The Los Angeles Area Chamber of Commerce announced Friday at a news conference its endorsement
of Gov. Jerry Brown’s proposal to hold a special election in June to address
the State budget crisis with an equal combination of spending cuts and a
temporary extension of the tax increases put into place two years ago.
We believe that Gov. Brown’s proposal to combine dramatic budget
reductions with a temporary extension of higher rates on the State income tax,
sales tax and the motor vehicles registration fee is fiscally responsible.
Our first choice was to address the deficit through spending cuts only.
As we discussed this option at length, we simply did not feel that the basic
infrastructure of our State could be maintained if $25 billion in budget cuts
were put into place at this time. We know that extending the tax increases will
have a short-term negative impact on our members and the economy, but not as
negative as the dramatic reduction in education, infrastructure and social
services that would come from a $25 billion budget cut.
In addition to balancing the budget today, we believe California needs
reforms that will have a positive long-term impact on revenue and expenditures
in the future. At a private meeting before the news conference, the Chamber
discussed with Gov. Brown its strong feelings about the need for reducing the
State’s long term budget deficit through pension reform and regulatory reform
with an emphasis on the California Environmental Quality Act. The governor told
us he understood the necessity of pension and regulatory reform, and he pledged
to work with the Chamber on these important issues. We will meet soon with the
governor’s senior staff in Sacramento to discuss specific recommendations.
Please note that the Chamber did not endorse the specific expenditures
and cuts that Gov. Brown proposed in his budget. In fact, we oppose some of the
cuts in the governor’s budget. What we support is a public vote in June, and an
equal combination of budget cuts and temporary extensions of the current tax
rates in order to balance the State budget and return California to fiscal
solvency. We also recommended that the governor look at a three-year temporary
tax extension rather than five years.
The Chamber is calling on
both Democratic and Republican lawmakers to take a leadership role in working
with the governor to present a plan to the voters in June. Painful as these
budget cuts and tax extensions may be, we need a bipartisan solution for the
good of California. The voters will only endorse a budget that is void of smoke
and mirrors and provides hope for the future.