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Business lobby braces for new world under Gov. Jerry Brown

Gov. Arnold Schwarzenegger's veto stamp killed the bill twice in the last two years, and the business community cheered.

But last Monday it returned – a measure that would keep employers from looking into consumer credit reports as part of their hiring process.This time, much to the consternation of business leaders, Assembly Bill 22 might become law.

"The general tenor of this office is that this bill has a better shot with Jerry Brown," said Haley Myers, legislative aide to the bill's author, Assemblyman Tony Mendoza, D-Artesia.

Her assessment distills a worst-case scenario for California business interests that could extend to dozens of proposed laws and hundreds of regulations under a Brown administration.

After backing the loser – and in one famous instance personally attacking the Democrat during the bare-knuckled gubernatorial campaign – business now must adjust to Brown.

Schwarzenegger, a wealthy businessman in his own right, has been a reliable firewall against Democratic-backed measures like AB 22. Over the past four years, the governor vetoed 38 of the 41 bills identified by the California Chamber of Commerce as "job killers" that would increase the cost or uncertainty of doing business in the Golden State.

Enter Brown, a lifelong politician who takes over Jan. 3 with his party controlling both the Assembly and Senate. Personally frugal and famously unpredictable, the once-and-future governor presents a challenge for private industry trying to gauge what he'll do.

Among the chief concerns of business: the prospect of rolling back workers' compensation changes Schwarzenegger instituted; increasing the state's minimum wage; and extending the scope of paid family leave.

Will Brown join fellow Democrats and steamroll the business lobby? Or will he corral the ambitions of his party, invoking the state's $28 billion deficit and the need to encourage business investment and job growth?

"We're expecting the unexpected," said Bill Hauck, president of the California Business Roundtable. "It will be vintage Jerry Brown."

Eye on new appointees

The uncertainty extends well beyond which bills Brown will sign. The new governor will appoint hundreds of officials to key regulatory and policymaking jobs throughout the government. They will be his surrogates, overseeing agencies such as the Air Resources Board, which sets and enforces the state's emissions policy, and Consumer Affairs, the state's mammoth business and professional licensing arm.

Business will watch those touchstone appointments closely because Brown will probably focus on the budget, said California Restaurant Association spokesman Dan Conway, "so the people he appoints to policy and enforcement positions could have a long leash."

Although they opposed Brown, business is encouraged by his rhetoric.

During his campaign he supported pension rollbacks for state employees, called for regulatory reform and promised he wouldn't raise taxes without a public sign-off at the ballot box.

Jack Stewart, president of the California Manufacturers & Technology Association, said those remarks align Brown with business interests for recovery and private-sector growth.

"He's a very smart man," Stewart said. "He understands you can't fix our state's problems without a thriving private sector."

The respectful tone of Stewart's remarks was in contrast to a controversial ad the California Chamber of Commerce aired last April that accused Brown, the outgoing attorney general and former mayor of Oakland, of decades of overspending.

The spot raised legal and ethical questions, and Brown and his wife, Anne Gust Brown, called chamber members to complain. Some members distanced themselves from the spot, which was pulled.

"The ad was a bad choice" for business, said Richard Temple, whose Sacramento firm represents political and corporate clients. "There will be political consequences, like there always are."

Business 'jihad' unlikely

But Brown also is a savvy politician whose decision to delay launching his campaign proved he could stand up to critics in his own camp, Temple said.

He'll need those same qualities to govern by holding the middle ground between Democratic allies such as unions and the GOP's business allies, Temple said. And business would be wise to recognize that.

"Brown is in a good position to tell friends 'no' and to pry concessions from the business community," Temple said. "I don't think that there will be a jihad against business in this administration. He needs their support to get anything done."

Some business leaders also think the Democrats' unity may quickly fracture, easing pressure on Brown to give in to them.

Business also may be able to appeal to Brown's sense of history and personal legacy.

In his first tour as governor from 1975 to 1983, he was considered a youthful oddity, a product of the counterculture, but California was still the envy of the nation.

Now the state is in horrible shape, and if Brown can turn it around while holding his own party at bay and boosting business and jobs, his place in history as a statesman, maverick and turnaround artist would be secure, said Conway of the restaurant association.

"He could go four years, go big and walk away a legend," Conway said. "The 'Governor Moonbeam' thing goes away."

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