2008 Budget Issues
Issue Status: Due to years of living beyond its means, California continues to face a challenging budget situation in the Capitol. When Gov.Arnold Schwarzenegger presented his 2008-2009 budget, it included 10 percent cuts across the board to deal with the $14 billion-plus state deficit.
Small business remains hopeful that the governor and legislators will hold the line on new taxes on hard-working Californians. We cannot tax our way out of this budget hole -- period. Tax increases discourage entrepreneurs and, given California's unbalanced tax structure, that impact will fall on those responsible for creating the invaluable new jobs that California most needs. The more small business is taxed, the less incentive they have to grow and expand, which means fewer entry-level jobs. With the California unemployment rate of 5.6 percent already higher than the national average, this is a blow that small business can ill afford.
NFIB Position: One of the main reasons that California is consistently ranked at the bottom of business-friendly states lists is the burdensome tax system. Small businesses are constantly bombarded with government regulations and costly taxes, assessments and fees. NFIB believes small-business growth is key to California's economic recovery and that tax increases stifle critical small-business growth. NFIB will also continue to oppose efforts to increase taxes on small-business owners.
Issue Status: One thing to remember is that the budget proposed in January is the first step in a long process that will culminate with a final version -- whatever that may be -- in May. Small-business owners have seen promises come and go, so we take cautious encouragement from Gov. Schwarzenegger's initial proposal. It is entirely possible and likely that the final product will look markedly different from what was presented in January. Stay tuned for more updates as the discussions continue.
