Honeymoon's over: finances top list of concerns for state.

• Author: Allen, Bruce C.
• Position: GovernmentRelations

In his waning hours as governor, Gray Davis replaced two-term California Board of Accountancy member Michael Schneider with two new appointments--sole practitioner Olga Martinez, CPA and Ruben Davila, CPA, a USC professor of accounting with a litigation practice.

Both were appointed in time to attend the Nov. 14 board meeting.

Enter the New Governor

Almost as soon as he relaxed his arm from the swearing in, Gov. Arnold Schwarzenegger lifted a pen to sign an executive order that stopped all regulations that had not yet taken effect.

He also called for a review of all regulations adopted since 1999 to ensure that the fiscal analyses of impacts on business were appropriately completed.

The CBA had been working on a regulatory package that was one hour from becoming effective when it received notice of the executive order.

The affected regulations help clarify and make specific the statutes on work paper retention, documentation and reportable events. CalCPA is working with the CBA and governor's office to get the regulations adopted since the statutes that were enacted are confusing, overly broad and in some instances call for licensees to report confidential client financial information to the CBA.

Additionally, the proposed regulations contain the specific implementing language necessary to allow California CPA candidates to sit for the computerized exam. If California fails to enact the regulations in time, exam candidates could be at a disadvantage.

Special Legislative Session

Tempers were flaring shortly after the new governor assumed office. Political pundits were calling it the shortest honeymoon on record for any governor.

Gov. Schwarzenegger called the Legislature into special session to deal with several issues, including workers' compensation reform; spending plans to address the state's fiscal crisis; placing a $15 billion bond issue on the March ballot; and repealing Davis' bill that would have provided driver's licenses to illegal immigrants.

The driver's license issue was resolved quickly, but not without emotional appeals from supporters and a commitment from Schwarzenegger to discuss the issue further.

The state's fiscal issues proved to be much more difficult to address. Some Democrats insist that raising taxes is the only way to solve the fiscal crises, while some Republicans are insisting that allowing the $15 billion bond issue to be placed on the ballot will just encourage future fiscal irresponsibility.

Schwarzenegger...