‘Stay frozen and perish, or take a risk in working together and survive’
In the 1969 film "Butch Cassidy and the Sundance Kid," Paul Newman and Robert Redford had a choice: Face certain death on a mountain, or hurl themselves into the unknown dangers of a raging river below. They stuck together, jumped and lived.
With a $25 billion budget deficit, the Golden State faces similar choices today. Stay frozen in place and perish, or take a risk in working together and survive. We urge our governor and Legislature to leap together.
The budget deficit is only a symptom of California's problem, however. That is why the Silicon Valley Leadership Group's 335-member company CEOs recently submitted a proposal to the governor and legislative leaders on a long-term cure for making California a competitive place to do business, grow the economy, share prosperity and create private-sector jobs.
First, California needs a strategic plan. It's no coincidence that during the past decade Texas has added 1.25 million private-sector jobs; tiny Arizona has grown 265,000 new jobs; and California ... lost 53,000 jobs. Most competitor nations and states have developed a strategic plan for jobs and economic prosperity. By failing to plan, California has planned to fail.
Gov. Jerry Brown should appoint a Cabinet-level officer to help create and implement a strategic plan. He should create a Board of Business Advisers. His "jobs czar" should assemble key leaders from top industry clusters, study what other nations and states do well, emulate what is appropriate and counter what is not.
Second, don't sip bad medicine; drink it fast. Deep and painful cuts must be made, as the governor said in his State of the State address. The governor has proposed $12 billion worth. We don't like them, he doesn't like them, but it is the best offer on the table.
Third, don't raise taxes. Coupled with deep cuts, the governor has proposed extending - not raising - the current tax rates enacted in 2009. These are unfortunate, yet essential. He is right to insist upon voter approval in June.
Fourth, legislators should insist upon reforms.
California's pension liabilities are roughly $650 billion. It's unfair to taxpayers. It's unfair to public-sector workers. It's also unfair to every important social program, every needed infrastructure investment and every strategic investment in our economy. Every dollar spent fixing our broken pension system is $1 fewer for priorities essential to our state's 38 million citizens. Pension reform should not wait for budget and tax questions to be fully resolved; it should be addressed separately but concurrently.
Finally, keep our eyes on the prize. California's budget should reflect our shared values - an educated workforce, First World infrastructure, essential services and concern for the poor. Our current tax system reflects a "don't tax me, tax them" approach. What is important to all of us should be funded by all of us.
The stakes are high, our Legislature must ante up, and all Californians must make their voices, and their votes, heard.
It's time to jump.
Carl Guardino is CEO of the Silicon Valley Leadership Group. Jim Cunneen is a former state assemblyman. This commentary first appeared in the San Francisco Chronicle.