Make California an Enterprise Zone
The budget recently proposed by Governor Jerry Brown contains difficult, but much-needed spending cuts. It more or less seeks to balance revenues with expenses—a challenging task for a state confronting a $25.4 billion budget gap.
That being said, Brown’s budget is foolish. Why? Because it does nothing to improve California’s dismal jobs climate. Instead it would make California even less competitive in the battle for jobs.
For six straight years, California has ranked dead last in an annual survey asking CEOs which state is the best for business. A growing number of businesses are fleeing the state or choosing to expand elsewhere. It should come as no surprise that California’s double digit unemployment rate continues to be among the worst in the nation. We are losing the battle for jobs.
As jobs go, so go state revenues. But most policymakers and academics in Sacramento don’t seem to understand that in order to have revenues, we need a healthy, vibrant economy that creates well-paying jobs for Californians. Tax hikes only serve to worsen California’s long-term budget woes. Voters instinctively understand this, which is why they’ve rejected every proposed tax increase on the state’s ballot since 2004.