SACRAMENTO -- Republican gubernatorial candidate Steve Poizner vowed Tuesday to turn the state's fortunes around by slashing welfare rolls, freezing state spending, hiring and borrowing, and cutting taxes.

Those moves, combined with a new round of deregulation and a number of government reforms, would revitalize the state's economy in a matter of 18 months, said Poizner, the state insurance commissioner who is behind in polls to both of his GOP primary opponents, ex-eBay CEO Meg Whitman and former U.S. congressman Tom Campbell.

His detailed agenda dovetailed with his previous "10-10-10" plan, which calls for 10 percent cuts in personal, sales and corporate taxes, a 10 percent reduction in state spending, and the creation of a $10 billion rainy day fund. Poizner announced his plan a day after releasing his fundraising figures, which show that he has $17 million cash on hand after contributing $19.2 million from his own pockets. Whitman has also contributed $19 million from her own personal fortune, but has not released how much cash on hand she has. Campbell barely raised $1 million last year.

"Tax cuts and regulatory reform will get the economy growing again," Poizner said at a news conference at his Sacramento campaign headquarters. "Reducing those tax rates makes our economy more competitive, will bring more jobs, a larger tax base."

Poizner said his tax cuts would actually bring in $3.77 billion in new revenue over an 18-month period, a "conservative" estimate, he added.


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Overhauling the state's permitting system would bring in an additional $3.45 billion, based on the economic activity that would be freed up.

He said his plan was not based on an ideological desire but an analysis of similar tax-cut and deregulation plans carried out in other states.

In all, he promised about $7.4 billion in new revenues and $13.5 billion in cutbacks.

He projected $406 million in savings by freezing 9,300 nonpublic safety state jobs that will be vacant after employees voluntarily leave their jobs this year.

By freezing pending bonds, the state would save $906 million in debt payments, Poizner said. He added he opposes instituting an $11 billion water bond that appears headed to the November ballot -- until the state deficit is cleared up.

A spending freeze to the 2009-2010 general fund spending would save $2.32 billion, he said.

The poor and sick would take some of the big hits in his plan, which would rely on cuts to MediCal ($1.59 billion), CalWorks ($3.35 billion), and prisoner health care ($1.09 billion). Another $3.85 billion would be saved in a "top-to-bottom" review.

Poizner said California's welfare rate -- the number of those on welfare and the length of time they receive benefits -- needs to get more in line with the national average. Only about 1 percent of the nation is on welfare, compared to 3 percent of Californians, and most states allow recipients to stay on the rolls for two years, compared to the five-year maximum in California, he said.

"Unfortunately, we've created a dependency system," he said. "We need to get them off it. ... I'm not saying we shouldn't have a safety net program. I'm just proposing to get (the maximum time on welfare) down to two years, and we need to enforce the work and training programs.

"This is a zero sum game," he added. "Every dollar we spend on welfare, is a dollar out of water infrastructure, K-12 or higher education spending."

Whitman campaign spokeswoman Sarah Pompei responded by saying that "no announcement will erase the fact that Commissioner Poizner financed an initiative that resulted in $40 billion in higher taxes, he has opposed cost-saving furloughs and has misrepresented his record of spending in Sacramento."

Reach Steven Harmon at 916-441-2101.