(September 10, 2009) The economic impacts of legislation should be analyzed before proposals are enacted, Senate Republican Leader Dennis Hollingsworth (Murrieta) said in a speech on the Senate floor last week.

Hollingsworth’s message was in keeping with the sentiments expressed by California Chamber of Commerce President and CEO Allan Zaremberg and business leaders from throughout California in August, when they urged the Legislature to focus on reviving the state’s economy and putting Californians back to work.

Zaremberg presented a draft roadmap for change called the “Agenda for Economic Recovery” that focuses on reforms the Legislature can do now to help Californians get back to work. “Restoring California’s economic health and creating high-wage jobs should be priorities 1, 2 and 3 of this Legislature,” he said.

Hollingsworth also said that the goal of the Legislature should be to restore California’s job climate and economy.

“Our budget problems in California are a symptom of the problems in California created by years of over-regulation and years and years of bills going through this house and the other house across the other side of this building that destroy jobs,” Hollingsworth said.

Hollingsworth said he and the other members of the Senate Republican Caucus will ask themselves the following questions before voting on any remaining legislation this session and throughout the future of any new legislative sessions. He urged Democratic members to consider the same questions before approving legislation that may kill more jobs.

Every Californian will want legislators to ask themselves the following questions when considering any legislation before them, Hollingsworth said:

1. Does this legislation include an analysis that proves that the bill actually improves the economic conditions in California?
2. Does this legislation improve the employment opportunities for struggling Californians impacted by this recession and state government-imposed burdens?
3. Does the legislation or the regulation make compliance easier for businesses to create jobs, or make it tougher to create jobs?
4. Does the legislation or the regulation make California a more attractive place to live and do business?
5. Does the legislation or the regulation encourage investment in jobs at all levels of the employment scale?

The questions asked by Hollingsworth are very similar to the draft roadmap put forth by the CalChamber and the business community.

The main elements of the “Agenda for Economic Recovery” are the following:

• Establish a process that analyzes and reports on the economic impact of legislation, regulation and administrative decision-making. Part of the state’s financial problem is the fact that the state analyzes only the fiscal impact of state actions rather than determining the full impact of a policy proposal on our economy. An essential piece of the agenda is the establishment of Economic Impact Committees in the Legislature to evaluate the impact proposed legislation will have on the state’s economy. Currently, legislative committees limit testimony to less than 10 minutes and often “waive testimony” altogether when a bill goes before the committee responsible for assessing the economic and fiscal impact. A new process will ensure that potential legislation does not cost jobs and stifle business development and would model the independent analysis that the Congressional Budget Office (CBO) provides at the federal level. This process will help policymakers avoid unintended consequences of proposals and ensure that legislative goals are met in a cost-effective manner.
• Create a state economic development plan that addresses the needs of the state and local communities. A critical part of the success will depend on enhanced partnerships between state and local leaders to develop a strategy to facilitate economic growth and job creation throughout the state and across industries. The agenda calls for developing and implementing a comprehensive economic strategy. Similar efforts are underway at the local level to develop concrete action items for spurring investment, job creation and workforce training. There are lessons to be learned from these endeavors, best practices to be identified and partnerships to be enhanced in order to get California’s communities back on track toward fiscal health.
• Resurrect legislation designed to improve the state’s economic environment, restore its competitive position and facilitate the creation of high-wage jobs in all sectors of the economy. Every year bills that would improve California’s economic health are killed with little discussion about the merits of the proposals. Meanwhile business investment has declined, bankruptcies and foreclosures are on the rise, and unemployment has reached record levels. To jumpstart California’s recovery, these proposals must be seriously considered and enacted.
• Defeat or postpone consideration of legislation that will further harm our economy and create new burdens on families and businesses. Since the state cannot pay for existing programs and state revenue continues to decline, creating new programs or requirements will add to the current crisis. Californians desperately want their elected officials to provide solutions to our economic decline, yet there are several bills that have been introduced that would inhibit job growth, deter investments in California, and put unnecessary obstacles in front of entrepreneurs.

For more information on the “Agenda for Economic Recovery,” visit www.economicrecoveryca.org.