Brown defends California's business climate

Associated PressGov. Jerry Brown says California must marry gays

Gov. Jerry Brown acted Wednesday as California's cheerleader-in-chief, countering the state's anti-business reputation in an address to hundreds of business, agriculture and education leaders.

“We've solved a lot of problems. We've got a lot of problems. We're living in a great state. Republican, Democrats, we're all Californians,” the Democratic governor told an annual gathering in the state capital hosted by the California Chamber of Commerce.

Brown credited the sales and income tax hikes voters approved last fall and an improving economy for helping to end a decade of state budget deficits.

He acknowledged that California is often criticized for having an unfriendly business climate but said the state also fosters a creative and entrepreneurial spirit that has helped produce a $2 trillion-a-year economy. Brown recalled that one survey had concluded that California had the worst business climate in the nation before he served as governor the first time in 1975.

“At that time, the collective income was about $350 billion. Now it's almost $2 trillion,” he said. “So just think if we had a good business climate, how rich we'd be.”

He added, “It's bad, but it also gets good.”

Brown said under his watch, California no longer has the worst credit rating of any state from Standard & Poor's or Moody's Investor Services. The state has reduced its structural deficit from $20 billion to $8 billion, and the new budget expected to be passed this summer should be balanced as long as revenue projections hold, he said.

“It's hard for me to believe a state this rich was rated by S&P and Moody's as the 50th worst state,” he said. “Well, after a lot of hard work, we got an upgrade. We are 49th. We're on our way. We're going up. We'll be 48th before you know it, and pretty soon we'll be back in contention, as long as I'm governor.”

While Brown has not committed to a re-election bid, he said the perspective gained from his first turn in the governor's office has made his current tenure more fulfilling.

“I guess I'll just have to stay and do the work of being governor, which I actually enjoy,” he said.

Looking forward, Brown pledged to limit spending and continue to make good on his campaign pledge to bring government closer to the people by pushing more services to the county level. He also said he will focus on longstanding issues such as education funding, prison overcrowding and protecting the water supply.

He also recently concluded a trade mission to China that was intended to promote California businesses in that country while encouraging Chinese investment here.

Last week, Brown projected California's general fund revenue to be about $97 billion for the fiscal year that starts in July, but the Legislature's nonpartisan budget analyst predicted the state will take in $3.2 billion more in tax revenue.

Brown dismissed the discrepancy on Wednesday, saying it only accounts for roughly 1 percent of the general fund. He said there are larger differences in revenue projections most years, so “that's not money you can spend.”

Also Wednesday, Moody's issued a statement encouraging lawmakers to use the governor's more conservative revenue forecast. The rating service said California “has frequently used overly optimistic revenue projections in its budget, resulting in mid-year budgetary shortfalls that needed to be solved using triggered spending cuts or mid-year legislated spending cuts.”

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