Blog / The Business Perspective
Chamber Supports Gov. Brown's Proposal for a Special Election in June on the State Budget
February 28, 2011
by Gary Toebben
As you may have read, the Los Angeles Area Chamber of Commerce announced Friday at a news conference its endorsement of Gov. Jerry Brown's proposal to hold a special election in June to address the State budget crisis with an equal combination of spending cuts and a temporary extension of the tax increases put into place two years ago.We believe that Gov. Brown's proposal to combine dramatic budget reductions with a temporary extension of current rates on the State income tax, sales tax and the motor vehicles registration fee is fiscally responsible.
Our first choice was to address the deficit through spending cuts only. As we discussed this option at length, we simply did not feel that the basic infrastructure of our State could be maintained if $25 billion in budget cuts were put into place at this time. We know that extending the tax increases will have a short-term negative impact on our members and the economy, but not as negative as the dramatic reduction in education, infrastructure and social services that would come from a $25 billion budget cut.
In addition to balancing the budget today, we believe California needs reforms that will have a positive long-term impact on revenue and expenditures in the future. At a private meeting before the news conference, the Chamber discussed with Gov. Brown its strong feelings about the need for reducing the State's long term budget deficit through pension reform and regulatory reform with an emphasis on the California Environmental Quality Act. The governor told us he understood the necessity of pension and regulatory reform, and he pledged to work with the Chamber on these important issues. We will meet soon with the governor's senior staff in Sacramento to discuss specific recommendations.
Please note that the Chamber did not endorse the specific expenditures and cuts that Gov. Brown proposed in his budget. In fact, we oppose some of the cuts in the governor's budget. What we support is a public vote in June, and an equal combination of budget cuts and temporary extensions of the current tax rates in order to balance the State budget and return California to fiscal solvency. We also recommended that the governor look at a three-year temporary tax extension rather than five years.
The Chamber is calling on both Democratic and Republican lawmakers to take a leadership role in working with the governor to present a plan to the voters in June. Painful as these budget cuts and tax extensions may be, we need a bipartisan solution for the good of California. The voters will only endorse a budget that is void of smoke and mirrors and provides hope for the future.
And that's The Business Perspective.
Comments
The governor told us he understood the necessity of pension and regulatory reform.
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Posted by: Bredgette @ 2:09:00 am
There is soo much illegal activity in my field of construction we cannot compete with all the unlicensed activity. Paying my taxes & the debt racked up is becoming impossible in this state. Love the weather but it feels like all the regulatory agencies are against my small business
Posted by: paul v @ 9:52:00 am
What the Governor needs to do is cut spending, reduce the pension funds (that he started when he was Gov the first time around) Cut the entitlements, stop sending illigal immigrants to schools, colleges, and universities, stop giving illegal immigrants welfare. The auto vehicle fee was doubled by the last Gov (Mr. S), and if this is raised again, it will have an impact on the middle class of people. If we raise taxes, then we will be the highest taxed state in the Union, and this will indeed drive more business from the wonderful State of California. Rasing taxes will also take away disposable income that keeps the flow of money in the system to build the economy. Stop people from spending, and the economy will take a big downturn. This Gov should take a page from the book of Wisconsin!
Posted by: Guy Fox @ 8:55:00 am
Raising taxes hurts economic growth and job creastion. Countries such as Canada, which have escaped from fiscal difficulties similar to California's, have done so by cutting spending, not raising taxes.
Posted by: Harry Homan @ 8:26:00 am
A tax extension and increase/creation of any type of new fees is fiscal irresponsibility. There is no more credibility and the government should not be allowed to take this type of position. If the Chamber of Commerce goes back in history and reviews what the DWP did many years ago regarding the sewer charges, they will understand what would happen if Gov. Brown is encouraged to make any type of increases on the citizens of California. The DWP created the "temporary" sewer charges (a modest amount) with the excuse that they needed the funds to create funding to buy garbage trucks and fix the sewer systems. The amount was based on a percentage of the water use. The sewer charges were made temporarily and TODAY, they are permanent and they are close to 125% of the water consumption. The Chamber endorsement of Gov. Brown should request no increases on taxes and reduction in government spending, such as administrative costs, there are many sources where State Employees are taking an overwhelming advantage of their positions and are irresponsibly increasing the budget. Gov. Brown should look first into the solvency of the Post Office, D.W.P. and agencies of this type and increase/create taxes on those agencies to help the reduction of the budget and after if still need it, then to appeal to the population to help, Gov. Brown should look into less government administration and more private industry employment in order to create more revenues to balance the budget. Government accountability, credibility and leadership are desperately needed it at this time. The L.A. Chamber of Commerce should change its position and encourage the Governor to lead change, not to impose on the population to keep supporting an fiscally irresponsible government.
