nursing home standards. You have\nalready corrected one glaring fault in reducing the time for submitting\nbills from six months to 60 days, but other legislation is absolutely\nnecessary if this program is to be made workable and controllable.\nWe will continue to press for reform and flexibility.\n-13-\nThere is no re compassion, no integrity 10 vision in any\nprogram which holds people down, and which will inevitably bankrupt the\nstate government; there is no equity in such programs when they threaten\nthose funds which are required for other essential services and opera-\ntions.\nSome have suggested that this may turn out to be a \"do-nothing\"\nsession of the legislature:\n- -that I will propose and you will oppose;\n- -that there will be much rhetoric but little results;\n- -that there will be many speeches but few meaningful statutes.\nNo doubt this pessimism stems from the fact that this is an\nelection year and, therefore, a session for partisanship. Letting\npublic problems go unsolved in an election year may be a timeworn\nbut\npolitical practice, /let us not refer to it as \"time honored\". There\nis little honor in it. The people we are under oath to serve have\na right to expect better of us. They did not elect us nor do they pay\nus to neglect their important business in the name of partisan politics.\nCrime in the street, death on the highway, pollutionof air and water,\npublication of pornography and confiscation of the earnings of our\ncitizens for wasteful public programs will take no election year\nholiday. Nor should we.\nWe were sent here to serve the people, not ourselves.\nWhat I have outlined today, and what I will present in the days\nto come, and that which has already been started and must be completed--\nthis is admittedly a heavy agenda.\nBut it is necessary if we are to match the bold dimensions of the\nCalifornia purpose.\nIt is not enough simply to accept the future. It is not enough\njust to predict it. It is our task to help invent it.\nThat is part of the history of California--our ancestors invented\nthe future. As Eric Hcfer wrote, \"They eloped with history; they ran\naway with it and shaped its course.\"\nMany speakers on many occasions, myself included, have taken the\nwords from Sam Walter Foss' poem which stride across the entranceway\nto State Office Building Number One, here in Sacramento:\n\"Bring Me Men To Match My Mountains.\"\nThere is yet another line in that poem which, together with the\nfirst, sets the tone for the Creative Society;\n\"Men with new eras in their brains.\"\nLet this be us as we go about the people's business.\n-14-\nLet this be us S we build tomorrow.\nWhile there is still time, let me wish you a HAPPY NEW YEAR. As\na matter of fact, I might even go farther and ask you for the same\nthing for myself.\n######\n-15-\n11/,\nL11,\nOFFICE OF THE GOVERNOR\nMEMO TO THE PRESS\nSacramento, California\nContact: Paul Beck\n445-4571\n1.17.68\nC-O-R-R-E-C-T-I-O-N\nIn Governor Reagan's Economic Club of New York\nspeech dated today for release Thursday A.M.'s, please\ncorrect Page 8, last paragraph as follows:\nadministration should become less centralized.\nWhile the problems\n# # #\nOFFICE OF THE GOVERNOR\nRELEASE: A.M.'s THURSDAY\nSacramento, California\nJanuary 18, 1968\nContact: Paul Beck\n445-4571 1.17.68\nEXCERPTS FROM SPEECH BY GOVERNOR RONALD REAGAN\nEconomic Club of New York\nNew York City - January 17, 1968\nGentlemen, you honor me with this invitation to break bread and\nthe honor is multiplied ten fold by your graciousness in listening\nto me, when in truth I could profit so much from listening to you.\nMy suspicion that your invitation was prompted, at least in part,\nnot\nby curiosity does/ detract from your kindness or lessen the\nwarmth of your hospitality. After all, someone who has been riding\noff into the sunset with the words \"the end\" superimposed on his\nis\nback /not supposed to turn up on the statehouse steps with a brief-\ncase full of something he calls the Creative Society.\nI am sure some of you have jumped to the conclusion that title\nCreative Society is intended to be a play on words, a counter to the\nGreat Society. And you are absolutely right.\nSince this is a non-partisan gathering let me hasten to say I\nhave no quarrel with the announced noble aims of the Great Society.\nNone of us, regardless of party, questions the desirability of\nreducing human misery and poverty or making opportunity, health,\nhousing and education available to all. But just so you won't for-\nget which side I'm on, I have serious doubts the Great Society'\ncan accomplish this and remain a free society and that makes the\nprice too high.\nI have long been concerned about government and what has seemed\nto be a relentless inch by inch encroachment on or usurpation of\nrights traditionally held to be the proper possession of the people.\nNow, I am a part of government, a formally elected member of\nthe Establishment--a funny thing happened to me on the way to\nDeath Valley. From the inside looking out the view hasn't changed.\nIf anything, my concern about government's increased growth and\npower is even greater.\nSome who have been in government a very long time as a part of\nthe permanent structure of government seem to develop an arrogance\nthat leads them to claim jump the inherent right of the citizen to\nI\nfreedom of choice. And/have learned at first hand how savage can\nbe their angry resistance to any attempt to reduce the size and\npower of government. I have also learned that size and power can be\nreduced and its reduction will be hailed by the people of whatever\nparty.\nAt the moment, there appears to be a panic fear afloat in the\nair, partly due to a feeling of helplessness, a feeling that govern-\nment is now a separate force beyond their control, that their voices\necho unheeded in the vast and multitudinous halls of government.\nI do not remember a time when so many Americans, regardless of\ntheir economic or social standing, have been so suspicious and\napprehensive of the aims, the credibility and the competence of\nthe Federal Establishment. There is a question abroad in the land,\n\"What is happening to us? Where is the country headed?\" It is as\nif we have lost any sense of national purpose. Particularly if we\nsubscribe to the belief that our national purpose is to assure the\nultimate in individual liberty consistent with law and order.\nIn the midst of material affluence on a scale unequalled in\nhistory, we have become a divided people. In many quarters, there\nis a defeatist and embittered mood of having been let down. Even\nthe Secretary of Health, Education and Welfare has admitted out\nloud that \"we are in deep trouble as a people\", and he hinted\ndarkly at possible repressions to come, unless the anarchists among\nus are put down.\n-2-\nIt is not in my mind to blame the government of the hour for all\nthe evils that presently beset us; for the uncertainties that blur\nAmerican prospects; and for the dissensions within that have made\nshambles of the American meaning in the world.\nThe fault lies with all of us. As a nation, we have let ourselves\nbe gulled into believing that tolerable solutions to our problems would\nbe forthcoming in good times; that the American productivity and inven-\ntive genius would yield the essential means for surmounting all our\ndifficulties, whether in the city slums of America or in the rice\npaddies of Southeast Asia. We were to have an instant tomorrow for a\ndollar down and heaven only knows how much a month.\nSomething called the New Economics was to take charge. Through a\nskillful tuning of monetary and fiscal policies, and a sensitive\nbalancing of wage-price guidelines, the economy was to be orchestrated\ninto a state of full employment at an ever-rising rate of productivity\nwhich would satisfy all the important national needs without dangerous\ninflation, and at a diminishing cost of operating the federal\nestablishment, relative to an ever-mounting gross national product.\nBut somehow the music is off-key and one wonders if perhaps the\nviolinists have just been fiddling around.\nnot\nThe economy has / behaved according to the plan. Suddenly the\nintended order of things has been reversed. In the midst of what\nstatistically looks to be the most prosperous period Americans have\neverknown, the books have begun to show alarming debits.\nWide circulation is given to the prophecy by Lord Thomas Macaulay\none hundred years ago that in the mid-20th century the destruction of\nour society and way of life would occur as it occurred for Rome in the\n5th century. Less quoted is his excellent advice to governments\neverywhere:\n\"Our rulers will best promote the improvement of the people by\nconfining themselves to their own legitimate duties, by leaving capital\nto find its most lucrative course, commodities their fair price,\nindustry and intelligence their natural reward, idleness and folly\ntheir natural punishment, by diminishing the price of the law, by\nmaintaining peace, by defending property and by observing strict\neconomy in every department of the state. Let government do this and\nthe people will assuredly do the rest.\"\nhave\nWe / hardly been observing strict economy in every department\nhave\nof the state and certainly, we'/ failed to let capital find its most\nor commodition their fair price\nOne arm of government has ruled that tobacco is injurious to\nhealth and must so state on each and every package. At the same time\nanother arm subsidizes the growing of tobacco and a third orders\ntelevision to give equal time to those who want to reply to or offer\ndissent to advertising protesting the sale of tobacco. Perhaps the\nfamiliar line \" we pause one moment to hear from our sponsor\" will\nbe changed to. \"pausing two moments to hear from the sponsor and a\nfellow who happened by.\nThe national accounts are out of balance. Government I.O.U.'s\ncannot be honored from the reserves immediately at hand. On that\naccount, the government is now compelled to call for a sharp reduction\nin private American investment abroad, for an embargo on foreign\ntravel by its citizens and for the beginnings of a furtive but none\nthe less real U.S. military withdrawal from Europe.\nAs an American I find this embarrassing to say the least. What\nis there to be said in defense of a government which, while presiding\nover a society capable of producing goods and services in the value\nof $300 billion annually and leading all the rest of the world in\ntechnology, no longer is able to let its citizens travel and do busi-\nness freely in the world simply because the government itself failed\nto keep its means and its programs in financial balance?\nIt is fine and necessary for changing generations to dream and\ncast up new visions of society. But always at some point the\naccountants have to put in an appearance so that the books can be\nhonestly balanced.\nThe only sensible course of action is for the government to face\nup to and deal bravely with the primary course of the trouble the top\nheavy spending programs and the extravagant credit policies that have\nbrought inflation back.\nA few years ago I quoted an historian to the effect that if we\nlose this way of ours-this way of freedom--history will record that\nthose who had the most to lose did the least to prevent its happening.\nAt that time the business community was under attack by the Bureau of\nInternal Revenue. Specifically, the bureau was issuing new regulations\nregarding tax deductibility of business travel expense, business enter-\ntainment and gifts to employees and customers. The bureau won by\ndefault.\nActually, the issue was one of principle involving the very right\nof management to make business decisions. But business sat down with\nthey debated whether the travelling man could have filet mignon or the\nblue-plate special for lunch. Should the limit for deductible pur-\nposes on gifts be $25 or $35. Forgive me if I seem presumptious, presumptuous but\nI think business should have said to government, \"So long as we are\nlegitimately spending money in the belief that it helps produce a\nprofit, it is not any of government's business how much we spend.\"\nThose who refuse to defend themselves--who prefer the easy path\nof appeasement are only feeding the crocodile, hoping he 11 eat them\nlast--but eat them he will.\nhave\nSo far I / talked about the private sector and its relationship\nto the federal government. Believe me, the temptation is to go on\ntalking on a broad philosophical plane, but some instinct warns me that\nthe curiosity involved in your invitation was in some measure curiosity\nabout California, its government and happenings generally in Sacramento.\nhave\nIf I / dwelt over long on troubles besetting all of us before\ngetting to those peculiar to California and California's government,\nit was to guard against the experience of a gentleman who departed\nthis earth from a point somewhere in Western Pennsylvania. Arriving\nat the Pearly Gates he was greeted by St. Peter and given an indoc-\ntrination course during which he learned the heavenly old timers had\na story telling ring and were particularly interested in new comers\nwho might have interesting earthly experiences to relate. He told\nSt. Peter he was a cinch to go over big--he was the sole survivor in\nhis town of the Johnstown flood. Peter took him over to the group\nand gave him a flattering introduction and buildup. The Pennsylvanian\nstepped forward to begin his exciting story. At which point, Peter\nmurmurred in his ear: \"By the way, that old guy in the front row is\na fellow named Noah. \"\nYou are too well informed for me to cite statistics on\nCalifornia's industries, problems of urban sprawl or just plain\nexplosive increase in population although some of the problems I\ninherited have to do with the latter.\nFor the last eight years the government of California justified\nevery increase in government spending as necessary to keep pace with\nthe population increase. Unfortunately the budgets were growing each\nyear twice as much as the percentage that could have been justified\non the basis of growth and inflation. The plain truth was Big Brother\nin Washington had a philosophical little brother in California. When\n-5-\nMashington sneezed the \"gesundheit\" was heard in Sacramento. For a\ntime tax revenues and accumulated surplus kept pace, but then in 1963\nthe pace was too much and the administration began employing gimmicks\nto fuzz up the fiscal picture and more importantly, to avoid or post-\npone the painful choice between reduced spending and increased taxes.\nTheir timing could not have been worse from my standpoint. The\nfinal desperate gimmick was employed in the election year and as a\nresult inherited by me in the middle of the fiscal year last January.\nThe device used to obtain a one time windfall was a switch to an\naccrual bookkeeping system, not a bad thing in itself, but when\nunaccompanied by any provision to insure cash liquidity, it was nearly\ncatastrophic.\nA budget of nearly $5 billion for 12 months' spending was adopted\nto be funded by 14½¹/2 months' revenue plus $190 million of accumulated\ncash which was spent as revenue and another $194 million borrowed from\nvarious state funds which by California law could not be carried as a\npermanent debt. My predecessor was spending as if he were practicing\nto be President.\nAt one point someone said - \"Cheer up, things could be worse.\"\nSo I cheered up and sure enough, they got worse.\nWe of course had to restore fiscal stability and present a bal-\nanced budget for the current year with no cash reserve to call upon\nand only 12 months' revenue for 12 months' spending.\nWe did it and without adopting any new taxes-of course we\none\nraised the old ones about / billion dollars. But seriously, that is\nnot our final answer to the excessive cost of government. We believe\ngovernment should cost less and the people should pay no more than\nthey can afford and no more than they are willing to pay.\nThe Creative Society remains our goal and we pledge its implemen-\ntation. Indeed, the beginning steps have been taken. But bringing\nsimple common sense to bear on the fiscal chaos confronting us was\nobviously a first priority, and common sense dictated cutting,\nsqueezing and trimming to reduce as far as possible the rate of\nspending in the few months remaining before the end of the fiscal\nyear.\n-6-\nOperancy\nV\nThe state had been increasing its number of employees between 4\nand 5½ percent a year for eight years. We thought there were too many,\nbut how to prove it without a lengthy study? Our decision was to put\na freeze on hiring replacements for employees who retired or quit for\nany reason. The screams of anguish curdled your blood. But the wheels\nof government did not grind to a halt, there was no loss of efficiency\nand the annual 4 or 5 percent rate of increase in numbers of employees\nwas reversed. There are today 2½ percent fewer employees than when\nwe started.\nBusiness and government are different we are told, and business\nprocedures will not meet the needs of government. Being totally\ninexperienced I did not know that, so I kept on committing blunders.\nWe discovered California had no plan for centralized purchase of\nautomobiles, no central inventory, no plan for selling or trading on\nan age or mileage basis. In fact, no one knew how many cars the\nstate owned. Each department head was on his own and some were buying\nretail. We put a freeze on that. Strangely enough by May there was\nfor the first time in the memory of man a surplus of available cars\nin the motor pools and the state's purchase of gasoline was reduced\n15 percent. Some of that, of course, might have been due to another\nmistake we made.\nIt seems that many of our employees had a streak of tourist in\nthem. We put a freeze on out-of-state travel. We did not say they\ncouldn't go, we said they would have to come in and get permission.\nThe budget for out-of-state travel has been reduced 78 percent.\nSuch ordinary, routine business procedures as centralized buying,\nstandardizing of specifications and competitive bidding have been\ninstituted and at last report have resulted in savings in excess of\n$20 million.\nLicenses issued by the state had a common expiration date\nresulting in long periods of near vacant office space and short periods\nof hectic hiring of temporary employees. We are staggering the expir-\nation dates to even out the workload.\nEveryone knows the phone company has a department that will come\nin, cheerfully listen to your phone problems and tell you what kind\nof setup you need. Everyone knows that except government.\nSo, we called on the phone company for that particular service\nand since we were a $16 million a year customer, they obliged. They\nfound people at adjoining desks with intercommunication systems. We\nhave now received notice our phone bill will be reduced by $2 million\na year.\nNot all the savings were in the million dollar class. In my own\noffice there was a sizeable supply of stationery bearing a name other\nthan my own. Custom decreed it should be burned. Somehow the thought\nof all the unused stationery adding to the smog seemed shamefully\nwasteful. Now the girls in the office \"x\" out that other name and\ntype mine in--and do you know I get a certain amount of pleasure out\nof that,\nBut a Creative Society must do more than this, it must not only\nmake a solemn declaration of goals and principles, but must effectively\nrepresent each of its segments in the pursuit of the good of all.\nMat the Creative Society will attempt to re-establish is the principle\nthat in the American federal system, the states in their proper\nconstitutional sphere are independent from the national government.\nSafeguards, however, must be provided to assure that the states\nthemselves fully assume their responsibilities both social and\neconomic. The sovereignty of our states has been dangerously eroded\nas hard pressed state governments reached eagerly for the handout of\nfederal money. Our slogan once was \"walk softly and carry a big\nstick.\" How on the Potomac shore it's \"Malk softly and carry a big\nsock.\"\nThe Creative Society is concerned with state responsibility.\nThere are problems in our society which require attention and action.\nThis action, I believe, should be taken at the state level where a\nthorough understanding of the problem exists.\nAs society grows more complex, administration should become\ncentralized. While the problems facing agriculture in the Midwest\nshare common elements with the problems of California's agriculture,\nthere are great dissimilarities which make rules from Washington\ndifficult and at times impossible to apply equitably. The same holds\ntrue for our urban problems, our problems of education and other\nproblems which face the people of the United States.\nFinally, the Creative Society to function in the best interests\nof the people, requires the participation of the people. It recog-\nnizes that no government can possibly find or afford an elite group\nof. individuals capable of making the right decisions affecting the\nmarket place, the home and all or even part of the many facets of our\nsociety and our daily lives. It recognizes instead that a society will\nbe only as great as the potential of its people and, therefore, govern-\nment must call upon the genius and the ability of the people for the\nsolution of their problems.\nNow you ask - does it work? The answer is yes.\nImmediately after the Watts riots, a Los Angeles businessman\ngathered a hundred of his associates together and challenged them to\njoin him in fulfilling what he said was industry's responsibility to\nprovide employment. He pointed out that what he was suggesting was\ngood business. Jobs were going begging because of a lack of skilled\nworkers. Workers were going on welfare because of a lack of job skills,\nand this was especially true in the minority communities. Along with\nthe high cost of this situation to both business and government, we\ncan add the vast waste in economic benefits when more than 10 percent\nof the buying public has less than average purchasing power.\nThe businessmen of Los Angeles followed H.C. McClellan into the\nWatts area where they set up an employment office. In sixteen months,\n17,800 hard core unemployed were placed in jobs at an average pay of\n$2.75 an hour (including women). More than 2/3 of them still hold\nthose jobs and 1/2 of the other 1/3 have progressed to better jobs.\nThirty percent moved out of the area, proof that the walls of the\nso-called ghetto are economic.\nAfter the election I went to Mr. McClellan and asked if he would\ndo state-wide what he had done in Matts. He agreed and today has a\nfulltime working program with 20,000 California employers involved\nand cooperating with our state employment office. Incidentally,\nfoundations and private citizens have picked up the tab for admini-\nstrative overhead so it is completely independent of tax revenues.\nIn the months between November and January a year ago, a Blue\nRibbon Committee of citizens took on the task of recruiting for my\nadministration. I did not think the Creative Society could be run by\npersonnel of the type usually associated with the political spoils\nsystem. This committee did not screen job seekers; it went out\nseeking men and women who could be persuaded to serve because they had\nthe skill and experience necessary for a particular job. In almost\nevery instance those who accepted appointments did so at great personal\nsacrifice. Employers were persuaded to give leaves of absence to\nbright young junior executives-- one refused.\nIn the appointment of judges, that prize patronage plum of the\ngovernor's office, the same policy prevails because politics should\nplay no part in the selection of those who administer justice. Joint\ncommittees of the bar, the judiciary and laymen screen and rate\nprospective judges and their recommendations are accepted.\nThen we come to government itself and the need to make it modern,\nregressive and efficient. On invitation, more than 250 of the most\nsuccessful people in our state volunteered and put in more than four\nmonths full time, organized into task forces according to their\nspecialities, they included some of the top exacutives of our\nlargest industries. These task forces went into every agency and\ndepartment of government to see where modern business practices\ncould be utilized to make government more efficient and more economical.\nThey ranged from hotel management to data processing. For example,\nhotel men looked at prisons and institutions to see where housekeeping\nand kitchen chores could be upgraded.\nWe have received 1800 specific recommendations which we are now\ncorrelating. Some will require legislation--some we have already put\ninto action by executive order. For example, one team discovered that\nno one in state government had ever applied a formula of how much floor\nspace is required per employee for employees doing similar work. And\nyet the state has in process a giant building program in the Capitol.\nAs a result of this team's effort we cancelled entirely the\nconstruction scheduled for last summer of a ten story building. The\nsavings, $4.3 million. Total floor space for all branches of state\ngovernment is 9 million square feet. By applying normal private\nbusiness standards, it is being reduced to 7 million square feet.\nIn our giant highway building program, $110 million worth of\nfreeway and highway projects are being started one year in advance of\nschedule financed by savings in administrative overhead in the depart-\nments financed by the gas tax.\nAnother citizen task force has completed a study of our tax\nstructure and has presented recommendations for a complete overhaul\nand tax reform.\nFor every unsolved problem there are ten people out there eager\nto help if someone will only point the way. By \"out there\" I do not\nmean in California - out there all over America. The Creative Society\nis government of and by as well as for the people.\nAn Ohio doctor wrote: \"For one shining glorious moment of his-\ntory, we had the key and the open door and the way was there before\nus. And men threw off the yoke of centuries and thrust forward along\nthat way with such brilliance that for a little while we were the\nlight and the inspiration of the world. And now the key has been\nthrown away, the door is closing and we are losing the way.\"\nWe can rediscover that way. We can remind ourselves and those\nin government who have lost faith in the simple verities that the\nmost profound words in the constitution are but three in number--\n\"We the people.\" Government is our creature, established by us for\nour convenience and we can leave no more valuable legacy to our\nchildren than the restoration of the American dream.\n(Note: Since Governor Reagan speaks from notes, there may be\nadditions to, or changes in, the above. However,\nGovernor Reagan will stand by the above quotes.)\n12\n-\n-\nOFFICE OF THE GOVERNOR\nSacramento, California\nRELEASE: Sunday A.M.'s\nContact: Paul Beck\n445-4571 1.26.68\nEXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN\nPacific Mutual Life Insurance Company Banquet\nCentury Plaza Hotel, Los Angeles\nJanuary 27, 1968\nIt is certainly no secret that for more than twenty years I was\ninvolved directly in organized labor as an officer and board member of\na union. During that period I represented the membership at the\nnegotiating table and I take pride in my record of service. That\npride extends to the rank and file of organized labor--the working men\nand women of this country. I know them to be as fair-minded and\npatriotic as any citizens of our land.\nWhen one talks of labor it is necessary to differentiate between\nthe rank and file and the hierarchy of labor, that power elite which\nhas gradually increased its control over the membership and whose\nmembers now take political stands and make pronouncements in the name\nof labor when in truth the rank and file have not been consulted as\nto their views.\nNever have I felt that labor or any other particular group of\ncitizens should have an extra or special claim upon government or be\ngranted favored treatment.\nBut what is the situation today? At the recent AFL-CIO convention\nin Florida, President George Meany made it unmistakably clear that\nthe ruling clique of organized labor considers itself as much a part\nof the administration in Washington as the State Department or the\nDepartment of Defense.\nThere was visible support for that contention. The President of\nthe United States, the Vice President, five cabinet members and a\nhost of lesser officials paraded across the platform. Labor Secretary\nWirtz gave the affair its proper coloration when he said, \"I'm\ndelighted to be here at this first joint convention of the AFL-CIO and\nthe President's Cabinet\".\nLabor's public relations director smilingly asked a representative\nof one of our largest corporations, \"When was the last time a President\nof the United States addressed one of your stockholders' meetings?\"\nNow who will declare that our President, sworn to represent all\nof us equally, has not in truth subtracted from some Americans in\norder to grant special favor to others? The Quid Pro Quo being\npolitical support.\nI have long been concerned about government and what has seemed\nto be a relentless inch by inch encroachment on or usurpation of\nrights traditionally held to be the proper possession of the people.\nNow, I am a part of government, a formally elected member of\nthe Establishment--a funny thing happened to me on the way to\nDeath Valley. From the inside looking out the view hasn't changed.\nIf anything, my concern about government's increased growth and\npower is even greater.\nSome who have been in government a very long time as a part\nof the permanent structure of government seem to develop an arrogance\n--2--\nthat leads them to claim jump the inherent right of the citizen to\nI\nfreedom of choice. And/have learned at first hand how savage can\nbe their angry resistance to any attempt to reduce the size and\npower of government. I have also learned that size and power can be\nreduced and its reduction will be hailed by the people of whatever\nparty.\nAt the moment, there appears to be a panic fear afloat in the\nair, partly due to a feeling of helplessness, a feeling that govern-\nment is now a separate force beyond their control, that their voices\necho unheeded in the vast and multitudinous halls of government.\nI do not remember a time when so many Americans, regardless of\ntheir economic or social standing, have been so suspicious and\napprehensive of the aims, the credibility and the competence of\nthe Federal Establishment. There is a question abroad in the land,\n\"What is happening to us? Where is the country headed?\" It is as\nif we have lost any sense of national purpose. Particularly if we\nsubscribe to the belief that our national purpose is to assure the\nultimate in individual liberty consistent with law and order.\nIn the midst of material affluence on a scale unequalled in\nhistory, we have become a divided people. In many quarters, there\nis a defeatist and embittered mood of having been let down. Even\nthe Secretary of Health, Education and Welfare has admitted out\nloud that \"we are in deep trouble as a people\", and he hinted\ndarkly at possible repressions to come, unless the anarchists among\nus are put down.\n-3-\nIt is not in my mind to blame the government of the hour for all\nthe evils that presently beset us; for the uncertainties that blur\nAmerican prospects; and for the dissensions within that have made\nshambles of the American meaning in the world.