February 2002

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Guest Commentary 

Richard Riordan, former mayor of Los Angeles, seeks the Republican nomination for governor in the March 5 primary election. This commentary on tax issues was written for Cal-Tax Digest.

As mayor of Los Angeles, I promoted a business-friendly city. I created a Los Angeles Business Team to encourage businesses to locate or expand in the city. We considerably shortened the time that was required to acquire permits. We proposed reductions in business taxes and regulations.

I propose bringing these same ideas to Sacramento. I will create a California Business Team to help businesses locate and expand in the state. I will order examination of regulations to reveal the cost/benefit relationship of these regulations. Regulations add costs to businesses. But do they improve our way of life? We must know if the regulations work, or if certain regulations are necessary at all. Regulations must be weighed, monitored, and streamlined or eliminated when appropriate.

I will put in place programs to improve infrastructure and education, both of which are needed for a better business climate. I plan to create a Department of Transportation separate from all other agencies to deal with the transportation infrastructure problems of the state.

We must invest in public infrastructure. I support Proposition 42 on the March 5 ballot to add more funds for transportation. In addition, I support efforts to set aside a portion of the state budget growth for infrastructure needs: water, roads, and schools.

The budget must be balanced with budget cuts. We must consolidate overlapping programs that perform similar functions, and examine how we spend every dollar by employing zero-based budgeting.  However, we must not use gimmicks to deceive the public about our fiscal situation.

Our economy has not grown in a balanced way. In the last three years, the fastest growing parts of the economy have been retail and government. Incredibly, state and local government added over 220,000 positions in just the last three years. After my eight years as mayor, the number of Los Angeles city positions grew by four, not including the addition of thousands of new police officers.

We cannot sustain economic health without encouraging manufacturing and other areas of our economy.

I have proposed a cut in the sales tax on manufacturing equipment used in California. I believe this tax cut will soon pay for itself and more in creating and keeping jobs in the state.

I will consider other targeted tax cuts or tax credits to spark the economy.

Tax increases will not help our budget problem. During a recession, tax increases hurt the economy.

My record in Los Angeles demonstrates that I understand how to deal with tax laws to create a business-friendly environment.

• My business tax reform effort put forward a plan of tax simplification and tax reductions.

• I shortened the time to get permits in the city.

• I closed a $200-million deficit and balanced eight budgets in eight years without raising taxes.

I believe in clarity for citizens when it comes to government finances. I oppose hidden taxes disguised as fees.

The split roll (imposing a higher property tax rate on commercial property than residential property) would hurt business, hurt the economy, and makes no sense.

A no-tax-increase pledge is unwise for a leader to declare without knowing all circumstances he or she will face in the future. However, my record on tax increases is clear. I opposed them. I reiterate:  As mayor, I balanced eight budgets in eight years with no tax increase, even when confronting a massive budget deficit.

I believe the private sector has the answers to difficult questions like dealing with the energy crisis and expanding on-line services to lower- and moderate-income households. I do not support a direct Internet tax, but I do acknowledge there is a fairness question about sales tax on Internet purchased goods and store-bought goods. This is in the jurisdiction of the federal government at this time and I support the federal moratorium.

I have supported efforts to contract for public services in the past and will do so again. I believe the people’s decree in outsourcing such services as highway design must be met.

Let business do what it does best and California will once again be a prosperous place.

Finally, I believe we can best help the poor and lower-income workers by providing quality jobs. The only way to create those jobs is to make California business-friendly.