Emerging from the deepest recession since the 1930s has been especially difficult for Southern California and the state as a whole.  California’s unemployment rate remains at record high levels – higher than 46 other states.

Small businesses, which provide more than half of private sector jobs, have experienced an 81% increase in bankruptcies.  The Small Business & Entrepreneurship Council ranked California one of the nation’s worst public policy climates for small business and entrepreneurship.

In short: Almost every state is more hospitable to business and has a lower unemployment rate than California.  

Fortunately, help is on the way.  Overdue state tax reforms are going into effect that will remove some of the tax barriers to job creation and retention, help small businesses survive the recession, and help further develop California’s high tech, biotechnology and green technology industries. 

Unfortunately, signatures have been submitted for the proposed Jobs Tax Initiative which would repeal these necessary reforms.  

One step forward, two steps backward.

At a time when creating jobs is priority one, the Jobs Tax Initiative hits California businesses with nearly 2 billion dollars in higher taxes.  

It taxes California employers for creating new jobs, takes away a lifeline for small businesses, and prohibits them from leveling their losses to survive the recession.

It also prevents our most promising and innovative industries from fully utilizing research and development tax credits.  

The California Manufacturers & Technology Association maintains a running list of California Business Casualties.  It is not an encouraging list.

This past decade California has lost more than 630,000 manufacturing jobs, 34% of its industrial workforce.  As troubling is a recent study by Site Selection magazine that finds entrepreneurs are opening or expanding manufacturing facilities here at barely one-tenth the national rate.  

NUMMI’s well-documented closure in Fremont will also result in more than the 4,700 direct job losses at the auto manufacturing facility.  NUMMI’s supplier companies, many of them small businesses, employ 20,000 workers and now will go out of business or need all the help they can get to stay in business and compete.

With more than two million Californians out of work, our cities, counties and state government have seen a decline in tax revenues.  Unemployed people and struggling businesses cannot generate adequate tax revenues to fund schools, transportation, health care and other services.   

The road forward must include an environment in which California businesses can grow and create new jobs.  Some inroads have been made, but the Jobs Tax Initiative would take us a giant step backward on an already challenged road to recovery.

So keep an eye out for the Jobs Tax Initiative. It’s dressed up in popular "close the loopholes" campaign slogans,  but instead of closing a single loophole it would gut sound tax reforms that are desperately needed to help pull California out of the recession and put people back to work.