California Democrats and Republicans offer competing jobs packages

Stung by public disapproval and worries over the speed of economic recovery, Gov. Arnold Schwarzenegger and state lawmakers have introduced more than 50 pieces of legislation they claim will add or preserve as much as 140,000 jobs.  In December, there were 14.1 million non-farm jobs in California, according to the state Employment Development Department.

Senate Democrats tout their jobs package of 25 bills – “Agenda 2010” — as a “plan to create 140,000 jobs,” arguing investment of public dollars will spur private sector employment.  “The only way to increase and sustain the tax base is to create high wage jobs,” said Senate president Pro Tempore Darrell Steinberg, a Sacramento Democrat, in a statement when the package was introduced. “The entire country is talking about job creation, but its importance can’t be overstated in California.  Agenda 2010 represents a real, nonpartisan, empirically supported effort to help create jobs for Californians.” 

Senate Republicans, who have a rival 22-bill package, counter that Democrats are merely increasing the size of government instead of encouraging the creation of private sector jobs. “I don’t disagree with some of the things they’re doing, like public works projects,” said incoming GOP Leader Bob Dutton of Rancho Cucamonga. “But mainly they want to create government or government-type jobs. We’re not going to get out of the recession without a strong economy in the private sector.”

Much of the Democratic job bills are government pump priming – speeding the sale of bonds to build a high speed rail system, levees and low-income housing in an attempt to generate more construction jobs. The Republican package favors economic private sector incentives such as tax credits and relaxing some of the laws that govern workplace schedules, such as the eight-hour-day requirement. 

Job creation was a centerpiece of the GOP governor’s State of the State speech in January. He says his plan, which includes extending a tax credit for first time homebuyers and a $3,000 bounty for employers who hire a previously unemployed Californian, will result in “100,000 new or retained jobs” and training for 140,000 persons to help them land better-paying jobs. 

“Now the important thing is that we merge all of those three packages together,” Schwarzenegger told reporters on February 10 in front of his Capitol office. “That’s the most important thing now, that we put politics aside and only think about one thing, and this is putting people to work — jobs, jobs, jobs.”

The focus on job creation is prompted in part by California voters.

Jobs and the economy was the issue Californians considered most important in a recent Public Policy Institute of California poll. Of those surveyed, 30% said they were “very concerned” and 19% said they were “somewhat concerned” that they or someone in their family would lose a job in the next year. Nine percent of the respondents said they had a job loss in their family.

“People are feeling more and more impatient about the slowness of the economic recovery in the state and they feel if there’s anything the Legislature should be doing it should be doing something to improve the economy,” said Mark Baldassare, president of the Public Policy institute. “Jobs and the economy was also the Number One issue last year and the year before.”

Claiming to help the state’s battered economy may also help improve the approval ratings of the lame duck governor and of state lawmakers. The same December Public Policy Institute poll found 30% of likely voters approved of the governor. The Legislature received a 10% approval rating.  “At this point, people are feeling pretty jaded about whether there is something our Legislature can pass that going to translate into real jobs and real economic improvement,” Baldassare cautioned. “The real test is whether anything that they’re doing is actually making a real difference.”

What is likely in the Democratic majority Legislature is that Republican bills backed by either the governor or GOP lawmakers will be killed.  Increasing the odds of that occurring is that several GOP economic stimulus measures are either tax cuts or tax credits, worsening the condition of the already cash-starved general fund.

Among such bills are three by Dutton of Rancho Cucamonga to cut long-term capital gains taxes in half for investments made between 2009 and 2012 and held for three years, SBX8 43.  Make the state’s research and development tax credit more generous, SBX8, and exempt manufacturing equipment from sales tax, SBX8 58.

Several other GOP proposals are opposed by labor unions, one of the major campaign contributors to Democrats. Among those is SBX8 66, which allows an employer to offer alternative work schedules to the state’s current eight-hours-a-day plus overtime for any work beyond that.

The two bills Democrats say will create the most jobs – 100,000 combined – relate to transportation projects. One bill, SBX8 36, would require the state Department of Transportation to create a list of projects that could be awarded with 90-days of receipt of a second round of federal stimulus dollars.  The dollars have yet to be approved by Congress.   The second bill, SB 965, allows the High Speed Rail Authority, the entity in charge of developing a high-speed rail system linking San Francisco and Los Angeles, the authority to spend federal economic stimulus money.  The state was awarded $2.25 billion by the federal government for the project. The authority is already empowered to spend money, federal or state, on the project.

“There seems to be a lot of political rhetoric and very little actual substance to improve the economic climate,” said Dutton.

Also included in the Democratic job package is a measure that would conform parts of California’s tax laws with changes in the federal system made over the past five years. Democrats say the 81-page bill, SBX8 32, will create 7,600 jobs.     Republican senators have voted for some of the Democratic proposals. Among them is a measure unanimously approved by the Senate, SBX8 27, that Democrats contend will create nearly 3,000 jobs by designating the state Housing and Community Development department as the recipient of  $193 million in federal money to build low-income housing.  The federal money has yet to be approved by Congress and, even without the legislation, the state housing department would automatically receive the money.

Republicans also voted in committee for a bill, SBX8 29, that would exempt employees in departments that aren’t paid for through the state’s general fund from unpaid, three-Fridays-a-month furloughs. Employees of the state’s two tax-collection agencies, the Franchise Tax Board and the Board of Equalization, would also be exempted.  Democrats say the bill will create 4,600 jobs.

Schwarzenegger has said he will end the furloughs at the start of the fiscal year beginning July 1 (the legislation mentioned can be found here).