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Valley Business Officials Warm To New Leader

Valley Business Officials Warm To New Leader By JACQUELINE FOX Staff Reporter How long the honeymoon for Arnold Schwarzenegger will last in Sacramento is anyone’s guess. But right now, the governor elect, who beat out Gray Davis Oct. 7 in a historic voter revolt, has become the Republican Party’s superhero. He also has received a warm reception from many Valley business leaders who suggest he has the muscle to potentially wrestle significant federal dollars for state programs and will enjoy the kind of access to the White House Californian’s haven’t seen since Ronald Reagan held the office. Plus, Schwarze-negger’s pro-business platform and strong links to California’s tourism and entertainment industries, many say, are an added bonus that could play a role in staving off runaway film production. “I think the entire state is going to be better off,” said David Fleming, chairman of the Economic Alliance of the San Fernando Valley and an attorney with the law firm of Latham and Watkins. Fleming, who served on Schwarzenegger’s campaign finance committee, said, the governor-elect’s moderate position on abortion and gay rights played a significant role in his successful bid to oust a Democrat, Gray Davis, from office. His middle-of-the-road politics, Fleming said, should also make it relatively easy for Schwarzenegger to reach out to Democrats who understand how important his ties to the President are. “Look, he’s already talked to (President) Bush and you can believe that the president is very interested in helping Arnold, particularly with his re-election campaign about to kick into gear,” said Fleming. “He has a very friendly ear in the White House, and I think it’s a great step forward for the Valley’s economy and the state as a whole. And I think he has what it takes to reach out across the aisle and work with members of the other party.” White House attention Bob Stern, president of the Center for Governmental Studies, agrees, that many of the issues impacting businesses in the Valley, indeed across the state, will take top priority with the new governor. He says it’s practically a given that federal funding to prop up California’s economy is already being set aside. “The Bush administration had absolutely no incentive whatsoever to help Gov. Gray Davis,” said Stern. “Since it’s going to take about 39 days for Schwarzenegger to be sworn in, it will probably be 40 days when we start hearing that this amount of money is coming in for this project, and this amount of money is coming in for that one.” However, some local lawmakers, however optimistic, also remain skeptical, largely due to the fact that, aside from nixing Davis’ proposed increases to the vehicle license fee, Schwarzenegger has given few specifics for how he intends to spur economic development. “I’m certain that he means to work with our side of the aisle,” said State Sen. Sheila Kuehl, a Democrat, whose 23rd district includes portions of the Valley. “I know he’s already reached out to Sen. John Burton and I know that the business community is very happy to have a governor who says he wants to protect the ability to thrive in California. But the problem we have so far, is that he has not indicated really what he means by that.” Kuehl said she’s hoping Schwarzenegger’s pro-business programs stretch beyond quick-fixes, such as the modest adjustments made to workers’ compensation and lowering taxes, and include some relief for higher education facilities, particularly the Cal State system, which, without some form of relief, will take a huge hit next year as 2003 budget cuts take hold. “One of the things I hope that the new governor recognizes is the importance of making a connection between good education and a strong labor force,” said Kuehl. Will federal dollars come? Kuehl also cautioned the business community not to get its hopes up regarding federal funding because the states are still grappling with expenses for Bush’s homeland security programs and because the president has earmarked billions in aid to rebuild Iraq, Afghanistan and fight terrorism in the Middle East. “I hope it’s true because we need the money, but I’m not sure it will flow just because there’s a relationship there,” Kuehl said. But in addition to funding, others suggest that simply the change itself, coupled with Schwarzenegger’s strong pro-business pledges, will force companies thinking of moving to the state but put off by the state’s higher costs of doing business here, may feel more compelled to stick it out. “I think this election is a huge morale boost for people who have been suffering under the perception that California is hostile to businesses,” said Bob Scott, director of the Civic Center Group, a former member of the city’s planning commission and leading proponent of new infrastructure programs locally, particularly in the Northeast Valley. Scott added that Schwarzenegger’s high-profile role in Hollywood and international star power carry the potential to boost two of the region’s most vital industries: entertainment and tourism. “He’s in the position where he can come up with some very strong representation on campaigns to help there,” Scott said. Kuehl, however, pointed out that programs implemented by Davis to boost California’s filming sector, such as Film California First, were slashed during the last year to lower the deficit. With Schwarzenegger now wanting to cut out the roughly $4 billion that would come from the boost in the VLF fees, she says, there’s not going to be much left over for him to use for new programs. “Without some kind of tax subsidy, I’m not sure he’s going to convince the industry to stay here,” Kuehl said. “I don’t know where the extra $4 billion would come from.”

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