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By HOWARD FINE

Staff Reporter

As Gray Davis becomes California’s first Democratic governor in 16 years, the state’s business lobbyists are starting to exhale. In the weeks since his November landslide, all indicators point to a middle-of-the-road administration.

“(They) have already sought us out, trying to find out the types of things our members are concerned about,” said Martyn Hopper, president of the California chapter of the National Federation of Independent Business, which represents small businesses throughout the state. “This is a little surprising. I sort of expected that the first contact would have been an ultimatum on raising the minimum wage or reinstating mandatory daily overtime pay.”

On the other hand, Hopper said, “there is still apprehensiveness in dealing with the state Legislature. There, you get the feeling business is definitely under attack.”

Already, he noted, measures to increase the minimum wage, reinstate daily overtime pay and increase workers’ compensation benefits have been introduced.

The question for the state’s business interests is what Davis who was propelled to the governor’s mansion in large part thanks to the support of the state’s labor unions and trial lawyers will do should such legislation reach his desk.

So far, business groups seem to be giving the new governor the benefit of the doubt, arguing that he cannot sign all the bills on these groups’ wish lists and still expect to see the economy grow at a respectable clip.

“Governor Davis was elected on a platform of moderation,” said Lori Kammerer, executive director of Californians for Compensation Reform, which backs reform of the state’s workers’ compensation system and reducing workers’ comp costs for employers. “He is going to have to be the umpire on these issues.”

The attitude of business lobbyists has softened somewhat since Election Day, when there was concern even panic that they would no longer have a sympathetic ear in Sacramento. But those fears have been allayed by the fledgling administration’s efforts to reach out and by the appointments that Davis has made to his staff and cabinet in recent weeks.

“At a Chamber of Commerce conference right after the election, the corporate types were very nervous,” said Allan Hoffenblum, an L.A.-based Republican political consultant. “But Davis has made all the right noises. He has played himself as a centrist and has reached out to business groups. As a result, I’m sensing more of a cautious optimism from business that he won’t give the store away in responding to pent-up demands from the Legislature.”

Hoffenblum noted that one of Davis’ key appointments former U.S. Rep. Lynn Schenk, D-San Diego, as chief aide was friendly with the business community while she was in Congress.

And while some of Davis’ other appointments like former state employees’ lobbyist Steve Smith to head the Department of Industrial Relations or Resources Secretary Mary Nichols may not be popular in business circles, they are at least familiar faces on the Sacramento scene.

“There may be a few new names added to Rolodexes in the capital, but the top appointments so far are known quantities,” said Fred Main, senior vice president of the California Chamber of Commerce. “Everybody is simply moving around, like one giant game of dominoes.”

Tim Coyle, government affairs representative for the California Building Industry Association, agreed. “The names are not changing that much, just the positions and the titles. That’s probably a plus because they won’t face such a steep learning curve,” he said.

Main pointed out that the state’s major business organizations have always had to maintain open lines with both parties. While Republicans may have controlled the governor’s mansion for the past 16 years, Democrats controlled the Legislature for all but two of those years. In fact, Main said the chamber last year hired Kelly Jensen, former chief of staff to then-Sen. Charles Calderon, D-Los Angeles, as one of its chief lobbyists.

“We expect that his contacts will be very useful,” Main said.

Like the chamber, the California Manufacturers Association has maintained an open line to the incoming administration. In fact, the CMA is one of the chief sponsors of the governor’s main inaugural gala. Meanwhile, the CMA’s president, Jack Stewart, has written op-ed pieces in the Los Angeles Times and other newspapers saying that business has little to fear from a Davis administration.

“We’re not wringing our hands worrying about the Democrats gaining control. Instead, we’re going in and doing,” Stewart said.

He noted that about one-third of the CMA’s board members are Democrats and that many have supported the new governor in the past and during the recent campaign.

“We’ve been around for 80 years and have worked through Republican and Democratic administrations,” Stewart said.

Rather than the governor’s mansion, business lobbyists say the real wild card is the Legislature.

“A lot of the legislators and their staffs don’t have years of knowledge and they often come in with their own agendas,” said Kammerer of Californians for Compensation Reform. “That is going to be more of a challenge. Ultimately, we expect to see significant and hostile legislation move forward this year.”

At the California Association of Health Plans, which represents the state’s major health maintenance organizations, President and Chief Executive Walter Zelman said that for his industry, changing Rolodex cards is not the issue changing policies is.

“There is a lot of pent-up demand in the Legislature for managed care reform,” Zelman said. “We believe that the Davis administration does not share in that pent-up demand and will look at things with fresh eyes. We are encouraged in this by the fact that he (Davis) has made high-quality appointments. They are experienced and thoughtful individuals.”

Unlike the cautious optimism expressed by business lobbyists, labor interests are downright enthusiastic about the transition. After all, labor was one of Davis’ biggest backers, and, as such, it was widely expected that Davis would reward that support with favorable appointments and policies.

“We’re pleasantly satisfied,” said Elizabeth Ecks, legislative representative for the California Labor Federation. “Those who have been appointed to the key labor positions have experience from the labor movement and represent working people’s interests.”

Davis’ appointment to head the Department of Finance, Tim Gage, according to Ecks, already has gone on record saying that state workers should receive a pay raise.

But Ecks said her rosy outlook is based on more than the new governor’s appointments.

“It’s the attitude behind the people, the attitude that working people will now have a voice in what happens in Sacramento, where for 16 years they had been shut out,” she said.