• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

Gov. Brown presents jobs plan for California

August 25, 2011 12:00:00 AM PDT
Governor Jerry Brown unveils a new plan to create jobs in California. It would change the tax structure for corporations, rewarding those who hire Californians and penalizing those who send jobs out of state. The governor spelled out the plan Thursday.

Boeing, Abbott Laboratories and Genentech threw their support behind Governor Brown's jobs plan. But getting it through the state legislature will be challenging.

In his first meeting with capitol reporters in nearly two months, Brown unveiled a package that seeks corporate tax changes to promote job growth.

  • The package increases the hiring credit from $3,000 to $4,000 per employee for small businesses with fewer than 50 workers.
  • The package gives companies a sales-tax break for buying new manufacturing equipment.
  • The package eliminates a tax loophole that allows companies to choose between two tax formulas when calculating tax liability.

Brown says the loophole gives incentives to the wrong people.

"Every time an out-of-state company moves a job out of California, then they get a tax break," said Brown. "And every time they hire in California, they increase the taxes they pay. That is why it is truly perverse, outrageous and needs to be eliminated."

Genentech says it built a plant in Oregon because it would have cost more to expand within California.

"By reforming it, that means when we're building in California, we're not penalized for putting an extra brick or an extra person in California, and we're not incentivized to build out of state," said Andrea Jackson, a Genentech director.

But because the plan is a tax change, the governor will need a two-thirds vote, and Republicans are already giving his jobs plan a thumbs down.

"It's not a solution. It's an agreement that we made with businesses, and now they want to break that under the guise of 'Oh, this is good for jobs,'" said state Assemblywoman Connie Conway (R-Tulare), Assembly minority leader.

Pressed on how many jobs his plan will create, Brown couldn't say.

"These are incentives, and removing dis-incentives," said Brown. "The exact number, that's what we call the 'fallacy of misplaced concreteness.'"

Brown also wants to renew the expiring surcharge on electricity bills to spur "green" jobs, even though a recent audit found that 10 percent of that money is spent on questionable research.

Load Comments