Governor, Unruh Team Up for Fiscal Good News
SACRAMENTO — Republican Gov. George Deukmejian and Democratic state Treasurer Jesse M. Unruh, aggressive adversaries while both were in the Legislature, teamed up Wednesday to pat each other on the back at a cozy press conference called to celebrate “California’s return to complete fiscal health.â€
Unruh, long a state and national Democratic Party figure, rejected the notion that his appearance with Deukmejian might suggest a reelection endorsement of the governor. He did, however, pointedly refuse to endorse the Democratic gubernatorial nominee, Los Angeles Mayor Tom Bradley.
“I have made no endorsements in any office,†Unruh brusquely replied when asked if he supported Bradley, the head of the state Democratic ticket.
The press conference was called to further publicize the newly upgraded rating of California general obligation bonds by two influential New York rating houses, Standard & Poor’s Corp. and Fitch Investors Service Inc. Both returned California bonds to a triple-A rating, the highest level possible and a strong indicator of their confidence in the California economy.
Unruh and Deukmejian separately announced the improved rating last week but complained at the press conference that the news media had paid virtually no attention. Unruh said the upgraded status will save taxpayers more than $21 million in interest during the life of bonds that he expects to issue over the next year.
Both Republican Deukmejian and Democrat Unruh, who often collided in the 1960s when they were members of the Assembly, insisted that their extraordinary press conference was strictly nonpolitical and was meant only to focus on what Deukmejian described as “yet another indication of California’s return to complete fiscal health.â€
Standing shoulder to shoulder, Deukmejian praised Unruh as a treasurer who had been a “major factor in the improvement in our bond rating, an achievement that will save the taxpayers millions of dollars.â€
For his part, Unruh, who faces no GOP election opponent, said the bond rating firms were “very impressed†that California for the third straight year rolled up a budget surplus of about $1 billion for expenditure on unforeseen emergencies such as floods and wildfires.
“I think the governor deserves a great deal of credit for being able to hang on to that (reserve) and being able to utilize his blue pencil (budget veto),†the former Assembly Speaker said. “I want to say with a Democratic Legislature, that is a great achievement.â€
Asked whether all the praise suggested an endorsement of Deukmejian, Unruh replied: “It suggests to me that the governor and I have been able to work together for the economic health of this state regardless of our party, and I am sure we will continue to do so.â€
At one point, Deukmejian sought to stifle a question dealing with whether Unruh supports Bradley. “We’re not going to be getting involved in political questions,†he told reporters.
Pressed later about the joint appearance, Unruh said: “I don’t think either of us is going to get hurt by this today.â€
‘A Very Healthy State’
He added: “People of California really ought to know this is a very healthy state now and who they give the credit to is up to them. You’ll see that in November.â€
As a central theme to his campaign, Deukmejian boasts of having returned state government to fiscal health without a general tax increase. Time and again, he has insisted that when he took office in 1983 the state faced a $1.5-billion deficit, California was “insolvent†and the bond rating was falling.
His fiscal policies, Deukmejian insists, turned the state around. Democrats and others, however, have noted that when Deukmejian became governor, California, like other states, was beginning to emerge from the throes of a lengthy recession.
Deukmejian noted that California bonds were last rated triple-A in 1980. Although they fell short of the triple-A status for the next six years, they remained at various levels in the A category--an indication that their investment quality was still high.
Unruh also joined Deukmejian in opposing a repeal or adjustment of the so-called Paul Gann budget limitation law enacted by the voters in 1979, and he endorsed the governor’s newly devised plan to sell off state pension fund investments in companies that do business with the apartheid government of South Africa.
Gann Law’s Limits
Basically, the Gann law allows state and local governments to increase spending according to a formula based on population growth and either inflation or the increase in per capita income--whichever is lower. Revenue in excess of the limit must be returned to the taxpayers unless voters raise the lid.
State government this year came very close to reaching the limit, setting off a campaign that includes many of the Gann limit drafters to either repeal it or make it more flexible. Deukmejian is an outspoken advocate of the limit.
Asked if he favored repeal or modification of the limit, Unruh told reporters: “I am in temporary agreement with the governor that we ought to see whether it works, and we really won’t know that for about two years. . . . I am inclined to believe you don’t fix something that works. If we find out that it doesn’t work, I am sure everybody will agree on fixing it.â€
Unruh, as the state’s chief fiscal officer and custodian of the treasury, said he supports Deukmejian’s South African divestiture plan “totally and to the total extent that it does not cost us a significant amount.â€
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