Published: December 11, 2008
Schwarzenegger, Legislative Leaders Appoint 21st Century Economy Commission
GOVERNOR SCHWARZENEGGER:
Hello, good afternoon. First of all, thank you very much to Speaker Bass and to Gerry Parsky and Senator Steinberg for being here today. We just wanted to make an announcement about our commission.
Just over a month ago I announced the creation of a Commission on the 21st Century Economy. As a matter of fact, we did it together with my partner, Speaker Bass. Today I'm happy to announce with the legislature our appointments to this important bipartisan group, which consists of 12 members.
Gov. Schwarzenegger and Legislative Leaders Announce Appointments to Bipartisan Commission on the 21st Century Economy
Left to right: Commission on the 21st Century Economy Chair Gerald Parsky, Senate President pro Tempore Darrell Steinberg (D-Sacramento), Governor Arnold Schwarzenegger and Assembly Speaker Karen Bass (D-Los Angeles).
Photo: Peter Grigsby, Office of the Governor. |
Gerry Parsky will chair this tax commission. Of course, I think everyone is familiar with Gerry Parsky. He has done a great, great job for the Public Employees Post-Employment Benefit Commission in 2007, that actually all the recommendations of that commission were adopted by the legislature. And he also did a great job with the University of California as a regent. As a matter of fact, he served there for 12 years and he was chairman for two years and did an outstanding job. So it was natural for me to look again at him to show some leadership and he's one of those guys that Democrats and Republicans feel comfortable with to head this commission.
Now, the other five wonderful civic leaders are Ruben Barrales, Michael Boskin, John Cogan, Becky Morgan and Curt Pringle. They will work right along with the other six appointees named by Assembly Speaker Bass and Senate President Pro-tem Steinberg and of course Speaker Bass is going to talk about and give you those names right afterwards.
Together these appointees will focus on removing the volatility from the California tax system. The commission will study our tax code and make recommendations by April 15th on how better to manage our fiscal future. The legislature will get the final say on these recommendations and I expect big things from this commission.
I was elected to fix things that are broken in California, if it is the Workers' Compensation system or if it is the tax system or the budget system, redistricting system, all of those kinds of things. Those things need to be fixed and we all have to work together, Democrats and Republicans, on those issues.
Our state has one of the most dynamic and diverse economies on Earth, yet we have a tax code that was written nearly 100 years ago, so it's definitely outdated. It is based on a farm and manufacturing model that no longer works for our rapidly changing technology and information-based economy. Over the last year the California GDP fell by 1 percent but our revenues fell by 15 percent.
So, as you can see, it's a dysfunctional system. Right now our tax code is the epitome of boom or bust, because it depends on just 1 percent of our taxpayers paying 50 percent of the taxes and that 1 percent is depending on Wall Street. So when Wall Street is down California is hurting and right now California is really hurting. This volatility, combined with not having a rainy day fund and the state's overspending gives us multi-billion dollar deficits that force us to slash programs or to raise taxes.
This commission will not solve our immediate budget problem but it will lead to a more manageable future and more stable revenues. So these are 12 smart people that we have appointed. It's a bipartisan team where Democrats and Republicans will be working together and I know they will be doing a fantastic job.
And now I would like to have Speaker Bass come out and say a few words about this, please.
SPEAKER BASS:
Thank you, Governor. And let me, first of all, thank the Governor for his leadership and willingness to convene this commission. And as the Governor and I talked - actually, before I was sworn in as Speaker and right after I was sworn in, I mentioned that one of the goals I wanted to accomplish was to establish this commission while we're in the midst, right now, of the crisis of trying to solve our budget problems.
We know that there are many structural reasons why we have the problems we do with the boom and bust cycle, as the Governor just described. And so, while I believe it's very important that we address the problem that we're facing at hand today, it's also important that we look at some of the structural problems that lead to these cycles. And so the establishment of this commission in an important step forward to doing that. I'm looking forward to watching what the work of the commission does and when the recommendations are put forward, that Senator Steinberg and myself and the other legislative leaders will have a vote on the recommendations.
I also want to thank Gerry Parsky for agreeing to chair the commission. And as I've gotten to know him and have learned of the work that he has done and the contributions to our state in the past, I'm very confident that not just his leadership but his leadership style and the way that he is known for building consensus and bringing people together, as he did in the Pynchon Commission, he will be able to do here as well.
The commissioners that I have appointed: Christopher Edley, who is the dean at Bolt Law School; Richard Pomp, a professor from the University of Connecticut; and Jennifer Ito, an activist and researcher from the Los Angeles area, who I believe will make an outstanding contribution to this effort.
I will say also that a number of the names that we put forward for the commission, I was happy to see, were also tapped by our President-elect to serve on his transition team and we're fortunate that at least on the part of Christopher Edley, that he's willing to serve in both capacities.
Let me now introduce my partner in the Senate, Senate Pro-tem President Darrell Steinberg.
PRESIDENT PRO-TEM STEINBERG:
Thank you very much, Speaker Bass. Let me also applaud the Governor and the Speaker for taking this very, very important initiative. You know, when I began as a member of the State Assembly in 1998, 10 years ago, California had a $12 billion budget surplus and, as we stand here today, of course, California is facing an unprecedented budget deficit.
Now, there are many factors that have gone into that swing, of course, including the national and international economic crisis that we face. But it is undeniable that one of the reasons why Californians go through the annual budget ritual in a way that is most years very, very frustrating, is that our sources of revenue are far too volatile. And so I think this is an absolutely crucial step for California, its elected representatives, to make the long-term changes that are necessary to assure more stability.
