Archived: Dual Priorities for California: Jobs and a Balanced Budget


In a story that made headlines in every newspaper around the country, and perhaps around the world, Jerry Brown was elected to his third term as Governor of California Monday. The eyes of our nation and the world are on Governor Brown and California because of our well publicized 12.4 percent unemployment rate and $28 billion budget deficit.

Governor Brown began his speech Monday with the following statement:

“With so many people out of work and so many families losing their homes in foreclosure, it is not surprising that voters tell us they are worried and believe that California is on the wrong track. Yet, in the face of huge budget deficits year after year and the worst credit rating among the 50 states, our two political parties can’t come close to agreeing on the right path forward. They remain in their respective comfort zones, rehearsing and rehashing old political positions.”

Californians agree with that statement. When voters selected Governor Brown, they put their trust in him to address and solve the challenges embedded in that paragraph, which begins with an emphasis on unemployment and the importance of growing our economy and creating jobs. With so many partisan issues at play in Sacramento, we regularly find our elected officials focusing on issues that do not balance the budget or create new jobs, thus making the problem worse.

Governor Brown went on to say:

“This is a time to honestly assess our financial condition and to make the tough choices. And as we do, we will put our public accounts in order, investments in the private sector will accelerate and our economy will produce new jobs just as it has after each of the other ten recessions since World War II.”

We strongly agree with this focus on California’s financial crisis, but we do not agree that our economy will automatically rebound if the state’s budget comes into balance. California must follow the example of other states who in addition to balancing their budgets, have a parallel focus on creating jobs through promotion and legislation that encourages private investment. These states understand that the long-term solution to adequate tax revenue is by growing the economy with new private sector jobs.

Joel Kotkin, executive editor of, pointed out in an email this week that state and local tax revenue grew by 5.2 percent nationwide during the third quarter of 2010. In California, state and local tax revenue grew by only 0.6 percent. The California economy is not recovering as fast as other states and we should not assume that with business as usual our economy will produce new jobs just as it has after each of the other ten recessions since World War II. The world is changing every day and global competition for new jobs and private sector investment is becoming more intense every day.

We need a parallel path in Sacramento aimed at creating new jobs and balancing the state budget. That is what Californians voted for in the last election and that is what we must expect and demand of our elected officials in 2011. In doing so, California will once again become the Golden State of Opportunity for all.

And that’s The Business Perspective.

The Business Perspective is a weekly column by Gary Toebben, President & CEO of the Los Angeles Area Chamber of Commerce, produced with the input of Samuel Garrison, Vice President of Public Policy.

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