California businesses benefit from election day outcomes
All kinds of California businesses, large and small, won at the polls Tuesday and are hoping for a big payoff.
Businesses as varied as strawberry growers, beer brewers and oil refiners — all heavy water users — stand to benefit from voter passage of Proposition 1, a $7.5-billion bond to fund improved water storage and quality and stave off future droughts.
Fiscal conservatives got a successful ballot measure, Proposition 2, that will create a budgetary “rainy day fund” to cushion the blow of the next recession.
Health insurers spent tens of millions of dollars to stave off an initiative, Proposition 45, that would have regulated their rates. And doctors and hospitals ponied up equally large sums to defeat Proposition 46, which would have raised medical malpractice award caps for non-economic “pain and suffering.”
To top it off, voters overwhelmingly reelected Democratic Gov. Jerry Brown to a historic fourth term. At the same time, they denied Democrats lopsided supermajorities in both houses of the Legislature.
Brown, 76, who has matured into a vocal believer in balanced budgets, is expected to rein in freer-spending liberal lawmakers. Indeed, on the day after the election, he publicly promised to roll back a series of temporary tax increases when they begin to expire in 2016. Those hikes in sales and income taxes helped the governor erase a $26-billion deficit and start building a surplus.
During the last four years, the governor has been “like the dad slapping the hand of the kids going into the cookie jar,” said John Kabateck, California executive director for the National Federation of Independent Business. “We’re hopeful he’ll do that next term.”
The combination of an already more pragmatic Brown and what’s expected to be a more moderate Legislature has put the California business community in a strong position over the next four years, said Dan Schnur, executive director of the Jesse M. Unruh Institute of Politics at USC.
“In a deep-blue state like California they couldn’t ask for any more on election day than what they got,” he said.
Allan Zaremberg, president of the 13,000-member California Chamber of Commerce, hailed the outcome of the four ballot measures and said he was particularly heartened by the state’s commitment to saving water and money. “These are crucial investments in the future,” he said, “because the only things that are certain in California are droughts and recessions.”
But business shouldn’t be lulled into complacency by the recent election victories, warned Rob Lapsley, president of the California Business Roundtable. He foresees a big battle over taxes, pensions and spending with Democrats and labor unions in the Legislature and on the ballot in 2016.
Business, Lapsley said, plans to push for an overhaul of California’s entire state tax code that would provide employers with incentives to hire more people and spur long-term economic growth.
“We’re gearing up to beat” efforts to extend sales and income tax hikes passed by voters in 2012, Lapsley said, and oppose drives to put new taxes on crude oil and commercial real estate.
Twitter: @MarcLifsher
