Editor’s note: This commentary was published in the Los Angeles Daily News last week. It includes a paragraph on AB 32 that was cut out of the piece when published by the newspaper.
With the publication of his 656-page self-portrait, Total Recall, a tremendous amount of media attention that has focused on the flashier moments and examined incidents in Arnold Schwarzenegger’s life. However, as business struggles to move the state’s economy forward, Schwarzenegger’s business-related record as governor deserves a bit of the spotlight.
I was there at the beginning. I was president of the Small Business Action Committee, which sponsored an initiative in 2004 to rewrite California’s workers’ compensation laws. We believed it a critical issue for supporting businesses in our state and preserving the jobs they create here. Schwarzenegger embraced the initiative, seeing the workers’ comp issue as a symbol of the state’s paralyzing dysfunction, and used it to convince legislators to come to the negotiating table and reach an agreement over his own workers’ comp bill. From the business point-of-view, the out-of-control workers’ comp costs were preventing job growth and encouraging other states to pillage our companies, recruiting them to relocate elsewhere. That 2004 reform saved many California businesses, and by the time Schwarzenegger left office it had reduced workers’ comp insurance rates by nearly 65 percent, saving employers more than $70 billion.
In the years between 2004 and when he left office, Schwarzenegger bolstered businesses in a number of ways. He made sure state government was working to support businesses and job creation. For example, in Sacramento we now find it commonplace that state agencies issuing contracts aim to give 25 percent of those dollars to certified small businesses. That mandate resulted from an executive order issued by Schwarzenegger in 2006. He also created the Governor’s Office of Economic Development, GoED, to serve as a one-stop-shop helping businesses navigate government hurdles and encourage them to invest and grow here.
While debt is certainly a problem for the state, the Governor’s Strategic Growth Plan were bonds approved by voters for traditional uses toward rebuilding the state’s schools, levees, and roads. That $42-billion in bond was the single-largest investment in California’s critical infrastructure in more than 50 years, which will help boost the economy.
As governor, Schwarzenegger served like a hockey goalie for anti-business legislation that made it through the legislature. He was there to bat the bills away. The California Chamber of Commerce each year produces a list of “job killer” bills that the Chamber notes has something for every business and industry in California to hate – increased employer liability, new barriers to economic development, more regulations and higher taxes on business. Of the 69 “job killer” bills tabbed by the Chamber during Schwarzenegger’s seven years as governor that reached his desk, he vetoed 63, or 91.3%.
Schwarzenegger was a refreshing change for the business community and its efforts to grow the economy and create jobs. His predecessor, Gray Davis, vetoed only 29% of 48 “job killer” bills.
What’s more striking is that Schwarzenegger accomplished these feats while working with an increasingly polarized Legislature controlled by the opposing party. He caught heat for his negotiating style and unwillingness to play by the usual Capitol rules, yet still somehow managed to push his business-minded agenda.
One can’t examine Schwarzenegger’s record on business without raising a warning flag about the potential costs of the greenhouse gases law he championed, which potentially could have a negative effect on the business climate. While groups such as the California Chamber of Commerce and the California Business Roundtable have praised the goals of the bill, AB 32, like others in the business community, they are wary of the implementation of the cap-and-trade provisions and the cost burden that likely would fall on business.
While the rest of the world will devour the salacious bits of his book and dissect his re-entry to the silver screen, we might take a moment to reflect upon how businesses fared under his administration — especially in our current economy.