Now that the legislative session is over, business is busy sorting out the good, the bad and the ugly.
The Good: Governor Brown formalized his Office of Business and Economic Development. GO ED was established in April 2010 via executive order but this action ensures that California now has a permanent and highly visible single point of contact for economic development and job creation efforts. Governor Brown also signed into law a bill that, among other things, requires a standard economic impact analysis for major regulations at the beginning of the regulatory process.
The Bad: Governor Brown vetoed a requirement that the state begin “performance-based budgeting,” forcing each state agency to provide lawmakers its goals, targeted outcomes and performance data. This bill was strongly supported by the business community.
The Ugly: California’s revenue for September missed the state’s budget projection by $301.6 million, raising the prospect that spending cuts could be triggered early next year, the state controller said. “For better or worse, the potential for revenue shortfalls is precisely why the governor and Legislature included trigger cuts in this year’s state spending plan,” Controller John Chiang said in a statement. “September’s revenues alone do not guarantee that triggers will be pulled. But as the largest revenue month before December, these numbers do not paint a hopeful picture,” Chiang said. Revenue from the start of the current fiscal year in July through September is trailing budget estimates by $705.5 million, Chiang said. (“California’s September revenue misses target,” Reuters, Oct. 10, 2011)