Overview

Whether the state has a budget surplus or a budget shortfall, the California Chamber of Commerce believes that the state’s tax policies are key to establishing and maintaining a robust economy.

Unfortunately, California faces the latter scenario, heading into 2008. The Legislative Analyst’s Office (LAO warns that California policy makers must make tough choices if solutions are to be found that will help the state to avert these alarming projections. Importantly, the LAO emphasizes that a long-term perspective is needed.

The CalChamber agrees. Developing solutions that address, not only the coming year, but also those to come, is necessary to break this ongoing pattern of budgetary shortfalls. Although budgetary solutions will require more than tax policy changes alone, the state’s tax structure is a vital component to establishing the type of economy that generates the revenues this state needs.

Goals

• Monitor legislation and regulatory activity to ensure that California tax laws are fair and can be administered easily.
• Review state spending plans to make certain that economy and efficiency are the primary goals of government.

Major Victories

• Stopping New Taxes. Led a coalition of associations and businesses that stopped a proposal to increase the cost of shipping goods and make California less competitive by imposing an illegal per-container tax in the ports of Long Beach, Los Angeles and Oakland (SB 974).
• Winning Tax Relief, Streamlining. Supported enactment of legislation providing property tax relief to tree farmers and other tax relief to other growers hurt by the January 2007 freeze (AB 297, SB 114); streamlining the tax filing process for non-profit corporations (AB 897); and new law to reduce the application burden for enterprise zone applicants (SB 341).
  

Issue Summaries

Taxation
Position: The CalChamber’s top 10 tax considerations for policy makers boil down to one central principle: To stimulate and grow the economy, whether in good times or bad, fiscal solutions must foster, not stifle, the fiscal vitality of California’s workers and businesses. Taxation

Enterprise Zones
Position: The CalChamber opposes any attempt to undermine or reduce the enterprise zone program and supports changes that will improve or strengthen the economic development incentives under the program. Enterprise Zones

Research and Development Credit
Position: The CalChamber will continue to advocate that the state be proactive in maintaining and expanding its leading edge in research and development (R&D) innovation and talent. This includes strengthening California's R&D credit by bringing it into conformity with positive aspects of the federal R&D credit. Research and Development Credit

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