(January 16, 2004) Governor Arnold Schwarzenegger’s Director of Finance Donna Arduin addressed a sold-out luncheon at the California Chamber of Commerce yesterday to stress the importance of the passage of the Governor’s California Recovery Plan to the state’s economic future.

Arduin explained the roots of the staggering $22.1 billion debt that Governor Arnold Schwarzenegger inherited, and outlined the Governor’s four-part economic recovery plan, which consists of the following:

• Proposition 57 - The Economic Recovery Bond Act to refinance a portion of the inherited debt.
• Proposition 58 – A Constitutional amendment to require balanced budgets with prudent reserves in the future.
• A budget for 2004-05 that moves toward structural balance.
• Improving the business and jobs climate in order to revitalize the state’s economy and improve revenue growth over time.

“The Governor’s California Recovery Plan is an essential element toward bringing California out of the fiscal mess Governor Schwarzenegger has inherited,” said Allan Zaremberg, Chamber president. “This plan provides businesses and investors with assurance that California is on the road to economic and fiscal stability. This plan also ensures a balanced budget process essential for the future health of California’s business climate.”

Governor Schwarzenegger’s plan also focuses on improving the state’s business climate by bringing jobs back to California. His plan would do this through completely overhauling the workers’ compensation system, and promoting policies that encourage economic development, among other things.

Arduin also detailed the intricacies of the Governor’s 2004-05 budget proposal, and explained how the plan would bring General Fund spending back in line with population growth and inflation. She reiterated the importance of passing the economic recovery bond – Proposition 57 on the March ballot – in order to payoff the inherited debt, and of the need for the balanced budget requirement so that the state never finds itself in this situation again.

The Chamber strongly supports both Propositions 57 and 58, and the Governor’s budget as essential elements to restoring California’s fiscal health.

“California’s business community needs the stability this plan offers, so investors feel comfortable about investing in this state,” said Zaremberg. “The bottom line is that we must stop spending more than we take in, and Governor Schwarzenegger’s plan ensures a balanced budget process essential for the future health of California’s business climate.”

Staff Contact: Sara Lee