Budget Signals California is on Path to Economic Recovery

California Labor Applauds Governor’s Proposal to Reform Wasteful Corporate Tax Break

Statement by California Labor Federation Executive Secretary-Treasurer Art Pulaski

“The Governor’s budget reflects the progress our state is making toward economic recovery. For the first time in years, California isn’t starting out the year awash in red ink. As a result of the Governor’s leadership and the passage of Prop 30, our state is finally in a position to move forward by making the necessary investments to rebuild our economy.

“California’s economy, while recovering, remains fragile. Every available dollar of state spending should go to creating jobs and strengthening the middle class. It’s a positive sign that the Governor signaled he’s willing to take a hard look at secretive corporate tax breaks that sap our state of much-needed revenue while doing little to nothing to create jobs. Voters spoke clearly to this issue by overwhelming approving Prop 39, which eliminated an absurd tax break that actually hindered job growth in California.

“We applaud the Governor for proposing meaningful reform to the wasteful enterprise zone tax credit program that drains the state of $700 million a year. The Governor’s reform proposal is a good first step, but much more needs to be done. Every corporate tax break must be put to the jobs test. If it’s not creating jobs, the tax break should be reformed or eliminated. That’s commonsense to California taxpayers who are weary of seeing their tax dollars lining the pockets of corporations through unaccountable tax giveaways like enterprise zones.

“While this budget is less bleak than previous years, legislators mustn’t take anything for granted. The cuts made in previous years created a great deal of hardship on millions of Californians, a hardship many still feel today. To grow our economy, we must invest in education, health care and repair the gaping holes in our safety net.

“We have an enormous opportunity to create a better future for our state. The California Labor movement urges the Governor and legislators to seize the moment. It’s time to invest in California again to put our state firmly on solid economic footing for future years.”

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