\nThe fault lies with all of us. As a nation, we have let ourselves\nbe gulled into believing that tolerable solutions to our problems would\nbe forthcoming in good times; that the American productivity and inver\ntive genius would yield the essential means for surmounting all our\ndifficulties, whether in the city slums of America or in the rice\npaddies of Southeast Asia. We were to have an instant tomorrow for a\ndollar down and heaven only knows how much a month.\nSomething called the New Economics was to take charge. Through a\nskillful tuning of monetary and fiscal policies, and a sensitive\nbalancing of wage-price guidelines, the economy was to be orchestrated\ninto a state of full employment at an ever-rising rate of productivity\nwhich would satisfy all the important national needs without dangerous\ninflation, and at a diminishing cost of operating the federal\nestablishment, relative to an ever-mounting gross national product.\nBut somehow the music is off-key and one wonders if perhaps the\nviolinists have just been fiddling around.\nnot\nThe economy has / behaved according to the plan. Suddenly the\nintended order of things has been reversed. In the midst of what\nstatistically looks to be the most prosperous period Americans have\neverknown, the books have begun to show alarming debits.\nWide circulation is given to the prophecy by Lord Thomas Macaulay\none hundred years ago that in the mid-20th century the destruction of\nour society and way of life would occur as it occurred for Rome in the\n5th century. Less quoted is his excellent advice to governments\neverywhere:\n\"Our rulers will best promote the improvement of the people by\nconfining themselves to their own legitimate duties, by leaving capital\nto find its most lucrative course, commodities their fair price,\nindustry and intelligence their natural reward, idleness and folly\ntheir natural punishment, by diminishing the price of the law, by\nmaintaining peace, by defending property and by observing strict\neconomy in every department of the state. Let government do this and\nthe people will assuredly do the rest. n\nhave\nWe / hardly been observing strict economy in every department\nhave\nof the state and certainly, we'/ failed to let capital find its most\nOne arm of government has ruled that tobacco is injurious to\nhealth and must so state on each and every package. At the same time\nanother arm subsidizes the growing of tobacco and a third orders\ntelevision to give equal time to those who want to reply to or offer\ndissent to advertising protesting the sale of tobacco. Perhaps the\nfamiliar line \" we pause one moment to hear from our sponsor\" will\nbe changed to. \"pausing two moments to hear from the sponsor and a\nfellow who happened by. \"\nThe national accounts are out of balance. Government I.O.U. 's\ncannot be honored from the reserves immediately at hand. On that\naccount, the government is now compelled to call for a sharp reduction\nin private American investment abroad, for an embargo on foreign\ntravel by its citizens and for the beginnings of a furtive but none-\nthe-less real U.S. military withdrawal from Europe.\nAs an American I find this embarrassing to say the least. What\nis there to be said in defense of a government which, while presiding\nover a society capable of producing goods and services in the value\nof $300 billion annually and leading all the rest of the world in\ntechnology, no longer is able to let its citizens travel and do busi-\nness freely in the world simply because the government itself failed\nto keep its means and its programs in financial balance?\nIt is fine and necessary for changing generations to dream and\ncast up new visions of society. But always at some point the\naccountants have to put in an appearance so that the books can be\nhonestly balanced.\nThe only sensible course of action is for the government to face\nup to and deal bravely with the primary course of the trouble- the top\nheavy spending programs and the extravagant credit policies that have\nbrought inflation back.\nA few years ago I quoted an historian to the effect that if we\nlose this way of ours-this way of freedom--history will record that\nthose who had the most to lose did the least to prevent its happening.\nAt that time the business community was under attack by the Bureau of\nInternal Revenue. Specifically, the bureau was issuing new regulations\nregarding tax deductibility of business travel expense, business enter-\ntainment and gifts to employees and customers. The bureau won by\ndefault.\nActually, the issue was one of principle involving the very right\nof management to make business decisions. But business sat down with\nthey debated whether the travelling man could have filet mignon or the\nblue-plate special for lunch. Should the limit for deductible pur-\npresumptions\nposes on gifts be $25 or $35? Forgive me if I seem presumptious, but\nI think business should have said to government, \"So long as we are\nlegitimately spending money in the belief that it helps produce a\nprofit, it is not any of government's business how much we spend.\" \"\nThose who refuse to defend themselves--who prefer the easy path\nof appeasement are only feeding the crocodile, hoping he' 11 eat them\nlast--but eat them he will.\nFor the last eight years the government of California justified\nevery increase in government spending as necessary to keep pace with\nthe population increase. Unfortunately the budgets were growing each\nyear twice as much as the percentage that could have been justified\non the basis of growth and inflation. The plain truth was Big Brother\nin Washington had a philosophical little brother in California. When\n-6-\nWashington sneezed the \"gesundheit\" was heard in Sacramento. For a\ntime tax revenues and accumulated surplus kept pace, but then in 1963\nthe pace was too much and the administration began employing gimmicks\nto fuzz up the fiscal picture and more importantly, to avoid or post-\npone the painful choice between reduced spending and increased taxes.\nTheir timing could not have been worse from my standpoint. The\nfinal desperate gimmick was employed in the election year and as a\nresult inherited by me in the middle of the fiscal year last January.\nThe device used to obtain a one time windfall was a switch to an\naccrual bookkeeping system, not a bad thing in itself, but when\nunaccompanied by any provision to insure cash liquidity, it was nearly\ncatastrophic.\nA budget of nearly $5 billion for 12 months' spending was adopted\nto be funded by 14½½ months' revenue plus $190 million of accumulated\ncash which was spent as revenue and another $194 million borrowed from\nvarious state funds which by California law could not be carried as a\npermanent debt. My predecessor was spending as if he were practicing\nto be President.\nAt one point someone said - \"Cheer up things could be worse.\"\nSo I cheered up and sure enough, they got worse.\nWe of course had to restore fiscal stability and present a bal-\nanced budget for the current year with no cash reserve to call upon\nand only 12 months' revenue for 12 months' spending.\nWe did it and without adopting any new taxes--of course we\none\nraised the old ones about / billion dollars. But seriously, that is\nnot our final answer to the excessive cost of government. We believe\ngovernment should cost less and the people should pay no more than\nthey can afford and no more than they are willing to pay.\nThe Creative Society remains our goal and we pledge its implemen--\ntation. Indeed, the beginning steps have been taken. But bringing\nsimple common sense to bear on the fiscal chaos confronting us was\nobviously a first priority, and common sense dictated cutting,\nsqueezing and trimming to reduce as far as possible the rate of\nspending in the few months remaining before the end of the fiscal\nyear.\n-7-\nBut a Creative Society must do more than this, it must not only\nmake a solemn declaration of goals and principles, but must effectively\nrepresent each of its segments in the pursuit of the good of all.\nWhat the Creative Society will attempt to re-establish is the principle\nthat in the American federal system, the states in their proper\nconstitutional sphere are independent from the national government.\nSafeguards, however, must be provided to assure that the states\nthemselves fully assume their responsibilities both social and\neconomic. The sovereignty of our states has been dangerously eroded\nas hard pressed state governments reached eagerly for the handout of\nfederal money. Vour slogan once was \"walk softly and carry a big\nstick.\" Now on the ootomac shore it's \"walk softly and carry a big\nsock.\"\nThe Creative Society is concerned with state responsibility.\nThere are problems in our society which require attention and action.\nThis action, I believe, should be taken at the state level where a\nthorough understanding of the problem exists.\nAS society grows more complex, administration should become less\ncentralized. While the problems facing agriculture in the Midwest\nshare common elements with the problems of California's agriculture,\nthere are great dissimilarities which make rules from Washington\ndifficult and at times impossible to apply equitably. The same holds\ntrue for our urban problems, our problems of education and other\nproblems which face the people of the United States.\nFinally, the Creative Society to function in the best interests\nof the people, requires the participation of the people. It recog-\nnizes that no government can possibly find or afford an elite group\nof individuals capable of making the right decisions affecting the\nmarket place, the home and all or even part of the many facets of our\nsociety and our daily lives. It recognizes instead that a society will\nbe only as great as the potential of its people and, therefore,\ngovernment must call upon the genius and the ability of the people\nfor the solution of their problems.\nFor every unsolved problem there are ten people out there eager\nto help if someone will only point the way. By \"out there\" I do not\nmean in California - out there all over America. The Creative Society\nis government of and by as well as for the people.\nAn Ohio doctor wrote: \"For one shining glorious moment of\nhistory, we had the key and the open door and the way was there\nbefore us. And men threw off the yoke of centuries and thrust forward\nalong that way with such brilliance that for a little while we were\nthe light and the inspiration of the world. And now the key has been\nthrown away, the door is closing and we are losing the way.\"\nWe can rediscover that way. We can remind ourselves and those\nin government who have lost faith in the simple verities that the\nmost profound words in the constitution are but three in number--\n\"We the people\". Government is our creature, established by us for\nour convenience and we can leave no more valuable legacy to our\nchildren than the restoration of the American dream.\n########\n(Note: Since Governor Reagan speaks from notes, there may be\nadditions to, or changes in, the above. However,\nGovernor Reagan will stand by the above quotes.)\n621\n2\nOFFICE OF THE GOVERNO\nRELEASE:\n11\nM., Monday,\nSacramento, California\nJanuary 29\nContact: Paul Beck\n445-4571\n1.29.68\nEXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN\nNational Automobile Dealers Association Convention\nLas Vegas, Nevada\nJanuary 29, 1968\nI would like to talk to you about what we in California are trying\nto do it is called the Creative Society. Now, I am sure that hearing\nthat title may have caused some of you to jump to the conclusion that\nperhaps I chose the term \"Creative Society\" as a kind of play on words\nand a play off against the \"Great Society.\" And you are absolutely\ncorrect. But because this is a non-partisan affair, let me hasten to\nadd that I have no quarrel with the goals of the Great Society.\nAll of us, I am sure, regardless of Party, oppose human misery and\ndeprivation. We feel the need to relieve poverty, improve education,\nsolve unemployment, insure decent housing, and provide medical care and\nequal opportunity. But just so you won't forget which side I am on, let\nme say that I don't think the Great Society offers the only way or even\nthe best way of achieving those goals. In fact, I don't think the Great\nSociety could do any of those things and remain a \"free\" society. That\nmakes the price too high.\nThe problem is not new. Government talks political equality and\nends up trying for economic equality. And in so doing, it moves more\nand more toward a centrally managed economy. Lord Thomas Macaulay, the\nsame Thomas Macaulay who, 100 years ago, predicted the middle of this\ncentury would see this system of ours grind to a halt, gave some pretty\ngood advice to those who serve in governments. He said \"our rulers will\nbest promote the improvement of the people by confining themselves to\ntheir own legitimate duties, by leaving capital to find its most\nlucrative course; commodities their fair price; industry and intelligence\ntheir natural reward; idle and folly their natural punishment, by\ndiminishing the price of the law, by maintaining peace, by defending\nproperty and by observing strict economy in every department of the\ntate. Let government do this and the people will assuredly do the\nrest.\"\nA federal agency recently ruled that television must give equal\ntime for opponents of smoking to reply to the cigarette ads on\ntelevision. But the government continues at the same time to subsidize\nthe production of tobacco. Federal limits are advocated for the size\nand shape and weight and the promotional practices of manufacturers.\nThey are urged by administration leaders at almost every session of\nCongress.\n-1-\nGovernment follow policies that drain away our gold supply and then\nit interferes with private business and the investments that private\nbusiness makes abroad---even though private business is at least\nresponsible for half a billion dollars of the favorable trade balance\nthat at least is holding up a little bit the outflow of gold.\nUnder the guise of fighting poverty, a number of programs have\nbecome competitive with the private sector in the field of law and\nemployment services to name a few. And in one small community recently,\ngovernment even set up a newspaper on almost a metropolitan scale with\na staff of 23. Then they bought 20 Polaroid cameras for the staff of\n23.\nIs government leaving capital to find its most lucrative course?\nCommodities their fair price? The federal government has ruled that\nthe American Telephone & Telegraph rate of return is limited to 7 to\n7½ percent. Granted that AT&T is a monopoly, a public utility subject\nto government regulation. But the FCC ordered lowered tariffs and at\nthe same time flatly fixed the maximum over the overall profit percentage\nAnd when government took this action, more than three million share-\nholders of the bluest of the blue-chip stocks took a billion dollar\nloss on their investment.\nNot too long ago the same government whose deficit spending and\ndeliberate policy of planned inflation now threatens us with wildfire,\nrunaway inflation asked eight major oil companies to rescind a one\ncent a gallon increase on gasoline and they did it \"in the national inter\nest for stable prices.\" Well, strangely enough, gasoline before taxes\nis cheaper today than it was 10 years ago. But the gasoline tax has\ngone up 19 percent in these 10 years.\nWe once had a slogan, \"Speak softly and carry a big stick.\" Now\non the shores of the Potomac the slogan is \"speak softly and carry a\nbig sock.\" And what have any of us in government or in business been\ndoing to prevent this destruction of the freest, the most virile economic\nsystem ever implemented by man?\nIf we lose this way of ours-this way of freedom history will\nrecord that those who had the most to lose did the least to prevent its\nhappening. When the Bureau of Internal Revenue made its assault on\nbusiness gifts and entertainment expenses, how did business defend\nitself? It lost the battle before it started and lost it by default.\nBusiness sat down with government as if at a bargaining table and\ndebated whether the travelling businessman should be allowed filet-\nmignon or be limited to the blue-plate special. Whether the tax\ndeduction for gifts\nthe business employee or\nspective customer\nshould be $25 or $35, the issue was one of principle, not amount. Why\ndidn't business say \"so long as we are legitimately spending money in\nthe belief that it helps produce a profit, it is not any of government's\nbusiness how much we spend.\"\nThose who still refuse to defend themselves, who prefer a path of\nappeasement, who hope that perhaps by smiling and holding out a hand\nthey can get a little favor that someone else isn't getting from\ngovernment, are only feeding the crocodile hoping it will eat them\nlast. But eat them it will.\nGovernment has legitimate functions and there is a large area for\npublic good that is served by cooperation between government and the\nprivate sector. But this does not include government assuming the\nprivileges and the prerogatives of management.\nI ran for office on the theory that government does not rule, it\ndoes not lecture; but it leads, it cooperates, it listens, and instead of\ntaking power into its own hands, it turns to the people for the answer\nto as many problems as the people can provide. And I would like to\ngive you a little report how well that government \"of\" and government\n\"by\" the people really works if you set your mind to it.\nIn the past several months we have done a number of things\nconsistent with our belief that in a creative society there are many\nfunctions now performed by government that perhaps can be better\nperformed by using the full genius and the power and the ability of the\npeople. Often those who classify themselves more liberally-oriented\nthan I am--and that leaves a lot of room--have accused this administra-\ntion of being business oriented. They are correct on the basis of two\nfacts that some of them never learned. One is that businesses do not\npay taxes, people do. The other is that government does not make jobs,\nbusiness and industry do.\nFor these reasons we are doing everything possible to create\nconditions to insure that business and industry can expand and meet\ntheir job needs in a growing population in California. At the same\ntime, we are trying to give Californians, the taxpayers, the people, as\nfrugal and as efficient a government as possible. Neither of the jobs\ncan be done overnight. We inherited government machinery a year ago\nthat was spending more than a million dollars a day, over and above the\nstate's revenue. In fact, my predecessor was spending so much money\nthat I thought he was practicing to be President.\n-3-\nNow there has al. ys been a lot of controversy as to whether or\nnot government actually can be run like business. Well, I believe that\ngovernment can afford only what it can pay for and should afford only\nwhat the people are willing to pay for. But proving that government\ncan employ modern business practices is a little bit like rubbing your\ntummy and patting your head at the same time. And in these last few\nmonths I have discovered how savage can be the angry resistance of some\nin government when you try to make any change or reduce the size and\npower of government. But I also have discovered that the size and\npower of government can be reduced. You see, being totally inexperienced\nI had not learned all the things that you could not do.\nIn my inexperience I found out that a governor has the right to\nveto some of the poverty programs that come across his desk for his\nstate. Of course, the federal government reserves the right to override\nthe veto if it wants to, but also in my inexperience, I had not learned.\nthat you are not really expected to exercise this veto. So I went ahead\nand exercised it.\nI was told, for example, of one program that was going to put the\nhardcore unemployed in a county to work clearing our open park-like\nlands in California. I had no quarrel with that goal, but then I\ndiscovered they were going to put 17 of the hardcore unemployed to work\nand more than half of the money was going to go for seven administrators\nto make sure that the 17 got to work on time. So we vetood it. There\nwas another program that we vetoed that was going to cost us quite a\nsum of money and it looked like it was a training course for picketers\nany more of\nand demonstrators. And if there is one thing we do not need/in\nCalifornia, it is demonstrators.\nThis system of ours was never intended to be monopolized by a\nhierarchy of career statesmen or government 01 fessionals permanently\nstructured by civil service. This unique way of curs was intended to\nbe constantly scrutinized by the people this is the secret that we\nhave overlooked too long in this system of ours. works best when\nevery once in a while from the ranks of the citizenry the inexperiend\ncitizen just brings the fresh air, some common sense and everyday\nthinking to the problems of. government. Now probably nothing has been\nso self-evident in this world in the past as the apathy that beset our\npeople, our willingness to let George do it. New don't read any\nendorsement into that for 1968 because this is a nonpartican meeting.\nthat there is no\nBut I think that = can safely say after a little more than a year/\napathy now on the part of Californians in regard to government.\nWe set out to kee our campaign promises and ice the people got\nover the shock they kind of took to the idea. Government, to start\nwith, cannot compete in the market for talent with private business,\nbut there is a way that government can compete and that is by asking\nprivate business to take a hand in government. One of the first things\nwe did after the election and in the months before we took office was\nto appoint a committee of leading citizens of our state. It was a\nrecruiting committee and it worked virtually full time, not just\nscreening applicants. We did not want the kind of people to head up\nour agencies and our bureaus and our departments who might turn out to\nbe empire builders and place an undue importance on those agencies.\nWe wanted men and women from civilian life who had no intention of making\ngovernment their career, and who would if possible discover that maybe\nthey could do without the agency they were chosen to head. This blue\nribbon citizens committee twisted the arms of employers throughout the\nstate and came back with one of the finest groups of private citizens\nyou have ever seen to come in and take over these jobs. Many of them\nadmittedly came only for a year or two. Then we will let someone else\ntake a turn at it. But we do have a type of personnel running those\npositions in our government that is unequalled in any state in the\nunion in any time in our history.\nAt the same time that we assembled this team, we took office and\nwe had to deal with deficit spending. We set a goal to reduce it by\nat least $20 million by the end of the fiscal year a few months away.\nWe had to grab at the few things we could see immediately as a way\nof saving money. We discovered, for example, that common, everyday\nbusiness practices so familiar to you in your work were virtually\nunknown in government. No one in the state of California knew how\nmany automobiles we owned. There was no system of disposing of them on\na mileage or an age basis. We found that department heads bought cars\nat retail so we put a freeze on the purchasing of new automobiles until\nwe could find out what was going on. The angry screams would have torn\nyour heart. And yet in about three months we received reports back that\nfor the first time in the history of the automobile in California, we\n.,ad a surplus of cars in our motor pools, over and above the employees'\ndemands. Part of this was because we also put a freeze on out-of-state\ntravel by state employees. We reduced the budget for that particular\nfunction by 78 percent. We also discovered that for eight years our\n-5-\nstate government had Leen increasing its number or employees from four\nto five percent a year, five and one-half percent the year before we\ntook office. So we put a freeze on rehiring replacements for those who\nleft government service. We wanted to see how far down we could take\nit before the cracks began to appear in efficiency. Well, the freeze\nis still on. No cracks appeared, we stopped the growth and we have\nfewer employees in the state than there were when we started in January\nof 1967.\nWe wondered why a private firm could come in and offer to take\nover our building maintenance for us and do it more cheaply than it was\nbeing done by the state. So we decided to do a little digging. In\nthe end we simply adopted the private maintenance standards that are\nused in private business for five of our buildings using our state\nemployees. As a result of this new procedure, we are now effecting\nsavings totalling $750,000 a year.\nWe consolidated buying. We took to more competitive bidding.\nWe standardized specifications and we saved millions of dollars on the\npurchase of supplies. We bought high speed tires for the highway patrol\nand the bill was $141,000 less than the previous year simply because we\nchanged the method of buying.\nWhen I took office there was a great big stack of stationery in\nmy office. It had another fellow's name on it. I thought the height of\nit denoted a certain amount of optimism. But when the janitors came in\none day and decided to burn it, I just couldn't stand it. I have some\nstationery with my name on it but I figured there must be a lot of\ninteroffice correspondence where this can be used. So the girls just\ncrossed out that name and typed mine in. And you know I got a certain\namount of pleasure out of that. Our state used to put out an official\nstate map with the governor's picture on at least my predecessor's\npicture. Well, this governor's picture will not be on the state maps.\nAs a matter of fact there aren't any state maps and that saved $192,000.\nSo if you come to California, stop at your nearest bil station they\nwill be happy to give you one.\nBy last June we had trimmed the estimated deficit by 23 million,\nbut at the same time we were trying to reverse an entire philosophy.\nSo we gathered the most su dessful professional and business and\nindustrial men and women in the state of California together and told\nthem of an idea we had, We told them that up until now, government\n-6-\nhad asked everything of them but blood, and we wer now asking blood,\ntheir blood. We told them what we wanted was not just the serving on\na committee or a name on a letterhead. We wanted the most successful\npeople in our state in a number of lines of activity to give up literally\ntheir homes, their careers, their businesses, their professions, for\nfrom four to six months full professions ranging from data\nprocessing to hotelkeeping. We wanted them to volunteer for task\nforces under a business management-consultant firm and an executive\ncommittee. For the next six months, they worked eight-hour days and\nfive-day weeks going into every agency and department of state\ngovernment to tell us how modern business practices could be put to work\nto make government more efficient, more businesslike, more economical.\nThey also raised the money it took for the administrative overhead so\nthat it did not cost the taxpayers one penny. Their report--after six\nmonths of work--will be made public early next month.\nWe are already putting into effect some of the things that they\nhave found. For example, hotel men went into the prisons--not to tell\na warden how to run a prison, but to look at the kitchen, dining room\nand housekeeping chores. As hotel men who had to run these places for\na profit, they could tell us what we were doing wrong.\nWe discovered, for another example, that many licenses issued\nby the state expire on the same date. We had vast office space that\nwas standing vacant most of the year. Then there was that great rush\nfor temporary employees and the confusion at the end of the year when the\nexpiration date came around. We have staggered these expiration dates\nthroughout the year on a regular basis so that we will have one work\nforce and a continuous work load throughout the year.\nWe also discovered that no one in government had ever applied to\ngovernment the principle or standards of floor space per employee that\nyou use in private business. They just went out and built public\nbuildings or leased them and filled them with people without realizing\nlow much floor space was needed. So we started applying to state\ngovernment those standards that you use in private business and we were\nable last summer to tear up the contracts and not construct a $4,300,000\nbuilding because by putting the employees closer together in the\nbuildings we now have, a new building was not needed then or in the\nforeseeable future. In a 14-story building already under construction,\nthe interior was altered a little bit using the same space standards.\nI'c now will house 1,051 more employees. By the end of the year we will\nhave reduced office space held by the state from nine million to seven\nmillion square feet.\n-7-\nwe found out tha our phone bill was $161/2 million a year. No one\nhad supervised it; no one had ever thought to go to the phone company\nfor their experts who explain what kind of a phone system is needed.\nWe found out that we have people with adjoining desks who had\ncommunicating systems. They had lights on their phones so that the\nfellow could sit and look at the light and tell whether the fellow beside\nhim was using the phone. That cost two dollars per phone a month extra.\nNow they can turn their head and look. Our phone bill will now be\n$2 million less than it was before.\nEvery year--perhaps it is true in your state as it was in ours-the\npapers would report the number of highway and freeway projects that\nwould be delayed for a year or so because of higher costs of right-of-\nway. Last year we were able to announce that on the basis of savings\nalready affected in the departments financed by our gasoline tax, we\nwere able to start $99 million worth of highway projects one year in\nadvance.\nOur agriculture department has started a long-needed rabies research\ndepartment totally financed by the savings that they affect within their\nown budget. We are rotating department heads just as you do in private\nbusiness to give a fellow a new slant at someone else's job---to find\nout what a new viewpoint might discover. We discovered, for example,\nthat different processing of licensees' applications will reduce the\ntime from 39 days to seven to 10 days because someone completely\ninexperienced in their field took a new look at it.\nWe are going to contract out some of our state printing jobs\nbecause we found out the state printing office was not equipped to do\nsome of the jobs as economically as private enterprise.\nAs you know, California is engaged in the greatest water program\nin the history of mankind and we are moving more water farther than man\nhas ever done. At the same time, we are going to with multiple use of\nthe reservoirs created. The largest earth-filled Com is at Oroville and\nit is goding to canate a lake with 169 miles of shoustine. We are going\nto develop recreational facilities, but not in competition with private\nresort operators. In cooporation with private business and private\ninvestors there will be more than two dollars of private capital invested\nfor every one dollar of state spending. We are going to be able to\ncater in the recreational areas to the sleeping bag camper as well as\nto the people who want to live in luxury hotels. We are going to begin\ninstituting this plan in all our recreational and park areas.