Associates Breakfast with John Chiang, California State Controller

October 6, 2009

Santa Monica

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California

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California Center

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Too much borrowing, a tax structure created in an industrial era, and a lack of political cooperation have caused a giant fiscal headache for the state of California in recent years, state Controller John Chiang told members of the Milken Institute Associates.

But while some tax, regulatory and political reforms may help put the state back on sound footing, the bottom line, he said, is state lawmakers "don′t budget properly."

"We have to figure out a better way to finance state government," Chiang said.

But that means lawmakers from both sides must cooperate more, making compromises that lead to a truly balanced budget — not one that relies heavily on borrowing and other "gimmicks," as California's has for several years, he said.

"People are going to have to upset their bases — on both sides," Chiang said.

Chiang gave Associates his view of the recent state budget crisis, including his decision to issue IOUs this summer because lawmakers hadn't passed a budget. He also answered questions about the state's business climate, tax reform, regulations and other fiscal issues.

Chiang was elected controller in November 2006 after serving two terms on the State Board of Equalization. He began his career as a tax law specialist with the Internal Revenue Service and previously served as an attorney in the State Controller's Office.

This event was open only to members of the Milken Institute Associates. To join, please contact Mindy Silverstein, director of Milken Institute Associates, at (310) 570-4634 or msilverstein@milkeninstitute.org.