During the recession of the early 1990s, California's taxpayers were asked to help meet the state's budget shortfall through a variety of tax and fee hikes. Since then, California's economy has come booming back, and deficits have turned into surpluses.

The first thing we must remember is that surpluses are usually the result of over-taxation. As California's taxpayers were forced to share the burden, they should also share in the economic boom. As governor, I would assure that the lion's share of surplus money is returned to taxpayers.

California's tax structure is far too complicated, and has lost the confidence of the public. As a result, I propose a full examination of our tax system that includes the relationship between local and state government, with the goal being a rational and understandable tax system that works efficiently for all Californians. This does not require - nor would I support - any weakening of Proposition 13 protections. Proposition 13 saved many Californians from losing their homes during the spiraling property tax era of the 1970s. I campaigned for it then, it was the right thing to do, and I support it now.

In coping with its effects, however, the state over time has enacted a complicated mish-mash of financial knots that plagues us today. It will fall on the next governor to make sense of that tangle of short-term fixes in a way that strengthens protections for homeowners and businesses. I would note that my opponent opposed Proposition 13 and spent his years in the Legislature voting for numerous measures to weaken Proposition 13.

Part of my desire to ensure our tax system is family friendly, business friendly, and investment friendly will be to restore the relationship between taxes and services. This involves amending the way that local governments have operated, including, for example, capping developer fees on new home construction.

These efforts cannot be achieved in a vacuum, but can only be achieved within a state and local government framework that is committed to regulatory reform and to reducing the overall cost of government at all levels, without sacrificing basic services. That is why I support competitive bidding, wherever appropriate, for the delivery of local and state government services, especially in the areas of social services and transportation.

For too long, California's tax structure has dampened our economic engine. As governor, I will support spurring economic growth through a well-targeted tax agenda. Some areas of tax reform that I will explore are: (1) Capital gains tax reduction; (2) Banning taxation of electronic commerce; (3) Eliminating the minimum franchise tax that puts an excessive burden on small, start-up companies; (4) Expansion of the research and development credit, and (5) Expansion of the manufacturers investment credit so that it applies to all industries. I will also push for bank and corporation tax rate reductions, and gradual elimination of the annual vehicle registration tax.

As governor, my goal will be to increase the efficiency of government regulation, create a rational tax structure that links taxes paid to services rendered, and reduces the tax burden on California business and taxpayers to provide for continued economic growth and jobs that benefit all Californians.

Attorney General Dan Lungren is the Republican nominee for governor. He served 10 years in the U.S. Congress before his election to attorney general in 1990. He was re-elected in 1994. Mr. Lungren began his political career as an aide to U.S. Senator George Murphy.

Lungren: "... my goal will be to create a rational tax structure that links taxes paid to services rendered..."