Legislative Democrats Begin Mock Negotiations
On
the last day of the just-completed fiscal year, the Assembly Speaker and Senate
President Pro Tem announced agreement on what
they call a unified Democratic budget "framework" that purports
to reconcile their different approaches and "signals the next step of
negotiations" with the Governor.
It
does no such thing.
But
don’t take my word for it; read the previously-confidential paper here.
You will find that this is not a document that anyone could negotiate from.
Business Uncertainty Over Government Action Undercuts a California Recovery
Carnegie Mellon University economist Allan H. Meltzer’s Wall Street Journal article Wednesday contains some thoughts that can be applied to California’s upside down fiscal situation.
One point Meltzer makes is that, "High uncertainty is the enemy of investment and growth." Businesses uncertain if tax laws will change pull away from hiring more employees or building more facilities until they know what to expect.
Corporations in this state face uncertainties on the tax front that will cause them to hesitate investing in their California operations. That in turn will keep the Golden State unemployment rate high and economic growth subdued, which only extends, if not deepens, the state’s economic chaos.
The ‘If Both Parties Agree, It Must Be Bad’ Argument
If you paid any attention to the debate over Prop 14, the top two primary initiative, you probably heard the following argument trotted out: if both political parties agree on something, it must be bad.
Many, many smart people made this argument, even though it’s a demagogic argument that provides a way to avoid examining the substance of the issues. Of course, the determination to avoid examining the substance of the issue is the basic organizing principle of California political debate (and media coverage of same). And who can argue with success? Prop 14 won.
So when it comes to bigger controversies – particularly about our budget system – perhaps it’s time to stop marshaling evidence about the damage done to California by its twin supermajorities, on budgets and tax increases. It’s time to stop showing how two-thirds adds to spending and borrowing.
Giving L.A. Businesses a Break
I’ve
criticized the city of Los Angeles for the way it treats businesses. It
says it wants companies to call the city home, then it all but cudgels,
kicks and chases businesses out of town.
But I must admit that I’m pleased
to see a proposal from Councilmen Richard Alarcon and Greig Smith that,
if passed, may be a modest help to lure businesses to the city or allow
them to get started.
The proposal would temporarily
expand the waiver on the gross receipts tax on businesses. Basically,
new businesses or ones that relocated to Los Angeles would not have to
pay the tax for three years.