\n-8-\nSeveral years ago alifornia entered into an reement with our\nfederal aid program to supply technical aid to Chile. When my adminis-\ntration took office, the State Department began to throw some roadblocks\nin our way until finally we got the hint. Realizing the climate had\nchanged we discovered Little Brother no longer lived in Sacramento as\nfar as Big Brother in Washington was concerned--so we just cancelled\nout that program. That is, we cancelled only the part sponsored by the\nfederal government. We are going to continue with our own Aid to\nChile program. We cannot engage in a formal program. We cannot spend\nany dollars we do not have. But California does have people with\nknow-how, so we went the task force route again and I appointed a\ncivilian task force. We think they will respond with a people-to-people\nprogram. We are going to start with agriculture. Despite the mild\nclimate, the good soil and enough water, Chile is desperately short of\nfood. California, on the other hand, has developed the world's richest\nagricultural economy and we are going to make our know-how and\ntechnology available to Chile. The people down there will be given\nproper incentive and leadership and perhaps this can spread throughout\nthe states and perhaps we can do a little better with helping our\nneighbors across the seas.\nNot all of the Creative Society efforts are directed towards\nstreamlining the bureaus and agencies. When we had the terrible riots\nin the Watts area a few years ago, one of our industrialists--Chad\nMcClellan--went in while there was smoke in the air and gathered\ntogether his fellow industrialists. He said we cannot solve all the\nsocial problems, but there is a problem we can solve. We have jobs to\ngive so they organized 2600 industrialists in the Los Angeles area and\nwithin a 16-month period these businessmen on their own set up shop and\nput 17,800 of the hardcore unemployed in the Watts area into private\nenterprise jobs.\nI contacted Chad McClellan and asked him if he would take this\nover on a statewide basis and this he has done.\nWe had another task force of financial experts who studied our\nentire tax structure with the idea of having a tax structure that just\nis not layer after layer that has been piled up over the past but\nrather a tax structure that will be geared to our economy. We do not\nhave a monopoly on the Creative Society. All over the land people are\nfinding out solutions to problems.\n-9-\nwhat are the oth greater unsolved problems chat government has\nassumed as its total jurisdiction? Housing is one. I do not offer this\nas a solution, but let me just throw it out for thought. We know that\npublic housing is a failure and we know that in most of our cities the\ngreatest area of crime is the area of public housing. We know that\nin public housing they use the halls and the elevators for toilets.\nWe know how a man refuses a raise or refuses an improved job because it\nwill put him above the salary bracket so he cannot continue to live in\npublic housing.\nWhy hasn't anyone ever asked how did suburbia succeed? Why hasn't\nsomeone thought. that perhaps the answer is private ownership? Wouldn't\nit at least be a try to give the person in public housing a deed to his\napartment unit--give him ownership outright--so when he had the oppor-\ntunity to move up to a better job, he had an equity in some property.\nAnd perhaps he could sell his equity by mortgaging and could live in\nthe suburbs, too. And maybe you would make a lot of citizens kind of\npolicemen and caretakers that would object to the neighbor that was\ndefiling the halls and the elevators or throwing bottles through the\nwindows. It might at least be worth a try.\nWe know that welfare is a failure. Welfare--to be a success--\nshould bring people off of welfare instead of always increasing the\nsize of it. Welfare is supposed to be salvaging people, not destroying\nthem. In crime, the government's only answer is cure poverty and\nyou will cure crime.\" But we had the greatest pcverty we had ever\nknown in the dark Depression and we had the lowest crime we have ever\nknown and now we are in our highest prosperity we have ever known and\nwe have more crime here than in any other place in the world.\nCould it be that while government is so busy meddling in things\nthat are not its proper province it has forgotten that its principal\nfunction is to protect society from the lawbreaker and not the other\nway around?\nThere are so many other areas. Today there isn't a. state in Please\nunion that doesn't realize that one of the great problems is the\nfinancing of higher education. Each year costs are going up higher than\nthe tax revenues can expand with the economy and the federal covernment\nhas stepped in with grants of all kinds to the point that now the\nautonomy of the college and university is being threatened. Because\nwith that money comes certain strings and certain controls and people\nare beginning to worry about academic freedom.\n-10-\nOnce again, what bout turning to the privat\\ sector? What might\nhappen, for example, if government would give a tax credit--not a tax\ndeduction, but credit--to parents who were paying tuition for their sons\nand daughters? Thus, perhaps tuition could be raised realistically\nbecause now the parent could afford it because he could deduct that\namount from his income tax bill.\nAt the same time, industry and business today must find some fund\nor some foundation by which to give money to have it deductible. What\nif they came to you, and within a ceiling of course, said to every\nbusiness concern: \"you can take as a tax credit 'X' thousands of\ndollars for the tuition that you will put up directly and personally\nto talented young people who are needy students and who need help in\ngetting a college education.\" That, too, might be worth a try.\nAn Ohio doctor said \"for one shining glorious moment of history,\nwe had the key and the open door and the way was there before us and\nthe men threw off the yoke of centuries and thrust forward along that\nway with such brilliance that for a little while, we were the light and\nthe inspiration of the world and now the key has been thrown away and\nthe door is closing and we are losing that way.\"\nWell, we can find that way. We can find it if you and I are\nwilling to reassert our right to run our own affairs; to remind govern-\nment that its only power is derived from \"we the people\"; that these\nthree words are the most profound words in all of the Constitution.\n\"We-the-people\" government is our creature, created by us for our\nconvenience only. You can have no greater responsibility today. There\nis no greater challenge and you can leave no more valuable legacy to your\nchildren than the restoration of the American dream.\n# # #\n(Wote: Since Governor Reagan speaks from notes, there may be addi tions\nto, or changes in, the above. However, Governor Roagen will\nstand by the above quotes.)\n-11-\n2/1\n-\nOFFICE OF THE GOVER R\nRELEASE: Thu Sday, P.M.'s\nSacramento, California\nContact:\nPaul Beck\n445-4571\n1.31.68\nEXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN\nGovernor's Conference on\nPlanning for Housing and Home Ownership Luncheon\nEl Dorado Hotel, Sacramento\nFebruary 1, 1968\nI am grateful to all those who have participated in this\nconference-- the sponsoring groups; the Department of Housing and\nCommunity Development; Nat Rogg, yesterday's keynoter; Congressman\nClawson; and all the other speakers.\nThe wide representation from private industry, local, and state\ngovernments at this conference indicates the growing interest in and\nconcern for our state's housing needs. This administration is con-\nvinced that many of our housing problems can be reduced, if not\nsolved, by having those public officials, professional and business\npeople, concerned with housing, fully discuss the issues.\nWe were convinced in scheduling this conference that it would\npresent an excellent opportunity for those of us concerned about\nCalifornia's physical environment, more particularly its housing,\nto discuss our problems and to explore new alternatives for their\nsolution. Your presence here affirms that belief.\nWe have called this conference for several reasons: the\nlegislature passed a bill in 1967 known to most of you as the\n\"Housing Element Bill\", or AB 1952, which the homebuilding industry\nsponsored on the basis that it would improve our local planning\nprocess as it relates to housing.\nWe are hopeful that this conference can give clarity and\ndirection to that legislation as it relates to California's current\nand future housing needs.\nSecond, while recognizing the need for planning, it seems to\nme that a major weakness of planning has been that it has failed to\ninvolve the full complement of local and private resources, and much\nmore importantly, the needs of the people themselves. In the field\nof housing, this weakness has been most obvious.\nI signed AB 1952 because I believed it to be potentially a good\npiece of legislation. But, if that potential is to be translated\ninto meaningful results, then discussion of its intent is very much\nin order. We have no intention of permitting this legislation to fall\nshort of success because of failure to adequately involve private\nindustry and local government.\nWe also called this conference to add emphasis to this\nadministration's hope that in the future, planning for housing in\nCalifornia will make maximum use of the home ownership principle.\nThroughout our history, the principle of home ownership has\nbeen a guiding influence in this nation's development. A former\nPresident, Herbert Hoover, said:\n\"A family that owns its home takes a pride in it, maintains it\nbetter, gets more pleasure out of it, and has a more wholesome,\nhealthy, and happy atmosphere in which to bring up children.\n\"The home owner has a constructive aim in life. He works harder\noutside his home; he spends his leisure time more profitably; and he\nand his family lead a finer life and enjoy more of the comforts and\ncultivating influences of our modern civilization.\n\"A husband and wife who own their own home are apt to save.\nThey have an interest in the advancement of a social system that\npermits the individual to store up the fruits of his labor. As\ndirect taxpayers, they take a more active part in local government.\nAbove all, the love of home is one of the finest ideals of our people\".\nPeople do not develop a sense of pride in their neighborhoods\nwhen the lawns are mowed for them by public housing employees; the\ngarbage is taken out by a public housing employee; and everything else\nis done for them. Despite all the efforts and fine management of\nmany local housing authorities, they cannot overcome the fundamental\nweakness of most public housing: namely, it fails to give a man a\nchance to own his own home.\nWhat would be wrong with giving a resident of a public housing\nunit a one-time deed to that unit? He then becomes a property owner\nwith the property owner's pride in his possessions. Property owners,\nwithout question, take better care of their property than renters.\nWith that deed the man in public housing would have the incentive\nto keep up his property, and if the chance came along to move to\nsell\nsomething better, he could / his public housing unit to make a\ndownpayment on the house of his choice.\nI believe this is something that should be explored in detail.\nWe, as a people, are not insensitive to the needs of the disad-\nvantaged. We are willing to be bold, imaginative, cooperative and\ninnovative in solving social problems.\nBut it is not unreasonable to want these problems solved within\nof traditional American values. Fundamental to\nproblem--solving mus be the re-establishment of _aw and order, of\nsafety in the home and the streets.\nI believe home ownership can help solve these problems.\nThis administration has been accused of being business-oriented.\nIt is, but not in the sense of offering special favor to any segment\nof society over others. It is business-oriented in the application\nof sound business principles to the solution of public problems. It\nis also a staunch supporter of home rule. There is no field where\nthese tenets can better be tested than in the field of housing and\nhome ownership. Local government, acting responsibly under its home-\nrule powers and in partnership with the California home-building\nindustry, can make major strides in this field. I am confident this\ncan happen.\nThere are those who imply that administrations which use business\nprinciples and practices as bench-marks in the operation of government\nare without \"compassion\" and do not recognize social values. They\nseem to harbor the belief that government obtains its financing from\nsome extra terrestrial source. They fail to recognize that it takes\na healthy economy to make it possible for society to do those things\nwhich must be done for its less fortunate members.\nThis is why this administration is doing everything possible to\nkeep that promise to improve the business climate of California--\nbecause the factors making up that climate are so inter-related that\na detrimental effect on one invariably affects the other. By the\nsame token, the strength of one frequently accrues to the benefit\nof others.\nLet me tell you about some of the things we are doing which are\nhaving effects on housing and home ownership in California.\nEarly in 1967 we established a Task Force on Building Construction\nwhich held many meetings during the year. The committee is composed\nprincipally of private builders and developers, finance and real\nestate men, and has as its objective the finding of new ways to\nimprove California's building climate. The task force works in con-\njunction with the various state commissions involved in this broad\nfield.\nIt is attempting to determine where and how we can cut government\nred tape that might be part of our building and development problems.\nIt is investigating areas where the private sector can be encouraged\nto participate more in solving housing problems.\nThe director of the Housing and Community Development Department\nbetween the committee and our administration.\nSeveral recommendations have been made by the committee which\nwe are now exploring. In fact, one of them is well on its way to\nimplementation. This involves the development of meaningful research\nand statistics which would be of benefit to local government and the\nhome-building industry.\nLast June, when I addressed the Pacific Coast Builders Conference,\nI promised that the Department of Housing and Community Development\nwould be restructured in such a way that this research capability\nwould be provided by the Department. I am pleased to report that\npromise is being kept.\nThe committee also pointed out the need for more current informa-\ntion on the condition of our housing inventory. Thanks to the\ncooperation of the California Real Estate Association and many other\nprivate organizations, a very useful and unique report has now been\npublished highlighting the condition of California's unsold housing\ninventory.\nThird, a series of fact finding hearings have been held by the\nDepartment and Commission on Housing and Community Development to\nreview and re-define principal housing and community development\nproblems which should command our attention during the next few years\nWe know that property taxes have in some cases acted as a\ndeterrent to the development and preservation of low cost housing.\nAs you know, we are working on a tax reform program. I have asked\nthat this reform program produce some type of an incentive which\nhelp\nwill/stop the creeping blight in our cities. Too many potentially\ngood homes are being lost to the bulldozer because the owners have\nfound it more profitable to let these homes run down than to keep\nthem in good repair.\nOne possibility is a tax moratorium that would be instituted\non increased assessed valuation resulting from home repair and\nimprovement. The common complaint is that the first person to con-\ngratulate you after you have improved your home is the tax assessor.\nWe are studying a proposal to delay that increased assessment for\nfive years, with the thought that more people will be encouraged to\nupgrade their homes, and the valuable asset that we have in existing\nhousing will be preserved and maintained.\nIt takes money to build homes. Unfortunately, home building\nactivity is one of the first victims when money gets scarce. There\nare signs already that unless new sources of money are found, and\nwithin, the next two to three vears one of\nthe greatest housing shortages this nation has experienced since\nWorld War II.\nOne relatively untapped source for home financing is the billions\nof dollars in our various pension trust funds. To cite examples of\ngroups taking a progressive approach in this area--the Public Employees\nRetirement System and the California Carpenters Pension Trust have\nshown their faith in California development by pledging considerable\npercentages of their available funds for home building.\nOur task force on building construction is concentrating its\nefforts to provide answers in this field. If we can show fund\ntrustees that real estate represents a sound investment and yields\nexcellent, direct returns, we can at least partly solve the money\nshortage. Many builders say they can build sound attractive homes\nfor $8 to $10 a square foot, and shall make a profit if the proper\ncommunity climate exists.\nThat climate starts right here in Sacramento, Now we know that\nred tape is one of the biggest deterrents to economical subdivisions\nand home building. Our Commissioner of Real Estate, Burt Smith, has\nworked to cut subdivision processing time in half through stream-\nlining of procedures.\nMany communities, cities and counties, knowing that time is\nmoney to the developers, are finding ways of speeding their approval\nof plan checks and inspections.\nWe know that outdated specification codes add unnecessary costs\nto building, and much effort of late has been spent by more pro-\ngressive building officials on updating codes to take advantage of\nnew products and new materials.\nBut much, much more work and push is needed in this area if we\nare to enjoy the full fruits of the genius of American industry's\nresearch and development efforts. The Department of Housing and\nCommunity Development is taking a leadership position by shifting\nemphasis from enforcement to updating of codes and regulations.\nAny discussion of housing must analyze federal involvement. You\nknow, we are living in what might be called a program era\". The\nfederal planners in Washington have a program for every social pro-\nblem, real or imagined.\nA rock is thrown in a Texas suburb and a national \"program\" is\nestablished as a part of the so-called creative federalism. The only\n\"creative\" thing about the program, however, is that it represents\nyet another federal creation that by-passes the states and takes away\nindividual initiative\nAnother outgrowth of the \"program era\" is the false hope created\nin people whose expectations of a better life rise but are never\nfilled. Low income people see and read press releases, pretty\nbrochures, and noble promises by the thousands that flow from the\noffices of federal agencies. When the promises are not kept, the dust\ngathers on the brochures and the press releases become yesterday's\nnews, the \"credibility gap\" intensifies and \"the long hot summers\"\nbecome a way of life.\nTo those who interpret these words as lacking in social conscience,\nlet me remind you that the federal government entered the housing\nfield in 1937 with a public housing program. Thirty years later that\nsame federal government says 26 percent of our population remain ill-\nhoused.\nThirty years later the streets of our cities are unsafe. Thirty\nyears later most of that housing created under the 1937 program fails\nto meet the social and physical needs of the people living in it.\nIs this the best we have to offer? We think not. Public housing\nhas not and cannot solve the housing problems of California and the\nnation.\nIn recent months there has been increasing momentum and effort\nto involve the independent sector in social problem solving.\nAmerican industry has the know-how, the resources, and the motive\nto solve many of our problems. The motive--and it is a good motive--\nis profit, under a competitive system. A few housing units may be\nbuilt out of compassion, but the major needs will be met because of\nimproved technology utilized by our private enterprise, profit-making\nsystem.\nAfter all, profit is not a dirty word. The building of homes for\nprofit creates jobs for the groceryman, the painter, the gardener, and\nwe could go on-but the:álternative is clear that profit must be con-\nsidered in the production of housing.\nCalifornia still has relatively few slums. The sordid tenements\nof the East have been avoided, thanks to an active home-building\nindustry and a progressive home rule approach to government.\nThe excellent speakers and panelists you have on this program\nhave discussed many of the problems facing home building.\nI will not restate those problems. However, there is one which\nseems to stand out as a principal factor--land. Although it is not\nyet the most costly item in home production, it is rapidly reaching\nLand is a primary factor in influencing site selection, design\nof dwellings, and most important, the direction of California's growth.\nGood planning and land utilization, therefore, assume great importance\nin the field.\nLocal officials should thus ask themselves:\n1. Do our regulations unnecessarily affect the availability of\nland for housing and impede development of homes?\n2. Are we setting aside an adequate supply of land to meet the\nneeds of California's present and future people?\n3. Are corrective actions needed for any aspects of the land\neconomy?\nYou know, this administration already has had a great deal of\nsuccess in utilizing the talents of those in private industry to\nanalyze some of California's more difficult problems and come up with\ncreative solutions to them.\nI would commend this approach to the city councils and county\nboards and suggest that each of the 58 counties and 403 cities estab-\nlish its own blue ribbon task force on building and housing. We have\nfound the task force works best when all segments--financial, home-\nbuilder, labor union and local officials--are involved. Working\ntogether, they should be encouraged to express their observations and\nrecommendations through such a task force on the following subjects:\n1. Codes and their application;\n2. Land utilization;\n3. Financial innovations with emphasis on private housing for\nlow and moderate income families.\nThe League of California Cities, at its conference late last year,\nplaced the objectives of this conference in perspective when one of\nthe League reports urged:\n\"Let us turn for the moment away from the problems of today and\nface squarely the challenge of tomorrow, to shape our communities so\nthat each community of California will make a maximum contribution not\nonly to the good life for its own citizens but for the society as a\nwhole. For, in the words of George Leonard of Look Magazine--\n'California presents the promise and the challenge contained at\nthe very heart of the original American dream; here, probably more than\nat any other place or time, the shackles of the past are broken. In\nhelping to create the society of the future, a man is limited only by\nthe strength of his ambition, the dimension of his concern, and the\ndepth of his courage to face the dangers of his own creation'\n#\n#\n#\n(Note: Since Governor Reagan speaks from notes, there may be additions\nto, or changes in, the above. However, Govemor Reagan will stand by\n2/2\n2\n-\nthe\n&\nOFFICE OF THE GOVERNOR\nSacramento, California\nContact: Paul Beck\n445-4571 2.2.68\nEXCERPTS OF SPEECH BY\nGOVERNOR RONALD REAGAN\nCALIFORNIA NEWSPAPER PUBLISHERS' ASSOCIATION\nLOS ANGELES, FEBRUARY 2, 1968\nThank you very much. You are very gracious.\nMr. Chairman, I want you to know that it was kind of a shock to\nme to discover that those pickets were yours and not mine. I have\ngotten so used to them, I don't ask whether they are going to be\nhere, I just ask which ones? One of my most joyous moments of last\nyear was vetoing an OEO program that was going to set up a training\nschool for more demonstrators.\nIf there is one thing that we do not have a shortage of, it is\ndemonstrators. Incidentally, I am sorry if there was any confusion\nas to whether or not I would be here. You told me last year that\nit was a tradition, and if there is one thing that I do not break,\nit is tradition, I am even observing Washington's andLincoIn's birth-\ndays this year. Here we are after a year's on-the-job training.\nThe redwoods are still standing and the search goes on for the Eel\nRiver.\nI suppose we have all made some mistakes in Sacramento, but\nsometimes that just proves that somebody stopped talking and tried\nto do something, One thing for sure, there is one mistake we will\nnot be making UP there, I doubt that we will see the state of\nCalifornia get into the same situation as Iowa found itself recently.\nWhen the state of Iowa's Conservation Department returned a citizen's\n$23 dollar gift for a small lake project--saying, we appreciate the\ngesture, but such a gift has to be processed through too many offices--\nthey sent it back, We are here to testify that in the opening months\nof our administration, we received a great many gifts--small gifts,\nchecks and sometimes bills-from people in California who said that\nthey wanted to help out in the financial situation of our state.\nI'll tell you something else that we have learned up there too,\na lesson that another fellow had to go to Alaska to learn. He was\nup there as a young boy in an earlier day. They began teaching him\nhow to drive a dog team. They told him that it was possible of course\nto pat the dogs on the head and they would be friendly, but not to\nfall down, or they will tear you to pieces.\nNow, with regard to protocol, I did not really put down some of\nmy notes here with protocol in mind. I only know that Frank Jordan\nhas to be mentioned first by me because he and Nancy are in collusion\nright now on how to get somebody to paint a couple of the corridors\nin the state house up there that are a rather sickly shade of green.\nAnd there seems to be a lesson in that someplace--as to why Frank\nwent to Nancy and not to me. I haven't figured it out yet, but I\nwill tell you that, after a year up there, all of us understand\nbetter why he has been elected and re-elected time after time through\nthe wisdom of the people of California. We are most happy that he\nis there. I do not know if it is protocol, since Frank is absent,\nI think that I should refer to the absent member--Tom Lynch--who\nhas been proving to us why the two party system lends strength to\nour way of life.\nHe has served the state and this administration without partisan-\nship and has cooperated to the fullest in trying to help us with\nlegislation that will solve the problems of crime and pornography.\nNow, I do not know where the next person comes on the protocol\nlist, but because there is such a wrong impression around, a feeling\nabout me and education, I want to make it perfectly plain that it\n\"just ain't true that I got no respect for book learning\". Max\nRafferty, of course, is the constitutional officer who is non-partisan\nin a friendly sort of way. He continues unceasingly to upgrade\neducation every day.\nThen, there is our controller, Hugh Flournoy. While Hugh has\nbeen denied the legislation he wanted in order to solve the problem\nof the inheritance tax appraisers' system, he has proceeded on his\nown to reorganize that particular branch of government, not only to\nmake it more efficient, but to make the criteria for those who would\nserve in that capacity, by test and examination, proof that they\nhave the knowledge and proficiency necessary, instead of simply\nhaving to demonstrate an excessive amount of political zeal at\nThen, of course, there is our den mother, is woman who has\nhandled more money than any other woman in the history of the world\nand she is proving to us that \"mother knows best\". She has marketed\n$600 million dollars worth of California's bonds this year, inspite\nof a bad bond market and until it got too bad, many of those bonds\nwere marketed at lower rates of interest. This bespeaks confidence\non the part of a great many of the financial people in the country\nin Ivy Baker Priest Stevens and also in this state of ours. Now,\none of her functions is to invest state funds so they will earn\nrevenue until the time has come to use them. And this year, she had\nan average of $18 million a day less to invest than in the previous\nyear. Yet, with that reduced amount her investment earned this\nstate $11 million more than had been earned in the previous year.\nThe $67 million in earnings is enough to run her department for 150\nyears.\nIt is hard to know what to say about the Lt. Governor. He just\nlulls around presiding over the Senate, when he isn't a college\ntrustee or a regent of the University, or on the State Lands Commission,\nor holding a meeting of the Commission of the Californias, or being\nchairman of the Automatic Data Processing study that is being under-\ntaken to bring us some of the management tools we need. Then, of\ncourse, he also is chairman of the Bicentennial Commission, the Job\nOpportunities Board, and certainly, of great importance, is his\nliaison with H.C. McClellan in that great program that is going on\nin our state with regard to employment.\nThere are a number of other things that he has to do. He is the\nonly first term Lieutenant Governor ever to be appointed to the\nExecutive Committee of the National Council of Lieutenant Governors.\nHe is busy.\nBut just to prove though that he has some spare time-since I\nhave to leave town tonight--he will be making the awards in the\nmorning which I understand his predecessor was never allowed to do.\nSome months ago I was attending a Governors' Conference. We\nthought that it was a very important Governors' Conference and one\nat which California should be represented. After arriving there\nit seemed that a piece of the long hot summer might erupt. In fact,\nit was about to erupt in California. There were some who thought I\nshould climb into the plane immediately and head back to California.\nI said, \"Well, Bob's there isn't he?\" They agreed that the situation\nwas well in hand. So I just stayed at the Governors' Conference.\nHe is a teammate. I told all of you people last year he would\nbe just that--and we are.\nWe operate in that way--a kind of board of directors with the\nCabinet Officers and these Constitutional Officers who regularly\nmeet once or twice a week. At these meetings we roundtable the pro-\nblems we have in California.\nIt was just a year ago that I interrupted what I was told was\nmy honeymoon to be with you and incidentally, I've learned since then\nthat it wasn't a love match. I reported to you then what we were\ngoing to try to do as well as some of the first steps that had al-\nready been taken to meet the fiscal problems of California--problems\nwhich we had just been uncovering. Those problems could not have been\nworse if this state had gone to Las Vegas. At that time I told you\nwe had set a goal for the six months before the end of the fiscal\nyear to try and reduce the expenditures by some $20 million dollars.