Schwarzenegger for Governor; Yes on Props. 1A-1E and 84; No on Props. 86-90

(October 30, 2006) California voters have an opportunity this election to help keep the state's economy and jobs climate strong and growing. With that goal in mind, the California Chamber of Commerce supports Governor Arnold Schwarzenegger for re-election, supports Propositions 1A-1E and Proposition 84; and opposes Propositions 86-90.

Re-Elect Governor

When it comes to jobs, tax policy and the economy, the distinction between the two major candidates for Governor is clear. Since his election in the unprecedented recall of 2003, Governor Schwarzenegger has successfully pursued policies to create jobs, strengthen the economy and increase revenues to the state through economic growth. California has gained 650,000 jobs since the Governor took office in November 2003.

Governor Schwarzenegger has reached across party lines to achieve landmark workers' compensation reform and the comprehensive infrastructure investment package that appears on the November ballot, plus greatly reduce the state's multibillion-dollar budget deficit and fully fund education this year - without increasing taxes.

He also has vetoed numerous "job killer" bills, including a proposal for a government-run health care system.

In contrast, his opponent supports a multitude of higher taxes and other policies that will harm business, our economy and our state.

The clear and significant difference between the candidates is why the CalChamber Board of Directors again broke with a long-standing policy not to endorse candidates in statewide elections and voted to endorse Governor Schwarzenegger, as it did during the recall election.

Helping Economy

The Governor and CalChamber are in agreement on the need to invest in California infrastructure by supporting Propositions 1A through 1E. Recent floods, overcrowded freeways and schools in disrepair are just a few of the signs that California urgently needs this investment.

Propositions 1A through 1E, part of the Governor's Strategic Growth Plan, will ensure the state makes that infrastructure investment in a comprehensive way, not the piecemeal approach we've seen in recent years.

Those who have concerns about California going into debt through the bonds should note that the state would otherwise have to wait 20 years before accumulating the resources to tackle our enormous infrastructure needs. Moreover, the debt level is no more than California has experienced historically.

Proposition 1A cracks down on the continued raiding of transportation funds in the state budget by amending the California Constitution to guarantee that all sales tax revenues on gasoline will be used for transportation needs, which was the original intent of the voters when they passed Proposition 42 in 2002.

The transportation bonds authorized by Proposition 1B will allow the state to take an important first step in addressing the more than $100 billion in backlogged transportation needs identified by the California Transportation Commission. The bonds will cover the costs of new projects to help California businesses move their goods to consumers and will address critical needs surrounding California ports, airports and heavily congested transportation goods movement corridors, including truck and rail improvements.

Proposition 1D bond funds for modernization will benefit students, as well as the state's businesses and economy, by providing classrooms that are equipped to deliver the highest quality education. As an added benefit, Proposition 1D will, for the first time in California's history, provide bond monies for career technical education.

An additional $7 billion in bonds in Propositions 1E and 1C will bring critically needed investments to California's levees and other flood control facilities and allocate funds for additional housing.

Approval of the entire package will help keep the state's economy - and California businesses - going strong.

Support for Proposition 84, also backed by the Governor, will generate additional bond funds for drinking water, flood protection and coastal protection projects.

Do No More Harm

Turning to the bottom portion of the ballot list, Californians can simply be sure they do no more harm to the jobs climate here by rejecting the new taxes on the ballot. The Governor also has said he opposes the measures raising taxes:

• Proposition 86 increases the tax on cigarettes and other tobacco products to pay for unrelated medical costs. This unwise policy choice will contribute to the state's fiscal difficulties when new programs funded by the new tax get locked into the ongoing budget and must be paid for when the revenue generated by the new tax inevitably declines.
  
  
• Proposition 87 increases the tax on California-produced oil, not only increasing our dependence on more expensive foreign oil, but also reducing tax revenues used for education, public safety, health care and transportation. On top of that, it creates a costly new bureaucracy that would operate outside the normal state budget process with no accountability to taxpayers.
  
  
• Proposition 88 creates a new statewide real property parcel tax and must be stopped so it won't encourage future attempts to enact new forms of statewide tax hikes. It clearly runs counter to what voters wanted when they approved Proposition 13 to limit property tax increases.
  
  
• Proposition 89 increases taxes on corporations to fund political campaigns. Ultimately, it will prevent businesses of all sizes from having a political voice on ballot measures that affect them, giving the upper hand to the campaigns of anti-business forces.

In addition, CalChamber-opposed Proposition 90, while claiming to reform government's use of its eminent domain power to condemn properties so they may be used for a more publicly beneficial purpose, in fact is both costly and harmful, and should be defeated. It opens the door to more frivolous litigation, which in turn will increase taxpayer costs for public infrastructure projects the state sorely needs to relieve overcrowded schools and congested roadways, as well as improve flood control. Proposition 90 also makes it more difficult for utilities to identify sites to improve our transmission capabilities, thereby threatening the affordability and reliability of our energy supplies.

Communicate with Employees

The length of the November ballot - 13 statewide measures alone - makes it more important than ever for employers to offer employees a business perspective on the propositions.

If you have not already done so, I encourage you to communicate your ballot positions to your employees so they have the benefit of that information as they decide how they will vote.

From the CalChamber's perspective, the choices are clear. California needs leadership that understands how to keep the economy moving forward. In addition, the state must invest in infrastructure and stop placing burdens on companies here that they face nowhere else.

That's why the CalChamber endorses the re-election of Governor Schwarzenegger, supports Propositions 1A-1E and Proposition 84, and opposes Propositions 86-90.

Allan Zaremberg is president and chief executive officer of the California Chamber of Commerce.