What Budget Crisis?

Mar. 19, 2010

I spend my days attending state Assembly and Senate committee hearings, trying to follow proposed legislation. Most days I end up sitting in a red velvet chair in a committee hearing room, listening to the ridiculous banter and commentary passing between committee members over policy and ideology. But more often than not, it becomes crystal clear to anyone in the audience that legislators are unaware that California is in a very serious financial crisis… because it’s business-as-usual for them.

What is business-as-usual? Just this week Assembly budget subcommittees met to discuss such pressing matters as Juvenile Justice, Assemblywoman Fiona Ma’s fur products labeling bill, civil rights and domestic violence issues, animal enclosures at zoos (!), public housing authorities and, of course, how best to implement the California Green chemistry initiative – in other words, how to add more regulations to manufacturers.

And what was the Senate doing? The Food and Agriculture committee discussed horses and pesticides. The Transportation and Housing subcommittee talked over the global recession. Predictably, the Committee on Climate Change met to discuss “local solutions” — part of the global warming fantasy to control the private sector, ultimately killing the goose that laid the golden egg.

Legislators on both sides of the aisle continue to busy themselves in their committees, diddling on pet projects, allowing special interests to whisper seductively in their collective ears, while California businesses continue to close. At the same time former Assembly Speaker Karen Bass and new Assembly Speaker John Perez were generously handing out ginormous raises to their staff, state employees were furloughed and private sector employees lost their jobs or had their hours cut.

While Perez and Bass continued to ignore the fiscal mess that they and their elected brethren created and allowed, in January the state’s long-term unemployment jumped 147.7% over the same month last year. In real terms, 768,000 Californians were out of work more than 26 weeks, which was up from 726,000 in December.

Either ideology or denial is the problem with the majority party. We know what’s wrong with the non-majority party and it has to do with a misplaced spine.

There are several things that would offer real hope and change to California residents and businesses, but Bass, Perez, Senate Pro Tem President Darrell Steinberg and Governor Arnold Schwarzenegger don’t seem to listen or even care. They are insulated from the pain that permeates and radiates taxpayers down to the bone.

Legislators could make some immediate fixes to bring about pain relief:

  • Lower the income and corporate taxes in the state – California has one of the highest personal and corporate tax rates in the country
  • Abandon independent contractor regulations
  • Abandon the net receipts tax – the business net receipts tax may be imposed on companies even when they are losing money
  • Class action lawsuit reform
  • Labor law reform – California has highly restrictive labor laws and penalties
  • Fix workers compensation again – it’s still broken

Legislators aren’t paying attention to California firms that move to Oregon, Arizona, Nevada and Texas because of our state’s hostile business climate at least partly brought about by government agencies that treat businesses like an enemy. California’s overtime laws render companies unable to compete. Oregon allows four-day workweeks, which are preferred by employees and employers.  California requires employers to pay overtime daily after eight hours, making the state non-competitive across the borders. But businesses with collective bargaining agreements in the state manage to find exemptions to restrictive labor and pay and overtime laws – all approved by the legislature.

AB 32, California’s Global Warming and climate change legislation, will be too costly as “green jobs” become mandatory in the state, killing most small businesses. Ironically, Apple Computer, eBay, Yahoo, Hewlett Packard and Intel all supported AB 32, but each of those companies is expanding in other states. Why? California businesses cannot compete with other states. After implementation of AB 32, it will only get worse.

Even the state of California has instructed agencies to buy vendor products and services out of state because it is too expensive using California businesses. Yet California lawmakers remain focused on AB 32 implementation, spending countless committee time discussing and planning for the big green transformation. Even with the exposure of junk science behind the global warming initiative, as well as the California Air Resources Board employee touting a phony Ph.D. behind the diesel soot effects study, legislators and special interest lobbyists continue the green jobs and manufacturing push.

While California legislators dilly-dally in committee hearings, hold fund-raisers and disappear on Fridays back to their districts, the grown ups in the state are making difficult adult decisions to move or shut down their businesses, sell or walk away from their homes, drop out of school and sell personal belongings.

While California pays its bills with IOUs and furloughs state employees, legislators are still talking about passing single-payer health care legislation, replacing private insurance companies by one non-profit health insurance fund.

Do Legislators really think that a federal government bailout is the answer for California? At this rate, the only taxpayers left in the state will be government employees. Eventually, they too will get fed up with footing the bill for the lawmakers’ bad habits, unethical and illegal activities and non-existent spines.

-Katy Grimes

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