It’s Time For Sacramento to Partner With Business
There
is rarely good news out of Sacramento. The perpetual budget crisis,
political stalemates and continuing cuts to vital programs can make
even the most optimistic of us wonder whether things will ever change.
So why, you might ask, is the Los Angeles Area Chamber of Commerce
investing the time, money and energy to take 100 business and community
leaders to Sacramento next week to meet with legislators and members of
Gov. Arnold Schwarzenegger’s administration?
We are going to remind Sacramento that all the solutions they seek
hinge on building our economy and creating more jobs by making
California more business-friendly. It is people with jobs and growing
businesses that generate the tax revenue that legislators in Sacramento
need to balance the budget.
For most in the private sector, we’ve been operating our businesses and
homes differently for more than two years. The global recession forced
us to reevaluate our business models and the decisions we make around
the kitchen table at home. We immediately reduced expenses and found
more efficient ways to meet the needs of our businesses and our
families. We did not have the option of operating in the red. The focus
turned to implementing long-term plans that brought us back to basics
with a strategy on how to survive – and thrive – once the recovery
begins.
Job Creation is Starting to Snowball in Los Angeles
I’m excited about three good reports about job creation in Los Angeles.
Last week, a major international business chose L.A. City and County
to be its North American headquarters.
Secondly, our signature
entertainment industry posted very positive numbers compared to last
year.
And finally, L.A. County and the University of Southern
California appear to be close to establishing a biotech park around the
USC Health Sciences campus in Boyle Heights. All three stories
represent major economic breakthroughs for our region.
A Fresh Start for Term Limits and California
Yesterday, the Los Angeles Area Chamber of Commerce, in concert with the Los Angeles County Federation of Labor/AFL-CIO turned in more than one million signatures for a term limit reform ballot measure. In order to qualify for the November 2010 ballot, 694,354 valid signatures are required. This initiative, if certified by county registrars this June and approved by voters this coming November, would fundamentally change the tone and temperament in Sacramento.
The term limit reform initiative we filed is simple and straightforward. Beginning in 2012, it reduces the time a politician can spend in the State Legislature from 14 to 12 years. Time can be served entirely in the Assembly, the Senate or a combination of the two. After 12-years of public service, a lawmaker is termed out of state Legislative office permanently. No exceptions! Equally important, this term limit change does not benefit any current or former lawmakers or anyone on the ballot this fall.
Voters passed the current 14-year term limit law in 1990 and it fundamentally changed Sacramento. The unintended consequence has been an electoral merry-go-round in which legislators are focused on winning the next office instead of developing the expertise and independence needed to tackle the State’s complex issues. An objective look at the political climate and lack of results in Sacramento shows that the current system is broken and not working.
Top-Two Open Primaries: A Gateway to New Solutions in Sacramento
The approval rating for the state Legislature is hovering in single-digits. Voter confidence is at a historic low. And 80 percent of voters believe that California is on the wrong track. Partisan legislative solutions have created paralysis in Sacramento. That is why the Los Angeles Area Chamber of Commerce is supporting Proposition 14 to create a new, non-partisan primary in which the top two vote-getters, regardless of party affiliation, advance to the general election.
A recent statewide USC College/Los Angeles Times poll confirmed that 20 percent of all voters choose not to affiliate with a political party and their ranks are the fastest-growing segment of California’s electorate. That reality is one of the reasons why California should encourage all of its registered voters to participate in open primary elections by passing Proposition 14 on the June 8 statewide ballot.
A closed primary system combined with an incumbent-controlled redistricting process and term limits that beg for reform has created a wobbly and broken three-legged political stool that fails to represent a broad cross-section of state voters who consider themselves “centrists.”
Small Businesses Being Attacked Under Another Name
Small businesses are the backbone of California’s economy. They are praised in speeches by elected officials and correctly regarded as the engine that will pull us out of the recession.
On the other hand, the term “independent contractor” sounds technical and can conjure up images of a faceless business that has no loyalty, threatens government jobs and is a ripe target for new taxes or regulations. Politicians don’t tout their support for “independent contractors” when running for office.
The truth is that most independent contractors are small businesses. They are painters, plumbers, real estate agents, auto mechanics, computer programmers, photographers, sound engineers, doctors, accountants — and many other types of small businesses.
