Governor Schwarzenegger Promotes California Jobs Initiative In Silicon Valley
Governor Schwarzenegger delivered remarks highlighting his California Jobs Initiative, a legislative package that will create or retain at least 100,000 jobs, at the San Jose Silicon Valley Chamber of Commerce Annual Power Report Lunch.
GOVERNOR SCHWARZENEGGER:
Well, thank you very much, Pat, for the wonderful introduction and the nice buildup. I think that everyone knows now that I was a bricklayer and that I was very good, so I’m glad that that information got out there very clear.
But I want to say thank you to Pat for the great work that she’s doing. She’s done great work for us when she worked for our administration and now she’s doing great work for the chamber and is really being so helpful still — even though she’s outside our office — but still a great, great help to our administration, so we want to just say thank you to her for the great work. Let’s give her a big hand. (Applause)
And of course Senator Maldonado, I want to thank you for being here today and for your great, great speech. I think that you have a good sense of humor; this is one of the things I like about you. You know, NBC has a slot open for 10:00 o’clock. (Laughter) If you want to get some — I’ll give you a good tip here. Get hired for that slot and then get fired and you will be a rich guy, OK? So — (Laughter)
But anyway, I love this guy. I mean, you can imagine, when I ran for office in 2003, one of the first people that came and helped me in this campaign was Senator Maldonado. I mean, he was the first one there, traveling up and down the state of California and helping me and getting a lot of the Latino votes, which was very important. And we got a lot, we got like 43 percent, which was unheard of for a Republican but it was largely because of his great help. And of course since then, since we have been working together, we have always had a great time. You know, we both have a good sense of humor about this, so we can step back and laugh at Sacramento even though there are major battles sometimes.
But he is a great, great leader and he is bipartisan, or post-partisan, whatever you call it. He only looks at what is best for the people of California rather than what is best for my party, or how can I do another in and all of those kinds of things. So he’s a terrific guy. So I’m looking forward to the legislature confirming him, so he is going to be our next governor, lieutenant governor of the state of California. So let’s give him a big, big hand for the great work that he is doing. (Applause)
And I want to say also thank you to Mayor Chuck Reed for always being a great supporter and being a great, great partner and for being here today. And of course also our chief of police, Rob Davis, we want to thank him also and then Sheriff Laurie Smith, we want to thank her for being here today and for her great work. And Secretary Vickie Bradshaw, who is sitting right over here, who is great — she is the Secretary of Labor. And so if you have any questions about labor or about job creation or anything like this, she can give you all the details. And then, of course, David Crane, who is our economic advisor, who is sitting here in the front also. And Assemblyman Blakeslee, who is sitting also on the front table here and a great partner, has been terrific. I just think the world of you for your great vision and for your great leadership. Let’s give him also a big, big hand for the great work that he is doing in Sacramento. (Applause) And there are so many other people that are here today that we should thank.
But I love being back here again. I told Pat when she asked me if I want to come here for your meeting that you have, for your luncheon, I said to her that it would be a great pleasure. I want to come here because, first of all, I like coming to San Jose just simply because when I think about twice when I ran for governor I got a lot of votes right here from San Jose. (Laughter) It was 75 percent of the votes. Think about that, 75 percent. Now, the other 25 percent just never forgave me for my movie “Hercules in New York.” (Laugher) I totally understand there is a little problem there. But anyway, I love coming back here and always talking to you. You all have been great, great partners and very helpful to all of us.
Now I have — right off the top, first of all, let me just say I don’t have a prepared speech, I just wrote down some notes of what I want to talk about. They gave me this morning a prepared speech and I looked at it and it just didn’t — you know, it didn’t have the right texture, it was too formal and I don’t think that’s what you want to hear, is just a formal speech to be read off.
But let me, just right off the top, say I have great news and that is that we got a phone call from Transportation Secretary LaHood from Washington and we are getting, the state of California is getting $2.3 billion towards our high-speed rail project. So this is really great, great news. (Applause)
I’m very excited about that, because as you know, for the last 10 years this state has been planning and working very, very hard to work out the whole plan for the high-speed rail, which is going to go from — the first leg, from Anaheim to San Francisco and it will of course come through here also, through San Jose. And the second leg will be going to San Diego and then up to Sacramento. And so we are really looking forward to that.
