Commentary : Is California in...

California is blessed with the most creative, energetic, entrepreneurial people--employers and workers--to be found anywhere on Earth.

Californians have refused to be defeated by fire, floods, earthquakes, drought or even international recession and Washington’s wrong-headed cuts in aerospace and defense spending, but something else threatens our jobs and quality of life: the high-cost of doing business in California.

In recent years, we’ve made fundamental changes to improve our jobs climate. We cut workers’ comp rates for small business by 19% just since 1993. We enacted job-creating tax incentives totaling a 10% reduction in the state tax rate for California companies. We cut years of red tape and over-regulation.

Already, we’ve seen positive results: Computer giant Intel announced 2,000 new jobs; toy company Lego chose California over Virginia as the location for a new resort, creating 700 new jobs, and San Bernardino’s California Steel Industries announced plans to retain 1,000 jobs and add hundreds more. All cited our reforms as part of the reason for their decision to stay and expand in California.

But as much progress as we’ve made to fulfill California’s potential, there’s still much more to do. The question we face on Election Day is: Who’s best able to continue making the kind of change we need?

Kathleen Brown offers glib slogans like “California First,” “Golden State Growth Program” and “Grassroots Capitalism.” But when it comes to making real change, Brown has revealed herself to be an ally of the special interests who favor the status quo--trial lawyers, labor bosses and government employee unions.

Just look at the record:

When we won workers’ comp reform last year, small business cheered. But Brown defended and applauded the very lawyers who had profited from the system and fought reform. She told them she regretted the “turmoil and upheaval” these reforms would impose on their practices.

Last year, Brown also succumbed to big labor pressure and denounced NAFTA. Fortunately, the trade agreement passed and has already increased U.S. trade with Mexico 15%.

To seize the opportunities that California’s future can offer, we need a governor who can stand up to the special interests and continue bringing fundamental change to our state. This is my agenda for change:

* Keep cutting back red tape. I created Cal-EPA to streamline and insist on honest science as the basis for environmental regulation. Now we’re fighting to reform the state and federal endangered species acts, which threaten to deny the water needed to sustain 40,000 family farms in the Central Valley and the growing cities and industrial users of Southern California. We don’t need a database of regulations on the books, as my opponent suggests. We need to get unnecessary regulations off the books.

* Hold the line on spending. For the first time in modern California history, we’ve reduced the size of California’s budget from one year to the next and kept spending more than $18 billion below projections. We need to keep a tight grip on our state’s public purse. Otherwise, autopilot spending will create pressure for tax increases that sap dollars from job-creating private sector investments.

* Bring taxes down. Our 1993 tax incentives are attracting new jobs today. But we should go even further. The corporate headquarters tax incentive now before the Legislature is a good start. As our economy grows, all Californians deserve to see their tax bills shrink.

My opponent proposes a new business tax moratorium that would provide 1/20th the tax relief of our incentives and a new-jobs tax credit that would let bureaucrats deny four out of every five businesses that apply.

* Expand foreign trade. Two million California jobs depend on foreign trade. That’s why NAFTA was so important. Now, I’m working for passage of GATT, the international trade and tariff agreement, which would open markets for California products in more than 110 nations. Bank of America economist John Wilson estimates its failure would cost California 173,000 jobs in 1995 alone. But Brown’s misguided “California First” proposal violates GATT, inviting foreign retaliation against California companies that would cost thousands of jobs.

* Get lawyers out of fender-benders. Too many lawyers are filing too many lawsuits, clogging our courts, driving up insurance costs and increasing the cost of products in California. We need reforms, like no-fault auto insurance, that will take lawyers out of routine fender-benders and other transactions where they wrongly drive up costs and drive out jobs.

* Target defense conversion. My first few months in office, I convened a summit of aerospace leaders to develop a strategy for defense conversion. Now, we have the most aggressive and successful conversion plan in the country, and our 1993 tax incentives are tailor-made to promote defense industry spinoffs and high-tech ventures. We’re also fighting additional base closings and redeveloping closed bases into new civilian job-generators.

* Bring down health-care costs. We need to improve health care but not at the expense of jobs. My approach, the Health Insurance Plan of California, has made health coverage affordable for small business without employer mandates or one cent from the taxpayers. My opponent supports President Clinton’s employer mandates, even though a UCLA Business Forecasting Project study estimated that they would cost California business $4.5 billion and our state 80,000 jobs.

If we make change, California has all that it takes to be the world’s entrepreneurial hot spot for the rest of the decade and beyond. As the Economist magazine recently observed, “California seems better equipped to cope with the future than anywhere else in the country.”

California is on the road to recovery--no matter what the naysayers might hope or claim. So let’s not retreat to the status quo favored by the special interests. Let’s keep moving forward and making fundamental change to restore the confidence, optimism and competitiveness of California. California’s workers and employers deserve nothing less.