A group of California business organizations calling themselves the Coalition for a CA Financial Workout Plan sent a letter to the governor and legislature on Wednesday urging them to take responsible fiscal action by adopting a workout plan and restarting budget negotiations.
In the business world, a workout plan is an agreement between a financially troubled company and its lender to alter the terms of repayment in exchange for legal commitments from the company to fix the structural problems that got the company in trouble.
“California needs a workout plan, where taxpayers agree to extend temporary taxes on the condition that state government fixes the underlying conditions that got California in trouble,” said Carl Guardino, CEO of the Silicon Valley Leadership Group.
The Five-Point Workout Plan proposes constitutional spending controls and budget reforms; a path to job creation; reform of the pension system; bringing government closer to the people; and extension of temporary taxes for a term that allows the reforms to take effect and the economy to recover.
The coalition urges approval of a workout plan by June 15th, the constitutionally prescribed date for passage of a budget. “The Workout plan should then be submitted to the voters for an up-or-down vote”, said Pete Weber, Co-Chair of Friends of the San Joaquin Valley. “Voters should decide if they will accept temporary tax extensions in exchange for structural reforms that restore stability to California’s fiscal future.”
“We disagree with those who don’t see the need for a workout – those who favor an all-cuts budget that will scar California’s future, as well as those who want tax extensions without the reforms needed to get California out of this mess,” the letter states.
Business organizations signing the letter are: Silicon Valley Leadership Group, Los Angeles Chamber of Commerce, Bay Area Council, Orange County Business Council, Friends of the San Joaquin Valley, San Francisco Chamber of Commerce, Oakland Metropolitan Chamber of Commerce, Sacramento Metro Chamber, Los Angeles County Economic Development Corporation, Fresno Business Council, Business Council of San Joaquin and San Gabriel Valley Economic Partnership.
To read the letter, click here.