But it is, nevertheless, a $42 billion project. And we are very fortunate that this is the only state where we actually, the people have already approved almost $10 billion in bonds for the high-speed rail, which was in 2008, which was during the height of the economic decline and the recession. But the people have understood the difference between spending money and investing in our future. Building the high-speed rail is investing in our future. It’s going to be extraordinary.
And, of course, I am a fanatic about building. And I have to tell you, I’m a fanatic about infrastructure and this is why, since I have come into office, I have pushed so hard to rebuild California. And I was very happy that in 2006 the people have approved all of those infrastructure bonds, $37 billion plus $5 billion that were on there for various different water projects. And then also we have negotiated with Democrats and Republicans to build and make a commitment to build 53,000 new beds for our prisons, which was very important. And then just recently, finally we got our water infrastructure done.
So with all of that together, you know, we really have made a commitment, the only state in the union that has made a commitment to rebuild and to build the infrastructure. And this is what I want also the national government to do, because when you look at our infrastructure all over the country, it’s falling apart. We’re living off infrastructure that was built by Roosevelt, by Franklin Roosevelt and also that was built by Eisenhower, the whole transportation system, the federal highway system and all of this. But it is all old. It needs to be rebuilt and we need to build new things.
The high-speed rail is one of those things that will bring us up to date. I mean, every continent, almost, has high-speed rail. We are the only one that does not have high-speed rail. And I’m very happy to say that California is way out in front compared to other states. And this is why when Secretary LaHood called me, he said, “You get the most money. Not only do you get the $2.3 billion but California gets the most money of any state because you are so far ahead of everyone else.” So I think this is great, great news for California, so I wanted to bring you that news here today.
I think the other thing that I wanted to talk to you about is that there are people sometimes that look at the state of California and they say this is a failing state. I see sometimes television programs, sometimes there are write-ups about it. And there are, of course, a lot of write-ups about it that it’s not a failing state and that it is a great state and so on. In my opinion, obviously, is very clear, because I’ve made it always very clear that I love this state. This state is not a failing state; this state is a successful state. This state is a $1.9 trillion economy, it is the eighth largest economy in the world. Yes, we had a decline, like everyone else all over the world, economically; we had a decline this last year of 2.8 percent.
But that is not what is doing us in. What is doing us in is that we have a failed budget system and that we have a failed tax system, because it doesn’t make any sense that when you have a decline of 2.8 percent in economic activities that you all of a sudden have a 25 percent drop in your revenues. It is because our budget system doesn’t work and our tax system doesn’t work.
Our budget system — since I have come into office I have been trying to make the state live within its means, to only spend the money that we have and if we have a spike in revenues to go and to take that money and use it for one-time use only, which is to put it away for a rainy day fund, which is very important. Most states have a rainy day fund, most cities have a rainy day fund. Or to go and pay off infrastructure bonds, pay off debt. Those are the king of things that you have to do with this kind of money. But you can’t go and use it for ongoing programs and this is what the state of California is continuously doing, is use it for ongoing programs.
And this is why I said we need budget reform where we make a commitment to live within our means and to go and put money aside into this rainy day fund. If we have 12.5 percent — let’s say we had $12 billion or so in a rainy day fund — we would be much better off now because for three years we will be putting aside $4 billion each year into this budget. And that will save us so we don’t have to make those enormous cuts in education or in higher education, or have to worry about in-home supportive services and so on and worry about our vulnerable citizens. So those are the kind of things we can do.
And when you look at the tax system — I mean, think about it. We have a tax system — a drop in economic activities of 2.8 percent and then you have revenue drops of 25 percent. That just shows to you that we have a very volatile tax system. Our tax system, 53 percent is relying on personal income and capital gains tax. Well, most of that is paid by rich people. But rich people invest on Wall Street, so when the stock market takes a dive then all of a sudden we all take a dive here, because we are relying so much on that capital gains and personal income tax. And this is what does us in over and over, so we have to even that out.
And we have a Tax Commission, a bipartisan Tax Commission that has been put together and went to work for one year straight, studying it very thoroughly. And they came out with their findings and gave us the findings. We gave it to the legislature and since then I’ve never heard of it again.
This is why it is very important to push them and to push those legislators and say this is very important because we cannot wait until the next decline. We are going to come back economically. We see already signs. As a matter of fact, when you look at it, the housing market is doing much better. With the drop in people losing jobs, it has slowed down and now we are building it back up again. So there are signs left and right that we see that the economy is coming back. The foreclosure rate is down by 24 percent and so on. We’re not out of the woods yet but we will come back. This is definite.
