FLASHREPORT

STATE BUDGET: OUT OF ADVERSITY COMES OPPORTUNITY

Allan Zaremberg, President and CEO of the California Chamber of Commerce

Governor Schwarzenegger and the state’s Republican legislators understand the importance of a strong economy.  Over the years, both have worked hard to protect jobs in the face of legislative proposals that would have hurt employers and our competitiveness.  The Governor has vetoed just about every job killing bill that has reached his desk and on each “job killer” we had near unanimous Republican legislative opposition.  Both have staunchly opposed tax increases and have been at the forefront of insisting that any solution to the budget imbalance minimize damage to the California economy.   A budget solution that protects the California economy in the future will not occur without the close collaboration of the Governor and Republican leadership.  

On Wednesday, Governor Schwarzenegger proposed a comprehensive framework for a budget compromise that includes a much talked-about temporary sales tax followed by a permanent ¼ cent rate reduction in addition to an economic stimulus package (that includes some big wins for employers and workers) and a mandatory budget reserve. 

Nobody likes tax increases, least of all the hard working taxpayers and the business men and women who pay them.  However, this budget – this year – is about more than tax increases.  The Governor’s framework may provide a unique opportunity to help the economy to recover (which will be the real solution to the budget crisis), to protect California’s job climate and to establish some much needed and lasting budget reforms.  Out of adversity comes opportunity…the opportunity to achieve flexible work days, to guarantee a mandatory budget reserve, to limit the growth of government, and permanently reduce the state’s tax rate. 

A key element of Governor Schwarzenegger’s budget compromise includes the ability of employers and employees to agree on flexible work schedules.  Conforming California’s overtime laws to those of other states would provide meaningful relief to California’s working families and reduce costs for employers.  For example, an average working couple could save about $400 a year if they were each to reduce trips to the office and not burn a gallon of gas a week.  Costs associated with care of children and elderly parents would also be reduced under a compressed work week schedule as would other job-related expenses. 

Governor Schwarzenegger and Legislative Republicans have worked together to protect jobs and the economy in the past.  Their combined leadership will be critical to ending the current budget stalemate and moving the state forward to renewed prosperity. ____________________________________________________________