NCPA - National Center for Policy Analysis

A Golden State Action Plan

August 25, 2010

The U.S. Chamber of Commerce's "Golden State Action Plan," highlights California's spiraling deficit, rising taxes and growing regulations, and offers a state economic growth plan. 

The report calls for the removal of roadblocks to private investments in California's transportation, energy, water and broadband infrastructure, and is asking that the state's failing public schools be overhauled.  Public employee pension reform is urgently needed to prevent the state's slide into insolvency.  And, the expansion of exports through a vigorous trade policy would especially benefit California given the state's position as a gateway to the world's fastest growing economies.  

It highlights that 12.3 percent of the state's workers are unemployed and that small businesses are suffocating under excessive regulations, high taxes and lawsuit abuse.  To address this, the Chamber's plan outlines steps to make the Golden State's economy more competitive and fiscally sound.  These include: 

  • Controlling soaring taxes and fees, since California already has the highest state sales tax in the nation, the fourth-highest personal income tax rate and the ninth-highest corporate rate.
  • Weeding out excessive regulations, including not-in-my-backyard (NIMBY) roadblocks that even stand in the way of "green" energy projects.
  • Reforming the legal system so that it punishes actual wrongdoing, without punishing businesses that are playing by the rules; a recent survey by the U.S. Chamber Institute for Legal Reform ranks California the fifth-worst legal system in the country.
  • Make Sacramento live within its means by controlling runaway spending, which has led to a projected $19.1 billion deficit this year alone; mandatory spending programs, mandatory budget allocations, public employee pension systems, and a steeply progressive tax system must all be reexamined and reformed. 

To spur job creation, the state needs a new direction.  Federal and state policies must be dramatically changed in order to revitalize California's economy before other states and other nations steal away more businesses, investors and jobs, says Chamber president Tom Donohue.  

Source: J.P. Fielder, "A Golden State Action Plan," U.S. Chamber of Commerce, August 24, 2010. 


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