But when we come back, eventually there’s going to be another decline economically. And I want to make sure that this state will never go through this problem again and this kind of a disaster again, as what we have gone through these last few years, because it is self-inflicted wounds. This is homegrown. This has nothing to do just with the economic crisis. As I said, yes, we have an economic crisis. But the kind of extreme problem that California has, it is homegrown, it is self-inflicted wounds, because the state of California has never yet made that commitment to fix its tax system or to fix the budget system.
Now, we are going to go and negotiate. Sam Blakeslee sits out there and he’s smiling. We cannot wait to sit down on that table and to negotiate with the other side to make sure that we’re going to get that done this year, because the reality is that whenever there is a problem, a crisis, there are great opportunities. So I always look at the glass half full, you’re absolutely right and Pat is absolutely right, I’m an optimist. I’m an optimist.
And let me tell you, I have seen this state go through ups and downs. I have come here in 1968 and then when the state started getting into trouble with the oil crisis and then later on started getting into trouble with the double-digit inflation rate and interest rates and so on during the Carter Administration. And then during the Reagan Administration, when all of a sudden there was no more building and you couldn’t get a loan or anything like that in order to correct the economy. So there were all kinds — I’ve seen those ups and downs. And every single time California comes back stronger than ever and that’s exactly what’s going to happen here again.
But I want to make sure that we are getting this budget reform done and the tax reform done in such a way so we never go through this kind of a down period again as we are going through right now. So I wanted to share that with you.
And number two, I think what is important right now — and I made that clear in my State of the State Address — was jobs, jobs, jobs. That is the most important thing. We’ve got to create jobs in the state of California.
And I was very happy when I heard the State of the Union yesterday, President Obama and so many of the things that I’ve talked about in my State of the State he also talked about in his State of the Union. And if it is like the job creation, that now that has become number one priority for them, or when he said this is the wrong time to raise taxes — l love that, because he’s absolutely correct. This is the wrong time to raise taxes. I mean, it’s never a good time to raise taxes, may I remind you. (Laughter) But this is as wrong a time right now as it ever can be, because now we need that money, we cannot take it away from the people and this is why it is so important that he said that. As a matter of fact, I have a TV screen in our Capitol where we repeat that quote of President Obama, that is the wrong time to raise taxes. (Laughter)
Because sometimes the Democrats in this state are not quite in sync with the national leadership. So if the national Democratic leader, or the leader of our country says it’s the wrong time to raise taxes, the Democratic legislators don’t get that cue. They are talking about this is the time to raise taxes; we want more revenues. And not only that, then they talk about we should go and have a single-payer insurance. Isn’t that unbelievable? That would cost us $42 billion. Those are the kind of ideas they’re coming up with right now, as we are in the middle of a crisis, that we should have single-payer insurance and that we should raise taxes and we need more revenues and all those kind of things. So I say to them no, this is the wrong time to do that.
So anyway, I want to make sure that we are balancing the budget. That this is our biggest priority now besides creating jobs and getting the economy back, is balance the budget and to go and to live within our means. As also President Obama has said, everyone has to tighten their belts, even within government, because outside in the private sector people have to tighten their belts. We have to do the same thing.
As a matter of fact, he recommended a spending freeze. I love that when I hear those kind of things, because that’s exactly what we are going to do in California. We’re going to have a spending freeze so we’re not going to go and continue spending money we don’t have, because right now the state of California is spending $600 million a month more than we have.
And this is why I urge the legislature and declared a special session of the legislature to send them in there, which means that they have 45 days to go and to make the mid-year cuts so that we stop spending those $600 million dollars a month, because that will just add up and will be another $3.5 billion come the new fiscal year, which starts on July 1. But so far I haven’t seen any action. So I urge the legislature, I urge them to go and do those mid-year cuts as quickly as possible so we don’t spend money we don’t have. And I urge the legislature also to come up with their own job creation package or just approve mine, the way I proposed it during my State of the State speech.
And, of course, I just wanted to go through it quickly:
- The first part of it was the $500 million for the hiring tax credit,
- The second one was a measure to streamline the permitting of construction projects,
- The third one was the extension of the homebuyers tax credit for new homes or for existing homes,
- The fourth one is a proposal to exempt the purchase of green technology manufacturing equipment from the sales tax,
- And the fifth one is tort reform to eliminate frivolous lawsuits that hurt businesses and that kill jobs.
