Exclusive Interview: Governor Brown Speaks Out In Defense of His State

This story originally appeared in the July 11, 1977, issue of U.S.News & World Report.

Q  Governor Brown, how do you answer critics who charge you with slowing the growth of business in California?
A  As we get closer to an election year, each side raises the ante and sharpens it rhetorical thrust. Environmentalists, labor unions, educators, the business community—each group that wants more or less government regulation, more or less government spending, comes to the State capital to argue its case.

Each of the claims made have to be cut in half, then divided by 2 before you begin to see what is actually a legitimate demand. It's my job as Governor not to yield to the demands of anyone, but to find a path that is consistent with the long-term interests of the State.

Q  What specifically is the fight all about?
A  There are short-term profiteers who would wish to pollute the environment, destroy people's lungs and run roughshod over one of the most beautiful places in the world. I don't want to see them do that, and obviously they will resist.

But beyond that, there are tax burdens and regulations that bear down on various individuals and corporations—but these things have emerged over a long history, under both Democratic and Republican administrations. I'm referring to the efforts to protect the coastline, the air and water quality, and the safely of workers, as well as the need for providing more funds for schools and other government programs.

I'm not at all surprised to see the conflict of ideals that is going on now, because that's what democracy is all about. The environmentalists have won some important victories, and now business and development interests are trying to regain some, and press their own views. It's the role of policy making to find the wisdom in the competing claims and to provide a balanced but thoughtful approach. That's what I'm trying to do—and I think the record bears that out.

Q  What is your assessment of the business climate in California?
A  Business is booming. The economic climate is healthy, and the number of jobs created is outpacing the national average. This is a market of more than 180 billion dollars and 22 million people, and any businessman who has a product that will make sense to the people of California can't stay out of here.

We welcome the businessman, but we try to create the kind of balance that makes for a society that people want, not only for this generation but for those to come.

Q  Does the State plan to do away with the much-criticized tax on business inventories?
A  I support the phasing out of the inventory tax over an appropriate number of years—probably seven. And we're now working with the committees in the legislature to devise an appropriate formula.

Q  Has California's heavy burden of State and local taxes—second only to New York's—hurt its economy?
A  Per capita taxes don't take into account the actual wealth and purchasing power that exists in the State. The taxes are a function, first of all, of the total wealth that exists here, which is higher than any State in the country.

Secondly, the taxes are linked to our wide range of services. We have more than 100 community colleges, 19 four-years State colleges, and nine campuses of the University of California. Then there's a well-developed public-school system which also offers adult education.

The schools, the environmental quality, the roads—all are part of the natural and developed wealth of the State, and these things cost money. But they also help create a better economy, in that the good roads allow for a highly developed marketplace, and the schools provide the people for business.

How else can we explain the State's triple. A credit rating, the good corporate profits and the increase in personal income? There are all indices of a solid economic base, and taxes are a part of the equation.

Q  You've recently been wooing overseas firms, but aren't foreign businesses in the State unhappy about taxes?
A  They're complaining about the unitary tax, which is based on the share of an international firm's profits that is attributed to its California operations. We're reviewing that situation. We won't be giving special tax breaks to any company, but if a legitimate case can be made about a particular tax that is not right, I'll seriously consider recommending to the legislature that it be modified.

Q  Has the State leaned too far in the direction of environmental protection?
A  If you are referring to dow Chemical's decision to drop its plans for a major plant, that was largely a matter of the local air-pollution-control district saying "No." In fact, I met with Dow to try to facilitate their obtaining State permits. But to alter the Dow situation would have meant radically restructuring the local-government process in California. Most people feel very strongly about home rule, and regional pollution-control districts have considerable authority.

The strength of the this State is its land its clean air and water. People coming in have to meet standards for protecting these resources. We'll give the businessman assistance—even to the point of changing a law, if appropriate—but we're not going to destroy the environment to create profit.

Other States are beginning to show the same kind of concern.

Q  Is anything being done to cut down on the regulations that hamper business expansion?
A  Certainly the process for approving new plants should he streamlined, and we're doing that in a bill presently before the legislature to speed up the issuance of permits. I very much support that measure. Many of the problems can be traced to the multiple layers of goverment, Local governments often have their planning processes and their roadblocks. And when you put that together with State and federal regulations, it is very much a mind boggler for business. I'm very sympathetic to this, and our reponse has been to create an office in the business and transportation agency to help busunesses negotiate their way through the labyrinth. Where we can we'll simplify, steamline and accelerate.