\nWell we made it by June 30th, and with a number of millions of dollars\nto spare, thank heaven. While we were busy economizing wherever we\ncould by trimming our sails, there was one run-a-way program in the\narea of welfare called Medi-Cal that was spending so excessively that\nwe were only able to balance the books and balance the budget by\ndint of the savings that had been made in the economies during that\nsix months period.\nWe submitted a budget shortly after coming into office a year\nago that was 7% higher than the previous year, which meant that\nit was within the ability of the then new tax structure to cover.\nOur taxes produce about 7-8 percent in increased revenue each\nyear. This 7 percent increase represented a little less than half\nof the increases we had come to know during previous years. Of\ncourse it was referred to as a record budget. But all California\nbudgets are record budgets and will continue to be record budgets\nas long as we increase in population and as long as we have inflation,\nbecause the combination of these two factors amounts to between 7-8\npercent increase in the cost of government. That figure is predicated\non the higher price of materials, the higher wages that must be paid,\nthe growth that must take place in certain departments to match our\nown state growth, and so forth.\nThis year's budget, which will be announced next week, will\nbe 7.1 percent higher than the previous budget.\nHad it not been for the economies that had taken place this\nlast year, in spite of last year's tax increase, we would have had\nto ask for $130 million in new taxes simply to finance this budget\nthis coming year. Now this doesn't mean that the cost of Government\nhas to be as big as it is. As a matter of fact, the story that I\njust told about the coming year's budget is a little more attractive\nthan what I presented because, within that 7.1 percent tax increase,\nthere is some $200 million that is actually for tax relief. It is\ngoing to be returned to the citizens at the local level in some\npractical form to help alleviate the tax burden at the local level\nand at the county levels. In addition to that, it also includes\n$90 million for capital construction, largely at our universities and\ncolleges. This is a first because, heretofore, this construction\nhas been financed out of bonds. Now we're going on a pay-as-you-go\nbasis just as far as we can, so the budget also represents that increase.\nI believe that we should continue to reduce the cost of govern-\nment. This will require the help of the legislature, since we will\ncome to the point where there is nothing further we can do administra-\ntively. During this session we will need the help of the legislature\nwith regard to welfare and the program I mentioned earlier, Medi-Cal.\nThere has been some confusion about this but in this last year we\nbegan to discover the run-away tendencies of Medi-Cal.\nOur first estimate was some $210 million in excess of the\nbudgeted amount. But this was not $210 million of state money.\nThis was the $210 million total of state, federal, and county funds.\nThis means that there was something less than $100 million in excess\nspending at the state level.\nThere has been some comment we have been loose and careless\nwith figures. This is hardly true when you stop to think that\nMedi-Cal wound up the year spending $63 million in excess of what had\nbeen budgeted. And $63 million is not too far away from the $100\nmillion that was projected several months before, when we had to\nguess at what was in the pipeline. And part of that reduction was\nnot just a mistaken estimate. It was because of administrative\nimprovements made in the program by Spencer Williams' department,\nsome with the help of the legislature who allowed us to change to a\nmodified accrual bookkeeping in this field, and also allowed us to\nshorten the six month period to a two month period for submitting bills.\nNow, Alan Post, the Legislative Analyst told us and told the\nlegislature that in spite of the administrative savings that we have\nmade and are continuing to make in that program, we cannot continue\nMedi-Cal as it is presently structured without having a tax increase\nalmost every year simply to pay for this one program.\nIncidentally you all know that for several years the counties\nhave been storming the gates of Sacramento demanding that the state\ntake back the administration of welfare, take it off their hands.\nYou might be interested to know that this year there has been a\ncomplete turn-around and the counties do not want the state to\nadministrate it. This comes as a result of the efforts that have\nbeen made at the state level to free the county administrators from\nundue regimentation, regulation and the red tape that has bound them\nheretofore. As a matter of fact, in less than a year, Spencer\nWilliams trimmed 2500 pages of regulations enforced on the counties\nby the state to one manual of 200 pages. Now this is just one\nexample of the sound business principles that are being put to work\nas we promised a year ago.\nAnd more to follow, particularly when we begin implementing the\ntask force reports you are all familiar with.\nSome 274 of your fellow citizens--perhaps that includes some of\nyou--have been serving the state for about six months and have given\nus 2,000 specific recommendations for making government more efficient,\nwill require logislation Others can be out\ninto effect simply by administrative order. Last year I told you\nwe were going to put a freeze on the hiring of replacements of employees.\nEvery year for the last decade the number of employees in government\nhas increased 4-5½ percent a year. We put a freeze on simply hiring\nreplacements. By June 30th, at the end of the fiscal year, we had\nnot only stopped that climbing trend but had reversed it by 2.3\npercent fewer employees in the state than there were when we started\nin January, 1967. It has been somewhat reduced in the last few\nmonths about 1.8 percent. That's simply because we have recently\nbeen implementing legislation of two years ago which calls for\ntripling the size of the state highway patrol.\nWe are nonetheless continuing our efforts to make government more\nefficient and a little smaller in size.\nWe have one particular department, as a matter of fact, that has\nalmost doubled in staff simply because they are switching to auto-\nmation, and in the switch-over they must have a large number of\ntemporary employees. But when this is finally completed and the\ntemporaries are dropped, the permanent structure of that department\nwill be reduced. Public Works has reduced its budget positions by 11\npercent through employing better buying procedures and using more\nmodern business practices. From February to October of last year\nPublic Works saved $22 million in the purchase of supplies and\nequipment for the state. We have a need to install in every department\nadequate cost controls. This would be in a simple, uniform format.\nBusiness management practices would enable us to push a button to\nfind out how we are spending throughout the year, how many employees\nwe have, and so forth. At present you would be surprised at the\namount of snooping that it takes to find out how many people are\non the payroll.\nIn the division of corporations such a procedure is now being\nemployed. This is one of the divisions that is self-supporting.\nMoney comes into the department and excess money is turned over to\nthe general fund. Bob Volk estimated last year, shortly after he\nhad taken over this assignment, that in this coming year the general\nfund would reap an estimated profit of $163,000. By the end of the\n-7-\nfirst six months of this fiscal year, the profit has reached $892,352\nand it will top $1½ million by the end of the year. Cost reductions\ndue to eliminating unneeded work, strict controls and a business\napproach to government were all responsible.\nThe division administrating savings and loan could not save the\nstate any money, but it did save some of the citizens some money\nbecause they are financed completely by assessments leveled against\nthe savings and loan institutions. They have reduced those assessments\nby $300,000 a year, simply in economies through modern business\npractices in that department. Of course this is not reflected in a\nreduction of the budget. There is also another great savings I would\nlike to tell you about. It is not reflected in the budget because\nit is in the area of those departments financed by the gasoline tax.\nNow, here the money must be spent in those areas for highways.\nThere is no way to turn this back. But you might be interested to\nknow that over in that department they have exercised such controls\nand made such reductions by means of modernizing and streamlining\ntheir operations that I believe I can say we are starting, one year\nin advance, 44 highway and freeway projects totalling $110 million.\nThis is red tape translated into concrete and steel, The fact is,\n$110 million comes almost entirely from administrative savings.\nHow many of you drive down a street that has been newly serviced\nand three days later they are digging it up to put a pipe under it.\nDon't they talk to each other? Well we do. This round table set-up\nI mentioned--the constitutional officers, Gordon Luce, Spencer\nWilliams, Ike Livermore and Earl Coke--has helped the administration\nreduce departmental requests for this year's budget by a total of\n$500 million.\nIn San Joaquin County, a canal which is part of the water program\nis going through the delta. We also have a freeway called the west\nside freeway. They are both going to be routed across the west side\nof the county. This was going to entail two right-of-ways. It was\ngoing to entail a water project buying land on which to dump the\ndirt which they take out of the canal. It was also going to entail\nthe highway department buying land from which to get 7 million cubic\nfeet of fill for the freeway. Instead, they came into the office\nthe other day to sign an agreement--an agreement for one right-of-way\nwhich both the canal and freeway will share. The highway is going in\nfirst. This will provide the rough digging for the canal. The dirt\nthat comes out of the canal will, in turn, provide fill for the\nfreeway.\nBut the excavation will create pools. So, Fish and Game got\ninto the act and is stocking the pools with warm water fish. The\nsavings on just the fill alone and the grading will amount to\n$5 million. But, it doesn't stop there.\nDown through the years we have read about the conflict between\nthe highway department and those who look at the aesthetic values\nof the state: the park and recreation people, the people who want\nto preserve beauty. We know the horrible battle that took place\nup north with regard to putting--or trying to put--a freeway through\nthe redwoods a few years ago. Well, here they are talking together.\nFor example parks and recreation and the highway department have a\nsix man commission, a team that is up in the Tahoe area right now,\nchoosing the right-of-way for the freeway that will be going around\nthe lake, to make sure that it in no way interferes with, or harms,\nthe beauty of that area. And they are going to continue along this\nline so that wherever possible we can keep the aesthetic values, the\nnatural values, the beauty of our state.\nThere is more to this administration than just trying to practice\neconomy. Although I know we talk so much about it--because it is\nsuch a problem--I am sure some people think that we are completely\nnegative in what we have done. Sometimes whenthey complain, I wonder\nif they have a picture of us sitting up there in Sacramento on a\ntreasure chest, just being stubborn saying, \"we're not going to give\nit to you, we won't spend it.\" And of course the truth is if someone\ngets all the money they want for their department it's got to come\nfrom somebody else's department, because there is just so much to\nspend, and it's all going to get spent. At the same time I think\nwe're taking as much money away from the people of California as any\ngovernment should take. I'll tell you now this administration is\npledged to not ask, and will not ask, for an increase in taxes. But\nwe haven't over-looked the services we have to perform.\nWe have a transportation task force for the first time in this\nstate. It is headed by William Pereira a noted architect. It covers\nevery type of transportation from rapid transit, to highways, to air,\nto water. In this way, all of the problems of transportation can be\nput together under one group qualified to discuss it, to try and get\nsome overall plan for our transportation needs. We have the same\nbasic type of commission to appeal to the problems of pollution,\nnot only of air, but earth and water.\nIn the area of conservation, with all the water needs that we\nhave in the state, we have already succeeded in protecting one wild\nriver along a fifty mile stretch in northern California. We are\ngoing to protect others where we can so they will remain the scenic\nwonders that they are.\nI have always been disturbed flying over some of the great lakes\nthat have been created in our water system. On one portion of the\nlake there is usually a piece of brown with some concessions that\nhave been created there, or which the state has commandeered, and if\nsomeone wants to use the lake for recreation, he must come in through\nthat one particular entrance. But the rest of the lake shore stands\nvacant and idle with a fence around it--assuring that no one can have\naccess to it. Well, in Oroville we are filling up behind that greatest\nof all earth filled dams a lake that will have 169 miles of shore\nline. Bill Mott, in Parks and Recreation, has embarked on a plan\nwhereby that lake is going to be opened up to private investors and\nwe are going to provide resort recreational facilities for everybody\nfrom sleeping bag camper to the person who wants a luxury hotel.\nIncluded will be housing developments that will be created around the\nlake, lake shore developments, lake shore homes, and SO forth. In\nfact, there will be $2 of private capital invested for every dollar\nthe state has put in and we are going to spread this to other areas\nbecause again we believe that the resort operators in our state are\nthe best qualified to make use of these wonders and to make them\navailable for the people of our state.\nWe haven't neglected human resources. In the first six months\nof this year three times as many of the physically disabled were\nrehabilitated and put out into self-sustaining jobs as in the previous\nperiod a year ago. One of the great programs in human resources, and\nBob (Finch) should be telling you about it because he has been\ndealing closely with it, is one by Chad McClellan. Right after the\nWatts riots he moved into the area and got 100-150 industrialists\nto go in with him with the idea of providing jobs for the hardcore\nunemployed. And in a 16-month period they put 17,800 of the unemployed\nin that area into private enterprise jobs. They put them to work\nand 2/3 of them still remain with jobs. Half of the remaining third\nare only out of these jobs because they were promoted to better jobs.\nThirty percent of them have moved out of the area to better homes,\nproving that the walls of the ghetto--if there are such--are economic\nand can be broken down if you give a man the price to go through\nthose walls and to choose where he wants to live. Chad McClellan\nagreed, at our request, to do this on a statewide basis. He has\norganized, in all our leading cities throughout the state, a program\naimed directly at the minority communities, and underpriviledged\nareas. Today there are 20,000 employers in California signed up and\nparticipating in this program. They are putting the unemployed in\nthose areas to work.\nNow, I talked a great deal during the campaign about turning\nto the great welth of manpower and womanpower that we have in the\nstate. Incidentally I should add that in Chad McClellan's effort,\nas they continue to put thousands of people to work, those who are\nalready at work are averaging $2.75 an hour, including the women.\nHere too there is a great staying power. Once given jobs they are\nproving what so many of us have said. Government should stop being\nin the business of destroying human beings by way of the soul\ndestroying dole. On the contrary, we should be salvaging and helping\nhuman beings.\nI suppose you think I should stay away from a subject like mental\nhealth, but I'm not. Here again I am happy to tell you that in spite\nof all the furor that was raised and all of the somewhat confusing\n-11-\ninformation that came up, we will again this year, as we did last\nyear, be increasing the budget for local health care, the regional\nhealth care centers for the mentally ill, to further stimulate the\nreduction in the patient population in our mental hospitals. Just\na few years ago that population numbered 37,000. We believe that\nin the next few years it will be down to a hospital population of\nabout 13,000 which will really represent the irreducible minimum\nbecause these will be custodial cases that will have to be hospitalized\nfor the rest of their lives. The others represent an actual gain,\nin that they are returned to their communities and are able to live\nnormal lives.\nYou might be interested to know that in spite of all you have\nheard, California is spending more per patient in the area of mental\nhealth than any other big population state in the nation. But what\nis more important is that you are getting your money's worth, because\nwe also lead in the percentage of patients who are taken out of our\nhospitals and returned. They are then able to live a normal life and\nlive on the outside.\nAt Camarillo Dr. Nash recently announced that for some time he\nhas had two retired executives from industry here in California.\nThey are volunteers at that hospital. He gave them carte blanche.\nHe admits that he took the cue from our task forces. He gave them\ncarte blanche to come in and look at the business operation at the\nhospital and make recommendations. They have been engaged in every\none of these efforts doing a fantastic job. We are going to continue\nto find uses for these prematurely retired people because we think\nthey are only too happy to serve if only someone will ask them and\npoint the way.\nWe are seeking a program in tax reform in an attempt to give\nour tax structure economies SO that we don't have to keep coming back\nfor a tax increase; so that we can have a flexible tax structure that\nwill fluctuate with the economy. We have again introduced legislation\nto control pornography and crime. We are going to actively get into\nthe area of welfare reform.\nIncidentally, and I should have said this While I was back on\nthat subject, perhaps we just started too soon with some of the\nthings that we are doing with Medi-Cal.\nYou know, for a time it was kind of lonely out there. Then in\nthe last few weeks it began to get brighter. I got a phone call\nfrom the Governor of Maryland who said that he would like to talk\nto me about some of the problems of Medicaid because he had just\ndiscovered that Medicaid was just about to throw his budget out the\nwindow. And the next call I got was from Massachusetts. And we found\nwas\nout that our good neighbor over here in Nevada / : asking the legis-\nlature to cancel Medicaid entirely and start over. They George\nRomney called to say that if they implement a next step to Medicaid\nin Michigan they would be $50,000,000 in debt.\nWhen Nelson Rockefeller called, he told me that he was asking\nthe legislature to schedule permission to drop 600,000 people from\nthe Medicaid rolls in New York. The plain truth is that federal\ngovernment foisted on the states a program which will in truth\nbankrupt any state in the country that tries to operate without the\nproper controls. But let me, because there has been so much confusion,\nmake one thing plain about this--there is no desire on our part and\nno intention of doing anything to see that those who need medical\ncare and can not provide it for themselves are denied such care. We\nbelieve that it is our responsibility to provide it and we will pro-\nvide it.\nHowever, we believe that we shouldn't be bound in any adminis-\ntrative monstrosities that make it impossible to control the program.\nI'd like to cite the example of a family here in California that was\nlate in getting to the doctor. The whole family was coming in for\nshots and examinations and SO forth on Medicaid. They apologized\ncheerfully to the doctor for being late. They said that they had\nhad another errand on their way to the office that took longer than\nthey thought. They were picking up their tickets for Honolulu. I\nsuppose the shots were to enable them to go.\nWell, I just have taken more time than I intended to. I noticed\nthat the tradition that prescribed -13- my being here also said that this\nwas something in the nature of a report. I thought that because last\nyear we started off by telling our troubles, you had a right to read\nthe scoreboard and find out what we're doing and we shall continue\nto do along this line. I believe that California can be as great as\nits people. I think that its people have just been greater than\nanyone could believe they would be. I don't believe that there is\nany apathy in California on the part of people about their government.\nI might also tell you we have quite a tourist trade out here because\nthis is where the action is and they want to see what is going on.\nWe hope that in another year we shall be able to make a report\nthat will contain less predictions of things in the future, and will\ninclude some of the answers in the form of the continuing task force\nreports. We hope that we will be able to tell the success of the\nnewly instituted tax reform.\nI can tell you now that we are going to continue along the\ncourse that we have set for ourselves. We are going to continue\nreducing the cost and the size of government. We believe that this\ncan be done without impairing the efficiency of government. We\nbelieve that there is still more leeway and more fat to be trimmed\naway. But we also believe that we can keep this state in the fore-\nfront as it is today:\n--In the areas of providing highways for our people to travel\nthe length and breadth of the state.\n--In providing recreational land and providing parks for our\npeople.\n--In the areas of caring for the needy and those who require\nour help.\n--In the area of preserving what is one of the finest educational\nsystems and higher educational systems in the nation today.\nFor we are not only going to carry that on, but we believe that\nthe educational system should be more available to those who are\ndisadvantaged and come from the lower income groups. We believe they\nshould not be prevented from getting an education in our public\nuniversities because the cost is too high. That is why we are doing\nour best to institute a plan that will provide the where-with-all\nfor deserving students who are denied an opportunity for an education\ntoday.\nWe' 11 continue, that is Nancy will continue, to look for a\nplace for us to live. We've done that, too, since we were here the\nlast time.\nAgain I want to thank you for the opportunity to report to you,\nand to tell you that in the days ahead, also, I hope I have an\nopportunity to meet with you on some of these projects; to brief you\nin advance and hopefully enlist your support on the things we are\ntrying to do.\nThere's one other promise I'll make at this particular place\nto this audience. Our's is an administration that believes, without\nany question, in the people's right to know. And that means your\nright to tell them, and you will be kept informed of all that we are\ntrying to do.\n#######\nNOTE: since Governor Reagan speaks from notes, there may be additions\nto, or changes in, the above. However, the governor will stand by\nthe above quotes.\nX\n2\n5\nOFFICE OF THE G ERNOR\nRELEASE:\n(\nor PMS of February 5, 196\nSacramento, California\nContact: Paul Beck\n445-4571\n2.1.68\nBUDGET MESSAGE OF GOVERNOR RONALD REAGAN TO THE\nSENATE AND ASSEMBLY OF THE LEGISLATURE OF CALIFORNIA\nON FEBRUARY 5, 1968\nIn accordance with the provisions of the State Constitution,\nI submit herewith the budget of the State of California for fiscal\nyear 1968-69.\nI want to make my position on fiscal policy absolutely clear\nat the outset of this message. I do not seek, nor will I support,\nany increased taxes for Californians in the coming year. Neither\nwill I support the adoption of any programs that are beyond the\ncapacity of the State's revenue system to fund in the foreseeable\nfuture, and which would in effect dictate an increase in taxes in\nthe following year.\nTotal expenditures for 1968-69 are listed at $5,699,536,034,\nan increase of $379,351,028 or 7.1% above the revised 1967-68 budget.\nThese proposed expenditures are financed from three sources: 69% is\nderived from General Fund revenues, 23% from Special Funds and the\nremaining 8% from Bond Funds.\nExamining these three principal budget categories in reverse\norder, it should be noted that Bond Fund expenditures are projected\nat $465,031,711 for a reduction of $184,788,586, or 28.4% below the\nrevised 1967-68 level. The reasons for this reduction are threefold:\n(1) utilization of $38.5 million of tideland oil revenues for higher\neducation capital outlay, (2) a reduction in the overall State\nbuilding program, and (3) the transfer of\nour building program for State institutions from bond funds to\ncurrent revenues.\nThe level of expenditures projected for Special Funds will\nremain almost unchanged. The projected level for 1968-69 is\n$1,336,424,700, and is 0.4% below the estimates for the current year.\nIt should be noted that 43% of the expenditures from Special Funds in\n1968-69 will reflect shared revenues collected by the State and\nreturned to local governments for use by them.\nThe remaining two-thirds of the budget for the coming year\nis financed from the General Fund. These expenditures are projected\nat $3,898,079,623, for an increase of $569,810,193, which is equal\nto a 17.1% increase above the 1967-68 revised spending level. However,\na total of $216 million of this nearly $570 million increase will be\nset aside to provide local property tax relief in the coming year,\nleaving a balance of $354 million to finance the added costs of the\nState government and local support programs for the coming year.\nAdjusting for property tax relief, we find the General Fund\nbudget increasing by approximately $354 million or 10.6% above the\nrevised budget for 1967-68. It should be noted, that if Canital\nOutlay for 1968-69 had not been shifted to pay-as-you-go, then the\nGeneral Fund increase would have been 8.8% Included in the $354\nmillion increase are five items that total $303 million. These\nare: (1) education subventions, up $69.3 million; (2) higher\neducation, up $67.8 million; (3) Medi-Cal, up $62 million;\n(4) State employee salaries, up $57.3 million; and (5) welfare\nprograms, up $46.6 million.\n-2-\nThe remainder for financing the General Fund increase in State\noperations, after allowing for the foregoing five high-cost items,\ntotals only $51 million. Therefore, adjustments within and between\nprograms were required in order to strengthen this small margin to\nmeet priority services, growth needs, and to provide the base for the\nconversion to a $90 million capital outlay pay-as-you-go program.\nThis, then, is a capsule account of the budget which is presented\nto you today.\nThe following paragraphs, will, offer some pertinent background\non our budgeting procedures, emphasize some of our budget proposals\nand summarize the fiscal challenges facing us for the coming year.\nBudget Background\nThe continued practice of overspending the State's annual\nrevenues and covering yearly deficits by \"one-time\" tax accelerations\nduring the first half of this decade reached a climax in fiscal year\n1966-67. That was the year when the State, in recognition of the\nfact that it would be spending more money during the year than\n12 months of revenue could produce, turned to a full accrual accounting\nsystem in order to achieve a balanced budget. In fact, the State\nController's financial statements now show that the State of\nCalifornia in 1966-67 spent $112 million of its reserves plus $334\nmillion of revenue collected in the following year in addition to\nthe revenue collected during the normal 12 months' period.\nMoreover, the adoption of the accrual system depleted the\n1966-67 year-end cash operating position to the extent that, for the\n-3-\nfirst time since the depths of the depression, the General Fund\nentered 1967-68 in the red by having to borrow $194 million. This\ncondition if it had been permitted to continue, would have violated\nthe constitutional provision prohibiting continued debt without a\nvote of the people.\nIt should be recalled that the original budget proposal for\n1966-67 contained a request that $132 million be set aside as a\nreserve to overcome the obvious detrimental effects of the then-\nproposed accrual accounting. Unfortunately, this provision was\ndiscarded and until this year the cash problem remained unsolved\nalong with the greater problem of how to finance a deficit budget\nafter no more \"one-time\" tax adjustments were available.\nIn 1967 I asked the Legislature to work with me in\nsolving the State's financial problems, and together we took the\ninitial steps towards reality by tightening up on State expenditures\nin all departments and by adopting a badly needed tax increase\nprogram for 1967-68. This tax program provided funds for five\nmajor purposes:\n1. To finance the State's current level of\nexpenditures on a realistic basis by\nproviding adequate revenue.\n2. To set aside $194 million in 1967-68 for\nrestoration of the General Fund to a\nminimum position of cash liquidity\nfollowing the depletion of this cash\nposition by the advent of accrual\naccounting.\n-4-\n3, To provide $216 million for an ongoing\nproperty tax relief program in 1968-69.\n4. To increase funds for support of local\nschools by $145 million, again on a\ncontinuing basis.\n5. To allocate $90 million to a pay-as-you-go\ncapital outlay program, thus reversing a\nlong time trend of piling debt upon debt to\nprovide for the annual needs of state\nconstruction.\nHowever, even with these new funds available there remain some\nvery important financial problems for us to solve.\nLast year, we did not legislate an answer to the problem\nof controlling those major programs which are increasing at a rate\nmuch greater than our rate of tax revenue increases. It is obvious\nthat we cannot long continue programs that outpace our revenues\nwithout eventual, tax increases. Nor can we adopt new programs\nfinanced by \"one-time\" tax windfalls without regard to costs and\nsources of revenue for ensuing years.\nGovernment has an obligation to look beyond the down payment\nstage, when it adopts a continuing program.\nIn answer to this need, I am today asking the Department of\nFinance, with the cooperation of all State agencies, to prepare\nfive-year forecasts of revenues based upon our existing tax\nstructure and five-year projections of operating costs based upon\n-5-\nour existing programs. These projections will be updated annually\nand will provide the taxpayers of the State, as well as the State\ngovernment itself, a blueprint of our future commitments. For\nyears our capital outlay budget has been projected on a five-year\nbasis, while our operating and support budgets, which are many\ntimes larger than capital outlay, have been routinely considered\non a year-to-year and too often on a crisis-to-crisis basis.