California: a profile: this profile is part of an occasional examining the issues and atmosphere guiding politics and policy in the various states.

[ILLUSTRATION OMITTED]

The Facts

Often referred to as "The California Republic," a reference to the Bear Flag Revolt of 1846.

Nickname: The Golden State

Capital: Sacramento

State Motto: Eureka! (I have found it!)

31st state to enter the union, on Sept. 9, 1850

Population: 37.7 million

Politics

Gov. Arnold Schwarzenegger (R), elected November 2003 and re-elected November 2006 California State Legislature 

State Senate: 25 Democrats; 15 Republicans

State House of Representatives: 47 Democrats, 32 Republicans, one Vacancy

Congressional Delegation: 34 Democratic and 19 Republican Members of the U.S. House; two Democrat U.S. Senators

Franchise Facts

Franchised Businesses: 80,340

Employment in Franchising: 1,001,196

Economic Output of Franchising: $74.1 billion

Issues affecting franchising in California

Health Care

As with virtually every state in the union, California continues to grapple with reforming its health-care system. But as with many issues facing the state, the of California's population amplifies the problem. Massachusetts enacted its health-care reform in 2006, the focus was on getting approximately 500,000 uninsured into the health-care system. California is estimated to have 6.5 million uninsured residents, more than the entire population of Massachusetts.

However, as Franchising World went to press, the governor and legislative leaders were attempting to reach a compromise on a Massachusetts-style approach to health-care reform. Many have cautioned the replication of an unproven model, but Gov. Schwarzenegger has made it a priority of his administration. As with earlier models, the California "solution," if it is ultimately enacted, is likely to spread the pain around by levying fees on employers, doctors, hospitals and insurance providers, as well as requiring residents to have some level of coverage. One of the big unknowns is if "residents" includes those in the country illegally.

Restaurant Mandates

Generally at the forefront of enacting consumer protection laws, California legislators have spent a great deal of time in recent years attempting to enact mandatory menu-labeling guidelines. Fortunately for the businesses that must comply with these often unrealistic and ineffective bills, Schwarzenegger has vetoed legislation on the grounds of its harm to small business. Most recently, the governor sent back to the legislature Senate Bill 120 last October that would have required restaurants to post certain nutritional information on menus and menu-boards.

The mandate hit franchised restaurants the hardest, as it applied only to restaurants that operate under common ownership of at least 14 other restaurants in the state or operate "as a franchised outlet of a parent company with at least 14 other franchised outlets with the same name in the state." While Schwarzenegger is business-minded enough to realize the pitfalls of this flawed policy, he is also a fitness-minded governor who wants to increase consumers' access to nutritional information and promote healthier living. So in 2008, expect to see another attempt at menu-labeling legislation, one that addresses the business concerns laid out by the governor.

Labor

For many years, the labor policy produced by the California legislature has been in favor of unions. 2007 was no exception. While Congress failed to pass a federal "card-check" bill last year, with the hope of eliminating private elections in union-recognition campaigns and thereby increasing union membership, California legislators actually did. Although limited to agricultural workers, Senate Bill 180 was viewed as a trial balloon for continued federal action on "card-check" legislation. Once again, Schwarzenegger saw the bill for what it was, an unnecessary attack on businesses large and small, and wisely vetoed the measure. But as with the federal legislation, "card check" is expected to be back again, perhaps in a slightly different form.

Troy Flanagan is director of government relations of the International Franchise Association. He can be reached at 202-662-0792 or [e-mail]. Visit the IFA Web site and select the Government Relations' page to view updates on state legislative issues.