Ryan ChartrandThere is plenty of disagreement about how to fix the state budget this year – new taxes, less spending, or more borrowing – but we all agree that a healthy economy is the ultimate answer for future budgets. I urge lawmakers to build on that consensus to bridge partisan differences this year and help prevent future budget shortfalls, and the business community will do its part by investing in new ideas, hiring new workers and paying more taxes.
Maybe this year we can’t do everything necessary to restore health to the California economy, but we should certainly make a strong start. First, let’s look for ways to reduce manufacturers’ costs of doing business that do not burden the state budget. Business climate and tax reforms could improve short-term revenues for the state and reduce long-term costs for manufacturers.
Also, important investments in workforce development should be funded this year and beyond. The business community will be a partner in these efforts.
A great example of this approach is the plan for a new math and science center at Cal Poly, which has the largest undergraduate engineering program in the West. The 50-year-old facility will be replaced through private donations of $17 million added to funds from the California State University’s capital outlay budget. Through this program the best and brightest students will be the innovators for California’s evolving manufacturing economy. If not included in the CSU capital budget this year, the private donations may be lost and the project put at risk.
When California’s economic engine is running on all cylinders, all Californians benefit. The high technology boom in the mid-1990s sent tax revenues through the roof. Our failure in those years was to build in more spending as if the good times wouldn’t end. The crash that inevitably followed was so painful California voters revolted and recalled the governor. We are still suffering a chronic deficit between spending and revenues caused by that tragic misstep. The current sluggish economy is a reminder of our past mistakes.
What other choices could we make this year to help reignite the California economy and balance future budgets? We believe manufacturing, if properly motivated, will be a big contributor to the 21st century economy and tax revenues in California. Millions of high wage jobs in innovative, productive and energy efficient manufacturing facilities should lead the way for other states and countries to follow. A key reason Governor Schwarzenegger signed AB 32, the Climate Change Solutions Act, was to spur green technology development to foster the next economic boom in California.
But don’t count on positive developments without effort. The state has lost more than 50,000 manufacturing jobs in 2008 and almost 450,000 since 2001.
California won’t be able to attract new investment for green technology manufacturing – or any other manufacturing – unless we have the infrastructure, workforce, tax policies and business climate to support it.
We need relief from tax policies that penalize companies investing in the state. Labor and workers’ compensation laws need to be balanced and fair. We must put career and technical education back in the public schools.
This year we supported a bill to put a $2.25 billion bond on the 2010 ballot for career and technical education facilities to support the emerging clean-technology economy. In SB 1672 (Steinberg), business funding for education and training programs would be supported by state capital contributions to meet the emerging workforce needs of the economy. We will be back next year to push this economic growth idea.
Manufacturers are making major decisions now that will affect California’s economy for years in the future. A light at the end of the tunnel on workforce and business climate will encourage new investments, more jobs and increased tax revenues. It’s time now to make sure the good times roll again in California.
Jack M. Stewart is the President of the California Manufacturers & Technology Association.