\nAlso we need a realistic operating reserve to absorb revenue\nand expenditure fluctuations. Since a drop in General Fund reve-\nnue of just 1% would create a fund shortage of almost $40 million\nduring the next fiscal year, I strongly favor the reestablishment\nof a reserve figure, equal to at least 2% of our annual General\nFund budget, at the earliest possible date. Such action could\neliminate the need for emergency program reductions resulting from\nnormal economic fluctuations during a budget year, as well as pro-\nvide some protection against unforeseen overspending such as may\nhappen this year in the School Fund, wherein the statutory spending\nlimit exceeds the funded estimates of school apportionments by\nover $60 million.\nBudget Proposals\nGovernments throughout the United States today are feeling\nthe pinch of limited financial resources. The Federal Government\nis faced with an annual deficit in the magnitude of $20 billion\nas well as severe program reductions. In California, our cities\nand counties are finding it imperative to establish and enforce\ntough priorities in order to fit their services to their revenues\nin the coming budget year. At the state level, throughout the\n-6-\nNation, the probl m is much the same. Eithe state spending\nprograms must be controlled or taxes must again be increased. The\nState of California is confronted with the same predicament, but\nI am convinced our problems can be solved without imposing additional\ntaxes.\nIn fact, in keeping with our promise to support property\ntax relief, later in this Session I will present a plan to reduce\nproperty taxes through the application of State revenues.\nI firmly believe that we, the Legislature and the Administration,\nhave the joint responsibility to enact a state budget within the\nlimits of existing income. This, however, can be accomplished only\nthrough coordinated administrative economies and legislative actions.\nThe budget I submit today reflects economies in administration\nand anticipates specific legislative action to control the spiraling\ncosts of Medi-Cal and welfare programs.\nIn preparing this budget, we were faced with many decisions.\nProgram priorities had to be determined within departments and\nbetween departments. Administrative controls, which we adopted\nlast year, were supplemented by further savings as we reexamined\neach departmental proposal. In our budget hearings and related\nbudget review procedures, all State programs were analyzed in\ndetail. Staffing patterns were challenged, and operating expenses\nbroken down for better scrutiny.\nEarly in this process, I established certain priorities.\nOne was for higher education. Although revenue limitations preclude\ngranting all that was requested, I am proposing a General Fund\noperating budget of $280 million for the University of California\nand a corresponding budget of $224.3 million for the State Colleges.\nThis represents an increase of $36.6 million for the University,\n-7-\nincluding restoration of the $20.8 million one-time reduction\n(Regent's funds) of last year, and an increase of $27.3 million\nfor the State Colleges. In addition, salary increase funds will\nadd another $14.1 million to the University budget and $13.5 million\nto the State Colleges' budget.\nA second priority was salary adjustments for the balance of\nall California State employees. Here we have set aside a total of\n$47.6 million to provide salary increases that will average 5.85%.\nThis is based upon an allowance of 5% for across-the-board increases,\nas recommended by the State Personnel Board, and 0.85% to be used\nfor equity adjustments. Additionally, $2.2 million has been reserved\nfor increased salaries for judges and justices in accordance with\nSec. 68203 of the Government Code.\nDue to projected savings in other areas, I am increasing the\nfunding of the Short-Doyle local mental health programs by $3.6\nmillion in State funds. This will enable us to provide full\n75% - 25% matching to all counties for the first time, as well as\nallowing for program expansion.\nAs I stated earlier, some programs have had to be curtailed\nin order to provide dollars for areas of greatest need. Although\nwe find we can meet the State's requirements for capital outlay,\nwe do not have the resources to continue granting funds to local\npublic and private hospitals for construction and remodeling.\nThis will in no way affect the Federal allocation to California\nhospitals, but will require the individual hospitals to provide\ntwo-thirds of the project cost in order to qualify for the one-third\nFederal share.\n-8-\nMedi-Cal and Welfare\nOur projections for the State cost of Medi-Cal during the\ncurrent year total $274 million. Unless necessary program changes\nare adopted, this cost will soar an estimated 46.7% to $402 million\nin 1968-69. However, I propose a Medi-Cal budget of $336 million\nfor next year. This represents an increase of $62 million or 22.6%\nover the current year. During this Session, I will request\nlegislation to enable us to administer the program within this limit.\nWe cannot continue to fund a program of this magnitude and extreme\ngrowth rate from a revenue source that is increasing at only 7%\nto 8% a year.\nIn the State's welfare program, we also are faced with a serious\nproblem of expansion. State welfare costs are approaching one-half\nof a billion dollars annually. This year, for example, the State's\nshare of welfare expenditures will reach an estimated $409,387,600.\nIf left unchecked, this would climb to $466,048,100 in 1968-69--an\nincrease of 13.8%, or $56,660,500. However, I propose a welfare\nbudget of $456,048,100 for next year. This provides an increase\nof $46,660,500, or 11.4%. In keeping with the proposed reduction\nin the rate of welfare spending, I will request specific changes\nin welfare laws.\nBudget Summary\nIn addition to the curtailments and program augmentations\nalready mentioned, we have provided for other program adjustments\nand new programs within the limit of existing revenues.\nFor example, we are making available funds for the creation\nof a new unit within the Department of Justice to direct the State's\n-9-\nfight against organized crime, while at the same time expanding\nthe staff in the Department's Bureau of Narcotic Enforcement.\nWe are providing funds to meet the needs of a cost of living\nadjustment for retired State employees.\nWe are boosting our allocation of funds to the counties to\nhelp defray the costs of employing public defenders.\nWe are adding $3.3 million to our State scholarship program\nin accordance with Chapter 1659, Statutes of 1967.\nFrom the Motor Vehicle Fund allocation, we will be able to\nemploy 500 new highway patrol officers and support their related\ncosts at an estimated $7.3 million. In addition, $1 million has\nbeen set aside to continue the work of improving the communications\nnetwork of our highway patrol system.\nOne-half million dollars will be made available for new\npositions in our Parks and Recreation Department to provide improved\nmaintenance and services in the recreation areas throughout the State.\nAlthough it is not practical at this time to list all of the\nmany detailed proposals contained in this budget, I want to assure\nyou that we are fully dedicated to a continuing analysis of every\nState program. Consistent with this policy, we shall take\ndetermined administrative action and actively sponsor legislation\nnecessary to fulfill our obligations in those fields where we\nfind the State's greatest need as reflected by our growth and the\nrequirements of our citizens.\nLast year, the Legislature and the Administration took those\nactions which were necessary to restore the State's financial\n-10-\nsolvency. This year, our tasks will be equally demanding as we\nadjust expenditures to meet the limits of our tax resources. And,\nwe must jointly develop the basis for progress in our programs of\nthe future.\nTherefore, once again I ask the Legislature to join with me\nin these efforts to provide the State of California with a budget\nbased upon sound fiscal policy and dedicated to providing that\nbalance of public service which will best meet the needs of all\nof the people of California.\n-11-\n-\nand\n2/8\n2\nOFFICE OF THE GOVERNOR\nRELEASE: Thursday P.M.\nSacramento, California\nContact: Paul Beck\n445-4571 2.7.68\nEXCERPTS FROM SPEECH BY GOVERNOR RONALD PEAGAN\nGovernor's Industrial Safety Conference\nFairmont Notel, San Francisco\nFebruary 8, 1968\nLike you I have a personal interest and concern in the reduction\nof accidental injuries in California. The size of the attendance here\nis a direct indication that interest in this important work of saving\nlives and preventing industrial injuries is growing.\nThere is no question that reduction of industrial injuries can\nbest be made in a climate of understanding among management, labor,\nand government, with goals defined and good programs of action. I am\nmore than a little self conscious talking to you with the knowledge\nI have that everything I say is known to you already and believed\nby you. I can only excuse taking your time on the theory that it\nbears repeating. In the last year we have endeavored to institute\neconomies in state government wherever possible. Now there is some-\nthing I did not really have to say. The screams of anguish from\nthose whose pet programs have been cut are ringing in our ears.\nToday I would like to discuss with you briefly one area where I\nbelieve highly beneficial savings can be made, first and most important,\nby preserving lives and limbs through the prevention of accidents,\nand then by reducing unnecessary and unproductive costs which always\naccumulate when serious mishaps occur.\nSeventeen California workmen were trapped for a day by a caving\ntunnel. No expense was spared in rescuing the entrapped men, and\nthis is as it should be. But how much better if the accident had\nnever happened. How much less the cost in worry, anquish and money.\nWe are a large and growing state. Civilian employment surpassed\nthe seven and one-half million mark for the first time last September.\nThese millions work in about 400,000 places of employment. Many are\nexposed to on-the-job work hazards in varying degrees--and unfortunately\nthese hazards take their toll each day, in the form of unexpected and\nunwanted accidents. Last year in California, there were approximately\n195,000 industrial injuries and 669 deaths. The direct cost of\ninjuries in the form of workmen's compensation benefits paid was\napproximately $500,000,000. That is almost one-half the states total\nrevenue from income tax. This figure does not include the indirect\naccident costs. Depending on the type of industrial environment\nof\nproduction\nfailure to meet contract schedules, damage to facilities and equipment,\nand many other intangibles, including morale of employees, will make\nthe total loss from three to four times higher. In California we are\nuse to big numbers and are trying to make most of them smaller. This\nis one we can and should make smaller.\nBetween 1950 and 1958 California had a healthy twenty-five\npercent reduction in disabling industrial injuries. Since 1958,\nhowever, there has been only slight improvement in the percent of\naccidents. Obviously there is genuine need for a renewed effort to\nget the accident graph started downward again. This is true especially\nin the manufacturing industry which has shown a significant increase\nin its disabling injury rate during the last few years.\nOn the bright side, a recent estimate released by the Division\nof Labor Statistics and Research in the Department of Industrial\nReleations indicates the overall industrial injury rate for 1967 will\nbe at an all time low of 30.7 disabling injuries per 1,000 workers,\ndown almost three and one-half percent from 1966. Fatalities in 1967\nwere down seven and one-half percent. We can take considerable\nsatisfaction from these figures, and we can all hope that this down-\nward trend will continue.\nTraffic safety is a vital part of our accident prevention effort.\nAbout one-third of our industrial deaths each year are attributable to\nvehicles--most of them to operators involved in collisions while\ndriving on our public streets and highways. To truck drivers,\ntravelling salesmen, and thousands of others, our highways are a\nplace of daily employment. In view of the vehicle's critical\nrelationship to the industrial death problem, I would like to review\nsome of the decisions and goals established at the Traffic Safety\nConference held last December.\nCalifornia has more than 164,000 miles of roadway in daily use,\na figure that is growing steadily. Me have 12 million licensed anto-\nmobiles, trucks, and buses travelling more than 90 billion miles\neach year on those roads, streets and highways. But the cost was\nhigh. There were 4,286 traffic fatalities during the first eleven\nmonths of 1967. Another 211,000 were injured. The death rate was\ndown 1.9 percent from 1966, but this was offset by an increase of\n2.1 percent in the injury rate. Regardless, both fatality and injury\nfigures are far too high and this administration is taking action to\nreduce them.\nThe drinking driver is one of our most serious problems.\nAlcohol is involved in approximately thirty-five percent of all fatal\nauto accidents. We are seeking a way to stop issuing drivers'\nlicenses to chronic alcoholics, and I am hopeful that a three year\ntrial program now underway will prove effective. Additional legislation\nwill be proposed this year to establish a presumptive limits law to\nprovide new protection from the drinking driver.\nWe also will support legislation which will require special\nlicensing procedures and special protective equipment for motorcyclists.\nWhile we continue to work with the negligent driver we must also\nfocus more of our efforts on the \"average driver\" through improved\neducation programs, and better licensing standards and techniques.\nWe are hopeful schools will be able to expand driver education\nand driver training programs.\nMore lives can be saved by improving emergency medical service\nand providing better transportation to hospitals or emergency stations.\nAlong with the tightening of licensing standards for drivers,\nwe must also improve the standards for vehicles. We cannot allow\nunsafe vehicles to operate on our highways.\nThere are other sources of off-job injury and death that need\nattention. The fact that home accidents cause twice as many deaths\nas work accidents is important to everyone here. Many of those injured\nat home are members of our industrial work force and thus a loss to\nour productive capacity as well as to their families when unable to work.\nFalls and burns are the most frequent causes of home deaths. These\ncan only be reduced through stepped-up public education programs.\nIt is obvious that there is much work to be done in all fields\nof accident prevention. Such work demands leadership from you here\ntoday and others like you.\nYour interest in preventing traffic and home accidents along with\nthose in industry is in keeping with a trend toward a broad, public\nspirited move for accident prevention in all human activities.\nAs an example, labor unions in recent years have teamed up with\nthe National Safety Council and other organizations in a campaign to\nmake Labor Day a safe day.\nThe matter of off-the-job injuries whether on the highways, at\nhome, or elsewhere, is especially important to those who work for\nwages, and to those labor officials and employers who concern them-\nselves with the welfare of such workers. Even with the help provided\nby workmen's compensation, industrial injuries are a serious blow to\nthe security and well-being of the working man and his family. Off-\nthe-job injuries cause even greater financial problems since there is\nno assurance that such injuries will b) covered by payments corresponding\nto those provided by workmen's compensation.\nI would urge that you continue to expand your safety efforts in\nall areas so that your knowledge and experience in the industrial\nsafety field will be helpful in preventing injuries everywhere.\nFortunately, many of the methods of accident prevention effective in\nindustrial operations are equally effective at home and on the highway.\nEmployers these days are also paying more attention to off-the-\njob safety, not at the expense of industrial accident prevention,\nbut as an extra effort to avoid job disruption from injuries wherever\nthey might occur. Industry is aware that its strength and its ability\nto earn a profit rests with the strengths and abilities of its\nindividual workers--workers who are on the job and free from injury.\nSociety has an obligation to do what it can to reduce accidents\nin every area. Industry especially must take a lead role since it\nhas a moral responsibility to send its workers home at night in good\nphysical condition--tired, perhaps, but at least healthy. In order\nto do this, industry must make employment and places of employment\nas safe as humanly possible.\nNew techniques in manufacturing processes, some of which require\nthe use of inherently hazadous' materials, now form a part of the\nindustrial complex. Industry is dealing with higher temperatures\nand pressures. The use of radioactive materials is increasing. New\nchemicals and solvents are being developed. Techniques are becoming\nmore sophisticated, requiring in some cases specialized knowledge to\nprevent accidents including fires, explosions, and collapse. The\nsafety problems encountered today are far different from those found\nin industry just a few years ago, and I do not pretend to know the\nanswers. I have faith, however, in your ability to solve these\nproblems for the future welfare of our workers.\nGovernment, of course, also has a responsibility especially in\nCalifornia where laws require that minimum standards of safety be\nmaintained. It is government's job to see that these standards are\nappropriate, reasonable, and up-to-date. Procedures must be maintained\nfor their enforcement in accordance with the law--a responsibility\nof our Division of Industrial Safety. Fortunately there are many\nemployers who willingly follow safety standards well above the\nIndustrial Safety to devote a larger portion of its time to the\neducational and training aspects of safety.\nThe theme of this conference is safety education. Widespread\neducation is indeed an essential ingredient in stimulating proper\nsafety attitudes and interest. Over half of our industrial injuries\nare preventable by the avoidance of unsafe acts. Of course this is\nnot the whole story, and it is not the easy answer to all our safety\nproblems. But it is worth the big push that this conference group is\ncapable of launching. It may be the means by which the industrial\ninjury rate is again started on a trend of definite decline.\nSafety to be effective must be constant, and if it is to be fully\neffective, we must work at it every day. William Wrigley was once\nasked why he devoted so much of his advertising budget to billboards.\nlie replied that \"If you tell people often enough about something some\nof it is bound to sink in.\"\nThe individual cannot be overlooked; his work procedures must\nbe examined to eliminate faulty habits and unwise short cuts that will\neventually lead to an accident. Supervisors have a responsibility\nto teach and train workers the safe way to perform industrial tasks\nand to augment their safety program with periodic safety meetings or\ndiscussions.\nOur labor organizations also have an important part to play in\nthis endeavor--by promoting and by endorsing safe work practices in\ncooperation with business and industry.\nLet me say I have enjoyed being here with you today. I know\nyour discussions and deliberations will prove to be effective in this\nimportant battle that must be continually waged against needless\naccidents.\n#\n#\n#\n#\n#\nNOTE:\nSince Governor Reagan speaks from notes, there may be additions\nto, or changes in the above. However, Governor Reagan will\nstand by the above quotes.\n-5-\nmy\n$\n65\n2/14\n2\nOFFICE OF THE GOVERNOR\nSacramento, California\nContact: Paul Beck\n(Not distributed to Press Corps\n445-4571 2.14.68\nREMARKS OF GOVERNOR RONALD REAGAN\nCalifornia Council on Criminal Justice\nSacramento\nFebruary 14, 1968\nIt is a great pleasure to welcome you here today at the initial\nmeeting of the California Council on Criminal Justice. As you know,\nthe creation of this council was one of the principal objectives of\nall of us during the 1967 session of the legislature. I am greatly\nindebted to many of you here for your efforts in securing the passage\nof that legislation, and particularly the cooperation shown by Attorney\nGeneral Tom Lynch and Senator George Deukmejian.\nThe report of the President's Commission on Law Enforcement and\nthe Administration of Justice, released in February 1967, recommended\nthat each state establish a state wide body with the responsibility\nfor planning and development in the field of criminal justice. We\nfeel that this council, which was already on the \"drawing board\"\nbefore that report was published will ably fill this requirement.\nWith the many problems of crime and disorder which daily face\nthe public officials and the citizens of our state and our nation, the\nprevention and control of crime is clearly our number one problem.\nIt is appropriate, therefore, that we recognize this priority in\nestablishing this Council on Criminal Justice, composed of leading\nrepresentatives of all agencies and levels of government which are\ninvolved in the criminal justice process.\nAs you will note from the composition of this council, your\nmembership will continue and enhance the partnership which has tradition-\nally existed between state and local government in the handling of law\nenforcement matters. Under this partnership, the primary responsibility\nfor maintaining law and order rests with the local community. The\nstate serves to provide that support and assistance whichis beyond the\nscope of city and county government. Together all levels of govern-\nment cooperate in forming a strong and effective means of combatting\ncriminal activity wherever it may occur in the state.\n-1-\nAs defined in legislation which created this council, you\nhave five major responsibilities:\nFirst---to develop plans for the prevention, detection and control\nof crime, and for the administration of criminal justice.\nSecond--to encourage coordination, planning and research by law\nenforcement and criminal justice agencies throughout the state and to\nact as a \"clearing house\" for proposals and projects in this field.\nThird--to develop plans for the dissemination of information on\nproposed, existing and completed research and development projects.\nFourth--to advise the various governmental agencies charged with\nresponsibility in criminal justice matters.\nFifth--to provide a vehicle for the implementation of federal\ncrime control programs that are applicable to this state.\nThis is a broad mandate for action. We cannot be content with the\nideas and concepts of past decades. Our ability to cope with crime\nand the criminal must include the most modern facilities which science,\ntechnology, and education can furnish. Only by careful planning and\ncoordinated effort can new horizons in criminal justice be discerned\nlet alone achieved.\nYour work should encourage every police department and sheriff's\noffice, every court, and every correctional agency to attain new\nheights of accomplishment in serving the citizens of our state. You\ncan be a catalyst for advance thinking and improved techniques, so\nthat we as a state can begin to catch up with the ever increasing\ncrime wave, and hopefully to begin to reduce it.\nThis council is not just another \"paper organization,\" nor is\nit just another \"committee.\" Each of you was selected because of your\nexpertise in your area of ciminal justice. We feel that the\ncombination of this talent, and the utilization of this council as\nthe focal point for progress and development, will produce results\nthat will benefit every city and county in California.\nIn carrying out your work you have the authority to utilize the\nexisting resources of any department or governmental agency. I hope\nyou will operate in this manner, so that you will provide the planning,\nthe coordination and the guidance. and will then call upon such groups\nas the Board of Corrections, the Commission on Peace Officers Standards\nand Training, the Judicial Council and the Department of Justice, and\nother similar agencies, to provide the detailed studies and proposed\nsolutions to our problems.\nAs you begin your work I would particularly call your attention\nto certain areas which appear to pose immediate and grave problems\nfor our state. These include:\n1. The increasing incidence of narcotic and dangerous drug use,\nparticularly by young people;\n2. The continued threat of organized crime;\n3. The increase in violent crimes, particularly assaults;\n4. The need for crime prevention programs which will involve\nvirtually every citizen in helping to deny to the criminal the oppor-\ntunity to commit his crime;\n5. The long and short range correctional requirements of our\nstate, and the need to reduce recidivism.\n6. The need for bringing together our scientific and educational\nresources through improved programs to prevent and control criminal\nactivity.\nThis is an imposing list of objectives, but I feel that the members\nof this council are equal to the task that I pose for you. I want\nto express my firm support of your work and my continued cooperation\nin all of your activities. You have the opportunity to render a great\nservice to the state of California. as well as to provide a model for\nthe rest of the nation to follow. The results of your actions will\ncertainly benefit every citizen of our state, if by your efforts he is\nable to live in a better and safer community.\n#\n#\n#\n#\n#\n#\nRELEASE: Thursday P.M.'s\nOFFICE OF THE GOVERNOR\nFebruary 15, 1968\nSacramento, California\nContact: Paul Beck\n445-4571 2.14.68\nEXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN\nStanford Business Conference Luncheon\nFairmont Hotel, San Francisco\nFebruary 15, 1968\nOf 853 recommendations submitted by the task force, 137 have been\nimplemented to date. One hundred twelve of these recommendations have\nbeen referred for further study and evaluation, and 604 are already\nscheduled for implementation. Of the 604 which have been scheduled\nfor implementation, 505 can be effected by administrative action, and\n99 will require legislative implementation.\nOf those recommendations already implemented, a total of just under\n$7 million in annual savings has been achieved.\nFuture implementations will provide the state of California with\nannual savings in the millions of dollars, and this is only a part of\nthe dynamic influence the application of sound business management\ntechniques is having in California.\nMy administration has waved no magic wand over the halls of govern-\nment in order to arrive at a more realistic approach to the management\nof government and its affairs in California. Instead, we have had out-\nstanding business-oriented men to administer the program of the\nadministration.\nWe have sought to eliminate unnecessary work, consolidate operations\nwherever possible, refused to replace departing personnel unless there\nwas a strong justification for doing so, enlarged existing responsibili-\nties; we have been decisive instead of bureaucratic, and we have not\nbeen afraid to make changes even with \"sacred cows.\"\nBy following this plan of action, the yield has been significantly\nencouraging.\nIn Public Works we operate with 17,924 employees, down from\n20,079 authorized positions, or 11 percent under the 1967-68 budgeted\nfigures--and, in many cases, handle a greater workload with an improved\nwork product. The quality of our service has increased with our\nefficiency.\n-1-\nIn General Services, purchasing techniques have been changed in\norder to provide for more competitive bidding, and more product com-\npetition and volume discounts. As a source of General Services'\nactions, better space utilization is being made by reducing square\nfootage allowances per employee. Savings from this department are at\na level of $22 million. Additionally, the Cal Expo project is a\nprimary example of private enterprise working with the state for public\nbenefit.\nIn terms of investments, we found that by law state highway\nfunds could only be invested in government bonds. A change in that\nlaw, suggested by us, which allows the investment of these monies in\nbanks and federal agencies' securities wi 11 result in an increase of\n$500 thousand in increased revenue to the state each year.\nIn the Drivers' License Division of Motor Vehicles, we were\nable to save $164 thousand by the application of sound business\nprocedures, and, as Hubert Humphrey once said, \"A billion here and a\nbillion there\nit all adds up!\"\nBut--the application of sound business practices to government is\nonly one important part of the story. There is another very meaningful\npart to the story of business and government. This second part is one\nto which you are all addressing yourselves in this conference- that is,\nthe role business can play in helping to solve some of the great social\nproblems with which we are faced today.\nMy administration views the application of sound business practices\nto government as a process through which government can better do the\njob it must do. But government alone cannot solve all the problems\nof our society without great personal sacrifices on the part of every\nindividual in society. Instead, we must also turn to the collaborative\nefforts of business and government to seek solutions to these pressing,\ndemanding, and challenging problems.\nMany of California's public needs are not responding adequately\nto present approaches by government. Many of these public needs are\nintertwined and are unresponsive to the fragmented, undersourced,\nunimaginative, and shopworn approaches designed by people in govern-\nment who are far removed from the actualities of the problems. Many\nof these public needs approach crisis proportions-- if they are not there\nalready--air pollution, traffic congestion, crime and delinquency,\ndependent children and broken families, urban blight, racial unrest,\nunemployment and underemployment.\nCalifornia must turn to its most talented, resourceful, and\ninnovative sectors--not just to government-- to provide solutions for\nthese problems. We must organize a total systematic effort to analyze\nand attack these critical needs. Not government alone, and not business\nalone, but the imaginative collaboration of the public, private, and\nindependent sectors of our society.\nIf you reach any decision at this conference, it should be a\ndecision that the opportunity for business to engage in social action\nproblem-solving is the most needed and challenging task which is\nbefore any of us today.\nJust as government cannot \"create\" jobs for our unemployed and our\nunemployables--sc it is that government, without the help of the\nindependent and business sectors, cannot run efficiently, nor can it\nsatisfy the needs of our citizenry. Indeed, without the input of\nbusiness, government would be full of sound and fury, and signifying\nnothing.