Reagan’s reasoning can, of course, be made to sound disingenuous. He claims to have discovered only after achieving office the programmed deficit of Governor Pat Brown. Mr. Casper Weinberger, chairman of Reagan’s Little Hoover Commission, likes to tell the story . . . “Hale Champion, outgoing director of the Department of Finance, cheerfully walked into the conference room, greeted [us] affably, and announced that while there would be a surplus available on June 30, 1967 (when the last of Governor Brown’s eight fiscal years ended), there was going to be a problem starting in January 1968.
”The Department’s best estimates showed, he said, that there would be a cash flow shortage in January, February, and March of 1968 amounting to $740 million. Champion added that approximately $340 million could be borrowed from other state funds, leaving the state’s bank accounts short by $400 million of the amount needed to write checks covering the state’s daily bills during those months. When the new tax monies came in April 1968, most of the cash flow problems would be behind us, added Champion, but of course there would be quite a big deficit by June 1968 if present rates of revenue and expenditure continued. In fact, the deficit by then would probably amount to over $350 million.
“After a moment’s silence,” Mr. Weinberger recalls, “somebody asked, ‘Hale, what would you have done about this if you had been re-elected?’ ‘Well,’ he answered with a slow smile, ‘we’ve been telling you Republicans we needed withholding and more taxes, but you’ve always defeated them.’”
“We knew there would be a deficit during the campaign,” Reagan reminisces. “But we didn’t know how large it would be. Accountants told us there simply wasn’t any way of ascertaining how much. Brown kept borrowing all over the place. The civil service people said there was a bare chance we could make it without raising taxes. As we got close to the election, it began to look as though there wasn’t any chance. I said during the campaign that there would have to be new taxes. The constitution requires that you submit a budget right after you take office. I did. But the research hadn’t been completed. And soon it became clear that even if we could effect $250 million in economies, there wasn’t a chance for a balanced budget. We just didn’t know the extent of the problem. We had no way of knowing that Brown was spending most of the contingency funds. I’ve now recommended that in the future, independent auditing firms be given a crack at the figures, so that how the state stands financially can be a part of the public knowledge.”
He paused to wave back cheerfully at four college-types who had pulled their sedan alongside, driving 55 m.p.h. in tandem with the state trooper who was chauffeuring the governor and exactly observing the speed limit. A honey-blonde leaned smiling out of the open window, hoisting a cardboard square hastily improvised from a grocery box or whatever, when the party spotted the governor’s license plates. Scrawled on it with lipstick was NO TUITION! Reagan laughed as the collegiates pulled away. “The faculties are mostly responsible for that,” he said. “They tell you one thing, and then they tell the press another.” He gave examples. “The No-Tuition bit is a local superstition. Even Brown said years before the election that tuition was ‘inevitable.’ Did they jump him? But it’ll take time. Right now the point is to save money where we can. I’m a good
person for people to trust their money with. I’m a good manager
, and I’ll treat their money as though it were mine. When we suggested 10 percent across the board we knew some departments would have to expand, though others could trim back even more than 10 percent. We won’t make 10 percent, but we will make about 8.5 percent. And remember, that’s 8.5 percent of the spending we have control over. Two-thirds of the spending in California is fixed by the constitution or by statute and we can’t do anything about it. It’s bad enough to try to make economies when you need the help of a legislature that’s controlled by the opposition party. We can’t very well tackle the constitution at the same time. But what we’re doing will take hold. What makes me mad is obstructionism that’s clearly intended to screw up your program. For instance, I said no more new hiring. If one department needs another secretary, pull her from a department where there are surplus secretaries. So some of the civil service people got together and when you need a secretary for the most urgent job they tell you sorry, there isn’t one available in the whole goddam state of California. You know there is, of course, but it’s a problem of locating her, and that takes time, takes time to canvass the departments and identify those that have the excess people, and there are plenty around. It isn’t any different from what you would expect. Why should the bureaucracy behave any different from the way I always said it did — protectively towards its own authority and vested interests? A governor can’t do everything, he hasn’t got that much authority, and maybe he shouldn’t have that authority. I have only a psychological authority, because the politicians know that the people are with me, that they see a lot of waste, and they resent the taxes and the inflation, and that they’ll support me. There are lots of things I just can’t do, at least not for a while. Take judicial reform. You know how many judges Brown appointed as a lame duck? Four hundred! I must be the only governor in the U.S. who can’t fix a parking ticket. But in time there will be vacancies, and I’m trying to reform the system, but Unruh hasn’t let the bill out of committee. You’ve got to be patient, and you’ve got to make a start. I’ll be around for a while.”