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Thursday, Aug 18, 2022
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Playtime is Over, Brown’s Austere First Budget Means Business

Editor, Jason Schaff Call it the end of the games. Or hopefully call it the end of an era. I’m talking about Gov. Brown’s first budget (well not actually his first budget, it’s his first in 30 years.) and the mood in the state since then. He’s asked for incredibly deep cuts and wants every sector of the state to share the pain. Business is not excluded. So everyone with interest in business as well as the state economy needs to have some opinions on how we can maneuver to help the state right its financial ship – as we know we should. That means all of us. Whether you like Brown or not, you know that’s he’s right in laying it all out on the table. This is the amount that needs to be cut so that the state isn’t in such a budget hole. He gave us some suggestions of what to cut and then wants the debate to begin. As any good bargainer is supposed to do, he proposed something pretty far out and outrageous and then, I believe, expects to scale back his demands to a level that both sides can accept. OK, what do we do now? The ball is in our court. Broad reactions Well, we step back and give some initial broad reactions without getting too specific. We set what we want to be the parameters of the debate – pulling and pushing as hard as we can. The Valley Industry & Commerce Association (VICA), who we look toward to lobby for our business interests did this last week with its initial response to the budget proposal. It said that the cuts he proposed to the state’s higher education system and his vow to restructure the way funds are distributed to local governments were of particular concern. In the proposed restructuring, Brown’s plan would eliminate state enterprise zone tax credits and funding for local redevelopment agencies. That means all the CRA stuff. He said that the funds allocated to those agencies would be redistributed to local governments to pay for vital services. He obviously means that business interests are not vital services. Or does he? Many people who don’t like government doing much for business at all will say that enterprise zones, which provide incentives for business, help more than just the impoverished areas. That’s true, but all companies that provide huge boosts to our economy are not always necessarily in the impoverished areas. They still provide an economic benefit. And why just burn everything that helps create jobs? How can we be assured that the local governments will get the help from the state to provide needed services in the redistributing of resources? The state has not been trustworthy in the past. Convince us. Brown needs to provide more details about how he plans the transfer of power to local governments. Once again, his budget proposals were a starting point. Some people feel that Brown’s proposals do not tackle such issues as pensions that must be put on the table for there to be complete financial stability. That really needs to be done and it seems to always be ignored. Many pensions are out of whack it seems. Let me know what private business pensions are – please. And then we should model the state pensions on that. The thing that the local business community can take a lead on is how we can promote business development in the state and our area while we cut the budget to the bone. This does take it to the local level. How can our local cities still promote business development here without relying on any help from the state? OK, I’m going to sound like a broken record, but this means relying on better marketing of our area and also focusing on a local level as to how we can better promote businesses. This means business tax reform in cities that need to do this, especially the City of Los Angeles. This means eliminating the business tax. This would actually increase revenue for the city through additional investments in the local economy. VICA is pushing this big right now. On the marketing front, California and Los Angeles and the greater San Fernando Valley area still are some of the best places in the world to do business. Great location, great employee base, innovative culture. Promote this. This will override budget cuts. It’s up to the business community to be innovative and creative to increase business despite the mess in Sacramento. Open to suggestions. Business Journal Editor Jason Schaff can be reached at (818) 316-3125 or at editor@sfvbj.com.

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