Posted by: ga @ 4:07:00 am
Budget Reform is critical to our survival. This can only be achieved through bipartisan action.
Posted by: Ted Booker @ 7:42:00 pm
A 'tax extension' is fiscal irresponsiblity. The citizens of California have already voted and been heard. Fiscal responsiblity means to not spend more than you have and to operate lean. A Chamber endorsement puts the Chamber in the same bracket of irresponsiblity. Most disappointing. The Chamber is better than that. The fact that the first round of those taxes were wasted is a crime and those responsible need to return the money spent, and then resign. The absurd request for more tax money to waste is insulting. The cost of doing business in Los Angeles is probitive and business leaders agree. Let's reclaim the 5.7 Billion wasted by the Los Angeles Community College District. Time for accountability and leadership. Los Angeles Area Chamber of Commerce, please change your position and help lead change. Be strong and lead.
Posted by: Brian F. Barry @ 5:53:00 pm
I am happy to announce that I have already left the State of California for greener pastures elsewhere, California Local and State government will never "get it": Business creates all the Jobs and Opportunities not Government! It is that SIMPLE!
Posted by: S.Olivas M.D. @ 5:32:00 pm
I read Mr. Toebben's carefully but am surprised that the Chamber could endorse Gov. Brown's Proposal. Does anyone really believe that these tax extensions are "temporary"? Or course not. Unfortunately, our politicians are like alcoholics in that they will immediately consume whatever they are given, and then desperately ask for more. These "temporary tax extensions" will be correctly viewed by most businesses as yet another permanent reason to get out of California. - Joe Kennedy, losangelesquickbookshelp.com.
Posted by: Joe Kennedy @ 4:51:00 pm
I am certainly glad that I am not a dues paying member of your chamber. The decision to support this is totally idiotic. If business does not start challenging the lunatic actions of the Governor and Legislature to deal with the over $600 BILLION in unfunded liabilities then employers like myself and many others will leave the state
Posted by: William Prouty @ 2:33:00 pm
Again we are kicking the can down the road. everyone says we need to talk about pension and salary reform for the public sector unions, but you do nothing except raise taxes on business and the middle class tax payers. Yes these cuts will be painful for a while but we have to get serious about fixing this state. California is losing business and private citizens at an alarming rate and these are the people who are paying the largest share to support all the entitlement programs that California has implemented. I am an african american woman and a registered democrat and I am strongly considering leaving the state because enough is enough. Strong fiscally responsible changes are needed now not in the future. What are we doing? - waiting for superman to return from Krypton.
Posted by: Webmaster @ 2:13:00 pm
In addition to regulatory reform, I recommend that Gov. Brown and the state legislator rethink their long term energy policy and reconsider the use of natural gas and coal fired power from out of state. Many new industry initiates are under way to develop and use new gas fired power and "Clean Coal" techniques to generate cheap long term power from either or both natural gas and coal. The new technologies also address the GHG issue. Many other states are already enjoying the economic and environmental benefits of these new technologies.
A change in these unnecesary onerous self-emposed laws create a tremendous burnen on the companies and the citizens of California. The savings would go toward developing more profits and business and in the end would produce more taxes for the state to use to fill the budget gap.
A change in these unnecesary onerous self-emposed laws create a tremendous burnen on the companies and the citizens of California. The savings would go toward developing more profits and business and in the end would produce more taxes for the state to use to fill the budget gap.
Posted by: David E. Wright @ 1:53:00 pm

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