In these times of global economic chaos and seemingly intractable deficits in our state budget, we need to act urgently and decisively to get Californians back to work. We cannot realistically solve our budget woes without aggressive stimulus measures that will boost our state’s economic activity and increase revenues.
That’s why I was proud to author ABx3 15, the economic stimulus legislation that was a critical part of this year’s budget. Getting this stimulus bill passed and signed was an important step forward in preserving existing jobs and creating new ones, stimulating greater economic activity and increased revenues, and helping to minimize the impact of the disastrous cutbacks that we’re enduring.
Last week Capitol Weekly provided a very thorough analysis of one portion of the bill — the “single sales factor” modification of the corporate tax allocation formula. Before this change, multistate businesses were actually incentivized by California tax law to move facilities and jobs out of state.
The change provided by ABx3 15 encourages more investment in physical infrastructure and jobs development here in California – a common-sense change that we needed now more than ever. The Weekly’s article failed to discuss two other vital components of the stimulus bill, the small business new hire assistance credit and the long-overdue film and television production incentive.
Small businesses are the backbone of our economy and our social fabric. They are the manifestation of the American Dream. And they are hurting badly during these difficult economic times. To help small businesses thrive during this recessionary period, ABx3 15 provides small businesses with an income tax credit of $3,000 for each new full-time employee hired during the next two years. This incentive will make the difference for thousands of small businesses that are trying to grow and will encourage new job creation during the time when we need it the most.
For a century, California has been the capitol of the entertainment world. Today, however, that heritage is being undermined by runaway production, the phenomenon that has seen thousands of well-paying creative and crafts jobs flee California. Not only is the financial hit on California enormous, but the individual effect on film and television professionals, their families, and local and regional commerce is catastrophic.
By targeting these jobs, over 40 other states and many foreign countries have enriched their own economies at California’s expense. Their governments fully realize the economic and social value of these solid, middle-class, family-supporting jobs and the impact they have on their economies. Their tax incentive programs have paid for themselves by many multiples through new economic activity and tax revenues. Yet until ABx3 15 was passed, California incomprehensively failed to lift a finger to preserve this critically important industry.
AB x3 15 has already had a dramatic positive effect on decisions about where to locate production, and as a result it has already saved and created countless California jobs. This is not an incentive that helps the studio exec or the well-paid actor. It is a measure, however, that will make a huge difference for the carpenters, electricians, painters, grips, and hundreds of thousands of other middle class workers who make up the real entertainment industry. The people whose jobs are saved by this measure don’t carry a briefcase, they strap on a toolbelt.
California’s fiscal crisis will eventually subside as the international economy recovers. In the meantime, we, as stewards of this great state, must act aggressively to get Californians back to work and lend a hand to those who are struggling. ABx3 15 is one step toward doing so.