|
Thank you very much. And Happy New
Year to each and every one of you. Thank you, Lieutenant
Governor Bustamante, Speaker Hertzberg and President
Pro Tempore John Burton. Thank you for your leadership
these past few years that I have been Governor. To all
the distinguished Members of the Legislature, my thanks
to you. My fellow Constitutional Officers, Chief Justice
Ron George, and all of the Honorable Members of the
Supreme Court, including the longest-serving member
ever to serve in the Supreme Court, Stanley Mosk. Thank
you.
To the Members of my Cabinet, friends
and fellow Californians, again, please give me the privilege
of welcoming the First Lady of California, my wife,
Sharon Davis.
And I want to say "hello" to the other
woman in my life, my mother, Doris Morrell, the woman
who raised me to implement her vision. She's not here
tonight. She's back home in Florida, watching on C-SPAN.
At least I hope she's watching. It's a good bet she's
either watching us or "Everybody Loves Raymond," one
of the two.
Since the last time we met, California
has lost three native sons, true servants of the people:
State Senator Ken Maddy, United States Senator Alan
Cranston, and Congressman Julian Dixon. They have all
walked the floors of these chambers in which we meet
tonight. And even though they served on opposite sides
of the aisle, they shared a deep love for this State
and an unmistakable commitment to improving the lives
of Californians.
I know they're smiling down at us from
the Lord's gallery tonight.
Kim Cranston and Bettye Lee Dixon could
not be with us tonight but we are honored to have with
us Senator Maddy's sister, Marilyn; his son, Don; and
his daughter, DeAnna. Please welcome them and honor
our dear departed colleagues.
For more than 150 years, it's been
the duty of the Governor to report on the state of the
State.
And once again, I'm proud to tell you
that the state of the State is strong, healthy and growing.
The year 2000 brought us 417,000 new
jobs; the lowest unemployment rate in 30 years; the
largest increase in personal income in 16 years; retail
sales up nine percent; exports up 25 percent.
My friends, we Californians are still
living in the age of possibility; but it is also a time
of great change and challenge.
We can no longer expect short-term
stock market windfalls of ten billion dollars. We can
no longer expect short-term stock market windfalls or
ten-billion-dollar surpluses.
California's economy does remain fundamentally
strong. It does continue to create new jobs and opportunity
for our citizens. But our economy is also restabilizing,
expanding at a more sustainable rate of growth.
We knew this day would come. That's
why, over the past two years, we've budgeted the public
dollars with caution and discretion, favoring one-time
investments over long-term commitments; all the while,
maintaining a healthy reserve.
And today, fiscal restraint is more
important than ever. For as we all know, a dysfunctional
energy market, driven by out-of-state energy companies
and brokers, is threatening to disrupt people's lives
and damage our economy.
You are all aware of the basic facts.
In 1996 the Legislature and the Governor launched an
untested restructuring of California's electricity market.
Under their plan, our three investor-owned
utilities -- Pacific Gas and Electric, Southern California
Edison and San Diego Gas and Electric -- were forced
to sell off their generation capacity to unregulated
private companies.
And the price of electricity, long
regulated by the California Public Utilities Commission,
was to be set, instead, in a free-wheeling commodities
market.
Now, our job today is not to engage
in an ideological debate over the pros and cons of deregulation,
and I'm not here to point fingers or assign blame. I
assume the proponents of deregulation really did envision
lower energy costs and smaller electricity bills. They
certainly didn't envision this mess.
But we must face reality. California's
deregulation scheme is a colossal and dangerous failure.
It has not lowered consumer prices; it has not increased
supply. In fact, it has resulted in skyrocketing prices,
price gouging, and an unreliable supply of electricity.
In short, an energy nightmare.
Well, my friends, it's time for us
to wake up.
The out-of-state generators who bought
most of our utility's power plants are now charging
California several hundred percent more for wholesale
electricity than we paid just one year ago.
Senator Dianne Feinstein and I have
repeatedly urged the Federal Energy Regulatory Commission
to use its exclusive powers to lower these record prices.