Q  What is being done to make sure that the State has enough energy to continue to grow?
A  I've met with Dr. Schlesinger [White House energy adviser], and our State energy commission has been quite active in forecasting energy needs. Energy development is a matter of available capital, of environmental quality and of trade-offs. The farmers in the San Joaquin Valley don't want to give up their fresh water to a power plant. The same goes for farmers elsewhere, who now see how important that water is—especially with the drought.

The energy commission is looking at some nuclear sites now. The number of sites eventually chosen will be based on their judgment. But as far as looking to nuclear energy in a major way, with dozens of new plants up and down the coast, I'd say that the ideal is in for alot of trouble—unless someone figures out an answer to earthquakes, orcan guarantee farmers their fresh water.

We have a definite problem, and I've been actively pursuing new energy sources, such as solar, geothermal and liquefied natural gas. I'm not at all sure burning coal is an alternative,although there may be some possibility in synthetic fuels derived from coal. We're way ahead of the rest of the country in conservation, and we're going to have to find the best balance between environmental quality and energy development.

Q  With the drought now in its second year,what are the plans to expand the State's water resources?
A  Some people are pushing a bill to repeal the State's Wild and Scenic Rivers Act, so that more dams and reservoirs can be built on the rivers. The measure has very little chance of passing.

It's unreal that people in the water business are trying to open up the wild rivers at a time when the water projects I'm proposing, which will cost 3.5 billon dollars, are themselves in great difficulty.

Given President Carter's views on new water projects and the desires of other parts of the country to obtain federal assistance, California must come up with a unitied position and get what is possible. So I'm inviting the people who want to dran up all the wild rivers to support my program, which won't go nearly as far as they want but will cost more than all the water projects in California to date.

Q  What do you think are the State's growth industries for the future?
A  Some of those with the greatest potential are electronics, aerospace, alternative energy technologies the record industry and motion pictures. Services and construction will also be strong.And any science-based technology will do well because of the educational system.

I think the growth industries are those that depend on ideas and thinking and technologies in order to expand and develop. Trade with the Far East, particularly in agriculture, is very important, too.

Q  How much room for growth is there in California?
A  We're running into a limitation on the number of people. A poll taken in Los Angeles showed that residents believe population growth is a serious problem, along with air pollution.

Basically, we're looking for clean industries and for ways to accommodate people at higher standards of living, but with good standards of environmental quality. We're running out of prime agricultural land, and obviously the cost of energy will shape the extent of futher development.

California's population is growing at twice the national average. Short-term, between now and 1982, population will grow by some 2 millon. That means a millon more homes. California is outpacing the nation in housing development, but where will we get the energy for it all? The demand has sent home prices rising and forcing people to adjust their views of what is a suitable home. So there'll be more townhouses and condominiums.

We're confronting the issue of quality of life, as well as the quantity of life. But the quality of life is something you take for granted. Business executives who come to California like it here. They like the environment, the recreation, the ideal that you can go to the beach, the desert or even sking within an easy drive of San Francisco or Los Angeles. And that's something we have to maintain.

We're also worried about the increase in crime, mental illness, alcoholism and family breakup. I'm as concerned about the reconstituting of communities as I am about the development of new industries.We are facing limits that we, as a people, have to wrestle with, and that's exactly what we're doing. I think the limits on how many people we can support here is a function of how our cultural institutions develop and how well we can learn to live together.

Q  Do you believe California will continue to lure residents from other parts of the country?
A  That's the paradox. The more jobs we create, the more people want to come here. So we never quite catch up with unemployment, because we have such a mobile society. That's why California's concern over employment opportunities is a national problem, not just a State problem.

California is not a company town. It's not a homogeneous group of people but a very diverse culture, with highly sophisticated people and possibilties. And perhaps that's its attraction. People should not apply models of other places in the world, or of other States, to California.

What people have to decide is where is the best place to locate for their product or for their way of life. For many, as in the past, California will be the place.