The legislative outlook for California businesses at mid-session following the June 2 deadline for bills to pass their house of origin is looking much sunnier than the outlook of a year ago.

Far fewer anti-business bills are on the table, and a number of pro-business bills are still alive, including several tax credit and infrastructure spending packages being pushed by business interests.

It's a stark contrast to last year, when California companies were facing dozens of bills that threatened to raise the cost of doing business, only to be saved by vetoes from Gov. Gray Davis.

What's changed, of course, is that legislators have realized that Davis intends to stick to his centrist path, which is effectively holding the more liberal, anti-business tendencies of the Democrat-controlled Legislature in check.

"The governor doesn't want a whole slew of anti-business bills; he showed this last year and again earlier this year with his veto pen," said Tony Quinn, a Republican political analyst in Sacramento. "The legislators now understand he's not going to sign these bills, so they are not introducing them or are stopping them on their own in committee."

As of the June 2 deadline for bills to pass their house of origin, less than a dozen major anti-business bills had made it through. What's more, the $12.3 billion state budget surplus is making it easier for Davis and legislators to hand out goodies to businesses, like tax credits, and to push for long-delayed infrastructure projects.

As a result, business lobbyists are more optimistic than they have been in years about getting tax breaks approved, including a hike in the manufacturer's research and development tax credit.

"The budget surplus is helping us a lot," said Gavin McHugh, senior vice president of the California Manufacturers and Technology Association.

Nonetheless, business lobbyists are still concerned about some of the anti-business bills that have made it through, particularly a proposed $2.7 billion hike in workers' compensation benefits and a $700 million unemployment insurance tax increase.

Coming in a year when businesses across the state have seen an average 20 percent increase in their workers' comp insurance premiums, the 15 percent benefit increase proposed in SB 996 by Sen. Patrick Johnston, D-Stockton, could hit the bottom lines of businesses very hard. The bill, if passed, would increase the amount of money that businesses would be required to pay injured workers. Labor and trial lawyer lobbies are vigorously pushing for the bill.


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