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Toe Tags for GOP Bills

As the current legislative session winds to a desultory close, I had the occasion recently to look back on the bills Republican Assembly Members had offered to make the state more business friendly. The sight was not a pretty one. Dead Republican bills littered the committee rooms and assembly floor. The local morgue does not have enough toe tags for all of the good, pro-jobs bills killed this year in Sacramento.

For example, the Republicans proposed several bills offering tax incentives to small businesses. Paul Cook’s AB 166 eliminated the yearly Minimum Franchise Tax on small businesses to make easier expansion and the hiring of new workers. If wholesale elimination was too much for the Democrats, then Martin Garrick offered AB 821 reducing that Minimum Franchise Tax from $800 to $100 for the second through tenth years of operation. If even that was too much, Mike Morrell proposed AB 368 to cut the tax for only the first six taxable years. And finally, if all else failed, Jim Silva had a bill, AB 831, to at least provide a break in the Minimum Franchise Tax to the few entrepreneurs who establish single member limited liability companies. No, no, no, no, said the Democrats. All four bills died.

Now, to the Democrats’ credit, they did permit tax breaks for Hollywood in order to help keep TV and movie productions in the State. But this is curious. If tax breaks are good for one industry, why not others? Isn’t this an admission by the Democrats that lowering taxes creates an economic incentive? Couldn’t the state benefit by offering similar tax relief to other industries, and especially to small business? That seemed logical, so Jim Silva authored yet another pro-business bill, AB 979, to give sales and use tax exemptions to benefit manufacturers in the aerospace, textiles and pharmaceuticals industries, among others. But Hollywood must be special because Democrats again said no. This bill is dead.

Also dead are nearly a dozen separate bills aimed at regulatory relief. The governor and Democratic leadership in the Senate began the year talking about the need for relief for business from the crushing regulatory burden imposed by our nanny state’s relentless bureaucrats. Republicans took them at their word and proposed bills to streamline the regulatory process, to provide more oversight to the regulatory process, and to assess the real economic costs to California of our regulatory process. Bill Berryhill (AB569), Shannon Grove (AB 333), Steve Knight (AB 429), David Valadao (AB273), and Dan Logue (AB 127) all offered bills aimed at improving California’s regulatory environment. Dead, dead, dead, each and every one of these worthy efforts.

My own tries for regulatory reform are illustrative. I authored two bills – AB 338 and 632 – which, in different ways, allowed the Legislature, as the elected lawmakers, to be more involved in the regulatory process. After all, regulations have the force of law. It is not asking too much that elected lawmakers, not bureaucrats, actually make those laws – and be accountable to the people for the laws they make. Yet only one of these bills, after being substantially amended and whittled down in committee, even made it out of the Assembly. And once in the Senate, where, remember, Democratic leadership had promised regulatory reform, this bill was promptly dispatched by a committee of Senate Democrats.

Then there are the GOP efforts to reduce frivolous lawsuits making it so risky to do business in California. Brian Nestande (AB 271), Linda Halderman (AB 158) and I (AB 556) proposed bills to limit punitive damages awards and to even the playing field when it comes to the appeal of ruinously expensive class action decisions since, under current law, businesses do not have the same appeal rights as putative class action plaintiffs. But these bills died predictable deaths at the hands of Democrats.   

Finally, a bit about the reason for my review of dead GOP legislation: The governor invited a few of us to his office to discuss ways to improve California’s business climate. That is a very good thing and the governor deserves credit for it and for the recent appointment of a so-called “Jobs Czar,” who also attended the meeting and seems committed to fixing California’s dismal job market. At this meeting, I gave the governor a list of the dead Republican jobs bills, i.e., those listed above and many others. The governor looked at the list and said, not altogether incorrectly, these bills are “pretty small bore.”

Frankly, the governor is right about that. None of these bills alone, maybe not all of them together, completely fix California’s problems. But each is a step in the right direction. More importantly, each says to the business community that Sacramento understands it has a problem with business and is willing to begin the work of fixing that problem. Instead, though, with the wholesale massacre of our pro-jobs bills, more California businesses, and the jobs they provide, will also die. We better buy more toe tags.

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