Those are the five proposals we have. And I know that the legislators have their own ideas and I’m welcoming those ideas. I say to them, come and let’s work together. It will take us just a few days to sit down. Let’s take your ideas and let’s take our ideas and merge them together.
But let’s get people to work. Every single day when we don’t do something, when there’s inaction in Sacramento to help people — there are so many things like this that we can do to get people back to work. It’s very important, because for people a job is not just that they are working but a job is that you can provide for your family, that you can feed your family. And it makes you feel proud when you have a job, it makes you feel wanted and needed. So it’s so important for people to get jobs. And because of this unbelievable high unemployment rate, people are suffering. They’re losing money, they’re losing jobs, they’re losing businesses, they’re losing houses and families are breaking because of the stress and the friction that is in there because someone is not able to provide for the family. So this is why it is important to get people to work as quickly as possible.
So I think that the other thing that I want to mention to you here is that — Abel scratched on it just quickly — and that is open primaries and the water infrastructure bonds. We need your help. We need your help. I mean, I would not go here and talk to you without asking you that you should participate, as you always have. We need to raise the same amount of money as we raised for the redistricting. It cost us $20 million that we raised and we got barely by, by 1.5 percent we won.
But there will be now open — districts will be redrawn by people, not by the legislators, so finally we get the power away from the legislature to give it back to the people. And this is what open primaries is all about. We’ve got to stop, first of all, to have a system in place that creates legislators that are far to the right and far to the left. We can’t get anything done in Sacramento. I mean, it’s paralyzed because people — with the way the redistricting worked was Democrats are locked into their districts and Republicans are locked into their districts. But that’s all OK. But then when they get to Sacramento they’re far to the left and far to the right. They can’t get together. This rubber band doesn’t allow them to get closer together.
So every so often you have a victory like water. It took us three years to negotiate the water deal. It shouldn’t take three years. We had all the facts in front of us. It takes a few months to negotiate that. But because of ideological differences and all of those things it takes so long. That’s why we don’t have a budget agreement yet. That’s why we don’t have a tax agreement, because people can’t get together because they’re so far apart.
So the redistricting will bring people closer together but open primaries will bring our legislators even closer together. It is very important to take the power away from the parties, from the Democratic Party and from the Republican Party and give the power to the people and bring people, bring our legislators together so they can agree on things and work together. That’s the only way we’re going to really go and move successfully forward as a state.
So this is why I urge you to go and get involved in those campaigns, to go and do fundraising for those campaigns. We’ve got to raise that money. We need your partnership and to participate in that.
And the same is also with water infrastructure. Since we worked for so many years on this water infrastructure, let’s not waste it. It’s going to be a very, very tough sell, because some people will not look at it like high-speed rail and say this is going to be a great investment in the future. Some people will be concerned because of the economic downturn and they’ll say well, I don’t know if we can afford that.
But this is very important for people to understand. We have to go and pass those bonds because we’ve got to start building now because we don’t have enough water as it is. Our water infrastructure has only been built for 18 million people, not for 38 million people. It was built under the Pat Brown era. We’ve got to finish this project, we’ve got to go and build it now for 50 million people, because water infrastructure, to build the canal and the dams and all of the stuff that needs to be done and to redo the Delta and to fix the ecosystem and all this — that will take 15 years, maybe 20 years. So by 20 years from now we will have 50 million population.
So this is why we’ve got to build this, we’ve got to do it now. We can’t wait until we get out of this crisis. Because the money is not going to be spent, anyway, right now. The money, we start spending that money in 2013, 2014, 2015, when we really start building this infrastructure. So people should know that.
So we need your help on all of those things. We’ve got to work together. We have done it in the past, that’s why we won some of those very important initiatives. So we need your help again. So I want to again say thank you very much to all of you for your great help and for being such great partners. Again, thank you to Senator Maldonado.
And with that, I want to hand the mike over back again to Pat, because I know that she wants to have us out here and answer some questions that maybe you or the audience have. Thank you very much. Thank you. (Applause)
Topics: budget, California, California Jobs Initiative, construction, economic development, economic recovery, Economy, employment, frivolous lawsuits, Gov Monitor, Governance, government, Governor Arnold Schwarzenegger, green technology, high speed rail, hiring tax credit, homebuyers tax credit, jobs, legislative package, news, Sacramento, sales tax, San Jose Silicon Valley Chamber of Commerce Annual Power Report Lunch, Senator Maldonado, small business, tort reform, U.S., United States
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