15% TAX CUT TOPS WILSON'S AGENDA\State address focuses on welfare, education.

Byline: Mark Katches Daily News Sacramento Bureau

Gov. Pete Wilson revived his plans for a 15 percent cut in state income and corporate taxes Monday, while unveiling new programs to spur welfare reform and cut down on juvenile crime.

In his sixth annual State of the State speech, the Republican governor also suggested creating a voucher program for up to 250,000 students in the state's worst public schools.

The governor focused on programs to reduce teen-age pregnancies and combat rising crime and violent gangs - problems that he said are "tearing apart the fabric of our society."

Wilson was stern but upbeat throughout his 33-minute speech to the joint assembly - a mood punctuated with his announcement that his proposed budget for the 1996-97 fiscal year will contain a $1 billion surplus.

Because of the surplus, Wilson said he again will ask lawmakers to pass the tax cuts they rejected last year.

"Let's let the families who earned this money - not government - decide how it can best be spent," Wilson urged lawmakers. "I propose that we leave some of the surplus revenue created by the economic recovery with the people who earned it.'

Although he contended that the U-Haul trucks that transported a mass exodus out of the state are reversing course, Wilson said California remains plagued by high taxes and too much government.

"A tax cut will force state government to fundamentally rethink how it spends every dollar it collects from the taxpayers," Wilson said. "We must ask whether each program or service is worth continuing."

Reaction to the governor's speech fell along partisan lines, with Republicans praising the message and Democrats contending that any budget surplus should be channeled into education and other services.

Although the speech was interrupted 24 times for applause, Democrats did little of the clapping.

"I worry that he promised a lot of new spending that is very difficult to do at the same time you're proposing a tax cut," said Senate President Pro Tem Bill Lockyer, D-Hayward. "The fiscal realities were perhaps absent."

Wilson officials did not release details of how the tax cut would affect Californians, saying instead that they would be released Wednesday as part of the governor's budget for the 1996-97 fiscal year, which begins July 1.

The across-the-board 15 percent personal income tax element of the plan would be phased in over three years. It also would take three years to phase in the bank and corporate tax cuts Wilson is proposing.

Assemblyman Richard Katz, D-Panorama City, said that wealthier citizens would get the brunt of the tax relief because they are in a higher tax bracket.

"If there is surplus money not being used for K-12 schools, I believe that money should be used to offset the serious cuts visited upon seniors and children before the governor gives another tax break to wealthy individuals or corporations," Katz said.

Although he did not mention it in his speech, Wilson also is planning to unveil a limited tax deduction for first-time home sellers who have seen the value of their homes plummet in a weak real estate market.

Wilson, meanwhile, said he will propose "opportunity scholarships" available to students in the bottom 5 percent of the state's public schools based on test scores this spring.

Wilson, who opposed a school voucher initiative in 1993, offered no details about the voucher program.

But his administrative aides said among the options, the vouchers would allow parents with students in the poorest-performing schools to send their children to public schools in the same or neighboring districts.

Parents also would have the option to take about $4,500 in state funding and apply that to tuition at a private school or religious school.

"California has some outstanding schools," Wilson said. "But there are too many that are failing to provide our kids the education they deserve and need. No child should be trapped in these failing schools because their parents can't afford an alternative."

Wilson aides say the list of poor-performing schools will not be available until this summer and, if approved, the plan would take effect in July 1997.

Katz argued that the plan is unconstitutional because it would allow religious schools to benefit from state coffers.

"It's a very scary trend," said Katz, the Assembly minority leader.

In the area of juvenile justice, Wilson is proposing to allow district attorneys to try as adults 14- to 17-year-olds who use a gun during the commission of a crime and restricting probation for juvenile offenders. He also advocated the use of curfews "to keep kids off the street and out of trouble."

To add "hundreds" of police officers on the streets, he unveiled a plan to allow taxpayers to check a box on their state tax forms to dedicate 1 percent of their taxes to go directly into law enforcement in their communities.

Wilson said reforming welfare, meanwhile, is not enough. He said the system needs to be replaced by programs that return recipients to work and end any government commitment in as little as six months.

With unwed mothers responsible for 35 percent of all births in California, Wilson also said the state needs to "end the vicious cycle of promiscuity and irresponsibility that produces generation after generation of children giving birth to children."

Besides a media campaign to raise awareness about teen pregnancy, he proposed tougher enforcement of statutory-rape laws.

The governor delivered his speech in the ornate chambers of the Assembly, where he became the first Republican governor since Ronald Reagan to enjoy a home-court advantage.

Making reference to his failed presidential bid, he joked to the gathered lawmakers: "I've been sent here tonight by popular demand of the voters - of Iowa and of New Hampshire."

After years of domination by Democratic Speaker Willie L. Brown Jr., who was sworn in as mayor of San Francisco on Monday, Wilson's party seized control of the speakership and rewrote the rules governing the lower house last week.

The governor made no mention of health care services, a sore spot with Democrats.

"I think it was shocking that there wasn't one single word about it," said Assemblywoman Barbara Friedman, D-Sherman Oaks.

WILSON'S PROPOSALS

Here is a look at key proposals in Gov. Pete Wilson's State of the State address:

A 15 percent across-the-board tax cut for personal income taxes and corporate taxes as well as other tax-cutting measures.

A voucher program for students in the bottom 5 percent of the state's poorest performing public schools, allowing them to transfer to private, religious or other public schools.

Stricter punishment for juvenile offenders, including the ability for prosecutors to charge minors as young as 14 as adults if they use guns in the commission of a crime.

A program that would allow state income tax filers to designate 1 percent of their tax bill to pay for law enforcement in their communities. It could generate up to $150 million statewide.

Tougher prosecution of statutory rape to help cut down on teen pregnancies.

Eliminating welfare checks in six months for recipients who are able to work and after two years for other recipients.

CAPTION(S):

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(color) Gov. Pete Wilson speaks to lawmakers Monday in the Capitol. Associated Press Box WILSON'S PROPOSALS (see text)