(January 7, 2009) In his final State of the State address yesterday, Governor Arnold Schwarzenegger made it clear that his number one priority in 2010 is fostering a business-friendly economy and creating jobs.

“Governor Schwarzenegger’s commitment to creating private sector jobs and improving California’s economy is the key to solving the state’s chronic budget crisis,” said California Chamber of Commerce President and CEO Allan Zaremberg. “The Governor’s job proposals are an important step forward in generating the kind of revenue California needs to fund essential programs like education and health care.  The Governor’s job-creating proposals mirror the priorities of all Californians and help restore their hope of an improved quality of life.” 

The Governor said he will introduce four proposals to spur job growth, commenting that “the people and businesses of California are an engine of self-betterment and progress. As long as government keeps the engine oiled with prudent policies—and more importantly—does not pour sand in its gears, this state will persevere and prosper." 

Jobs Initiative

The Governor outlined measures he will present to the Legislature to stimulate the economy and create jobs:

• The California Jobs Initiative, creating or retaining up to 100,000 jobs and providing training to 140,000 individuals to enable them to retain their current positions or compete for higher-paying jobs.
• A measure to streamline the permitting of construction projects that already have a completed environmental impact report.
• A proposal to extend and expand the $10,000 homebuyer tax credit to include the purchase of existing homes in addition to new residences for first-time homebuyers.
• A proposal to exempt green tech manufacturing equipment from the sales tax

Budget/Tax Reform

Commenting that he has been calling for structural budget reforms since taking office, the Governor said California's economic growth declined 2.8 percent, but California’s tax revenues were down more than eight times that much.

“Our economy is diverse, whereas our tax system is not,” the Governor said, pointing out that 144,000 taxpayers pay almost 50 percent of all personal income taxes. The Governor called on the Legislature to begin work on the “major, radical reforms” proposed by the bipartisan Commission on the 21st Century Economy.

He also urged action on proposals from California Forward for performance-based budgeting and applying one-time revenue spikes to one-time uses, such as debt reduction, infrastructure and the rainy day fund.

Additional Proposals

Other efforts the Governor asked legislators to support included: 

• Operation Welcome Home, a program to ensure returning veterans are provided access to the services and opportunities they deserve.
• A constitutional amendment to ensure that the state never again spends a greater percentage of funds on prisons than on higher education.
• The call for “federal fairness” in allocation of California tax dollars, as the state currently receives back only 78 cents for every dollar sent to Washington, compared to 94 cents when President Clinton was in office. He noted that California carries an unfair proportion of the cost of border security and undocumented immigrants. The Governor also urged the California congressional delegation to vote against the federal health care bill, which places additional costs on the state, or seek a better deal for California.
• Pension reform. Annual pension costs are up 2,000 percent in the last 10 years, while revenues have increased only 24 percent, the Governor said, asking legislators to approve changes to reduce pension costs going forward.

More information on the Governor’s proposals is available at www.gov.ca.gov.