But despite our repeated demands, the Federal Energy
Regulatory Commission has shirked its responsibilities
to protect ratepayers from this legalized highway robbery.
In fact, the Commission made matters
worse when, in December, they lifted the hard price
cap, causing the average price per megawatt hour to
increase nearly 900 percent, compared to the same month
a year ago. That is like paying 25 dollars for a three-dollar
gallon of milk.
Another problem with the California
deregulation scheme is that we have literally lost control
over our own power. We have surrendered the decisions
about where electricity is sold and at what price to
private companies with only one objective: Maximizing
unheard of profits.
On many days, ten to twelve percent
of electricity generated in California leaves our state
in search of even more exorbitant prices elsewhere.
On some occasions, the merchant generators have brought
the State to the very brink of blackouts by refusing
to sell us back our own power because they could find
higher prices elsewhere.
Think about it: They're refusing to
sell us our own power.
Worst of all, there's evidence that
some generators may be withholding electricity from
the California grid to create artificial scarcity; which,
in turn, drives up the price astronomically.
My friends, electricity is not an exotic
commodity like pork bellies, to be traded in the chaotic
equivalent of a futures market; electricity is a basic
necessity of life. It is the very fuel that powers our
high-tech economy.
And make no mistake, we will regain
control over the power that's generated in California
and commit it to the public good.
Never again can we allow out-of-state
profiteers to hold California hostage. Never again will
we allow out-of-state generators to threaten to turn
off our lights with the flip of their switch.
In the plan that I propose today, we
will attack the problems of supply and price, both in
the short-term and in the long-term.
As a down payment on this emergency
effort, I've set aside one billion dollars in my budget
to help stabilize the supply and price of electricity
in the present and help provide new power generation
to meet the demands of the future.
In the days that follow, I will ask
you to pass legislation to take these immediate steps:
One, restructure the governing boards
of the system operators, so we can replace the current
advocates for the energy companies with advocates for
the public.
Two, overhaul the crazy bidding process
for electricity, which currently guarantees that every
generator is paid according to the highest bid rather
than according to their own bid.
Three, streamline the process for utilities
to enter into low-cost, long-term contracts for electricity;
and then apply pressure to out-of-state generators to
supply that power.
Four, provide state regulatory agencies
with the authority to order any functioning generating
facility down for "unscheduled maintenance" to go back
online.
Five, give the Public Utilities Commission
50 new inspectors to monitor and, if necessary, stand
guard at any facility suspected of deliberately withholding
power from the grid.
Six, make it a criminal act to deliberately
withhold power from the grid, if it results in the imminent
threat to public health or safety.
Seven, expand the authority available
to the Governor under a state of emergency in the event
of imminent power outages.
Eight, provide four million dollars
to the Attorney General to investigate and prosecute
possible racketeering, market manipulation, price fixing
and other potential violations by merchant generators.
These generators may be acting within
the law; but if they're illegally gaming or manipulating
the market, the Attorney General will track them down.
All these steps we can and must take
immediately.
But soon thereafter, we must do the
following:
Repeal the law that allows the three
major utilities to sell their remaining generating facilities.
Instead, we must require them to hold onto those facilities
and sell their power to California consumers.
Next, we must also require our municipal
utilities to sell their excess power to California consumers
at reasonable rates. Currently, they're free to sell
their power to anyone in or out of the state. Next,
I'm calling on California to flex the enormous clout
we have as consumers. We are 34 million strong and the
sixth largest economy on the Earth. By reducing our
electricity demand by even a small amount, we can reduce
the price, avoid shortages, and lower energy bills.
So tonight, I'm asking every Californian
to cut consumption by as much as seven percent, and
we will back that up with a 250-million-dollar investment.
We'll supply cash incentives for replacing inefficient
refrigerators, washers and air conditioners with more
efficient models; and we'll create energy-smart homes,
schools, workplace and communities.
Every day, every Californian can contribute
to the solution by turning off lights and appliances
when not in use, shifting their use to off-peak times,
using less heat and air-conditioning, reducing outdoor
lighting displays, and turning off business equipment
when not in use. For example, putting a computer on
"sleep" mode reduces the power it would otherwise need
by 40 percent.