\nBeyond this, without a combined thrust by all the sectors of our\nsociety, this may well be the sad commentary of our society.\nI am confident this will not happen--as I am confident the\nbusiness sector will see their responsibilities and accept these\nchallenges.\nNOTE: Since Governor Reagan speaks from notes, there may be\nadditions to, or changes in, the above. However, the Governor\nwill stand by the above quotes.\n2/15\n2\n51\nOFFICE OF THE GOVERNOR\nRELEASE: Thursday P.M.'s\nSacramento, California\nFebruary 15, 1968\nContact: Paul Beck\n445-4571 2.14.68\nEXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN\nStanford Business Conference Luncheon\nFairmont Hotel, San Francisco\nFebruary 15, 1968\nOf 853 recommendations submitted by the task force, 137 have been\nimplemented to date. One hundred twelve of these recommendations have\nbeen referred for further study and evaluation, and 604 are already\nscheduled for implementation. Of the 604 which have been scheduled\nfor implementation, 505 can be effected by administrative action, and\n99 will require legislative implementation.\nOf those recommendations already implemented, a total of just under\n$7 million in annual savings has been achieved.\nFuture implementations will provide the state of California with\nannual savings in the millions of dollars, and this is only a part of\nthe dynamic influence the application of sound business management\ntechniques is having in California.\nMy administration has waved no magic wand over the halls of govern-\nment in order to arrive at a more realistic approach to the management\nof government and its affairs in California. Instead, we have had out-\nstanding business-oriented men to administer the program of the\nadministration.\nWe have sought to eliminate unnecessary work, consolidate operations\nwherever possible, refused to replace departing personnel unless there\nwas a strong justification for doing so, enlarged existing responsibili-\nties; we have been decisive instead of bureaucratic, and we have not\nbeen afraid to make changes even with \"sacred cows.\"\nBy following this plan of action, the yield has been significantly\nencouraging.\nIn Public Works we operate with 17,924 employees, down from\n20,079 authorized positions, or 11 percent under the 1967-68 budgeted\nfigures--and, in many cases, handle a greater workload with an improved\nwork product. The quality of our service has increased with our\nefficiency.\n-1-\nIn General Services, purchasing techniques have been changed in\norder to provide for more competitive bidding, and more product com-\npetition and volume discounts. As a source of General Services'\nactions, better space utilization is being made by reducing square\nfootage allowances per employee. Savings from this department are at\na level of $22 million. Additionally, the Cal Expo project is a\nprimary example of private enterprise working with the state for public\nbenefit.\nIn terms of investments, we found that by law state highway\nfunds could only be invested in government bonds. A change in that\nlaw, suggested by us, which allows the investment of these monies in\nbanks and federal agencies' securities wi 11 result in an increase of\n$500 thousand in increased revenue to the state each year.\nIn the Drivers' License Division of Motor Vehicles, we were\nable to save $164 thousand by the application of sound business\nprocedures, and, as Hubert Humphrey once said, \"A billion here and a\nbillion there\nit all adds up!\"\nBut--the application of sound business practices to government is\nonly one important part of the story. There is another very meaningful\npart to the story of business and government. This second part is one\nto which you are all addressing yourselves in this conference--that is,\nthe role business can play in helping to solve some of the great social\nproblems with which we are faced today.\nMy administration views the application of sound business practices\nto government as a process through which government can better do the\njob it must do. But government alone cannot solve all the problems\nof our society without great personal sacrifices on the part of every\nindividual in society. Instead, we must also turn to the collaborative\nefforts of business and government to seek solutions to these pressing,\ndemanding, and challenging problems.\nMany of California's public needs are not responding adequately\nto present approaches by government. Many of these public needs are\nintertwined and are unresponsive to the fragmented, undersourced,\nunimaginative, and shopworn approaches designed by people in govern-\n-2-\nment who are far removed from the actualities of the problems. Many\nof these public needs approach crisis proportions--if they are not there\nalready--air pollution, traffic congestion, crime and delinquency,\ndependent children and broken families, urban blight, racial unrest,\nunemployment and underemployment.\nCalifornia must turn to its most talented, resourceful, and\ninnovative sectors--not just to government--to provide solutions for\nthese problems. We must organize a total systematic effort to analyze\nand attack these critical needs. Not government alone, and not business\nalone, but the imaginative collaboration of the public, private, and\nindependent sectors of our society.\nIf you reach any decision at this conference, it should be a\ndecision that the opportunity for business to engage in social action\nproblem-solving is the most needed and challenging task which is\nbefore any of us today.\nJust as government cannot \"create\" jobs for our unemployed and our\nunemployables--sc it is that government, without the help of the\nindependent and business sectors, cannot run efficiently, nor can it\nsatisfy the needs of our citizenry. Indeed, without the input of\nbusiness, government would be full of sound and fury, and signifying\nnothing.\nBeyond this, without a combined thrust by all the sectors of our\nsociety, this may well be the sad commentary of our society.\nI am confident this will not happen--as I am confident the\nbusiness sector will see their responsibilities and accept these\nchallenges.\nNOTE: Since Governor Reagan speaks from notes, there may be\nadditions to, or changes in, the above. However, the Governor\nwill stand by the above quotes.\n2/19\n2\nOFFICE OF THE GOVERNOR\nRELEASE: Immediate\nSacramento, California\nContact: Paul Beck\n445-4571\n2.19.68\nEXCERPTS OF REMARKS BY GOVERNOR RONALD REAGAN\nSeminar on Intergovernmental Relations\nSenator Hotel, Sacramento\nFebruary 19, 1968\nIt is a great pleasure to extend greetings to participants at this\nseminar on intergovernmental relations. This is one of a series of\nstatewide conferences in which representatives of government, education,\nand the private sector come together to discuss and seek solutions for\nthe problems facing our state.\nSome of you recently attended a very excellent conference on housing\nwhere state and local government officials were joined by representatives\nof business and industry in a significant review of the problems\ninvolved in providing adequate housing for all the citizens of\nCalifornia.\nI am sure that this conference will likewise be successful in\nidentifying the major challenges which face state and local governments,\nand which will require the joint efforts of all these groups represented\nhere. You can help provide the citizens of this state with the quality\nof life they need and deserve.\nToo often we are all necessarily concerned with the day to day\nproblems and crises which demand immediate resolution. Yet we cannot\nafford to overlook the equal, but sometimes less apparent, necessity for\nlong range planning. We must look today at the problems of California\n5, 10, and even 20 years in the future so that we can begin to develop\na blueprint for the type of California we wish to achieve.\nWe have already started this in state government by initiating a\nfive-year projection of information on needs for state services and\nfacilities and the availability of resources to meet these needs.\nYour conference today is certainly consistent with the idea of\ntaking a long-range view of California's future, establishing goals and\nbjectives, and bringing together the talents of a variety of disciplines\nand backgrounds, to formulate solutions and recommendations.\nAs we look toward the California of the 70's and 80's, one of the\ntraditions and strengths of our state which we certainly wish to pre-\nserve is the partnership and concept between state and local government--\nand the strong concept of \"home rule\" which has reserved to cities and\ncounties a high degree of governmental authority.\n-1-\nThis administra recognizes and seeks to strengthen the role\nof local government as a vital force in our society. The cities and\ncounties of California daily fulfill the most essential needs of the\npeople. These functions, carried out at the local level, give our\ncitizens the greatest opportunity to exert strong and constructive\ninfluences over their government.\nThe growing national trend towards centralization of government\n$\ndone much to remove political decision-making from the people. This,\nin turn, has too often sapped their sense of responsibility fcr the\ncourse of government. To counteract this trend we must build strong\nlocal governments that are responsive to local needs and which allow\ntheir citizens to directly shape the policies which affect them.\nWhile we are talking about keeping government close to the people,\nI also want to talk about involving people--private citizens--directly\nin government itself. I am sure you are all aware of the many ways in\nwhich the private sector has been involved in many of the programs of\nthis administration.\nThe recent reports submitted by our Survey on Efficiency and Cost\nControl are examples of this. Other groups have worked on legislative\nrecommendations, environmental quality, fiscal and revenue management,\nand a variety of other projects.\nI know that at the local level there is a similar willingness on\nthe part of public officials to obtain the ideas and efforts of citizens\nwho are not regularly a part of the governmental structure. I certainly\nwant to encourage such involvement and to indicate that the dividends\nwhich will be gained--both in good suggestions and in a renewed sense\nof participation in the processes of government--will be beneficial to\ngovernment and to the citizens alike. The fact that so many of you are\nhere today as representatives of the independent sector attests to your\nagreement with this principle of citizen participation and responsibility.\nI spoke earlier of the partnership between state and local govern-\nment, because, to me, this certainly characterizes the working relation-\nship which we seek to promote in California. Intergovernmental\nproblems are perhaps the most complex issues that we face in Sacramento.\nVirtually all action taken by the state affects local government in one\nway or another, and likewise the views and actions of cities and\ncounties have a great influence on the policies and programs of the\nstate.\n-2-\nWe have therefore felt the need to expand and improve the techniques\nand the organizational means for managing intergovernmental relations.\nWe seek the most effective vehicle for relating the needs of city and\ncounty government, of schools and other local agencies to state programs\nand planning.\nI am therefore happy to discuss with you today some of our ideas\nfor enhancing the state's capability of working with local government\nin achieving our common objectives.\nAs you know, we recently submitted to the legislature a plan for\nthe reorganization of the executive branch of state government. Within\nthis reorganization we are instituting a new concept designed to\nprovide a vehicle for handling intergovernmental problems. It is our\nplan to expand the role of the Intergovernmental Council on Urban\nGrowth, and give it the capability for exercising an advisory overview\nof all problems mutually affecting state and local governments, and to\nengage in long-range planning in these areas.\nThis concept does not accept the idea that we can compress into a\nsingle department of state government the problems of local governments.\nIndeed, virtually every department of state government is concerned with\nsome subjects which affect cities and counties. Therefore, we need a\ncouncil which can cut across the governmental structure and provide a\ncomprehensive and coordinated approach to the common problems of a\nvariety of governmental agencies.\nWe propose, therefore, to create a Council on Intergovernmental\nRelations which will give all of us the best possible means for working\ntogether. We hope this council--reporting directly to the governor's\noffice--will serve as a sounding board for new ideas and new programs\nand recommendations for implementation at the state and local level.\nRapid growth and economic development have seriously affected the\nquality of California's natural environment and there is an immediate\nneed to provide effective waste management controls. Legislation has\nalready been introduced which will approach this problem. I will ask\na group of outstanding citizens to determine an appropriate course of\naction to preserve and enhance environmental quality on a long-range\nbasis.\nPublic service manpower shortages are critical now and will intensify\nby 1975. Changes in urban growth patterns have created the need for a\nnew dimension in public service. Last week I authorized the creation by\nExecutive Order of the California Public Service Education and Training\nAdvisory Council. Their charge will be to develop creative plans and\ncooperate and assist in the development of programs for the training of\npublic servants for all levels of government.\nThe Council on Intergovernmental Relations also will be called upon\nto assist in the implementation of certain federal grant programs and\nto provide assistance in local planning and community development\nefforts.\nOne direct result of the intergovernmental approach has already\nbeen achieved. That is the creation of the Intergovernmental Board on\nElectronic Data Processing which is concerned with the development of\ninformation systems as an essential part of long-range data collection\nand planning.\nBut mere recognition of the importance of local government is not\nenough. We must be aware that an increasingly complex urban society--\nwith the problems of the core cities and sprawling suburbs--creates new\nand difficult problems.\nWe believe the answer to these problems is to strengthen, not to\nabandon, the basic concept of local government. It is to find new\nsolutions which will promote greater efficiency and effectiveness, while\nat the same time retaining local decision-making and responsiveness to\nindividual citizens.\nThere are certain immediate problems to which the Council on\nIntergovernmental Relations might direct its efforts:\n1--To review the allocation of governmental services and resources\nbetween state and local governments and to make recommendations for\nchanges where necessary.\n2--To give local governments the opportunity to develop fiscal\nprograms and sufficient revenue capabilities to finance local services\nwithout having their taxing capacity pre-empted or reduced by excessive\nfederal and state taxation. In this regard, our recent action in\nproposing to the legislature that certain sales tax revenues be allocated\nto the counties for property tax relief is a first step in this endeavor.\n3--To solve the problem of the prcliferation of special taxing\ndistricts and to develop a plan for strengthening local government by\nimproving its efficiency in providing the various services which are too\noften fragmentized in small and costly local taxing agencies.\nThese have been some of the ideas developed by this administration\nconcerning the problems of California and the programs which will ful-\nfill our future needs. It is no exaggeration to say that the quality\nof life which will be enjoyed by Californians of the future depends\nto a great extent on efforts such as yours today.\n# # #\n(Note: Since Governor Reagan speaks from notes, there may be additions\nto, or changes in the above. However, Governor Reagan will\nstand by the above quotes.)\n-4-\n-\n3/\n3/4\n4\nOFFICE OF THE GOVERNOR\nSacramento, California\nContact:\nPaul Beck\n445-4571\n3.4.68\nC-O-R-R-E-C-T-I-O-H\nIn Release of Excerpts of Speech By Governor Ronald Reagan 20th\nAnnual California and Pacific Southwest Recreation and Park Conference\nto be released for P.M.'S today, please correct Page 2, Paragraph\nnumber 5 to read:\nOccasionally, a property in our park system can function better\nif it is not state owned. This is true of our Squaw Valley ski area.\nSo we are going to sell it.\nPB\nOFFICE OF THE GOVERNOR\nRELEASE: P.M.'S MONDAY\nSacramento, California\nContact:\nPaul Beck\n445-4571\n3.1.68\nEXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN\n20th Annual California and Pacific Southwest\nRecreation and Park Conference\nCommunity Concourse, San Diego\nMarch 4, 1968\nIt is a pleasure to be here among such a large group of fellow\nconservationists. I recognize that one of your primary interests is\nin the conservation and preservation of America's natural resources so\nthat they can be used and enjoyed by future generations of Americans.\nI share that interest with you because it is part of the con-\nservative philosophy to preserve the best of our heritage--including\nour natural resources. But the conservative philosophy also demands\nthat the best use be made of those resources we preserve.\nIn California we are proud of the record we have made in\npreserving our natural heritage and this administration is striving\nto build on and improve that record.\nWe are proud, also, of the recreational use we are making of\npark lands and our great natural resources. And of the innovations\nour Parks and Recreation Department is bringing into this broad field.\nAt the same time, we recognize that what we are doing today\nis not enough. We must prepare for tomorrow-- to make parks and\nrecreation even more readily available to the increasing millions\nof Californians and others who need to share and who have a right to\nshare in all that California has to offer.\nWe must examine and plan for our environment and how it properly\nrelates to economic progress of our state.\nI don't suppose a governor can be expected to be a technician\nor an expert in specific fields of resources--but he can be held\nresponsible for the appointment of experts and outstanding leaders who\ncan provide imagination and advanced thinking. In the language of my\nformer occupation, we have done a good job of casting and I am par-\nticularly proud of the team we have put together. The captain of this\nteam is Ike Livermore, a noted conservationist. With him are\nBill Gianelli, director of the Department of Water Resources, an\nacknowledged expert; Jim Stearns, director of the Department of\nConservation, a life-long dirt farmer experienced in soil conservation\nand timber management; Admiral Ned Sprow, director of the Department\nof Harbors and Watercraft, with his Coast Guard experience;\nWalter Shannon, director of the Department of Fish and Game, a noted\nand experienced leader; and William Penn Mott, Jr., director of the\nDepartment of Parks and Recreation, world-famed in conservation and\npark management.\nConservation people tell us that there are few departments 0⁻\nparks or resources as free of political interference as those of this\nadministration. It is going to stay that way.\nUnder Bill Mott's guidance the department last year added\nmore than 12,500 acres to the park system, including more than 2, 500\nacres of redwoods (no, I don't believe if you've seen one redwood,\nyou've seen them all).\nBut, while we added parklands, we do not think that just adding\nmore land is the answer to all of California's park and recreational\nneeds.\nOccasionally, a property in our park system can function better\nif it is not state owned. This was true of our Squaw Valley ski area.\nare going to sell\nSo we sold it at a profit.\nIn addition, we think that developed park properties should\nundergo regular re-evaluation to make sure that they still meet the\nneeds for which they were originally required. If they do not, then\nthey should be disposed of and new lands should be acquired that do\nmeet current needs. In other words, we do not think a park system\nshould be static, and in California, it is not.\nLet me digress here just a moment to point out that about half\nof California is federally owned. Most of that land is mountain and\nforest land in the Sierras. We are working to persuade the federal\ngovernment to make more of these lands available for recreational\ndevelopment and use.\nWe think that it is possible to evolve an integrated program\nwith the federal government, letting it concentrate on the mountains\nwhile we concentrate on providing recreation along the coast, in the\ndesert and in the interior valleys.\nBut, since there seems to be a determined effort to portray this\nadministration as only interested in saving money, let me get back\nto a brief report of our accomplishments and progress during 1967.\nWorking with Bill Mott, we started out by adopting a 13-point\n\"action program for the state park system.\" This included reorgani-\nzation of the denartment development of a master nlan for the nark\nsystem, more utilization of private capital in park and recreation\ndevelopment, development of a more realistic user fee schedule and\ninstitution of a camping reservation system.\nThen we went one step further. We lifted the ban on pets.\nWe figured, \"love you, love your dog.\"\nOne of the things we did was increase park fees, not to deprive\npeople of the use of our parks, but rather to charge a larger pro-\nportion of the costs of maintaining parks against the park users\ninstead of the general taxpayer. But, we also cut them in half for\nthe fall and winter months in order to stimulate off-season use.\nA major advance has been the establishment of communications\nbetween departments. I am pleased to tell you of the progress being\nmade by the special committee which I appointed to resolve problems\nbetween highways and parks, an interdepartmental committee made up\nof representatives of the Resources and Transportation agencies.\nThis committee has, in its short life, resolved many problems and\nresolved them not on engineering values alone, but has looked at the\nproblem in a total environmental planning process considering all of\nthe values, not just the economical ones.\nFor instance, a special technical task force made up of\nplanners, ecologists, landscape architects and engineers is now\nstudying the problem of locating an all-year-round road on the west\nside of Lake Tahoe. This will be done by environmental planning so\nthat the unique resources of the area will be protected, at the same\ntime providing for the transportation of people and things. Quality\nand creativity are being emphasized in all of our planning efforts.\nAs part of that emphasis, we intend to take a strong look at\npossible ways of bringing parks to people. Everybody does not have\nthe time or the money to travel to the desert or to the mountains or\nto the wilderness areas.\nWe think there should be a way to give our city and slum\ndwellers the advantages of parks on as nearly a daily basis as they\nwish. The quiet and tranquility of the great city parks such as\nCentral Park and Griffith Park can do much for modern man in today's\nhurried and harried living.\ntoward\nAnd, the small neighborhood parks can go a long way / keeping\nour boys and girls off the streets and channeling their energies into\nworthwhile activities. As our cities and urban areas continue to grow,\nthe need for new parks grows greater and the strain on existing\n-3-\nfacilities mounts ever higher.\nI am asking Bill Mott to look into ways and means of helping\nour urban areas develop and expand their park systems to meet the\nneeds not only of today but also of next year and the next 50 years.\nOne possibility is to look at freeways and their rights-of-way\nwith the idea of multipurpose use of the land around them and perh\nS\neven the space above them. It is possible that freeways can be more\nthan merely the shortest distance between two points. They can be\nfocal points for parks, recreation, even industry and shopping centers.\nOur parks and recreation people, along with our highway and\npublic works officials and representatives of cities and counties are\nbeing asked to sit down together and study closely the existing\npossibilities we think are here.\nThus, the challenge to the Department of Parks and Recreation\nis clear. Its responsibility is not only to protect the environmental\nquality of California, but also to provide for the recreational needs\nof our people. In reorganizing the department, it was not our\nintention to give greater emphasis to these recreational needs than\nto preservation of the natural resources of this state, but rather\nto provide an organizational structure that would recognize not only\nthe preservation and conservation responsibilities that the department\nholds, but also to accept the challenge of constructively providing\nfor the leisure-time demands of our citizens.\nWe recognize also that good conservation practices go beyond\nmerely preserving what we have left. We must also be in the business\nof reclamation, as well as that of protection. We must not only\nprotect our rivers, lakes, bays and beaches from pollution; we must\nreclaim and purify those that have been polluted.\nAnd, we must do the same for our air. These major problems\nwill not be solved this year or next. But Californians are deter-\nmined they will be solved, and we are working in that direction.\nReferring to Tahoe again--that very unique beauty spot we\nshare with our neighbor state, Nevada--years of frustration were\nended with the establishment by our legislature of the Tahoe Regional\nPlanning Agency which will move toward protection of the unparalleled\nbeauty of the area while insuring balanced recreational and economic\ndevelopment there. In the best spirit of neighborliness and coopera-\ntion, Governor Paul Laxalt and the legislature of Nevada enacted\nsimilar Tahoe legislation so that both states can move forward together\nI have asked the Resources Agency to lend full support to the\nBay Counties Development Council which, this year, will complete a\ncomprehensive study of protection of the natural attributes of\nSan Francisco Bay along with proper respect for its economic develop-\nment.\nWe are concerned with the problems of coastal development and\nconservation. We know too little of the enormous values for mankind\nof proper understanding and use of our coastal resources and the sea.\nBut, we are going to know more, thanks to the fine work and informa-\ntion provided by the Advisory Committee on Ocean Resources. Through\ntheir efforts we have created the Interagency Council on Ocean\nResources, with Lt. Governor Finch as chairman. Here is an advisory\ncommission of experience which will probe the problems of coastal\ndevelopment and conservation.\nLegislation has already been enacted creating the Middle Fork\nof the Feather River as a wild river. This fifty-mile stretch of\nnature will provide a primitive area where man can enjoy the outdoors\nas it was before he arrived.\nCalifornia is also progressing in the area of open space\nprotection as it relates to land usage and the tax base. Few realize\nthe extent to which green grass is giving way to blacktop, but the\nthreat is real and serious. Open land in Southern California is\nbeing converted to urban uses at a rate of 70 square miles per year.\nYou can get some idea of what that means if you think of the city\nof San Francisco occupying only 44 square miles.\nLegislation was passed last year to provide tax relief for\nagricultural lands which remain as open space. A broader study by\nthe Legislative Joint Committee on Open Space Lands and its advisory\ncommittee will clarify our direction with regard to this complex\nproblem.\nThough we are moving in these many specific areas of resource\nprotection, all of it and more must come together to produce an\nenvironment which will provide the people of this state a healthy\nand exciting place to live, next year, ten years hence and in the\nyear 2000--just 32 years from now when as many as 50 million people\nmay live in our state.\nEnvironmental protection study legislation is now before the\nlegislature and I have instructed our Resources Agency to provide all\nleadership and technical assistance for its passage.\n-5-\nWe must come to grips now with the total environmental needs\nof people and their enjoyment of life as it pertains to the quality of\nair and water and its availability; to the proper protection and use\nof the land and the rivers and streams, lest there be none; to the\ncreation of a balanced transportation system, lest we be overwhelmed\nby autos and freeways, aircraft and airports, rails and terminals--a1\ngobbling up the land, without plan or coordination. We must study\nnoise and its effects on people, the potential of thermal and nuclear\npollution, and we must have adequate parks, recreation areas and\nspace, and peace and quiet for people and living.\nI have asked Director Mott also to concentrate upon the prep-\naration. of the master plan. This will define state responsibility\nso that it is clear to other agencies and groups who must supply\ncity, county and regional recreational areas. This plan will define\nthe needs for scenic and historical areas and for recreation. Updated,\nregularly, it will give us a solid five-year look ahead as well as a\nlonger vision into 25 years for park and recreational needs, and the\nprivate sector will participate. Not only is the recreational\nindustry, on its own, becoming most significant in the state, but we\nare assisting by review of statutes which unduly restrict or dis-\ncriminate against such development. There must be no double standard\nwhich places higher requirements on private development than on\nstate-owned\npublic or\nparks where supervision, sanitation and density\nare equivalent.\nWherever possible, we are seeking private capital expansion of\nconcessions in state parks--stores, cabins, roadside camping areas,\nboat launching--perhaps even golf courses in state recreation areas.\nThe Department of Parks is seeking a partnership with the\nlocal communities adjacent to state park monuments by the appointment\nof citizen advisory committees. We need the imagination and enterprise\nby which, for example, in Coloma, at the John Marshall Gold Discovery\nSite, local citizens helped rebuild Sutter's Mill--as it was that day\nin 1848. Or self starters of the \"Save the Redwoods League\" who\nrecently helped us acquire the final major addition to the Avenue of\nthe Giants, in Humboldt County, or the enterprise of the Sierra Club,\nwhose members recently planted 10,000 seedling trees in one of our\nmajor redwood park watersheds.\nIt is possible that we will see a Redwood National Park in\nthe next year or two. And this is well and good. But\nthat we do not need a national park to protect our redwoods.\nCalifornia has already done that. Most of the remaining virgin\ngrowths of the redwoods are already protected in state parks. And\nlet me point out that any national park, to be meaningful, will have\nto enconpass at least two state parks.