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Page 32

California

Pete Wilson, Republican

Legislature: Democratic

Took Office: 1/91

Grade: C

Pete Wilson has had a Dr. Jekyll and Mr. Hyde relation-

ship with the taxpayers of California.  His first term was a

fiscal and economic disaster for the state.  He muscled

through the legislature a $7.5 billion tax increase, the

largest in the history of the 50 states.  California's al-

ready high income tax rates were raised to the third highest

in the nation.  The economy sank further into recession,

real estate values collapsed, business failures soared, Or-

ange County was forced to declare bankruptcy, and, for the

first time in its history, California suffered net outmigra-

tion.  The tax hikes failed to raise the anticipated reve-

nues, and the state's budget crisis intensified.  The second

term has been better.  Wilson not only has allowed the ill-

fated income tax hikes to expire but has recommended further

cuts in the business and individual tax rates--proposals

that have been mostly thwarted by the legislature.  His lat-

est budget proposal contained a $3.6 billion tax cut, in-

cluding a 75 percent reduction in the car tax phased in over

five years.  Thanks to the economic resurgence, California

today has a $4 billion surplus.  Although Wilson now adver-

tises himself as a fiscal conservative, his record fails to

match his rhetoric.  The Los Angeles Times recently noted

that "Pete Wilson the tax cutter has not come close to

matching Wilson the tax raiser.  Tax increases at the start

of Wilson's administration in 1991 hover at $3.6 billion

above recent tax cuts."  Moreover, Wilson has been a prodi-

gious spender.  When he took office state spending was at

about $38 billion (in 1996 dollars).  By 1996 it had risen

to more than $50 billion. Wilson hopes to run for president

on his fiscal record--largely an unhappy one.

Score Grade Rank

Overall Fiscal Policy Score

41

C

37

Spending Score

44

C

28

Revenue and Tax Rate Score

40

D

39

Amount

1.4%

Average Annual Change in Real Per Capita Direct General Spending through 1996

1.6%

Average Annual Change in Direct General Spending Per $1,000 Personal Income through 1996

-2.7%

Average Annual Recommended Change in Real Per Capita General Fund Spending through 1999

1.9%

Average Annual Change in General Fund Spending Per $1,000 Personal Income 1996-98

1.6%

Average Annual Change in Real Per Capita Tax Revenue through 1997

1.4%

Average Annual Change in Tax Revenue Per $1,000 Personal Income through 1997

-0.5%

Average Annual Recommended Change in General Fund Revenue Per $1,000 Personal Income through 1999

4.1%

Average Annual Change in Real Per Capita General Fund Revenue 1996-98

0.1%

Average Annual Recommended Tax Changes as % of Prior Year's Spending through 1999

-1.4

Change in Top Personal Income Tax Rate, proposed and/or enacted (% points)

-1.395

Change in Top Corporate Income Tax Rate, proposed and/or enacted (% points)

18.1

1998 Combined Top Income Tax Rates (Personal plus Corporate) (*0.5)

1.25

Change in Sales Tax Rate, proposed and/or enacted (% points)

3.0

Change in Gas Tax Rate, proposed and/or enacted (cents per gallon) (*0.5)