The State will lead by example. Every
single day State government will cut its consumption
by at least eight percent. And during Stage 2 alerts
we'll save at least 20 percent.
Now, to California consumers and businesses,
let me be clear: Our goal is to provide reliable, reasonably-priced
electricity to power the homes and businesses of this
great State.
To the utilities and financial community,
let me say this: I reject the irresponsible notion that
we can afford to allow our major utilities to go bankrupt.
Our fate is tied to their fate. Bankruptcy would mean
that millions of Californians would be subject to electricity
blackouts, public safety would be jeopardized, businesses
would close, jobs would be lost, investment would flee
the State, and our economy would suffer a devastating
blow.
To my colleagues in the Legislature,
I say this: We have met many challenges before. Together,
we will meet this challenge and we will meet it quickly.
I will work with the Legislature, consumers,
and the business community to address the financial
condition of our utilities in the long-term.
My friends, there is no easy solution.
But if I have to use the power of eminent domain to
prevent generators from driving consumers into the dark
and our utilities into bankruptcy, then that's exactly
what I will do.
All of these measures I've just mentioned,
I believe will provide relief in the short-term. But
to build a reliable long-term supply of electricity,
we must plan and invest now for the future.
For the 12 years before I took office,
this State failed to build a single major power plant.
Not one. Those days are gone.
Since April 1999, my Administration
has licensed nine new power plants; five are under construction,
as we speak.
But many more must be built to serve
our growing population.
We must also provide low-interest financing
for new peaking facilities and repowering of existing
ones to make them cleaner and up to 40 percent more
efficient. In return, these facilities must commit their
power to California at reasonable rates.
Next, we must expand the generating
capacity under the control of the Department of Water
Resources, and we'll require the 141 campuses of the
University of California, the State University System
and the community colleges, to each move towards energy
independence through cogeneration or other means.
And we will develop means of committing
State-owned lands for the siting of generating plants
on the condition that the energy be distributed right
here in California.
These are all important steps.
But there is no point in building more
plants in our state if the electricity is going to flow
out of our state.
The time has come to take control of
our energy destiny, and that will require either a Joint
Powers Authority among the State and our 30 municipal
utilities to develop the additional power we need, or
a California Public Power Authority that can buy and
build new power plants.
I will work with the Legislature to
determine which option will work best for California
consumers and businesses. I'm not interested in any
Utopian ideas; I want ideas that will work in the real
world.
The remedies I'm proposing tonight
are reasonable and necessary under the present extraordinary
circumstances. But as I've said before, everyone should
understand that there are other, more drastic measures
that I am prepared to take, if I have to.
Now, as important as the energy situation
is, we cannot and will not allow it to overwhelm the
many other important challenges and opportunities we
face as a state.
We have proven together that by placing
the common good ahead of partisan advantage, we can
develop practical solutions on the issues that confront
the people of this great State.
And that is exactly what we will do
again this year.
My friends, we have a special responsibility
to the citizens of California. They don't expect government
to address every issue on the planet. In fact, they
only demand three things: Fix what's broken, improve
what's ailing, and leave the rest alone.
Together, we have demonstrated that
it matters not whether an idea comes from a Republican
or a Democrat; what matters is whether the idea is right
or wrong and, most importantly, whether it will work.
From the bottom of my heart, I would
like to thank the Members of this Legislature for the
most productive two-year session in recent memory.
Rarely, in our generation's history,
have the Governor and the Legislature worked so closely
together to produce so many good results.
We passed two budgets in a row: In
balance, on time.
We put a prosperity dividend back into
people's pockets, providing tax relief in record amounts.
We funded and equipped our law enforcement
at its greatest strength ever.
And having said that, please join me
in recognizing five extraordinary public servants sitting
right behind my wife, Sheriff Les Weidman of Stanislaus
County; Lee Baca, Sheriff of Los Angeles; Lou Blanas,
Sheriff of Sacramento County; Mike Corona, Sheriff of
Orange County; and Commissioner Spike Helmick of the
California Highway Patrol. Thank you for a job well
done. Thank you.
