Nobody blogs about it. Nobody talks about it. Yet, if you want to know the real engine behind California’s economy, you have to acknowledge its central role. If you see improving financial health in school districts and other government institutions, its at the center of the reasons why. The answer is SB 899. This bill, signed April 14th, 2004, by a Governor with a 72% approval rating, has unleashed the largest single tax cut in California history. The author of the legislation, Senator Chuck Poochigian, has put more money in the pockets of business, and saved government entities more money than any elected official – ever. The Fresno Unified School District, facing a takeover by the State due to a $31 million dollar deficit, closed the gap and balanced its books with the help of this legislation.
What was SB 899? Simply, Workers’ Compensation reform.
Workers’ Compensation is a payroll tax, a mandatory form of insurance designed to protect workers from industrial and work related injuries. In California, it became, with the help of liberal Democrats, public employee unions, and Gray Davis, one of the most significant job killing issues of our time. So bad was the system in 2003, right after Gray Davis signed bills to INCREASE the cost of Workers’ Comp, that employers were shelling out over 5% of their payroll just for this benefit. All of our neighboring states were under 2% of payroll. The result – a mass exodus of business and a teetering economy.
SB 899 immediately applied common sense reforms to the system and adopted a cost structure making California competitive with other States – all while continuing to offer excellent medical and disability benefits to injured workers. Neutered in the process were attorneys and medical providers, still seething at the changes. They are authoring bills as you read this to dismantle the reform and go back to the old system.
So, what have California employers saved to date? 15 billion dollars. That is BILLION. This is a tax cut. The largest in history. California is competitive again. Tax revenues are flowing into the Treasury. And the liberals and unions are HOPPING MAD about it. The Governor is likely to go down to defeat in November. With it will go all of these savings and reforms. Whether you like the Governor or not, this one issue is worth your vote for him in November. We need a veto pen in the horseshoe – bad.
February 3rd, 2006 at 12:00 am
I am glad that SOMEONE is finally pointing out just how BIG these savings have been! However, they are not YET the largest tax cut in California history!
That record is still held by the reductions that Senator McClintock fought for and won in the California car tax! By this June, California motorists and businesses will have saved OVER $25 BILLION from these reductions.
And remember, Grey Davis had completely reversed those cuts by executive order a few months before we recalled him!
John