State's business lobby wants labor laws adjusted along with budget

Last of two parts on special-interest influence on the budget.

Companies like UPS would like their California truck drivers to decide when to take their lunch breaks.

The world's largest package delivery service has spent $804,169 lobbying its cause at the Capitol since 2004.

Now, business groups and like-minded Republicans have added relief from the meal and rest period rules to the list of things they want approved with the state budget.

California businesses, led by the California Chamber of Commerce (CalChamber), the California Taxpayers' Association and the Howard Jarvis Taxpayers Association, have spent millions and successfully enlisted the GOP to advocate for their interests over the years.

In California, it takes a two-thirds vote of each house in the Legislature to pass a budget or a tax increase. That gives the minority-party Republicans – and the business community lining up at their doors – far more ability to influence the budget than most other legislation. GOP lawmakers have successfully blocked major legislative tax increases since 1991 because of that power.

This year, with the budget already 28 days late and the state $15.2 billion short of a balanced budget, business groups are pushing to ensure their interests are taken care of as the budget is shaped. With that push comes money.

CalChamber, the highest-profile business group, has spent more than $11.5 million to influence elected officials since Gov. Arnold Schwarzenegger assumed office in late 2003, according to disclosure forms filed with the secretary of state's office.

Individual chamber members spend millions more on lobbyists and campaign contributions.

Bob Stern, president of the Center for Governmental Studies in Los Angeles, said businesses will spend to be heard by lawmakers. Most of the time, "the purpose is to reduce taxes on them. In some cases, they're getting tax breaks from the state," he said.

These business-funded anti-tax groups tout a winning record with both the Legislature and the public. The Howard Jarvis Taxpayers Association celebrated its 30th anniversary this year, heralding that its founder's legacy, Proposition 13, has saved $528 billion for California taxpayers.

The groups have the ear of both the governor and Republican lawmakers who believe the best way for the state to climb out of the budget hole is to expand the economy through incentives such as the flexible meal breaks. Tax increases, fiscal conservatives argue, would only drive more businesses out of state.

Tax historian David Doerr of the California Taxpayers' Association, a nonprofit anti-tax group with board members from Shell Oil, R.J. Reynolds, Intel, PG&E, and Verizon, among others, said Republicans still are convinced that tax increases were unsuccessful the last time they were pushed through the Legislature.

Some attribute the unmet goals to a deepening recession, but a temporary sales tax boost, an income tax increase on high-income earners, and suspension of corporate tax credits pushed by then-Gov. Pete Wilson failed to bring in a projected $7 billion in revenue.

In the end, "all you have is, the revenues did drop, and it didn't bring in what you thought it would be," Doerr said.

Since then, businesses have remained vigilant in opposing taxes.

In 2004, major corporations ranging from Anheuser-Busch to Philip Morris donated $8.65 million to help defeat Proposition 56, which would have lowered the vote threshold for tax hikes from two-thirds to 55 percent. In addition to a $750,000 contribution from the California Republican Party, businesses, retailers and farmers gave the bulk of that money to the Californians Against Higher Taxes coalition to fight the measure.

Proposition 56 would have let the Legislature approve a state budget or a tax hike with a 55 percent vote instead of the two-thirds majority currently required. It also would have docked lawmakers' pay if they failed to pass a budget on time.

David Wolfe, legislative director for the Howard Jarvis Taxpayers Association, said more than big business would suffer under the tax increases proposed this year.

About the writer:

• Call Judy Lin, Bee Capitol Bureau, (916) 321-1115.