Continuing with our achievements, we
reformed HMOs. We made record investments, long overdue,
in our parks and water. We passed the toughest gun safety
laws in the nation. And we've taken the edge off "wedge"
issues.
That is not all we've done. We've opened
wide the doors to college with merit scholarships and
Cal Grants. Never again in California will a student
who succeeds in school be denied a college education
because they lacked the money; and for that, I thank
each and every one of you, particularly Senator John
Burton.
On roads and railways, from one end
of the State to the other, you will begin to see the
results of our history-making transportation initiative.
All of this we're doing within our
means. That was my promise two years ago and that is
my promise today.
My friends, no single issue better
personifies our bipartisan resolve than our collective
desire to improve California public schools.
Over the last two years we've invested
in education like our future depends on it, because
it does.
We've asked more of our students and
schools than ever before.
We've put in place the building blocks
of achievement. High standards, accountability, technology,
modern facilities, new tools for learning. The most
aggressive teacher incentive program in America, including
the biggest performance bonuses in the nation; and,
most importantly, our hard work is paying off. Test
scores are up, student confidence is higher, public
support is growing. All across the State, we are turning
higher expectations into better student achievement.
I thank you for that.
You know, as well as I, the fight for
our children's future will not be won overnight. But
know this: We are winning it. Let me just take one school,
Melvin Avenue Elementary School in Los Angeles.
Two years ago Melvin was like a lot
of other schools in California: Underfunded, overcrowded,
underperforming.
Two years later, things are changing,
expectations are higher, students are motivated, parents
are involved, teachers are more skilled.
Two years ago, Melvin was a school
without a direction. Today it is a full partner in our
new accountability program.
Two years ago, Melvin's teachers were
undertrained and underpaid. Today, they're better paid
and better trained. One of them has been nationally
certified and seven more soon will be.
Two years ago, Melvin was using materials
and books that were older than many of the teachers.
Today, they have new textbooks; their classroom libraries
will soon be fully-stocked. And by the end of the school
year, they are confident every classroom will have Internet
access and one computer for every six students.
Two years ago, Melvin's reading scores
were among the lowest in the state. Today, 200 of their
kids are attending our Reading Academies. Every primary
teacher has attended our Professional Development Institutes.
And this year, Melvin Avenue improved 79 points on the
Academic Performance Index, six times better than their
statewide target.
Ladies and gentlemen, please welcome
Susan Grossman, the principal of Melvin; its nationally
certified teacher, Sangeeta Maithel; and one of its
top students, Hugo Saavedra. Thank you for your wonderful
achievement. My friends, this is a success story. But
it's not just Melvin's story, it's California's story.
All across the State, elementary schools are on the
rise.
But we still have a lot of work to
do.
Test scores show, while elementary
students are improving rapidly, middle-school students
are showing only modest improvement.
Educators tell me that for all our
new investments, the main thing they need now is more
time to teach.
And so tonight I ask for your help,
as I propose extending the school year in California
by 30 days, starting where the need is greatest, right
there in our middle schools.
That is 30 days of additional classroom
instruction. No busy work; just teaching. Now, this
program is voluntary. But the schools and teachers who
participate will receive generous financial incentives
and strict accountability measures will be put in place.
It's just a month, but it adds up to
the longest school year in the nation. And it will make
a huge difference for our children, as they cross the
critical bridge between elementary and high school.
Now, we also need to match high standards
with high-quality instruction.
Two years ago, you were good enough
to allow us to send 6,000 teachers to attend the Professional
Development Institutes, organized by the University
of California. Last year, we funded an additional 70,000
teachers.
It has been the most ambitious, and
I believe the most effective teacher-training initiative
ever launched in America. And it has produced some of
the best-trained, most highly-motivated teachers in
America.
Over the next three years, we simply
must give every teacher who teaches math or reading
the benefit of this experience.
That's 200,000 math and reading teachers
receiving 40 hours of intensive out-of-the-classroom
training and 80 hours of critical follow-up support,
all according to UC standards.