\nDesirable as a Redwood National Park may be, we are insisting\nthat at the same time the economy of our Northern California timber\nareas be protected.\nAnd we are also insisting that the federal government, in\nreturn for our redwoods, give us beach and mountain lands that can\nbe developed by California into useable recreational areas.\nWe recognize that the future is in the hands of our youth. The\nyouth of today will either be the protectors or the destroyers of our\nland. Our schools are doing a magnificent job with conservation\neducation--but we must help. We have created a Resources Agency\nConservation Education Committee of Fish and Game, Parks and\nRecreation, Water Resources, with the lead from the Department of\nConservation, to work with the State Department of Education in this\nall important program development. I asked every school, service\nclub, the press, T.V., radio and news media and every citizen to help\nemphasize Conservation Week, March 7-14; to bring home the message\nto youth and adults alike: \"Understand the value of our land, streams\nand countryside; protect it from litter and degradation; leave it\nunsullied for future generations because if it is destroyed, it is\nlost forever.\" We are determined not to let that happen.\n# # #\n(Note: Since Governor Reagan speaks from notes, there may be addi-\ntions to, or changes in the above. However, Governor Reagan\nwill stand by the above quotes.)\n3/6\n3\n76\nOFFICE OF THE GOVA NOR\nRELEASE:\nhursday, A.M.'s\nSacramento, California\nContact:\nPaul Beck\n445-4571\n3.6.68\nEXCERPTS OF SPEECH BY GOVERNOR RONALD REAGAN\nCalifornia Taxpayers Association Annual Meeting\nFairmont Hotel, San Francisco\nMarch 6, 1968\nIt is a pleasure for me to be here today. This is not the first\ntaxpayers group I have appeared before, but we made certain at the\nlast session of the legislature it would be the largest--if not in\nnumbers, at least in terms of taxes paid.\nRegarding that tax increase, I feel like the mother spanking\nher lovable but recalcitrant child--it hurt me more than it hurt you.\nYou know what happened. I spent a year campaigning for fiscal\nresponsibility and against new taxes.\na\nThen/little better than a year ago, when I took office, we\nfound the fiscal affairs of California in such a state that it was\nimpossible to have both fiscal responsibility and a balanced budget\nwithout new taxes.\nSo we had to raise your state taxes. Those of you who have\nalready paid your tax bill know this all too well.\nThe tax increase amounted to $855 million.\nI want you to know just why that tax increase was necessary--\nhow it came about and where the taxes are going.\nOf the $855 million in tax increases. $690 million went to pay\nfor left-over programs and debts. These were debts incurred but never\npaid during past years:\n--First, a $194 million debt which was a carry-over from the\nlast year before our administration took over. We took the position\nthat this debt had to be paid off. The attorney general agreed,\nsaying that a continuing deficit was unconstitutional in California.\n--Second, we had to raise $496 million to pay for programs and\nspending projects which had been started by the previous administratic\nSome of these programs may have been worthwhile, but the hard fact\nis that the money should also have been raised on a continuing basis\nat the time the bills were passed. This was not done and we had to\ndo it--we had no other choice.\nSo, these two items--$194 and $496 million, which total $690\nmillion--came due and payable last year. The taxpayer charge account:\n-1-\nwhich had been piling up over the past several years caught up with\nus and you had to pay.\nIn addition, your state government decided to help offset the\nspiraling costs of the local schools and the increasing pressures\non the property tax. This amounted to $145 million, To have failed\nto do this would have been to jeopardize the educational system and\nwould have increased the pressures on the local property taxes even\nmore.\nTwenty million dollars out of the total tax increase--that is\nthe request my administration asked for to meet the needs of a grow-\ning state. That $20 million was less than 0.6 percent of the total\ntax increase. We asked for that amount because the programs were\nstarted and we believe in a pay-as-we-go policy. We will not duck\nhard decisions and we will not try to hide the costs of government\nfrom you.\nLet me also point out that if it had not been for the economies\nwe put into effect during the early months of this administration,\nthe tax increase would have been $130 million greater--in other words\n$985 instead of $855 million.\nIf it were not for the economies we have achieved already--not\ncounting those that we are now also working on--if we had allowed the\ngrowth of state government spending to continue at the same rate as\nthe Brown-Unruh administration during the last five years of the\nprevious administration--we would have to increase your total state\ntaxes at a rate of about four percent per year.\nWe cannot allow this to happen. Now that we have paid off the\ndebts and straightened out the accounts we inherited, we are determined\nthat this government will live within the means of its taxpayers,\nand will live within the revenues which are now projected--without\nany tax increase.\nWhen I took office I pledged that we would cut and squeeze and\ntrim. We have done that. We will continue to do that.\nWhen we did cut back on some of these programs, the cries of\nanguish were loud and long. But I heard no great storm from the\ntaxpayer whose dollars were being discussed. Now we hear from them\nas the tax bill comes due. And I want to point to those who have\nmade a career of buying gifts for the people with the people's money,\nit is their turn now to listen; it is their turn to hear the anger\nand the wrath of the taxpayer.\nlf they did not hear it in their budget meetings when they refused\nto cut costs or when they passed more spending bills, let them hear\nit now. Keep it in mind the next time they ponder the spending of\nmillions of dollars.\nIn face of all these problems--the absolute necessity to raise\ntaxes to cover past debts and inherited programs--and the need to\nadopt a budget of $5.7 billion for the coming fiscal year--in face\nof all this, there are those in the legislature, there are those on\nour campuses who complain that we are not spending enough of your\nmoney. They demand that you spend even more through taxes.\nDespite the fact that we increased the budget for the University\nof California by $30 million over. the last year, there are those who\ndemand that we increase that budget even more. Despite the fact that\nwe increased the budget for the state colleges by $39 million, there\nare those who demand that we increase it even more.\nIt is the same in some areas of public assistance--Medi-Cal,\nsocial welfare, etc. There are those who want to spend more and\nmore.\nWhere, I ask, is this money coming from? From the taxpayer?\nHe cannot afford it. He just cannot afford it. And, we cannot con-\ntinue to confiscate his earnings--raising the state's take, year\nafter year.\nAlmost every day in the legislature bills are passed which\ndemand more of your money\nsome would take millions of your dollars.\nThe votes are cast--and the bills passed--by those legislators who\nknow full well that if the taxpayers were voting, the bills would\nbe turned down. Yet, too many legislators continue to vote to take\nor mortgage more of your money.\nThe time has long since passed to put an end to this.\nWe must have a new set of priorities, a new agenda for state\ngovernment. We must place more emphasis on cutting costs. The tax-\npayer must be permitted to keep more of what he earns.\nLet me say that from a strictly political viewpoint, trying to\nhide the heavy costs of state government and ducking the wrath of\nthe taxpayer, it would have been expedient for me to go along with\nwithholding. This might well have been easier for some of you, too,\nbut the credit-card approach somehow makes it seem as though we are\nspending less when we are actually spending more.\nBut, I have refused to go along with this easy way out--it would\n-3-\nbela disservice to the taxpayer under the present circumstances.\nIt is important that you know just what state government is\ncosting you. It is time that all of us realize the grinding load\nwhich is imposed upon each one of us, that we know the actual cost\nof government on our income, our lives and our futures.\nThe tax increase should make you angry. I hope it does make\nyou angry. It makes me angry.\nBut, focus your anger on those who caused it--those who first\nspent your money without telling you what the bill would be--and\nwithout making clear to you that you would have to pick up the check.\nFocus your anger on the politician who uses your money to buy\nhis votes and then tries to shift the blame when the bills come due.\nAn angry taxpayer is the best weapon we have for keeping down\nthe costs of government.\nThe lesson of April 15, 1968 will be a harsh one. It should\nserve as a reminder that government is not free--not even when the\ncosts are hidden and sugar-coated and dribbled out through gimmicks\nand slogans, which may sound good, but which only delay the day of\nreckoning.\nBut now that I seem to be in a complaining mood, let's talk\nabout the numbers game that is being played with Medi-Cal. According\nto some, we made a false and horrendous estimate of Medi-Cal over-\nspending and then had to readjust and blushingly admit we had been\nguilty of crying wolf until, finally, according to these financial\nsooth-sayers, we actually turned up with a surplus. After listening\nto them, I am better able to understand the record of the past\nseveral years.\nThe numbers game is not limited to Medi-Cal. When we are\nsuccessful in effecting economies, those economies are loudly\ndenounced as surpluses resulting from our miscalculations. Well,\nthose surpluses for the most part are hard-earned through the careful\nbusiness practices of those we have appointed to head our various\ndepartments. They accrue to the benefit of the taxpayer and, as far\nas I am concerned, those department heads have my thanks. If they\nare to be censured, let those who have no regard for the public\ntreasury do the censuring.\nOf course, we do not always find surpluses. We have found a\ncouple of deficits--the last one for $70 million--due to miscalcu-\nlations in a piece of legislation adopted last year. May I say it\nwas not a part of our legislative program.\nThe last error will be compounded by another $82 million next\nyear unless the legislature acts to rectify the legislation--AB 272--\nwhich is at the base of the trouble,\nI have invited the Speaker of the Assembly to sit down with me\nand members of the staff this week to see what we can work out. In\nthe meantime, we are hopeful that continued economies may give us\nenough funds to meet at least part of this year's deficit. Just as\nlast year's economies paid for the excess spending in Medi-Cal, I\nhave promised already, and I will repeat it here, we will not go to\nthe taxpayers for more money to rectify that error.\nI have not changed my belief that we are already paying too much\nfor government.\nI am still convinced we can trim the fat out of government and\nthen base our tax rates on what government should cost rather than\non what it costs now.\nWe are also working on the premise that taxes can be spread\nmore equitably. Centainly the hodgepodge, crazy quilt tax structure\nCalifornia has now can be improved upon.\nAs you know, tax reform is a major goal of this administration.\nWe had hoped to be able to present a comprehensive tax package this\nyear for the legislature to consider.\nIt appears now that we may have been overly optimistic. Never-\ntheless, our own people are continuing to work diligently with the\nCalifornia Taxpayers Association and others toward this end.\nWe are taking full advantage of a report turned into us after\nnearly a year of study by a special Tax Task Force I appointed early\nlast year.\nWe are examining the merits and demerits of a number of proposals\nand suggestions all aimed at simplifying and making more equitable\nour tax system.\nI should like to discuss some of these proposals in detail, but\nI have noticed that it is easy for the press to mistake our examina-\ntion of propossis for adoption of policy. For teat reason I will\nnot go into any specifics here tonight. But, when we are ready to\nmake a proposal fox tax reform, the people of California will be the\nfirst to hear what those specifics are.\nNow. just as you have an interest in our tax system and our tax\ntake, so should you have an interest also in where and how your tax\nmoney is spent.\nYou not only have a right to demand maximum efficiency in those\nexisting programs we spend your money on, you also have a right to\nknow what programs are being contemplated and why.\nAnd just as you have a right to these answers, so do you have\na responsibility to ask questions, to keep an eye on your government,\nto insist that it function properly and efficiently.\nLet me warn you here that if you--if all of us--do not accept\nthat responsibility, government will not long function properly and\nthe blame will rest on your shoulders as well as on the shoulders\nof those in government.\nAn indifferent electorate paves the surest read to bad govern-\nment.\nToday, more than at any time in our history, we cannot afford\nbad government. The demands on government by society and the com-\nplexities of society itself are too great.\nGovernment at every level must be aware of the problems we face\nand must seek to deal with them within a framework that preserves\nthe rights and freedom of the individual, and calls into play the\ngenius of those who make up our society.\nNo government, however large or however powerful, has at its\ncommand the resources and the brainpower to find the answers to\nsociety's problems and to apply them equitably.\nToo many in government today at almost every level fail to\nrecognize this. As our nation has grown in population and in\ntechnology, those within government more and more have tended to\nbelieve that only they have the answers, and they have attempted to\nfoist their answers onto the people with an increasing \"father knows\nbest\" arrogance.\nSomewhere in our nation somebody has found an answer to almost\nevery problem that besets us. Those answers are more available than\never before, to be used wherever they are applicable.\nGovernment must not be too proud to turn to those with the\nanswers, to use them, to help with them, to provide the encouragement\nand the incentive to make them work.\nWe are trying that at the state level in California. We turned\nto the business community to help us streamline our state government.\nWe turned to Chad McClellan, and he has more that 20 thousand\nindustrialists and businessmen organized and working in cooperation\nwith government to provide job training and job placement for our\nunskilled minority citizens. We turned to a citizens' task force\nand the California Medical Association to look at our mental\nhospitals and recommend changes and improvements. And, as I mentioned\nearlier, we have turned to many people, including your organization,\nto help us with our tax programs.\nWe will listen to anyone who may have the solution to one of\nour problems, who can help us not only attack the symptoms, but also\nthe root causes.\nIt is easy to point to the pressing problems of our time:\nThe awakening discontent with their lot of the poor, the under-\nprivileged and the minorities\n-Crime against individuals in the form of increased violence,\nand against society in the form of new uses of violence.\n--The plight of our cities, racked by crime, stifled by traffic,\nsmothered in air pollution, infested with slums, afflicted with urban\nsprawl.\nThe solutions to the problems come less easily. There are some\nwho would have government preferably big government take over.\nThere are others who believe that solutions begin at the grass\nroots-where the people are--that local government knows its peculiar\nproblems best and can solve them best, that state government must do\nwhat local and regional government cannot do, and that the federal\ngovernment must do what states cannot.\nIn recent years this approach to government has been out of\nfashion.\nFor 35 years the federal government has been usurping the powers\nof the state governments, the state governments have been taking\npower from the local governments and all governments have tended more\nand more to limit the options of the individual citizen.\nCompulsion has become a way of life in our land--all in the name\nof problem solving.\nAnd yet, too often we fail to reach the root cause of the problems\nWe deal only with the symptoms.\nI an not foolish enough to say we shouldn't deal with the symptoms\nWe must, of course. We cannot and will not tolerate rioting in\nthe streets or on the campuses. We will make a determined effort to\nmake our streets safe from those who would murder and rape and rob;\nwe will work to unclog our streets, purify our air, educate our\nchildren.\n-7-\nBut beyond all this, we must seek to determine and correct the\ncauses of our failures. Why have the cities decayed; why have crime\nand dope addiction increased; why have not our minorities of this\ngeneration escaped from the slums?\nAnd, at the same time that we seek answers to these present\nproblems, we must look to the future and anticipate new problems.\nAlready we have people looking down the road to see how\nCalifornia can adjust to the problems of a peacetime economy, looking\nat new approaches to our water problems, studying the possibilities\noffered by our ocean resources. We must anticipate a state park\nsystem that will take care of a California population approaching\n50 million persons; and work on a plan for an integrated transporta-\ntion system.\nMost of these projects are going on at minimal cost to California\ntaxpayers and are depending on the involvement of leading citizens\nthroughout California. But more of them can be carried out by a\ngovernment always on the brink of insolvency due to excess and fiscal\nirresponsibility.\nThe fact remains that California must maintain a stable and\nprosperous economy.\nAnd that takes us right back where we began. A stable and\nprosperous economy goes hand in hand with a sound and equitable tax\nsystem. We are determined, with your help, to give the people of\nCalifornia such a system and to have the courage to say no to living\ncollectively beyond our means.\n#\n#\n#\n#\n(NOTE: Since Governor Reagan speaks from notes, there may be\nadditions to, or changes in the above. However, Governor\nReagan will stand by the above quotes.\n3/4\nOFFICE OF THE GOVERNOR\nSacramento, California\nContact:\nPaul Beck\n445-4571\n3.20.68\nTRANSCRIPT OF SPEECH BY GOVERNOR RONALD REAGAN\nJoint Sacramento Service Club Luncheon\nOld State Fairgrounds, Sacramento\nMarch 14, 1968\nYou do me a great honor by inviting me to break bread with you.\nOne of the first things that happened to me as Governor was to be\nimmediately shipped off to Washington to a conference that was going\non there. I left the Camelia City as a brand new resident, had two\nhours with Ev Dirksen and discovered that flower you're wearing is\na marigold.\nSeriously, I appreciate the opportunity to report to you on the\ndoings of one of the major industries of your community. And, in\nthis case, I'm reporting also to the stockholders. And if some of\nyou haven't become aware of that, you'll find out when you get the\nbill from your broker on April 15.\nI've had the opportunity to get around the state since the\nelection some. I was up in one of our more spacious but less populated\ncounties in the North and an old fella accosted me and said, \"You're\nfrom the Capitol.\" He says, \"They got some smart fellas down there.\"\nAnd I said, \"That's SO. II And he says, \"They got some that ain't so\nsmart. 11 I allowed that was SO. He says, \"Pretty damned hard to\ntell the difference, ain't it?\"\nOne of the first things I learned in this new job was the truth\nof an old story that has to do with a newcomer in the gold rush days\nto Alaska. And one of the first things he had to learn was how to\ndrive a team of husky dogs. And they showed him how to harness them\nup and then they told him, \"These dogs are all right. You can pat\nthem on the head and they won't hurt you\nunless you fall down,\nand then they tear you to pieces. =\nA couple of days ago, I heard a fellow on the radio here in\ntown. I don't know who he was, but I have a deep affection for him.\nHe was on the radio and for some reason or another he said, \"Every\nman should have a wife, 'cause sooner or later something will happen\nthat you can't blame on the Governor.'\nBut I'm sure that a part of your hospitality in extending this\ninvitation to me must have been prompted by curiosity. After all,\nit isn't every day that a fellow who, for a number of years, has\nbeen riding off into the sunset with \"The End\" superimposed on his\nback, turns up on the State House steps with something called \"The\nCreative Society\".\nBriefly and informally for the next little while, let me open\nthis stockholder's meeting. This Creative Society that I have talked\nabout is based on a belief in the people's ability to manage their\nown affairs and, in cooperation with government, solve the vexing\nproblems that have plagued us for SO long. It's based also on a\nbelief of mine that government tends to get hidebound and the hides\nare laced together with red tape and the story of government is\nusually, and too often, written in red ink.\nNow, let me give you an example of this and of what seems to be\nsome strange philosophy that government and people in government\nhave.\nI know it's kind of like the sergeant. The young rookie was\nasking him why he was doing something a certain way, and the sergeant\nsaid to him, \"Son, let me ask you something. If you were starting\na brand new country and one of your first chores was to create an\nArmy and you got the first division of that Army organized, what\nwould you call it?\" The kid said, \"I'd call it the First Division.\"\nHe says, \"In the United States they called the first one the Second\nDivision, and if you can understand that, you'll understand everything. 11\nWell, with regard to the red tape and the red ink of government,\nin 1920 it cost $20.75 to phone from New York to San Francisco. And\nfor that amount of money, you could mail 1,037 letters. Today it\ncosts $1.00 to call from New York to San Francisco, and for that\namount you can only mail 16 letters. So, the government is investi-\ngating the Bell System.\nThe one thing the Creative Society isn't and can't be is a\nmagic wand. Taxes had to be raised. The budget is an enormous\n5.7 billion dollars. The budget is too high. Taxes are too high.\nAnd I have discovered that there is a savage resistance on the part\nof some to reducing either the size or power or cost of government.\nThere's a defeatism on the part of too many of you with regard to a\nbelief that nothing can stay the growth of government.\nNow, I'm here to tell you that, while we have a long and hard\nroad ahead, the power and the size and the cost of government can be\nreduced, that we made this start, and that now we have reached a\npoint in which we have to have the help of the people of California\nfrom here on.\nI won't go into the story that you know already about the fiscal\nmess that we were in. I'll just tell you something of our approach\nand the results so far.\nWe had quite an awakening when we first arrived in Sacramento.\nIt seemed that with every drawer we opened, the story got worse.\nOne day when I was shuffling through the papers on my desk, thinking\nthere must be a letter of resignation in there someplace, somebody\ncame in and said, \"Cheer up, things could be worse. If So I cheered\nup, and sure enough, they got worse.\nBut 4410 of our budget goes back to the county and local govern-\nments. That's fixed by law. Eight percent is in the use of the\nbond funds and California is the biggest marketer of bonds in the\nUnited States. Fourteen percent of them marketed by us--about an\naverage of 600 million dollars a year. That's, of course, specified\nand controlled by law. Twenty-three percent are special revenue\nfunds, and again, these are fixed by law.\nBut at least here we can do something. We can exert an effort\nto see that you get a better buy for your dollar. Only 22% is the\namount of that big budget that goes to pay for the administration\nand the running of the government of the State of California. And\nhere we can make an effort in the way of economy.\nI would like you to know that if we could cut-you can do a\nlittle bit of arithmetic and figure it--if we could cut the cost of\noperating the State of California in two, we would only be reducing\nthe overall state budget by a little more than ten percent. Which\nwill give you some idea of how tough the job is.\nHowever, I didn't set out to discourage you. We made our first\nstart. We realized that we had to start effecting economies very\nquickly. We looked around for the immediate ones.\nIn the last ten years, while we've increased the population of\nCalifornia 39%, the number of state employees has gone up 70%-so\none of our first efforts was to put a freeze on the hiring of\nreplacements for employees who left the services of state government.\nAnd I am able to tell you now that, after that continued growth and\nsize of government here, there are today 1.8% fewer employees in the\nState of California than there were a year ago last January. But\neven here we've been handicapped. We could only apply this to the\nadministration of the State of California.\nHigher education was a different matter and we couldn't exert\nthat freeze or have an effect on them. You'll recall, incidentally,\nthat the state University was going to be put out of business by the\nreductions we made in the budget for the University.\nBut somehow they've not only managed to stay in business, they've\nmanaged to increase their number of employees by 8.4%. Even with\nthe limited budget, that wiped out some of the gain that 've made.\n-2-\nNow our gain, incidentally, was made also in spite of the fact\nthat we're increasing the California Highway Patrol to keep up with\nour expanding network of highways. There is a bill introduced in\nthe Legislature to provide radar for the California Highway Patrol.\nIt is an established and proven fact that by the use of radar\neach radar set is the equivalent of a great many highway patrolmen.\nIt is also a proven fact that, in the country, with the use of\nradar, you protect the lives of citizens on the highways and you\ncan reduce automobile deaths and accidents.\nhighway safety\nBut I will predict that before the week is out, that bill will\nbe killed in committee. It'll be killed because one particular\nlobby is exerting a great deal of pressure on the Legislature, and\nthat lobby isn't within a tenth of being as powerful as the people\nof California could be, whose money will be taken and whose lives\nwill be lost in highway accidents. But, unfortunately, the lobby\nis here, and the people have not made their will known to the\nLegislature.\nNow we had another thing something in the nature of a freeze.\nWe discovered that our state employees were tourists at heart.\nThey were all over the place. We didn't tell them they couldn't\nleave\nwe just told them they had to come in and tell us where\nthey were going and why. And that reduced the budget for out-of-\nstate travel by 78%.\nBy last spring we had reduced the amount of gasoline the state\nhad to buy for the state cars by 15%. Incidentally, we discovered\nalso that nobody knew how many of those cars we had, so we put a\nfreeze on buying them. And that's made some changes. But one of\nthe weird changes is, suddenly by stopping buying them, we got a\nsurplus of automobiles in all the state motor pools.\nWe did something about the beautiful four color reports that\nwere being circulated from department to department each year. They\nformed a stack that was half as high as I am. We found that mimeo-\ngraphed reports will do just as well.\nWe discovered that we had a phone bill of 16½ million dollars,\nso we brought the phone company in. Somehow someone had overlooked\nthat they have a department that will come in and survey your needs\nand tell you what kind of a phone system you need. And we brought\nthem in.\nThey found people sitting at adjoining desks with inter-\ncommunicating systems. They had phones on their desks with lights\non them so they could look at the light and see if the fellow\nsitting alongside was using the phone. Those cost two dollars per\nmonth extra per instrument. Now they turn their heads and look at\neach other and the phone company tells us the bill will be reduced\ntwo million dollars this year.\nWe consolidated buying, indulged in competitive bidding,\nstandardized specifications. For example, have bought this\nyear's high-speed tires for the California Highway Patrol at\n$141, 000 less than they cost a year ago. All in all, from February\nFirst a year ago to October 31, we reduced the cost of supplies and\nequipment purchased for the state by 22 million dollars.\nYou know, the state used to be in the pheasant breeding\nbusiness for restocking of our countryside for the hunters. Weire\nnot against that- but we found that we could go out of the breeding\nbusiness and buy them from private enterprise and save $3300 a year.\nSo now we buy them instead of raising our own.\nWe found out there were a number of jobs being done by the\nState Printing Office that they were not equipped to do, and that\nwe could actually get them done cheaper from private enterprise.\nWe are now contracting this work out.\nIncidentally, in one of those task forces we had going through\nthe state government, they just happened to be in the State Printing\nOffice on En occasion when they were getting ready to scrap one of\nthe presses. A great many thousands of dollars were involved. But\nsomehow the press just wasn't equipped to do the particular job.\nIt had to be done. And one of the members of the task force just\n-3-\nhappened to be in the printing business and he showed them how. If\nyou just went around in back and made some minor adjustments, you\ndidn't have to scrap that printing press--and that saved a few\nhundred thousand dollars.\nWe sold the Grizzly for $204,000 and now occasionally have to\ntravel by charter, but most of the time we travel commercial. That\nsaved the state $116,000 a year on the Governor's Office traveling\nexpense. I did draw the line, however, when some of our eager\nbeavers suggested I start traveling by \"Flying Nun\".\nWe're taking an inventory of the lands We're selling the\nbiggest white elephant we found. We've had it since that famous\nOlympics--the state's holdings in Squaw Valley.\nBut also now, particularly in our mental institutions, as we've\ndeclined in population and as there's been a change in the type of\npatient involved--because the patients who could be rehabilitated\nare now being sent back to regional health care centers--we're\ninventorying the farm land that used to be kept for mainly re-\nhabilitation around those as well as other state institutions, and\nthey are going back on the market and going to be sold.\nWith regard to investment of funds, we have gotten a change in\nlegislation giving us more flexibility in investing state funds.\nAnd they are invested up until the time they have to be spent or\nhave to be used. This has added hundreds of thousands of dollars\nto the earnings on those funds.