On June 30, the
Assembly Committee on Jobs, Economic Development and the Economy convened the
third in a series of hearings on the California economy. The committee heard
details of a recently released report by the Milken Institute regarding the
staggering loss of manufacturing jobs in California.
Witnesses included
Jack Stewart, president of the California Manufacturers and Technology
Association; Perry Wong, senior management economist for the Milken Institute;
and business and labor representatives.
Both Mr. Stewart and
Mr. Wong cited several examples of the impacts of the manufacturing decline in
California, including lost wages and the loss of significant tax dollars.
Mr. Wong suggested
that in order for the state to attract and retain businesses, particularly
manufacturing businesses, "Consistency and transparency is the key – the
rules aren't the problem, changing them is."
Assemblyman Dan
Logue repeatedly asked participants what impact AB 32
(California's climate change law, enacted in 2006) would have on business. He
mentioned a study in Spain that stated every new "green" job resulted
in the loss of 2.2 jobs in other areas. At Mr. Logue's urging, companies
discussed the difficult regulatory environment and how upcoming AB 32 regulations will pose a
significant burden on their businesses across the state.
Carrie Rogers, of
the Los Angeles County Economic Development Corporation, said the state needs
"an economic impact (study) on the regulatory environment."
Discussion also
centered on the actions of nearby states to lure business from California.
Assemblyman Bill Berryhill said, "California rolls out the red tape, while
other states are rolling out the red carpet."
Representatives of various
labor organizations also spoke on the importance of maintaining high-paying
jobs in California. Angie Wei of the California Labor Federation said that when
speaking of helping business in California, "Tax incentives should not be
giveaways, but (should) be seen as investments." She added that there
should be penalties if tax incentives aren't used properly or if businesses don't
meet certain requirements.
Finally, the
committee discussed several potential ideas to help stimulate both the
manufacturing and business sectors overall. Committee members suggested that
both labor and business leaders work with legislators to come up with practical
ideas to improve California's business climate.
In closing,
Assemblyman V. Manuel Perez, who chairs the committee, asked staff to draft a
list of follow-up actions, including how states and countries attract capital
investment.
Cal-TaxReports, July 13, 2009
© 2009 California Taxpayers'
Association.
All Rights Reserved.