Los Angeles Area Chamber of Commerce Releases Member Survey and Guiding Principles for State Budget Reform

Members of L.A.’s leading business organization support a combination of spending cuts and fee increases to solve the state’s fiscal crisis

June 17, 2008

SACRAMENTO, CA (Access Sacramento) – The Los Angeles Area Chamber of Commerce released today guiding principles for California state budget reform during Access Sacramento, its annual advocacy trip to the state Capitol.  Developed based on the results of a member survey on the various budget proposals being discussed in the Legislature, the guiding principles call for bipartisan collaboration, long-term fiscal reforms and a combination of spending cuts and fee increases to solve the current $17 billion budget deficit.  The Chamber’s Board of Directors will continue to evaluate each specific budget proposal as lawmakers work to pass the 2008-2009 state budget.

“California’s previous budget crises were successfully addressed by cutting bloated budgets and increasing targeted taxes,” said Gary Toebben, President & CEO, Los Angeles Area Chamber of Commerce.  “In the current fiscal crisis, L.A. Area Chamber members are open to addressing the state’s budget deficit through a combination of spending reductions and revenue increases in order to ensure the long-term financial stability of the California government.”

The L.A. Area Chamber’s guiding principles for state budget reform also call for the creation of a bipartisan panel to develop proposals for long-term structural budget and tax reforms to end the current boom and bust budgeting that continues to cripple the state.  The Chamber supports targeted reductions before across-the-board budget cuts; Governor Schwarzenegger’s call to strengthen budget reserves; and encourages the evaluation of a two-year appropriation and revenue schedule and the passage of a budget on time. The principles also caution the state not to cut items that generate matching federal funds.

“California continues to be a ‘donor state’ for the rest of the nation, receiving only 79 cents for every dollar it provides to the federal government,” said Toebben.  “As lawmakers work to balance the budget, we urge them not to make this ratio worse by cutting programs that generate matching federal funds.”

Sixty-five percent of L.A. Area Chamber members responding to the survey said that lawmakers should address the budget deficit through a combination of spending cuts and tax/fee increases.  Fifty-six percent said they would support reinstating the vehicle license fee to the pre-1998 level of 2 percent of vehicle value.  Sixty-seven percent opposed a sales tax on services, 59 percent opposed increasing the state sales tax, and 55 percent opposed removing business properties from Proposition 13 protections.  Chamber members were split or undecided on proposals including: expanding the state lottery to generate additional revenue; implementing an out-of-state Internet sales tax; limiting research and development tax credits; and limiting net operating loss deductions.

The guiding principles for California state budget reform and the results of the member survey were presented during the L.A. Area Chamber’s annual advocacy trip to Sacramento, which included 100 business leaders from Southern California.  Meeting with legislators, agency officials and lawmakers over two days, the delegation advocated on issues including: business and job growth; California Environment Quality Act (CEQA) reform; education and workforce development; energy, water and the environment; health care; international trade; and transportation and goods movement.

The L.A. Area Chamber’s guiding principles for state budget reform, the results of the member survey and the 2008 statewide advocacy agenda are available at www.lachamber.com/accesssacramento

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The Los Angeles Area Chamber of Commerce represents the interests of business in L.A. County. Founded in 1888, the Chamber promotes a prosperous economy and quality of life in the Los Angeles region. For more information, visit www.lachamber.com.

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