Davis Is No Brown--and That’s Good

In the waning days of the gubernatorial campaign, when Gray Davis’ election seemed more and more likely, many of my colleagues in the business community began wringing their hands over the prospects of a Legislature controlled by the Democrats and a Democrat in the corner office. It has been 16 years since such a phenomenon has occurred.

And although our memories are a little fuzzy, it’s still painfully clear just how awful things were for business back then: Jerry Brown, Willie Brown, Adriana Gianturco, small is beautiful, lower your expectations, learn to live with less. Wasn’t Davis Jerry Brown’s chief of staff? Katie, bar the door!

While not always on the same wavelength as business, Brown’s successors, George Deukmejian and Pete Wilson, provided a safety net from the excesses of the legislative Democrats. During the last two sessions, dozens of anti-business bills were introduced and moved through the legislative process. Sacramento’s business advocates united. With aggressive lobbying, a concerted public relations effort, the looming threat of gubernatorial veto and the politics of election ’98 in full swing, most were killed in the Legislature. Wilson finished off the few that made it to his desk with his veto pen.

For the emboldened legislative liberals, who had significant gains in both houses this fall, there appears to be an electorally approved mandate to continue what they’ve done for the last two sessions: stick it to business. And, with their party in control of the governor’s office, the perception is that they will now be completely unencumbered in turning their bad legislation into bad law. That theory has a few fundamental flaws.

There are unique dynamics at play for the new governor and the new Legislature. First, Davis is not Jerry Brown. Davis was elected by positioning himself as a centrist. As controller through California’s worst recession, he remembers well the flight of California business to more business-friendly states. As lieutenant governor through the mid- and late 1990s, he remembers the Herculean effort made by the governor and the Legislature--a Legislature controlled by Democrats most of the time--to reform California’s business climate and set the stage for the state’s dramatic economic revival.

Davis is now a national figure. As the chief executive of the nation’s most powerful and populous state, he will be, by default, a national political prospect, whether he aspires to be or not. And with whom will his accomplishments be compared over the next four years? The answer: his two Republican predecessors and the governors of other states, like Texas, Illinois, Pennsylvania, Ohio, New Jersey, Florida, Arizona and Nevada, which are competitors for California jobs. Interestingly, not one of these states come January will have a Democratic governor. Therefore, Davis will be under inordinate pressure to lift the stigma of the Democrats’ “big government” policies from his back and embrace a more pro-job, pro-economic development agenda, like those that can be expected from his Republican counterparts. To do otherwise would be to risk his national prospects and perhaps even reelection.

Some would have you believe that our recent election is the beginning of the end for California business. Our association has worked with Republicans, Democrats and independents. We’ve succeeded and prospered by educating those in public policy as to the principles that allow business to grow, thereby creating jobs and improving the quality of life for all.

Davis and the legislative majority are more likely to remember the business flight of the early 1990s than they are the “big government,” tax-and-spend-a-thon of the 1970s.

Despite what some pundits may say, most California business leaders are optimistic about working with Davis. In his campaign, Davis endorsed eliminating capital gains for small and medium-sized businesses. He talked about expanding Internet bandwidth and, generally, improving California’s infrastructure. He called for national standards on securities litigation and endorsed broader research and development tax credits for California’s growing industries. Above all, he talked about making our state’s schools better. Surveys show this concern is No. 1 among employers, too.

These issues are ones on which business can build a strong working foundation with the new administration, because these are goals that we too support. By forging a strong working relationship based on mutual goals, we can make California the best place to compete and win.