Despite Democrat Antics, Wilson Has a Legacy

In a sequence of events only explicable by the Byzantine politics of Sacramento, Gov. Pete Wilson and the Legislature have managed to take the first big budget surplus of this decade and give it to people who need it the least.

At the height of the recession, the state borrowed about a billion dollars from the Public Employees Retirement System to balance its books. Dominated by Wilson-hating labor unions, the retirement system sued to get its money back. This year, the state Supreme Court agreed and directed a repayment of $1.3 billion.

No one expected the repayment to take place immediately, since there were plenty of starving programs competing for the budget surplus. Wilson offered to pay the retirement system over time in exchange for a tax cut and funding for a variety of long-delayed programs. But rather than negotiate with the governor, the Democrats running the Legislature ridiculed him. In response, Wilson directed that the retirement system be repaid in full immediately, thereby exhausting every new dollar that had been earmarked for coastal protection, strapped counties and a state employee pay raise. Ironically, the Public Employees Retirement System doesn’t need the money; its coffers are overflowing as a result of the stock-market boom.

How could such a mess have occurred? One has to go back to 1991, when Wilson

Tony Quinn, a vice president of Goddard Claussen, a public affairs firm. He worked in the Department of Commerce during the Deukmejian administration.

assumed office and the legislative Democrats missed an opportunity. Unlike his Republican predecessors, Wilson is something of a throwback to the Progressive tradition of Earl Warren and Hiram Johnson. He is, fundamentally, a man of the political center, someone Democrats could have done business with. In the same week that the California budget melted down, the centrist Democrat in Washington was preparing to sign a balanced-budget and tax-cut plan negotiated with Republican congressional leaders whom the president has helped pull to the political middle. Unfortunately, this has not happened in Sacramento.

The Democrats’ visceral disdain for Wilson springs from three incidents: Wilson’s support for term limits in the 1990 campaign, which Democrats correctly saw as a dagger aimed at them; the governor’s refusal to make a reapportionment deal with them in 1991, and his championing of Propositions 187, the illegal-immigrant initiative, and Proposition 209, which bans racial preferences.

The latter has been the toughest nut. The Democratic Party is wracked by competing interest groups, of which racial-minority interests are the most sensitive. In 1994, state Democrats overwhelmingly lost the white vote; if that happens again in 1998, their chances of electing a governor are nil. By exploiting their divisions over race, Wilson has run a fingernail across the Democratic chalk board.

But the Democrats have accomplished one thing: They have made sure that Wilson will leave no legacy as governor, at least in the traditional sense of the term. There will be no innovative education reform as in Michigan, no innovative welfare plan as in Wisconsin, and no return of money to the taxpayers as in many states this year. Yet, Wilson has a legacy of the most unusual kind.

While Sacramento slept this summer, the state’s gross product passed $1 trillion. California’s economy has been transformed in the 1990s; all jobs lost from the recession have been replaced, many in industries that didn’t exist a decade ago. More Southern Californians work in multimedia than in aerospace; high-tech companies are pioneering new markets in places as diverse as India and Malaysia. And all this happened with no help from Sacramento.

The governor did what he could, pushing international trade and military-base conversion, but state government cannot fly on one wing. The Legislature has taken virtually no interest in economic development, satisfied to arbitrate among the interest groups that pour dollars into its campaign coffers.

So the real Wilson legacy may be the realization that we don’t need much state government to make things work in California. Perhaps, this is the fundamental triumph of Republicanism--sort of a withering away of state government.

No one will question the competence of the Wilson bureaucracy; they’ve made the trains run on time in a virtually corruption-free administration. When the Legislature has acted during the Wilson years, its usually been when there’s a gun to its head. Wilson won the battle over welfare reform, but that reform was enacted only because the new federal welfare law required it. Workers’ compensation was reformed and electric energy deregulated only when the need became overwhelming.

California really needs a Risorgimento, a revival of useful government. The Constitutional Revision Commission led the way, but the Legislature ignored its work. There is too much government in a structural sense--two energy agencies, two tax-collecting bodies, three competing bodies trying to set education policy--and too little in a utilitarian sense. No one is focused on how Sacramento can meaningfully contribute to the creation of jobs or generation of wealth in this growing and diverse state.

The next governor will have to confront these issues head-on, lest a dysfunctional Legislature continue to frustrate him or her and all future governors, and repeat the debacle of 1997, when millions of Californians were denied both tax relief and deserved benefits.