CALIFORNIA WATCH : A Serious State

Sacramento actually did it! In the final hours of this year’s legislative session, California lawmakers passed a package of bills that should help to reverse the state’s image of being inhospitable to business. The strong bipartisan effort sends a clear signal to business within and outside of California that the state is pursuing competitive business policies.

If business takes advantage of these changes, it could mean jobs, jobs, jobs.

To be sure, the multi-bill package, which Gov. Pete Wilson plans to sign, is no cure-all for the worst recession to hit California since the Great Depression. Neither will the measures directly alleviate the wrenching structural changes being forced on the state by the downsizing of the defense industry and other key components of the state economy. But the legislative package should help existing businesses to stay or expand in California and encourage new ones to locate here.

The legislation provides tax breaks, streamlines cumbersome and costly state requirements and revises the complex unitary tax on multinational companies. These business-friendly measures follow the major overhaul in the workers’ compensation system that was signed into law by Wilson in July.

In good economic times, the state’s tax and regulatory policies were burdensome to business. In the current climate, they have been killers, putting some companies out of business. It took a while for Sacramento to respond to hard times, but finally it got serious. Having proven it can be done, now Sacramento can get serious more often.