Together, we can build the best-trained,
most highly-skilled army of teachers ever. I say, let's
do it. Now, when my wife and I visit schools, we've
seen firsthand how a strong and determined principal,
like Melvin's Susan Grossman, can literally elevate
a school. So this year, I will request funds to train
every principal and every vice-principal in California
-- 15,000 in all -- in programs that meet University
of California criteria.
But there's more to the equation. Studies
show that young people who take algebra succeed at much
higher rates than those who don't.
To the next generation of Californians,
I say this: Do the math.
Ninety percent of all new jobs require
advanced math skills. More than ever, math is the doorway
to higher learning and future successes.
Since I've taken office, we've been
implementing the toughest math standards in the nation.
Last year, I was very pleased to sign
Senator Poochigian's bill that requires, for the first
time, that every student in California must take algebra
before they graduate from high school. And I say, it
was about time.
But our challenge now is recruiting
1,300 new algebra teachers to meet this new demand.
So I will ask you to fund a 30 million-dollar
algebra initiative. Again, this is a financial incentive
for schools to attract and retain high-quality algebra
teachers.
While we've been investing in our oldest
students, we shouldn't forget our youngest.
Too many children step aboard a school
bus for the first time without developing a solid foundation
for learning, right from the start.
To help our children prepare for the
rigors of the classroom, I will appoint a task force
led by my new Secretary for Education, Kerry Mazzoni,
in partnership with the California Children and Families
Commission, including its chairman, Rob Reiner, to explore
a comprehensive "school readiness" initiative.
I will ask them to focus on finding
ways to provide local communities with critical resources,
including Proposition 10 funds, to help prepare our
children for a lifetime of learning and success.
Please join me in welcoming and thanking
my new Secretary of Education, Kerry Mazzoni, and Chairman
Rob Reiner.
As we unleash the full potential of
our children's minds, we are also ensuring that their
bodies are healthy and strong.
Can anyone in this chamber imagine
your child without health care? Thanks to Healthy Families,
more parents than ever don't have to do that.
When I was elected, only 30,000 kids
were signed up for our Healthy Families Program. Today,
I'm proud to report 375,000 children are enrolled; a
twelve-fold increase.
This expansion of Healthy Families,
combined with a strong economy, has produced another
piece of good news. Tonight I'm very pleased to announce
the first real decrease in the number of uninsured Californians
in the last two decades. In a single year, together
we moved 500,000 Californians to the ranks of the insured.
Yes, we are making progress, but our
job is still not done.
It's time to recognize that a healthy
family is more than healthy children: It's also healthy
mothers and fathers.
I have already requested a federal
waiver that will allow California to become only the
fourth state in the nation to include parents in this
program.
With your help, we will provide health
care coverage to 290,000 working parents.
Finally, I want to say a word about
what we're doing to make California government more
accessible to the people of California.
Tonight we will launch our new state
government Web site, the "My California" homepage. We're
using Web technology to personalize government in a
way no other state has ever done.
With advice from the best minds in
Silicon Valley, who were part of our Web council, we
have developed an Internet site that makes it simple
to register your car, obtain a fishing license, check
up on your school's academic performance, and much,
much more.
By next week, we will post information
on our new campaign to conserve energy, all through
a seamless, state-of-the-art Web portal found at "my.ca.gov,"
your online link to California.
My friends, this is a time of great
challenge for California.
But you and I have demonstrated to
the people of this wonderful State, we are fully-prepared
to face those challenges and provide practical solutions.
Education, energy, e-government, health
care. In a couple days, I will propose my budget with
additional initiatives in higher education, tax relief,
public safety and environmental protection.
On all these issues, we must continue
to be united by our collective desire to serve the people
of this great State; to be guided by common values that
cause us to seek common ground.
All of us -- Republicans and Democrats
alike -- have a duty to govern boldly and responsibly,
with compassion and accountability, with big hearts
and tough minds.
Now, let us move forward, in the spirit
of bipartisan resolve. Together, we will bridge the
gap between the California that is and the California
that is yet to be.
Thank you. God bless you. God bless
California.
|
