Well, here we are again — It’s mid August and the legislature still doesn’t have a budget. In fact, we have yet to even VOTE on a proposal. The democrat majority wants to be credited for proposing a budget; however they seem unwilling to have a debate or vote. Why?? I am fairly certain that, not only will all Republicans oppose it, but also not even every Democrat will support it.
I am continually amazed that there are those in Sacramento who think we can tax our way out of this financial crisis. It is no secret that California’s economy is in a decline. Families are paying more and more for gas and groceries while their house payments go up and their home values go down. Our state’s unemployment rate has risen to 6.9 percent, the highest level in more than a decade, and businesses are leaving for other states.
It’s time we take immediate action to improve California’s business climate, attract businesses and create jobs. Passing a responsible budget with long-term structural reforms along with a "rainy day" fund is a solid first step.
In recent weeks, we have seen companies like AAA of Northern California announce that they were closing all of their California call centers and taking 900 jobs to facilities in Arizona and Oklahoma. Their representative was quoted in the media as saying that it cost them more do business in California than in any other state.
I was also troubled recently by Toyota’s decision to bypass California and instead locate a new hybrid car plant in the state of Mississippi. It simply makes sense that our state would be the natural place to build hybrid cars. After all, more hybrids are sold in California than any other state, and our commitment to green technology is second to none. But California lost out because other states like Mississippi go to great lengths to attract companies like Toyota by keeping taxes low and offering incentives to relocate there.
It’s clear that California is losing businesses and jobs because we are not competitive with other states. For years, politicians at the State Capitol have placed costly mandates on businesses that have made it far more expensive to operate here than other states. In addition to the state mandates, California has the 4th highest tax burden for businesses in the country.
I believe that economic reform should be an important priority for lawmakers as we wind down the final weeks of the legislative session to help reverse this negative trend and grow our economy. I have joined my colleagues in putting forward several common-sense proposals to lower the costs of doing business here and make California competitive again.
By setting aside the costly mandates and keeping taxes low, we believe we can encourage businesses to open and expand in California, create more jobs and opportunity and bring in more tax revenue to the state.
Some will argue that easing mandates on businesses will undermine California’s environmental laws. I disagree. There are more ways to protect and preserve our natural resources than by imposing expensive government regulations. I believe this can be accomplished through incentives.
As a co-chair of the Assembly Republican Task Force on Energy, the Environment and the Economy (E-3), we have proposed several common-sense ideas to encourage companies to reduce energy usage and embrace green technology without putting them out of business. By offering tax credits and other incentives, we can reduce greenhouse gas emissions and improve energy efficiency without increasing costs, discouraging economic growth or losing jobs.
I am also a member of the Select Committee on the Preservation of California’s Entertainment Industry. The entertainment industry is one of California’s oldest and most important businesses. The film production industry in California accounts for approximately 50% of the total United States motion picture output and is the eighteenth largest industry sector contributor to California’s gross state product. Unfortunately, in recent years the issue of “runaway production” has become a real problem.
Many other states in the nation have offered tax incentives to lure the entertainment industry out of California. As a member of this committee, I am determined to work to offer incentives so that we can keep this important and vibrant industry here in California where it belongs.
One thing is certain – higher taxes on California’s small businesses are not the answer. Some in Sacramento are calling for more than $9 billion in higher taxes on families and businesses as a way to solve the budget crisis. Raising taxes at a time when our economy is in decline is the worst thing we could do right now. Making it more expensive to own a business in California will surely lead to more companies relocating to other states, more downsizing, more job losses and less tax revenue.
In the coming days, I hope Republicans and Democrats will work together to make improving our competitiveness with other states a priority. Working together, we can bring more jobs to our state and create more opportunities for California’s hard-working families.
Assemblyman Cameron Smyth, R-Santa Clarita, is a co-chair of the Assembly Republican Task Force on Energy, the Environment and the Economy, a member of the Committee on the Preservation of California’s Entertainment Industry and represents the 38th Assembly District in the California Legislature.