The California business community is claiming victory after last Tuesday’s elections. Gov. Schwarzenegger’s promise to make California seem more business friendly seems to have at least achieved some cosmetic success, judging by the reaction of many business groups. For starters, Proposition 72, which would have required businesses with 50 or more employees to pay for most of their workers’ healthcare costs, was defeated. As was Proposition 67, which would have taxed phone lines three percent to pay for hospital emergency rooms. Proposition 64, which limits an individual’s right to sue a company for unfair business practices, passed easily. Now, area business leaders will wait to see just how many businesses, if any, will be more willing to expand or move to the Valley because of these changes. “I don’t think anyone’s going to say ‘let’s move to California because of the results of these propositions,'” said Martin Cooper, chairman of the Valley Industry and Commerce Association. “But it may be the beginning of a trend where everyone realizes that having appropriate support for business is good for the entire state, not just the business community.” “People are starting to realize that this state has gone too far to the extreme of regulation of business and taxation of business.” Cooper said that Gov. Schwarzenegger has proved a very effective marketer of California, but added that “the product is not quite refined.” The governor was able to see most of the ballot propositions break his way last Tuesday, including Proposition 72. Those who supported employer-paid health care argued that the requirement would lessen California’s uninsured population by a million people, while business groups said that it would force companies to go out of business, move out of state, or hire more part-time workers that wouldn’t have qualified for health care benefits. Jot Condie, president of the California Restaurant Association said in a news release that a coalition of over 1,500 groups and individuals joined the governor to defeat the measure. “With Proposition 72 off the table,” Condie said, “Now it is the time for the legislature to work with the business community to reduce the cost of healthcare and enact measures to help businesses afford to offer coverage to more Californians.” Roberto Barragan, president of the Valley Economic Development Center, agreed that Proposition 72 would have hurt businesses. “It would give medium sized businesses more reason to move out of state, as much as we do need health care, all employees need it, it’s really an issue that has to be dealt with on a national level,” Barragan said. Lawsuit measure Business groups were also celebrating the passage of Proposition 64, which limits lawyers’ ability to sue businesses for unsafe work practices; they must now represent a wronged or injured party before filing a law suit. Cooper said that the victims of frivolous suits tend to be smaller businesses like auto repair shops, which often can’t afford to hire a lawyer to fight the suits, and, faced with a costly trial, are forced to settle cases. “Fairly sophisticated and large businesses don’t worry about this type of thing,” he said. “They just turn it over to their legal departments or high-priced downtown law firms.” The California chapter of the National Federation of Independent Businesses was pleased with the results of both proposition votes. “These two victories are not happening in a vacuum,” said Michael Shaw in an NFIB release. “They come on the heels of the March Primary Election passage of initiatives fixing the state budget and legislative actions reforming California’s workers’ compensation system. Taken together, we are more confident California is not the same state it was a year ago and is rebounding nicely, allowing small business to remain in operation and start producing employment opportunities again.” Cooper held a more cautious optimism, but said that these passages combined with business tax reform expected to clear the City Council by the end of the year could go a long way in convincing business that Los Angeles is an attractive place to do business. Also eagerly watched by some portion of the Valley business community, along with the rest of the country, was the fate of Proposition 71. The proposition, which passed, directs the state to float $3 billion in bonds to support research in embryonic stem cells, which have been said to have the potential to treat a wide range of chronic conditions from Parkinson’s to paralysis from spinal cord injuries. VICA supported the measure and Cooper said the group’s main concern was the effect of the proposition on local companies, not social and cultural concerns. “We discussed it more in terms of its business benefit,” said Cooper “There are a lot of businesses between Woodland Hills and Thousand Oaks along the 101 that are going to see this as significant. The Amgens are going to say ‘you know what? The government is going to share part of the burden, and there is the potential for some real breakthroughs here.'”
