Author: Jack Stewart

Prop 23 = temporarily postponing AB 32 until economy improves
Meg Whitman = one-year delay of AB 32
Jerry Brown = Immediate AB 32 implementation and increased costs

Gubernatorial candidate Meg Whitman agrees that AB 32 will be a job
killer and hopes that as Governor she would be able to delay it until
it can be fixed. But to make sure AB 32 is delayed, voters must support
Prop 23. We can’t leave this to chance.

California’s economy already looks like this:

California
needs high quality jobs, new manufacturing facilities and small
business growth. Rational state environmental policy, supported by
economic impacts analysis, will help us achieve these goals.

Unfortunately, the state is implementing another expensive
environmental program that drags the economy farther down. SB 375,
passed into law two years ago, seeks bold greenhouse gas emission
reductions by controlling regional planning policies.

As the lead agency, the California
Air Resources Board (CARB) has been charged with working with Regional
Metropolitan Planning Organizations (MPOs) to determine reasonable and
achievable greenhouse gas targets to meet the goals of SB 375. The
substantial undertaking started out as a collaborative process but it
has turned into a disaster for the economy.

For
the past year, we’ve heard you say again and again that your top
priority is jobs for California workers. Unfortunately, you are not
walking the talk.

According to the U.S. Bureau of Labor Statistics, from August, 2009 to
August 2010, thirty one states created new jobs while nineteen states
lost jobs. Texas was the big winner with 134,600 new jobs.

California was the big loser with a loss of 103,900 jobs.  Utah, with
a population  1/14 the size of California created 13,800 new jobs by
targeting California’s high technology employers. The long term jobs
picture for California is even gloomier.

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.  

California Is Still No. 1 … as the worst place in America to do business, a ranking it’s held since CEO magazine
began surveying CEOs in 2005.

Not only does California’s business
climate rank worse than every other state, but California ranks far
below the national average in every category tested, from taxes to
regulations, to workplace quality to Living environment.  In only one
sub-category, Arts & Culture (ranked lowest in importance to CEOs),
California surpasses the national average.

This is not new information, every few weeks we see a new poll or
survey ranking California’s business climate at or near the bottom. 
Texas, on the other hand has consistently been ranked as the best place
to do business by CEO magazine.  One CEO’s comment was particularly
revealing, "Texas is pro-business with reasonable regulations while
California is anti-business with anti-business regulations." 

It looks like Tennessee just attracted a $1 billion solar manufacturing facility and 500 accompanying jobs from a German solar firm, Wacker Chemie, and an Associated Press story hints that the volunteer state put up a $50 million incentive package to recruit the high wage company.  

This news adds to a previously announced $1.2 billion investment from another solar firm, Hemlock Semiconductor, looking to produce solar products in Clarksville, Tennessee.  Why is it that little old unsophisticated Tennessee can attract $2.2 billion in solar power investments and the home of solar and other green power mandates can sit and watch its unemployment numbers skyrocket to the country’s third worst rate – 10.1 percent – and leave behind an economy-altering number of manufacturing jobs?  

During the first eight years of this decade, California has done an absolutely marvelous job of creating growth in government.  According to the Employment Development Department (EDD), there are 184,500 (8%) more employees on the government payroll than on January 1, 2001.  Over those same eight years, private sector employment is up only 33,600 (0.2%).  This means that the public sector accounts for 85 percent of the overall growth in California over the last eight years.  If you look at the chart below, it’s obvious, given our state’s trend, that the revenue “generators” can’t support the revenue “users” and a swelling government.

The Sacramento Bee reported this weekend that "business groups" are starting to support tax increases as a partial solution to California’s historic budget shortfall. It is important to note that new tax proposals must come with a plan for true economic stimulus. Without it we’ll continue to lose companies like Opti-Solar who announced last week that they were laying off 105 employees, while its solar panel competitors thrive in Oregon, and APL who recently announced it is moving its shipping line headquarters from Oakland to Arizona to take advantage of lower operating costs. Can you imagine a shipping company moving to landlocked Arizona because the cost of doing business in California is too high? It’s true and now California has lost a company that operates 130 ships worldwide that had its headquarters in the Bay Area for longer than California has been a state.

Is any Californian alarmed that snap judgments without the benefit of professional economic analysis are being made to negotiate the state’s budget and economic recovery?

Economic impacts must always take precedent in a state that leads the nation in bold government programs. The unintended consequences of previous policies and budget solutions have exacerbated the current emergency and still we see almost no economists in the Capitol laying out the long and short term effects for the myriad policy debates that make up our budget negotiations. 

Today, CMTA and 25 other employer groups sent a joint letter to the Legislature insisting that economic stimulus must be the third leg of budget negotiations.