"There Is a Limit to What We Can Absorb"

By HENRY MULLER AND JOHN F. STACKS Pete Wilson

Q. Is the California Dream threatened by all the problems the state faces?

A. The state has got to achieve an equilibrium. We're in a period when we have taken on a number of burdens, some natural, some of our own making. This is a rich state by any number of indexes. But as with a rich country, there are practical limits to what you can do. There are also political limits to what people are willing to assume in the way of burdens.

California is going through a period of change. Growth is not new to us. David Gardner, the president of the University of California, was asked to give a one-sentence definition of California, and he said, "They found gold here in '49, and they haven't stopped coming ever since."

But the growth is relentless. We're experiencing something that's very troubling to me, and that is an outflow of those who are the producers -- and a tremendous increase in the number of consumers of services, particularly children. When I say that there has to be an equilibrium, that's really what I'm talking about. There has to be an ability of the state to grow economically to keep pace with the burdens placed on it.

Q. The problem comes down to California's rapid population growth, doesn't it?

A. Since 1985 the state's population increased 18%. School enrollments increased 23%. Welfare increased 31 1/2%, and Medi-Cal, which is what we call our Medicaid, increased 49%. Delaware moves to this state annually.

I've been to two National Governors' Association meetings. The theme of both was that federal mandates, especially health care, are going to bankrupt the states. Look at an ironic situation: one federal statute says illegal workers are ineligible for public assistance, but another federal statute says that their children shall be enrolled in the state public school system. That's why we're adding about a quarter-million kids a year -- from all of it, from the birthrate, from the migration from other states.

Q. Is there anything you can do to slow the population inflow?

A. We will have to minimize the magnetic effect of the generosity of this state. When I make this comment, people immediately will say, "You're anti- poor people." I'll be accused of racism. The fact of the matter is, Californians are having to pay a disproportionate share of the national burden for supporting the poor. What we are going to have to do, I think, is either make an internal decision to be less generous or, better, ask the Federal Government -- notably the Congress -- to give some relief on these mandates because their good intentions are threatening the stability even of rich states like California. There is a limit to what we can absorb.

Internally, the people of this state are going to have to decide what their priorities are. They've indicated that the most urgent from their standpoint is education. And I don't disagree with that. Education needs reform so that we can have a competent and productive work force. That's true here; that's true nationwide.

We have to consider the kind of kids that are going into the classroom. Are they prepared to learn? Are they healthy enough to concentrate? Which is why we have laid such heavy emphasis on a preventive -- as opposed to remedial -- approach. One program in particular is designed to ready children for the classroom. Today, as much as I may criticize the quality of our education, I have enormous sympathy for the classroom teacher who is asked to be substitute parent, social worker and, in some cases, cop. They shouldn't have to be any of those things. What they have to be, obviously, is on the alert to try to get children the sort of help that they need, whether it's mental health counseling or physical examinations.

But basically, all these things we're talking about depend upon our having the sort of economic base, the capability to maintain an employment base that will keep pace with this population. And California is not an island. We are in competition with other states, with other nations -- and the fact that we offer vast markets in no way makes us irresistible to business. It is possible to exploit California's markets while being headquartered in Arizona or Nevada or, for that matter, North Carolina. We have to be very concerned that we maintain our competitiveness.

Q. What will be the impact of the great new ethnic mix?

A. The changing demographics of California are reflective of a growth that is very much a mixed blessing. At the same time that we are renewed and enriched and refreshed by the energy and creativity of a new generation of immigrants, they are a mixed blessing in the sense that our overall population is becoming much younger. As I mentioned, we have an exodus from the state of those who are in their productive years and a great increase in the growth of the child population. And as a result of that, there's a great increase of consumers of expensive governmental services -- of education, of health care and welfare. So that is what is reflective of the changing demographics. More than anything else, it means that the state is growing younger.

On the good side, we believe that not only our geography but also this diversity of our population puts us in a particularly advantageous position to exploit what we think is going to be a transpacific explosion. We think there is going to be a tremendous increase in the importance of transpacific trade, and, indeed, it has already begun. Today a greater volume of our trade crosses the Pacific than the Atlantic.

+ Q. Can the state's political institutions keep up with the challenges raised by the rapid rate of change in all these areas?

A. Part of it is the rapid rate of change, and part of it is just the inability of the legislature to be as responsive as it should be. We don't have affordable car insurance because the trial lawyers' lobby has been successful in killing it. We don't have ((enough)) reform of workers' compensation because the applicants' attorneys will be successful in forestalling any reform beyond what we achieved this year.

Q. It is being said more and more that there is a sheer physical limit to the number of people who can live here because of the environmental constraints. Assuming you could take care of all the governmental and financial problems you've described, the question remains: Is this a state that can support not only 30 million but maybe 40 million or 50 million people?

A. It's true that in existing urban centers you have a problem of congestion that I think is far more serious to manage than even the quality of the air that automobile traffic produces. I am convinced that by moving to alternative fuels, we will have significantly improved air quality and still be confronted with horrendous congestion unless we take steps to alleviate that. The people in this state at the last election approved $3 billion worth of rail-bond issues. In the primary in June 1990 they approved essentially a doubling of the gas tax. That will produce enough funding for highway construction. If that hadn't occurred, we would have been absolutely strangled by our own traffic.

Is there a limited carrying capacity? That's something people have been arguing for years. I think the answer depends on the extent to which you are willing to anticipate and accommodate growth. The quality of life doesn't depend exclusively upon numbers. You can have a miserable quality of life in a small village. You can have an infinitely better quality of life in a large city. It depends on whether or not the necessities and amenities have been provided, and that requires first and foremost that you anticipate and accommodate, and that you've got the economic base.

The U.S. Constitution guarantees the right of free travel. The courts have gone much further and have inferred from that the right to reside. Indeed, in a number of cases they have rejected efforts -- by Connecticut and Hawaii and others -- to deny to new residents the welfare benefits that are paid to established residents. I happen to think those cases are wrong. It seems to me that at the very least there should be a period in which new residents do not receive the benefits that the state provides. People have talked about a three-year waiting period. Otherwise, you have a situation in which you are risking the health of your economic base.

Q. Looking at all this, do you ever wonder whether California is ungovernable?

A. Being Governor of any state, and certainly a state with California's problems, is fraught with difficulty. Representing California in the Senate ((which Wilson did from 1983 to 1991)) seems like a cloistered existence, even if being a Senator from California is very different from being a Senator from a small, relatively homogeneous state. The difference, still, is that this is a much better job -- for all its slings and arrows. It's far more demanding, but it's far more satisfying, far more interesting.

Q. Do you see your kind of politics of the center having a chance at the national level? Or is the power of the extremes still too great?

A. I don't think that the power of the extremes is too great. By and large, I don't delude myself that the vast majority of the American people are thinking about politics. In fact, they prefer not to think about it. They want services delivered, and they really don't much care how. But they are inherently schizophrenic: they want the services, but they don't want the tax to pay for these services.

Still, there is a basic difference between the parties, and that's healthy because it produces competition that is absent in a number of other countries. The problem, frankly, is that whether you talk about Sacramento or Washington, too often the people who are engaged in the competition forget that it is for the purpose of benefiting the public and not the politicians.