In the wake of the overwhelming rejection of the package of budget-related ballot measures crafted by the Governor’s Office and the Legislature, and the seriously flawed budget deal that really nobody is happy with, now is a good time to examine exactly what the problem is with the budget and the state’s finances in general.
Governor Schwarzenegger arrived in Sacramento amid great fanfare and promises to “blow up the boxes” in California governance and return California to it’s former glory as a business friendly state. Unfortunately, those “boxes” are still intact and California ranks near the bottom of national business destinations.
The question of, “how did we get into this mess?”, has been asked many times during the past few years, yet the answer is painfully obvious. Early in this new century the state’s coffers were overflowing with revenue. The dot com and real estate booms were in full swing, new businesses were opening their doors at a record pace and overnight millionaires were popping up with regularity.
The state leadership, instead of recognizing this monetary windfall for what it was, a generous, but temporary spike in revenue due to unique economic circumstances, used it to justify ongoing and increased levels of spending that were revealed to be unsustainable.
The solution to this revenue/spending dilemma is to create a business climate in California that stimulates and promotes business growth, job creation and entrepreneurship. We must return the Golden State to a place where those who are willing to risk, innovate, build and employ are provided with the tools to make that happen.
California is besieged by neighboring states and others, tempting California companies with incentives to pack up and take their businesses and their employees elsewhere. There is a successful economic development program that the Governor and Legislature can rely upon to stem the flow of companies exiting the state. That program is the California State Enterprise Zone Program.
The Enterprise Zone program is an essential tool for economic growth in California. The program delivers measurable benefits to our state by creating jobs and business growth opportunities, while reducing unemployment, increasing household income and lowering poverty rates. The state’s 42 Enterprise Zones are located in economically distressed communities across California, from Eureka to Calexico and points in between. The Enterprise Zone program has played a pivotal role in statewide job expansion, while creating job opportunities for those with barriers to employment.
Since it’s creation in 1984, the Enterprise Zone program has been vital to hundreds of businesses, spurring job creation, retention and attraction and making California a more attractive place to do business. Combined with the Enterprise Zone program, lowering taxes and fees, especially on California businesses, will increase revenues, so that fewer budget cuts will be required.
California does have a budget problem, but we can grow ourselves out of this dilemma, by providing businesses with reasons to stay, grow and expand. Small and medium-sized businesses have always been the backbone of California’s economy, yet the state faces an uncertain financial future unless we provide them with the tools necessary to promote business growth in California. Without it, the future will be bleak indeed.