And like the Speaker and like the Governor, once Mr. Parsky and the commission does its work, it is our responsibility then to take those recommendations and actually put them up for a vote. No dusty shelf reports. We need to take action and we need to take action sooner rather than later. Let me add to the names that Speaker Bass mentioned a few moments ago: George Halvorson; Fred Keeley, former Assemblymember and colleague of mine, will serve as a member of the commission; and Monica Lozano, three very, very qualified, highly qualified people.
Let me now turn it over to the chair of the commission and let me add my thank you for his public service. You know, in California when there's talk about a difficult problem and who are you going to get to do the work, who are you going to get to chair it, there are always just a couple of names that keep getting sort of recycled. And they keep getting recycled because there are few people who can actually take on these big, huge, Herculean tasks and actually make something really happen. And we're very fortunate here to have the former chair of the Board of Regents, former member for 12 years, the chair of the commission, Gerald Parsky.
GERALD PARSKY:
Thank you very much. The Governor has always advised me to keep expectations low and try to exceed them. I'm not quite sure that can really happen with that kind of introduction but thank you very much.
As I was leaving my house this morning my wife Robin turned to me and said, "Why are you doing this?" So, I jotted down a couple of notes as to why.
First of all, the Governor. He's been a very close friend and I think that he is a great public servant and usually when he calls my instinctive reaction is yes, without him having to say why. But I really believe in the objectives that he has and his desire to really improve the state for the long term.
Second, it's the bipartisan nature of this request. The leaders that have been here and the Republican leaders all have been behind this effort, all recognize that we have a long-term problem and sincerely want to address it. And the willingness on the part of the leadership here to bring the recommendations as a whole to an up or down vote is reflective of that.
And finally, it's because of the nature of the team that has been assembled. I know most of them. Although the Governor and the leaders picked the people, I have had an opportunity to work with a good number of them. And if you look at their backgrounds, each of them, you will see that they have experience and understand almost all elements of the California economy. And I think this will be a very important effort. We'll conduct public hearings, giving an opportunity for the public. We'll have at least three or four of them before we issue a final report.
And the final thing I would say is the issue itself and the mission of this effort is also something that I think is very important. Reforms in the tax code have been long in coming and I think if we can reform the tax code to reduce revenue volatility and allow California to better achieve the economic potential that it has, while maintaining fairness and do it on a basis that will help in the long term, I think we'll be making a contribution.
So, although the task, I think, is quite significant, I welcome the opportunity and thank everyone. And we're happy to take any questions.
QUESTION/ANSWER:
QUESTION: Are the changes that you're looking at making, are they more of a timeline, are they more of the timeline variety, to even out when money comes in so it better suits when we pay our bills? Or is it more in the line of increasing the amount that we get?
PARSKY: Well, again, if you look at the charge that was given, the objective is to remove the kind of volatility that exists. Our effort is not to raise taxes; that's not the purpose of this commission. The purpose is to, as the Governor has said, work on a revenue-neutral basis but eliminate the kind of volatility that frankly has created, in part has created, the situation that we are in. And there are many other states, there are other countries, that have addressed this issue and have a much more even way to deal with revenues and as a result don't face the high volatility that exists. So that's the objective.
QUESTION: Are you starting with any kind of baseline list, for example of things that are already, those that are on the table from the Governor, or the legislature? (Inaudible) services, other kinds of things that are already -
PARSKY: No. I think the Governor and the legislature have made it clear that it's really up to the commission to come forward with constructive ideas, all under the general guideline that it is intended to be revenue neutral. And if you look again at this charge, the executive order, you can see that there are a number of things that are inherent and will guide the commission but the specifics are left to the deliberations of the commission.
QUESTION: A question for the Governor. Governor, Senator Cogdill left the Big Five saying the integrity of the Big Five is compromised. Do you think it has been? And how does this challenge face all of you as you face a $41.8 billion deficit?
GOVERNOR: Well, first, I think the most important thing is that the leaders meet regularly, hopefully every day, hopefully as many hours every day as possible. And I think that all of this, that it's compromised and all this, might be an excuse not to negotiate.
But the bottom line is that I think we have to meet. And the sad story is that sometimes, even though I always make it a rule that in the Big Five Meetings, anything that is being said inside my office during the Big Five Meetings, stays inside that office. That's the rule we always have. But there are sometimes people that go to their aides and then give the information of what the meeting was about and that information goes outside. So we have experienced that many times but it has never stopped me from negotiating, or to invite people to my office to work, to come up with a solution as quickly as possible.
When you deal with a budget deficit of this fiscal year of $15 billion, or $14.5, $14.8 is what it is exactly, you don't look for those kinds of excuses anymore. You've got to work now. And this is why I recommended very strongly to the legislative leaders today again, sit down right after you leave this office. Sit down - you don't need me to be there all the time. I'm just trying to bring everyone together. Because I have made it very clear that the Big Five Meetings are not the most productive things to get things done but it definitely is a way of motivating everyone and bringing everyone together and that's what we are trying to do. So I urge the legislative leaders again, Democrats and Republicans, to sit down and to work, even if you have to work through all night. Work, work, work and save this state. Thank you very much.
Governor Schwarzenegger and Legislative Leaders Announce Appointments to Bipartisan Commission on the 21st Century Economy
Time: 2 p.m.
Date: Thursday, December 11, 2008
Event: Press Conference, Room 1190, State Capitol, Sacramento, CA
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