Pete Wilson as Governor: Will Pragmatism Do It? : Inaugurated today, the San Diegan faces extraordinary problems

Pete Wilson is not a great orator and he was not a great U.S. senator. Nor is charisma exactly his middle name: For better or for worse, he is no John Kennedy--or Ronald Reagan. But as he takes the oath of office today as California’s 37th governor, expectations are in fact running rather high. The hope is that somehow California may have stumbled upon just the right person to be in this job--and at just the right time.

Such expectations arise for a number of reasons. One is that if this San Diegan isn’t quite the second coming of Kennedy/Reagan, neither is he a Jerry Brown nor a George Deukmejian. He is not a visionary, he is a pragmatist; he is not an ideologue, he is a doer. But after eight years of hip-tech moonbeam and then eight years of slash-and-burn conservatism, California is more than ready for shirt-sleeve pragmatism.

He has gotten off to a good start. His pre-inauguration moves have received wide acclaim. Environmentalists praised his nomination of former Sierra Club executive Douglas P. Wheeler to head the state Resources Agency--and were thrilled when he agreed to intervene on behalf of redwood conservation with the state Board of Forestry. And his selection of Democrat Maureen DiMarco, a respected education advocate, to the post of first secretary for child development and education added to the hope of broad-based government.

It could be that these moves were precisely calculated to engender a nonpartisan, let’s-get-the-job-done spirit. If so, one hopes Wilson calculated well. The new governor faces a Democratic-controlled Legislature and the state is facing a budget-deficit problem that dwarfs any in recent memory. To maneuver California through such straits will require all of Wilson’s pragmatism--and a lot of luck.

State general-fund spending will exceed revenues in the coming fiscal year by $5.9 billion and it could get worse than that. The problem is not only the recession but also a longer-run, built-in structural imbalance between state revenues and expenditures. Even if revenue growth averages a healthy 7.5% a year over the next 10 years, that won’t cover the costs of built-in spending demands that increase each year by 8.1%.

The structural problem is attributable to a number of powerful factors: Population growth and federal entitlement requirements; societal and behavioral changes (high rates of drug abuse and so on) that increase demand for services; legislative or voter-imposed limits on spending that constrain state options, and the overall decline of federal grants as a state revenue source.

All of this adds up to a formula for Excedrin headache No. 1991 for one Peter Barton Wilson, and the answer for him is not only an uptick in the economy but also a little bit of that pragmatic, nonpartisan magic that would seem to be his hallmark.

Wilson is going to have to work with the Legislature to chart a path out of this fiscal nightmare. If he is to be successful, he will need to keep many options open--and this means not only getting the Legislature to agree on continued no-frills government, with possible additional cuts here and there, but also to get legislative approval of new measures to increase state revenues. Both kinds of steps, not just one, will be needed.

The demand for general-fund state services, in California as well as in other states, has grown substantially in recent years and is projected to continue upward well into the next century. As a result of the increasing imbalance between the growth in general-fund revenue and general-fund services, the state has already trimmed most of the fat from many existing programs. This means Wilson will have to focus on expanding the revenue base as well as continuing to streamline spending.

Given the magnitude and urgency of the problem, the new governor and Legislature may feel less constrained than they have been to make the difficult decisions necessary to realign state spending and revenue.

THE STATE’S RED INK 1990-91 (in billions) Projected general fund revenues: $42 Projected general fund deficit: $-0.8 1991-92 (in billions) Projected general fund revenues: $44.3 Projected general fund deficit: $-5.9