TUESDAY | June 17, 2008

California is no stranger to budget deficits.  Whether caused by the U.S.’s entry into World War II, the beginning of the baby boom, the slowing of the aerospace and defense industries or even election-year accounting, we have confronted this problem before.  While times have changed, the thinking today remains the same – spending reductions and revenue increases are both needed to balance our state’s books.

The L.A. Area Chamber compliments the Los Angeles Times for its thoughtful weekend editorial, commissioned by California Forward, on our state’s past budget crises and the solutions of former Governor's Earl Warren, Pat Brown, Ronald Reagan and Pete Wilson – all of whom made tough political choices to bring fiscal stability back to our state.

Today, as lawmakers face a $17 billion budget deficit, the Chamber released our guiding principles for state budget reform.  Like our predecessors, these principles recognize that a combination of spending cuts and fee increases are necessary to solve the current budget crisis.  Our principles also call for bipartisan collaboration and long-term fiscal reforms to end the boom and bust budgeting that has crippled our state for so many years.

Collaboration will be the key to getting the budget passed.  The Chamber strongly supports the recommendations of Assembly Speaker Karen Bass and Governor Schwarzenegger to establish a panel of elected officials from both parties to develop proposals for long-term structural budget and tax reforms. 

Receiving only 79 cents for every dollar California sends to the federal government, we also strongly caution the state not to cut programs that generate matching federal funds.  Doing so will only make this ratio worse and further contribute to the long-term budget problems of our state.

While the Chamber’s Board of Directors will evaluate the specific legislative proposals on an individual basis through the summer, our guiding principles were developed based on the results of a member survey assessing the various spending cuts and tax/fee increases currently being considered in the Legislature.  The Chamber thanks the members who took the time to complete the survey and share their thoughts with us, and in turn our lawmakers.

As we move into what is sure to be a long, hot summer of budget debate in Sacramento, we urge lawmakers to roll up their sleeves, work together and make the tough political choices necessary – the same choices made by the likes of Warren, Brown, Reagan and Wilson – to get our state’s fiscal house in order.

And that’s The Business Perspective. 

The Business Perspective is a weekly opinion piece by Gary Toebben, President & CEO of the Los Angeles Area Chamber of Commerce.

by Gary Toebben, President & CEO, Los Angeles Area Chamber of Commerce

L.A. Business
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