\nWe have a program, a merit program, in the state--have had for\nyears--whereby employees are given bonuses when they suggest things\nthat will result in increased efficiency or economy. We're paying\nout three times as much in those bonuses now as had been paid out\nprevious to this administration, because the fine employees of this\nstate--and there are a great many thousand of such employees who\ntake great pride in their work and are dedicated to their tasks--\nthey discovered that someone is interested.\nA couple of weeks ago I awarded two bonuses of $11,500 each\nto two young men who had, on their own time, worked out a system\nfor speeding up the delivery of funds such as the federal grants and\ngetting them invested and, as a result of their plan, the state is\ngetting an additional $309,000 a year on return on just the brief\ninvestment of those funds.\nThe Savings and Loan Department is financed by assessments\nagainst the savings and loan industry, which may not cut someone's\ntaxes in the immediate run, but certainly it's a return of money\nwhere it should be. We've reduced the cost of operating that\ndepartment by $300,000 a year.\nThroughout this country our business climate has not been the\nbest. And one of the drawbacks in the business climate was our\nCorporation Commission. And down through the years, businessmen\nthroughout the country and here in California have known that here\nwas a great hold-up and a great, massive bureaucracy that was\nhindering what we were trying to accomplish. But we have a self-\nsupporting Corporation Commission now.\nThe Corporation Commissioner told us at the beginning of the\nyear that he had begun effecting some economies and efficiencies\nand he believed that he would be able to hand the General Fund,\nby next June 30, a $163, profit over and above the running of his\ndepartment. Well, a short time ago he was in to tell me that that\n$163,000 was a wrong estimate--it's already a million and a half\ndollars, and by June 30 expected to be a $2 million profit. Around\none half million of that is a reduction in the cost of his department.\nThroughout the country, as I've had occasion to get out, I\nhave found that the increased efficiency and improvement in the\nCorporation Commission here in California is the talk of the\nbusiness community in the nation.\nHave you ever wondered in government whether people ever talk\nto each other? You know, you drive down a newly surfaced street\nand three days later they're tearing it up to put a pipe underneath?\nWell, we've got people that do talk to each other. Some of them\nare here today.\nI can see Bill Gianelli out there. Bill is heading up our\ngreat Water Project. Bill came into my office the other day with\nSam Nelson, who is in charge of our Highway Department. They had\nan agreement. They just thought I'd like to have them sign it in\nmy office. I was delighted.\nI'll tell you what the agreement does. As you know, the Water\nProject is going on down through the Valley. There's a peripheral\ncanal going around the Delta. You know also that the West Side\nFreeway is also going down through the Valley. Well, across San\nJoaquin County, there were two rights-of-way. The highway needed\nland from which it could get seven million cubic yards of fill, and\nthe canal needed additional land where it could dump the excavation.\nWell, those two rights-of-way are now very closely parallel. It\nmeans that less land will be taken off the tax rolls of San Joaquin\nCounty.\nThe highway is going first. They do the primary grading or\ndigging of the canal first. That digging will provide the seven\nmillion cubic feet of fill at a savings of five million dollars and\nthey won't have to tear up any of the county's roads because the\ntrucks bringing the dirt will simply go from the site of the canal\nnext door to the freeway. And, incidentally, Fish and Game even\ngot in the act.\nAs you know, if you dig a hole that big and let it stand for\na while down in the Delta, you're going to have a lake. So Fish\nand Game is stocking the pools of water in the primary digging\narea until it's time to finish the canal, and the people will have\nfishing holes there.\nBut this taught them something else--out of this has come a\nprogram whereby as they go on down the two hundred miles of the\nValley, they are going to use one administrative headquarters for\nboth the Water Project and the Highway Program. They are going to\nuse the same areas for equipment, for servicing, for repair, for\nfueling. They are going to use the same staff and the same equip-\nment for emergencies, such as for slides and so forth.\nAnd this has now spread over into permanent structures. For\nexample, a forestry camp had space and utilities already in. With\nthe addition of only a little office space, we found we could use\nthat same location at a great savings for both the offices of the\nHighway Project and the Water Program. This has all come about\nsimply because in government we now have some men, like these\ngentlemen I just mentioned, who believe that their function is not\nto build an empire, but is to run government as if it were their\nown business in the way a business should be run.\nWith regard to the gasoline tax, since I've touched on highways,\nthis is one of the areas where we can't reduce the budget. The\nmoney there has to be spent. Spending is based on the amount of\ngasoline tax which comes in.\nBut we can make sure that you get a better buy for your dollar.\nA few months ago I was able to tell the people of California that\nas a result of savings in administrative overhead in the use of the\ngasoline tax, we were starting forty-four highway and freeway\nprojects--$98 million worth--one year ahead of schedule.\nIn fact, I am now pleased to tell you that I spoke too soon.\nThe figure is now $194 million--translated from red tape and\nadministrative overhead into miles of concrete highway for the\nState of California. This is the equivalent of a 2½ increase from\nyour gasoline tax.\nWe are reducing our office space and believe that within a year\nwe will have it accomplished. The office space occupied by state\ngovernment offices will go from 9 million square feet to 7 million\nsquare feet. And all that it took to do this was to simply apply\nthe private business standards for square foot of space per employee\nfor those doing similar work. That same standard applied to\ngovernment workers made this reduction possible.\nI'm sure you already know about the four million, three hundred\nthousand dollar building that was to have been started last summer\nfor one of our state departments. It will not be built. We simply\ntore up the contracts without signing them because by applying these\nsame standards we found that we have no need for that building, now\nYou received your notification for the rene~I of your auto-\nmobile license a lit\\ e early this cause we got word\nof the postal increase and we saved $110,000 in postage by sending\nthem out early. You're going to get them even earlier next year.\nAnd we had some sideline benefits. We discovered that by\nsending them out early we reduced the amount of overtime and the\nnumber of temporary employees needed for this rush period. So\nwe are going to put them out about another month earlier next year\nand reduce it even farther. Renewal time for license is 40 days.\nWe have already reduced this by five days, and we're in the midst\nof a planned phase out which, by July, at the time for renewing\nlicenses, will be ten days.\nIncidentally, having men of this kind who ask questions, as\nbusinessmen do, Verne Orr over in this particular department took\nnote of the fact that when you lose your driver's license you go into\none of the Motor Vehicle Bureau offices. You give them your name\nand address and they hand you a certificate. That certificate is\ngood for sixty days, as a license. And Verne got wondering how we\nreally know who the people are and whether they're who they say\nthey are when they come in and get those certificates.\nSo we changed the rules. If you go in now with a lost driver's\nlicense, they tell you it will be put in the mail the next day, and\nyou'll have it. And in the first 23 days of the change of the rules,\nwe received back 551 of those certificates, all of them sent back to\nus by people who said we didn't lose our licenses, we don't know\nwhy we've been sent this. Maybe one indication is a woman who\nwrote us to say she received it. She didn't lose her license\nbecause she never had one. She can't drive an automobile. But she\nsaid also that in the same week she received the license, a check\nwas stolen from her mailbox. Those certificates are as good as a\ndriver's license for credit and for identification for cashing checks.\nSo, we're sending those letters and those returned certificates as\nthey come in to local police throughout the state.\nNow, some of our economies and our attempts at economy were met\nwith great screams and dire predictions. In addition to the one\nI've already mentioned, another was that the colleges and the\nUniversities were going to disappear and the quality of higher educa-\ntion would sink to an all-time low because of the economies we made.\nIncreases in the budget for higher education are based in part\non higher prices we all have to pay and on increased enrollment.\nBut with the cuts that were made last year and this year in the\nbudgets which higher education asked for, you might be interested to\nknow none of the dire things happened because, even with the cuts\nrequired this year, our budget provides the highest increase per\nstudent of the average of the last ten years.\nAnd, in addition to this, believing that a program-type budget\nis good business, we have in our budget this year, made proposals\nthat will give the college system more flexibility than they have\never had in being able to use their money.\nWe knew of an incident a few years ago with this tight-line item\nbudget where one state college wanted to buy some motion picture\ncameras and some very intricate lenses for scientific research.\nUnder the system previously in effect, somebody in Sacramento blue-\npenciled the cameras and not the lenses. The college is sitting\nthere with shelves full of lenses and no cameras to put them on.\nSo we are giving them a program-type budget to the best of our\nability.\nYou have heard, of course, that with the changes we have made\nin the mental health program--and here the screams were especially\nloud--we were going to destroy this program which was admittedly the\nleader of the nation.\nCalifornia, with the exception of one or two small states that\ndon't have the great problems of the large states, is the leader in\nthe mental health field. I don't see some of the same critics rush-\ning into print to acknowledge, now that the year is over, that we\nhave increased our lead over the rest of the nation.\nWe are spending more per patient than is being spent in any other\nstate of the Union. We are enlarging the floor space per patient\nto the 70 square feet we always wanted instead of the 55 square feet\nthey've always had. We've accelerated the pace of putting patients\nthat can be cured or rehabilitated into regional and local health\ncare centers. We are moving toward the day when we'll have only the\ncustodial patients there for whom there is little or no help or\nimprovement.\nWe have improved the mental retardation program. We're working\ntoward the day when we can stop operating these large hospitals for\nthe mentally retarded with their thousands of unfortunate young\npeople and to get more of them into the local centers where they\ncan live in more normal surroundings and be taught to have a more\nuseful life. We have given them a flexible budget which they have\nrequested but never had before, and there will be an increase in the\nnurses compared to the number of patients.\nIn the midst of this fiscal crisis, some of those who must\nshare the responsibility for the financial plight we were in have\nbeen the most vocal critics, not only of our efforts to economize\nbut, of course, of our efforts to increase the taxes in order to get\nout of the debt position we were in. But at the same time they\ncontinue to propose spending measures.\nIndeed, they introduced enough spending measures last year to\nincrease the budget by 43 million dollars at the very same time\nthey were complaining about the economies. And I blue-penciled\n$432 million out of that budget.\nWe're unhappy with the tax situation. It doesn't reflect our\nthinking on the kind of tax system we should have in this state.\nSo we have a task force that's been working for the better part of\na year, and we are now working to put into legislative form proposals\nfor complete reform of our tax structure, to see if we can't have a\ntax system that will be geared to our economy, that will go up with\nour economy so that we don't have to keep changing the rules on you\nand coming back every couple of years and telling you we're going\nto take a higger percentage out of your earnings.\nIn that connection, I've made a suggestion and I'd like to\nmake it again right here, because in the days ahead I'd like to\nsolicit your thinking. You know that the corporation and insurance\ntax can only be raised in California by a 2/3 vote, a 2/3 majority\nof the Legislature. I see no reason why the individual taxpayer\nshould not have the same protection. And I am going to seek a Con-\nstitutional Amendment that will make it necessary to have a 2/3 vote\nof the Legislature to increase any tax in the State of California.\nMaybe I can take a minute here and mention something there's\nbeen a great deal of discussion about, particularly in view of\nApril 15 coming up. It has to do with withholding. I have taken\na position against it. I believe this reflects the feeling of the\nmajority of the people of California. I personally am opposed to\nwithholding.\nI would like to point out that there are some people who are\ndropping us letters to tell us they've changed their thinking since\nreceiving their tax bill. They changed their minds about it\nthey want withholding. I can understand that and I have said and will\nsay again, if this is widespread and the people of California have\nchanged their minds and want it, certainly I cannot stand in their\nway.\nBut before they make that decision, before perhaps some of you\nmake that decision, I want you to know that the greatest proof that\nwithholding is a sedative and not a cure for the ailment is the fact\nthat, had we put withholding in, with this present increase in the\npersonal income tax there wouldn't have been a peep out of anyone.\nThey wouldn't have noticed it.\nHere is the greatest proof that when the poeple become conscious\nof the size of the tax, withholding then becomes a convenience for\ngovernment. It puts in the hands of government an easy method for\nincreasing the tax.\nAlso, before the people make any change in their thinking, I\nwant them to know, I want them to understand, the main convenience is\nfor government. It makes it easier for government to manage its\nfunds. It makes it easier for government to collect. But 1t is an\nincrease in your tax.\nWe have today a record of collection in which there is only\nabout a 1.8% loss by way of people who either make errors or cheat\nor leave the state. And there is no proof at all that withholding\nwould correct that.\nI don't think the federal government has that good a record and\nthey have withholding. So forget any idea that there are hundreds of\nmillions of dollars being lost to the pcople of California by others\nnot paying their taxes. There are some, to be sure, but the biggest\nincrease that the state would get from withholding is going to come\nout of your pockets.\nEven without increasing the rate, there would be anywhere from\n60 to, in a couple of years, a hundred million dollars under with-\nholding. This would represent the state's ability to take advantage\nof increased prosperity the minute it happens and get more out of\nyour pocket without waiting a few months before catching up with that\nincreased prosperity.\nAlso, for whatever ability this would give the state to cure\ncheating on the part of some individuals, it would just put the\nstate in the business of cheating, because they have a happy term.\nThey say the state would get about $20 million from what they\ncall a \"recurring windfall\". Now isn't that a nice sound? A \"recur-\nring windfall\". That means, $20 million a year that you don't owe,\nbut you pay and you don't know that you don't owe it, and the\nstate gets to keep it. I don't think the state should be in the\nbusiness of cheating.\nWell, enough about that. Now, I don't want you to think that\nbecause we've placed a great deal of emphasis on money matters that\nwe've neglected the area of people, the people's problems.\nOur programs of state subsidies to the county probation depart-\nments have substantially reduced the number of commitments to the\nstate's correctional institutions. There are nearly 1500 less than\nwere anticipated nearly a year ago.\nFor the first time in the history of the Youth Authority there\nare empty beds in the institutions where a short time ago they were\ntalking about the need for new building.\nWe are now working on a special program with regard to the\nyoung women who are in our correctional institutions. And if this\nworks out, it will save $170,000 a year and mean that here, too,\nthere will be adequate space. This program has been hailed nationally\nby others who are in this field.\nIn the Division of Apprenticeship Standards, we have set up 30\nnew programs. We have adopted a new code to insure that minority\nraces have an equal chance to take advantage of these programs.\nWith less personnel in the Division of Industrial Safety, we\nhave increased the workload and the results. We've increased the\nnumber of safety inspections. We have vastly increased the condi-\ntions that have been corrected and the net result is that our rate\nof disabling injuries is at an all-time low in this state.\nAt the same time, in the program to rehabilitate the physically\nand mentally handicapped, we have doubled the rate who are being\naided, rehabilitated, and put out into private self-sustaining jobs.\nOver a year ago I went to Chad McClellan, who had gone into\nthe Watts area right after the riots with a program in which he\nhad enlisted the support of his fellow industrialists to provide\njobs in the minority areas. I asked him if he would take this on,\non a state-wide basis. He did. It is at no cost to the state and\ntoday, in some 16 major areas in the state, he has set up a program\nin which thousands of businessmen and industrialists are engaged in\ncooperating with the government on job training programs, putting\nthese people in the minority areas to work.\nAnd, I might add, we have the lowest rate of unemployment that\nwe have had in well over a decade--right now, in the state of\nCalifornia.\nOn the subject of the task force, composed of almost 300 of\nyour fellow citizens that went into 60 agencies of state government\nand came back to us with 2000 recommendations for economies and\nefficiency controls, I had to laugh about an editorial in a certain\nlocal paper. It was to the effect that this report, like all the\nothers in the past, would be warehoused, gather dust, and nothing\nwould ever happen.\nWell, we've only had those for a few weeks. Yet, 206 of their\nrecommendations have already been put into operation for an $8 million\na year savings. I have approved another 600 that can be put into\neffect simply by administrative decision, and 99 that will be sub-\nmitted to the Legislature because it requires their approval.\nIf and when the bulk of these are implemented, they can reduce\nand will reduce the cost of government in the neighborhood of $200\nmillion a year. They will cancel out the need for $153 million in\ncapital construction. They will save on a matching basis $67 million\na year to the counties and local communities and they'l even reduce\nthe federal funds that we need by $92 million. When you can save\nmoney for the federal government, you have performed something of a\nmiracle.\nVery shortly a lake, with a 169 mile shore line, will be filled\nto capacity behind the dam in Oroville. I don't know about you,\nbut every time I fly over some of those multiple-purpose lakes of\nthe water system and see them with a dam and one little civilized\npatch where the state has condemned some land and given a concession\nit recalls to my mind that if you want to get on the lake and fish\nor boat or anything you've got to go through that small patch,\nbecause the rest is cut off by a chain link fence. It says, in\neffect, don't you dare dabble your hands or feet in the water.\nWell, it's not going to be that way anymore. Up at Oroville,\nParks and Recreation has worked out a plan whereby in the lake be-\nhind the dam at Oroville we are going to the private sector, to\nresort promoters and to builders, on plans which will give us con-\ntrol.\nWe are going to develop the lakeshore by private means for re-\nsorts all the way from luxury hotels to campsites and to building\nof lakeshore homes around the lake. And when this is done there,\nwe're going to spread this system to the other areas that the state\ncontrols in the same way.\nIn the area of judicial selection, we have a bill before the\nLegislature, and it's going to have hard going unless you make\nyour desires known. I don't believe that judges should be appointed\non a basis of political favoritism. I think what they do is too\nwell nigh sacred.\nWe have a piece of legislation which will take, once and for\nall, the appointment of judges out of politics. This is a program\nwhereby on the highest level of the court there will be a statewide\ncommission appointed: two judges, two members of the bar, two\ncitizens. And this board will take all names of possibilities for\njudgeships and screen them.\nThe board will then submit the names to the Governor, who must\nmake his selection from among them on the basis of character and\nability and experience.\nThere will be five regional boards of the same texture, made up\nof local people of the judiciary, the bar and the citizenry around\nthe state for the lower court levels. And there will be advisory\nmembers from each local area that will be appointed to help those\nboards even though they don't have a vote.\nAnd in this way, governors henceforth will be handed the names\nof people chosen by their peers and their fellow citizens as being\nqualified, both personally and by experience, to be judges. I am\ndoing everything I can to see that this is approved, but, as I say,\nit is going to require the support of the people to let government\nknow that that's exactly what you want.\nOver a ten-year period the population of our state has in-\ncreased 39%. Welfare spending in California went up 247% in constant\ndollars over the same period.\nWe are bound in and limited by what we can do by federal regu-\nlations as far as reforming the program until we can get help from\nthe federal government. We have done what we can for the local coun-\nties. We have reduced 2500 pages of state regulations to one 200-\npage manual.\nBut we've gone farther than that. We have just announced that\nin Fresno, we will have an experimental program. In Fresno we're\nstarting a pilot program where all of the multitude of welfare\nagencies are going to be formed under one director, into one program,\nto funnel people in at this end and funnel them out at the other\nend into jobs they're trained for in private enterprise.\nWe're going to break the dependency cycle and have a goal of\nmaking people independent of welfare instead of the other way around.\nI'm running over my time and I didn't intend to. But I'll just\ntake a minute or two more, if I may.\nA challenge of our society, of course, goes far beyond what we\nin government are attempting to do. There is a challenge to you\nhere as the leaders in your community, and this challenge extends to\nservice club members throughout the state and throughout the United\nStates. You have a great and personal stake in what happens in your\nstate and your nation.\nThe challenge is simply this: If our system of government is\nto work the way it was meant to work, we must reverse the tren\nturning more and more authority and control over our lives to\ngovernment. We must accept our responsibility as free men and as\nconcerned citizens.\nNow it is easy enough to say, \"Well, I vote and I pay my taxes\nand I obey the laws. \" But, we are kidding ourselves. This isn't\nenough, and you know it. Otherwise, you wouldn't be members of\nservice clubs--because by their very name they imply that they're\nof service to fellow citizens.\nWhat can you do? Well, the answer is as easy as it is varied.\nThe problems lie all around you. And, only you can provide the\nlasting solutions within the framework of a free society.\nWhat are you as businessmen doing, for example, to prevent\njuvenile delinquency? You, as individuals or your clubs, can do\na great deal. Most kids old enough to get into serious trouble would\nrather work than play if we gave them half a chance. Where are the\nsummer jobs and the after-school jobs that you and I used to have?\nWell, most of them are gone and the excuse is government regulations\nand government paperwork. And that excuse has some validity.\nBut, if we're interested in keeping the kids off the street and\nout of trouble, we can make an extra effort. If there's some way\nthat the state government can get out of your way, let us know and\ndo it. The alternative is to keep criticizing the younger\ngeneration while we turn our backs on them.\nNow you can make your complaints about the high cost of govern-\nment meaningful by demanding fiscal responsibility at the city and\nthe county levels where your tax dollar doesn't buy as much as it\nshould in most cases.\nYou can work in the poor areas and the slum areas through govern-\nment programs or through privately sponsored and financed programs.\nIt's not enough to just give to the Community Chest or the Red Cross\nor the Salvation Army, although this, too, is vital.\nToday's problems demand your time and your energy as well as\nyour money. They demand your personal involvement and that again\nis the meaning of the Creative Society.\nMoney may seem like an answer in Washington where the slogan\nused to be \"Walk Softly and Carry a Big Stick\" and now it's \"Walk\nSoftly and Carry a Big Sack\", but if money is the answer, how do\nwe explain that California ranks third in the nation with the\nnumber of poor and first in the amount of federal anti-poverty funds\nthat we've been alloted. Since mid-'64 we've spent $288 million in\nthis program in California.\nAnd we didn't alleviate poverty, we created an administrative\nnightmare. Follow ; Watts, millions of dolla were funneled into\nthat area as a hot spot. They had to solve it. For a time there,\nI can assure you that the poverty program administrators outnumbered\nthe residents. And then a national magazine doing research found\nout that more than 50% of those funds went for administration.\nThis is why I vetoed a number of poverty programs in the\nstate. One in Fresno was set up to teach people how to demonstrate.\nIf there's one thing we don't need in California, it's more demon-\nstrators!\nThere was another one down in Ventura County\nit was a pilot\nprogram. It was going to put 17 of the hard-core unemployed to\nwork clearing up our park lands. I vetoed the program because they\nwere going to have seven administrators to make sure the seventeen\ngot to work on time. But it wasn't enough. The seventeen were\nexpected to travel 12,000 miles doing this job and there was no pro-\nvision made for their transportation or their housing.\nThe general accounting office has said that there is one Job\nCorps Training Center in California with 1,860 enrollees and a\nstaff of 1,078.\nBut even this pork-barrelling has been topped by one in Chicago.\nThey had an organization that was awarded $872,000 to teach basic\narithmetic and reading to dropouts. Well, that's a worthy purpose.\nKind of curious, a reporter for the Chicago Tribune went down one\nday to see how they were doing in school. And he interrupted a crap\ngame. They explained to him that it was a recess.\nBut then he started looking at the teachers--they got $3840 to\n$6500 a year--not an excessive amount, but neither was their work.\nHe found that two of them were in jail--one charged with murder, one\ncharged with conspiracy to commit murder. Three were out on bond--\nwaiting trial for rape. Another was waiting trial for aggravated\nbattery, and still another one was on probation for a burglary con-\nviction. And the director said it was too early to say whether the\nprogram had been successful.\nIncidentally, the teachers were paid $5 a head for each dropout\nthey could bring in. And since they were able to offer the drop-\nouts $45 a week plus a family allowance, the best recruiting place\nwas the nearby school, where they were talking the kids into drop-\nping out.\nWell, there is a better way. Not only you, but those who work\nfor you, could be encouraged to be involved. Ours is a world of\nincreasing leisure\nleisure to play golf, go boating, go skiing,\nand leisure to help those who need help and can profit by it.\nYou can be minimal good citizens--doing what the law requires\nand little more, or you can become involved--if you want to save our\nsociety and build a better society. There is a demand that you\nbecome involved. The alternative is a continued drift to big govern-\nment\nto bread and circuses\nyes, and to riots and bloodshed\nfomented by those who've been promised much but have received very\nlittle.\nYou have a very definite stake in what we're attempting here\nin Sacramento, We have proven, I believe, already, just showing a\nlittle light at the end of the tunnel, that government can employ\ncommon sense and can employ business practices.\nWe've proven that the people can participate in government and\ncan lend their abilities to the solution of the peoples' problems.\nWe've proven that the size and the power and the cost of government\ncan be reduced. We've brought hope across this land that government\nof and by as well as for the people is still a practical possibility\nand is still the basic American dream.\nChad McClellan, who I mentioned a short time ago, has received\ninvitations from 20 Governors, Democrat and Republican, and he has\ngone to those Governors and today there are 13 programs in 13 differ-\nent states started because of him, all similar to ours.\nKen Pryor, who was chairman of the citizens' task force, is on\nthe same circuit at the invitation of other Governors. He has just\nreturned from Maryland where they are now going to put a citizens'\ntask force to work in their state\nto bring about the same\nNo, we haven't totally accomplished all we intend to do or all\nthat we've tried to do. But we've made a start and we have reached\nthe point now where we cannot continue without your support.\nBecause from here on, to make the real reductions, we need changes\nin the laws. We need the backing of the Legislature to give us\nthe flexibility.\nIf those who place their faith in ever more powerful govern-\nment succeed as they are trying to succeed in stopping what we\nhave started here, then each one of us will have to ask, where,\nif ever, do we think it can get such a start again as we have give.\nit here in California. We must succeed, or I believe it is pro-\nbably the last chance for that American dream. Thank you.\n#\n#\n#"
}