May 6, 2024

Finally Acknowledging Reality

The 2024 legislative year is already shaping up to be one of the most challenging years for advocacy. We are only in April at the time of this writing but the volume and breadth of bills that Western Growers is advocating for to help safeguard our members’ current and future operations is staggering. That process, coupled with the fact that the state is grappling with a projected $73 billion budget deficit, has made conversations with legislators and other state officials about short and long-term policy goals very interesting.

A $73 billion budget deficit in Sacramento has certainly grabbed attention, and rightfully so. It’s not like this situation just happened overnight. We had a record surplus last budget year and everyone knew we were going into deficit times. The ongoing push for new programs and regulation sin California has not helped the situation at all. The inertia of government is much like a ship. You cannot stop on a dime, and it may take miles/years to reach your desired position. It takes planning and attention to detail, especially given that there are more than 127,000 statutes and over 60,000 regulations on the books in the state. Obviously not all of these laws affect business and agriculture. However, these large numbers, when combined with all of the anecdotal evidence, clearly demonstrate that California is a heavily overregulated state.

Creating and encouraging a fiscally conservative environment also means that the levers of government should be used to untie the hands of industry so that they can increase their revenue, hire new employees, promote existing employees and expand their businesses. Speaking to legislators about this is frustrating, to say the least. Many say that we often hear that argument from the business community and then dismiss it later on. Apparently it’s okay to disregard facts when the business community says something.

“Facts” is bolded because some things are just true. This issue was directly acknowledged by the California Legislative Analyst’s Office (LAO) in a report it published in February 2024 titled “Key Fiscal and Policy Issues Facing California.” The LAO is a state agency that provides policy and fiscal advice to the Legislature. I stumbled upon a key passage in the report that needs be shouted from every rooftop.

“The Legislature can make California a more attractive place for business investment by ensuring that the system of taxation and regulation is not unduly burdensome.”

That sentiment is powerful because it’s both true and comes from a trusted advisory agency to the Legislature. Arguably the current system of regulations is already burdensome. But the LAO’s encouragement is to refocus on this and try to find policy actions that are beneficial to business and other state policy goals. I’m encouraged to see this worded so directly in a strategic report. It does not mean that anything super meaningful will necessarily happen overnight to shift the immediate regulatory trajectory in California as regulations often take many months, if not years, to develop. However, the report signals to state officials that something needs to be done to provide greater relief for California’s business sector in order for them to really prosper.

Businesses do matter. You’ve always known that. We’ve always known that. Most of the general public knows that. We can also now add the LAO to that list.