Senate Sends Assembly Three Bills Democrats Say Create Jobs

With some Republican support, Senate Democrats sent three bills to the Assembly February 18, which they claim will create more than 12,000 jobs.

The measures partly conform California to changes in federal tax law since 2005, halt the furloughing of state employees at departments not paid out of the general fund and direct $20 million in federal economic stimulus funds to community colleges to “install or upgrade energy management systems at 47 of its 110 campuses.

All three are included in the Senate Democrats’ package of job creation bills, which they’ve dubbed “Agenda 2010.” Senate Republicans, who have a rival jobs package of 22 bills, say the Democrats’ proposal is long on rhetoric and short on substance.

Senate Democrats on their website say the furlough bill, SBX8 29, creates 4,600 jobs. The tax conformity measure, SBX8 32, an additional 7,600. Less than 500 jobs from the community college bill, an analysis says.

It’s unclear from the website – or the bill — how changing the tax treatment of self-created musical works and increasing the penalty for a tax preparer understating a taxpayer’s liability and dozens of other tax code changes creates 7,600 jobs.

The 4,600 figure for the furlough bill appears, in part, to be based on a University of the Pacific Eberhardt School of Business study that estimates a loss of 5,000 private sector jobs in Sacramento County from imposing three-days-each-month furloughs on all state workers.

In a press release announcing the bill’s passage on a bipartisan 30 to 6 vote, it says the measure could “potentially create more than 4,000 private sector jobs” because the increased earnings of the affected state workers “will make its way back into the community and local businesses.”

Authored by Senate President Pro Tempore Darrell Steinberg, a Sacramento Democrat, the furlough measure would exempt employees in departments not paid for out of the cash-starved general fund as well as employees of the Franchise Tax Board and the Board of Equalization, the state’s two tax collection agencies.

Departments not paid out of the general fund include the Department of Motor Vehicles. An analysis of the measure estimates it would affect some 80,000 of the state’s more than 265,000 employees.

“I can tell you what furlough Friday has meant to downtown Sacramento businesses,” Steinberg said on the Senate floor. “Let’s not be pennywise and pound foolish. This bill makes a practical common sense change to thee executive branch policy to impose three day furloughs across the board.”

Stenberg said for every dollar saved from furloughs, the state losses seven.

The Franchise Tax Board estimates $465 million in taxes will be lost because furloughs constrain the agency’s ability to audit returns and collect owed taxes.

Gov. Arnold Schwarzenegger vetoed a conformity measure similar to the one passed by the Senate because of a provision allowing taxpayers forced from the homes to not pay taxes on forgiven debt. The bill passed February 18 contains the same provision. It was sent to the Assembly on a 21 to 14 vote.

The third “jobs” bill transfers $20 million in federal money from the state energy commission to community colleges to improve monitoring of energy use at a building rather than a campus level.

An analysis of the measure, SBX8 31 says it will create 488 jobs and save nearly 48 kilowatts and 1.5 million therms of natural gas.

“We will put people to work. We will save energy,” said Sen. Gil Cedillo, a Los Angeles Democrat. The bill was sent to the Assembly on a unanimous vote.

The Senate also sent several budget related measures to the Assembly including one that purports to save $800 million on health care costs in the state prison system and another to partly restore the solvency of the fund containing the nickel and dime recycling fees Californians pay.

The fund has been insolvent in part because of borrowing from it by the Schwarzenegger administration to address budget shortfalls and pay for the start-up costs of implementing AB 32, the landmark greenhouse gas emissions reduction measure.

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