In Sacramento, some legislators are seeking to implement an “independent contractor withholding” proposal, which would require businesses to withhold 3 percent of their payments to independent contractors to provide an interest-free loan to the state.
Jobs and Economic Recovery in Washington, D.C.
This week, 225 business and community leaders from Southern California will be in Washington, D.C. lobbying for an agenda that shines a spotlight on job creation, infrastructure development and education. While the focus of Congress this week is on health care reform, the Southern California delegation will remind members of Congress and the Administration that California has one of the highest unemployment rates in the nation and a bipartisan effort is essential to putting Americans back to work.
The delegation will present 39 different recommendations of advocacy priorities in the areas of aviation, economic recovery, energy, environment and green jobs, education, health care, homelessness, housing, immigration reform, transportation and goods movement and workforce development.
Stand Up to Redistricting Wars Targeting Citizens Commission
Voters beware: A group of California Democratic lawmakers is attempting one of the most cynical power-grabs in recent memory. The goal is to overturn voter-approved Proposition 11 in order to give themselves the authority to redraw their own district boundaries and choose the voters they want to represent.
Two years ago, California voters ended this inherent conflict of interest by passing Proposition 11. The initiative established an independent citizens commission to draw new legislative districts following the 2010 census. The new process is transparent and will reflect the state’s political and ethnic diversity. That’s why good government organizations such as California Common Cause, the League of Women Voters, and AARP joined the Chamber in championing this initiative. It’s also why political leaders spent millions of dollars opposing the initiative.
With Job Creation, Action Speaks Louder Than Words
Every elected official is talking about job creation, but few have actually done anything to create or save private sector jobs. Actions taken over the last week highlight the marked difference between action and inaction.
Yesterday, the L.A. City Council’s Budget & Finance Committee voted unanimously to recommend the creation of a new internet business tax category. If approved by the full Council this Friday, this will send the clear message that Los Angeles is willing to compete for well-paying, high-tech jobs. This new category, established at the lowest tax rate available, will provide fiscal certainty for dozens of L.A.-based internet businesses that pay an average salary of well over $75,000 per year.
The Budget & Finance Committee made the right decision. If this proposal is passed by the full Council, there will be a short-term loss in tax revenue for the City but a long-term opportunity to create jobs and dramatically increase the tax revenue that these growing companies (and their employees) will contribute to the City of Los Angeles. I especially applaud Council President Eric Garcetti for his leadership on pushing forward this action and we encourage a unanimous vote on Friday.
Rebuilding the Economy One Export at a Time
Earlier this month, President Barack Obama laid out his plan to rebuild the U.S. economy through the National Export Initiative (NEI) — a five-year effort aimed at creating 2 million new jobs in America by doubling exports. The launching of this initiative, as well as the President’s public support of the pending Free Trade Agreements (FTAs) with South Korea, Colombia and Panama, is welcome news for California businesses. The President should be commended for recognizing that free and fair trade is an important strategy to create jobs and ensure the long-term growth of the economy.
The President’s focus on international trade should also be a call to action for California businesses. Businesses need to vocalize their support for these FTAs to California’s Congressional representatives. Beyond that, California businesses are urged to take advantage of the export opportunities that will be presented by the NEI. Many companies — particularly small and medium-sized businesses — are not aware of the numerous export opportunities that are available. The NEI, through the U.S. Department of Commerce, will provide a vast array of tools and will help businesses identify new customers and business partners in foreign markets. The initiative will also help businesses access credit.
Creating Jobs Depends on our Willingness to Compete
There is good news to report about keeping film and television production jobs in Los Angeles and California. Tax incentives approved by the state Legislature and signed by Gov. Arnold Schwarzenegger last year are working. According to a state report, 60 productions that threatened to leave California are staying local, a strong statement about the value of competitive incentives.
Runaway film production has long threatened this signature industry of Los Angeles and California. Over the years, other states and countries have developed extensive tax and financial incentives aimed at luring entertainment jobs away from California. And those efforts were paying off for states like New Mexico and Louisiana, while California cities watched the jobs disappear. Every year, the Chamber and the California Film Commission suggested competitive incentives to even the playing field, but lawmakers in Sacramento argued over whether to offer any retention incentives at all. Fortunately, the long-sought film retention tax credits were enacted last February, following a strong push by local lawmakers led by former Assemblymember and now L.A. City Councilmember Paul Krekorian.