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| For Immediate Release June 25, 2002 |
Contact: Gino DiCaro |
California’s Business Leaders Announce Proposal to Stimulate California’s Economy for the Future
Proposal to Increase State Revenue and Create Jobs
Sacramento, CA- - Sacramento, CA - Leaders from California’s top business associations joined today at the State Capitol to announce an economic stimulus plan that will increase tax revenues and create thousands of new jobs for Californians.
The proposal is based on a detailed economic analysis just released by the Santa Monica-based Milken Institute and calls for reducing the sales tax on purchases of machinery and equipment used in manufacturing, research and development and telecommunications by five cents. The report determines that through this tax reduction California will not only gain thousands of high-skill, high-wage jobs, but that the state will also see a substantial increase in tax revenue resulting from the increased economic activity.
According to the report California is increasingly at risk of losing manufacturing jobs to other states as well as international competitors due to new and existing California-only cost burdens. In fact, California lost a higher percentage of manufacturing jobs in the 1990s than any other major manufacturing state, because California is among the highest cost-of-doing business states in the country.
This proposal will help turn around California’s economy while providing a strong base for sustained economic growth and job creation,” said Jack Stewart, President of the California Manufacturing and Technology Association. “While state leaders work to balance this year’s budget with program cuts, increased taxes and borrowing, none of these short term solutions will improve California’s long-term economic viability. Without a stimulus plan we will continue to see budget deficits and job losses as an ongoing problem in California.”Studies show that for every new manufacturing job, an additional 3.5 jobs are created in other job sectors. By implementing this proposal California would create 120,000 new jobs by 2006 with an additional 50,000 jobs in each of the following six years.
Allan Zaremberg, President of the California Chamber of Commerce, said, “California’s position as a major manufacturing region continues to deteriorate. Because of the added burden we place on businesses in California, we see jobs from every industrial sector flee our state along with the tax revenue these jobs and businesses contribute. It’s time to reverse this trend and start improving California’s competitive environment.”
Understanding the current budget deficit problems for the 2002-03 budget, manufacturers would qualify for this tax reduction beginning on January 1, 2003 but would not yet claim the refund until future tax years.
Milken Sales tax Reduction Report - PDF file
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