Capitol Alert: Business groups urge Jerry Brown, lawmakers to solve budget

A business coalition pushed Wednesday for a grand state budget compromise that essentially merges Gov. Jerry Brown's budget and GOP demands for long-term pension and spending controls.

The group of 12 -- which dubs itself the Coalition for a California Financial Workout Plan -- said voters should be allowed to decide on tax extensions as well as permanent fixes that address the "underlying conditions that got California in trouble."

Members include the Silicon Valley Leadership Group, Los Angeles Chamber of Commerce, Bay Area Council and Sacramento Metro Chamber.

The coalition outlined a "Five-Point Plan" that includes tax extensions, a long-term spending control, reductions to public employee pensions, changes in the California Environmental Quality Act and a shift of responsibilities to local governments. The group also suggested that state leaders address abuses in redevelopment agencies and enterprise zones without eliminating them.

"We urge the Governor and the Legislature to respect voters and taxpayers by giving us an honest budget plan by June 15th, along with a structural reform plan that puts California back on the right track," the letter concludes. "That's a workout plan we are willing to support in the ballot booth."

Talks between the Democratic governor and Republican lawmakers broke down in March mainly over differences in several items backed by the business groups -- pensions, general tax extensions, spending cap, redevelopment agencies and enterprise zones.

The business coalition didn't necessarily agree with either side in the dispute but suggested that compromises can be found. Those include reducing the length of Brown's five-year tax extensions or choosing a pension overhaul that falls somewhere between the governor's targeted ideas and a Little Hoover Commission report that recommended freezing pension benefits for current workers.

Finding a compromise in the Capitol has been difficult so far. Democrats are counting on business and labor support should they take their tax plan to the ballot, but labor unions are reluctant to back any election package that includes long-term pension and spending rollbacks.

Republicans, meanwhile, are unwilling to place tax extensions on the ballot in the face of conservative opposition. They feel they can drive a hard bargain on pensions because of strong voter support and the possibility of qualifying an even stricter initiative for the ballot next year should legislative efforts fall short.