Donna Blair has spent 15 years as an Atlantic Richfield lobbyist in Washington, watching her office grow from two persons to 25 as the national capital became the prime battleground for tax and regulatory wars.
But last November, a year after the election of Ronald Reagan, the veteran of Washington's legislative skirmishes was working out of the Expo Inn Motel of this California state capital as Atlantic Richfield's first permanent representative here and the harbinger of a significant shift in the relations between business and government in the United States.
Along with several other large corporations and interest groups, ARCO has found the action moving to the states. Deregulation at the federal level has increased interest in new regulations in the states, where the growing need to find money to make up for federal budget cuts also has led legislators to look for what Blair calls "the deep pockets--the oil companies would certainly be included in that."
Shell Oil Co. has added a second lobbyist, Jim Walter, to its staff here and put him in charge of Shell's contract lobbyists throughout the far western states. Shell's vice president for government relations, David Gross, has moved from Washington to Houston to devote more attention to state problems.
The company magazine, Shell News, praised its reorganized lobbying team for thwarting an attempt by some Illinois legislators to prohibit pricing of gasoline by the liter. The company said the proposal would have cost the company millions of dollars in computer mechanism changes and would have made a price increase necessary.
"Where once before governmental relations divisions sought to be mainly in tune on the national level, they now must multiply their energy by a factor of 50 to handle situations like the move by Illinois . . . ," the magazine said.
Richard Cox, the National Rifle Association field representative here, said his organization has had to shift its activities to the state and local levels as the gun control debate moves from Washington to places like Morton Grove, Ill., where a handgun ban is in effect, and San Francisco, where a similar ban is being considered.
Joseph McLaughlin, public affairs director for the National Governors Association in Washington, D.C., said he had noticed an increase in want ads for experts in state government affairs. Poverty and environmental groups have begun to complain that while the oil companies may be able to afford new staffs in the states, watching 50 legislative arenas has begun to strain their resources.
The growing state effort to draft more regulations and find more revenue sources "could Balkanize the national economy," said Bank of America public affairs vice president Fred J. Martin Jr. He heads a council of business organizations trying to coordinate information on tax and regulation changes so the states can procede in an orderly fashion.
"Interest groups are pitted against each other when you've got a shrinking pie, and they are going to have to invest more in lobbyists and political contributions," said Alan D. Miller, legislative advocate for Common Cause in Sacramento. "It's more of a problem at the state level, because you don't have the capacity to run up large deficits and thus say yes to everybody." His reference was to the fact that in most states, unlike the federal government, laws require balanced budgets.
A recent survey showed that legislators in several states are expressing interest in increasing taxes on cigarettes and liquor to balance their budgets. Miller said California may attempt to follow the lead of other states and impose a "severance tax" on petroleum as it is pumped out of the ground. The breakup of American Telephone & Telegraph may also bring an increase in state regulation of telephone communications, Miller said.
According to Leonard C. Stewart, managing editor of the Washington newsletter State Relations Report, state governments have been gearing up in the last two years for an assault to regain tax sources that have been drained from them by the federal government.
In 1930, he said, state and local governments collected 67 percent of all taxes and the federal government 33 percent. By 1980, he said, the federal share had grown to 70 percent and states and localities were left with about 30 percent.
McLaughlin of the National Governors Association said his figures show some states are moving to prevent a projected drop in their corporate income tax revenues caused by recent federal tax cuts. In 44 states, the corporate tax rate has been tied to the federal rate, but at least 10 have moved to separate their rates from the lowered federal standard. That is just the sort of state initiative many major corporations would like to prevent.
ARCO lobbyist Blair, who gained brief fame in Washington in 1976 for telling an interviewer, "I would sooner tell people I was a streetwalker than a lobbyist for a major oil company," said she anticipates working on some of the suggested state tax increases that would affect major corporations, such as a proposal to split property tax rules so corporations could be charged a higher rate. "You can imagine how popular that is with us," she said.
California is also considering regulations that would affect the company's relations with its service stations, such as allowing service station owners to buy products from someone other than their franchiser.
According to Shell Oil officials, states are also rushing into the vacuum created by the expiration of the emergency petroleum allocation act last September. The states may now set up rules for allocating petroleum products in an emergency. Bill Wood, Shell's governmental affairs manager, told the Shell News the company did not object to setting aside some quantities of oil products for allocation by the states, but was concerned about efforts to "control us as if we were a public utility when, in fact, there is tremendous competition."
Wood also mentioned state attempts to tax chemical companies like Shell to clean up hazardous waste dumps, "even though the dumps were created by fly-by-nights already out of business."
"But it's practical politics," he said. "You get the money from whomever can pay."
In dealing with state legislatures, corporations are attempting to increase not only traditional lobbying but also direct contacts between lawmakers and corporate officers. Businesses in some states have set up "round-table" groups that bring legislators and executives together to discuss issues.
Blair said she finds politicians in Sacramento less apt to treat her like a leper, and much more accessible in general. "They seem much more down-to-earth and less wrapped up in their self-importance," she said.
Computers and sharing of contract lobbyists and trade association staffs help extend the companies' reach into the states, several lobbyists and executives said. But one Sacramento-based consultant, Jonathan C. Lewis, complained that the recession had led some companies to cut funds for lobbying just when the action in the states was picking up.
"That's not only short-sightedness, it's craziness," he said. "A simple government regulation can cost a corporation millions of dollars.