Employment and infrastructure needs show California’s dilemma 

It was just coincidence that Gov. Jerry Brown unveiled a billion-dollar tax proposal on the same day that the Legislature’s budget analyst released a long report on the state’s infrastructure crisis.

It was, however, a timely juxtaposition. Brown was responding to economic woes as politicians often do, with a news conference, a quick-hit plan and assurances that it will make things better.

Legislative Analyst Mac Taylor, however, was indirectly telling politicians what they should do to improve long-term prosperity — upgrade transportation, education, water and flood-control systems.

It’s very questionable whether Brown’s proposal to change the way corporations are taxed, give tax credits to employers for new hires and grant manufacturers a sales tax break can be enacted, since it needs some Republican votes.

Brown and Democratic legislators implied unmistakably that one motive is to show voters that they’re feeling their economic pain, while setting up Republicans for blame in next year’s legislative elections if they block the tax swap. Brown also wants business support for a tax increase ballot measure next year.

Even were Democrats’ motives pure as winter snow in the Sierra, however, and even were their plan to become law, its economic impact is very questionable. Independent studies of employment subsidies, such as the “enterprise zone” program, indicate that their lasting benefits are scant.

California needs more than a new tax gimmick to sustainably recover from recession. We need to make ourselves competitive in a global economy.

Balancing state finances, overhauling an anachronistic tax system, streamlining regulation and improving the education system would reassure potential investors. And so would doing something about our decaying infrastructure.

Former Gov. Arnold Schwarzenegger raised the issue and proposed bond issues to deal with it, but we have the nation’s worst credit rating and the cost of repaying bonds already issued or in the pipeline has become a major factor in the chronic budget woes.

Not only do we need to spend tens of billions of dollars on new or improved infrastructure, we also need to spend more on maintaining what we already have — much of it dating back to the governorship of Brown’s father. And because of fiscal constraints, we need to find new ways of paying the heavy cost.

It’s not as sexy as punching a new tax loophole, but it’s the real business of making us competitive again.

Dan Walters’ Sacramento Bee columns on state politics are syndicated by the Scripps Howard News Service.

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