Schwarzenegger's jobs program requires some heavy lifting

The Sacramento BeeJanuary 10, 2010 

SACRAMENTO _ Anxious to leave a legacy as the governor who revived California's wheezing work force, Gov. Arnold Schwarzenegger has laid out an ambitious jobs creation program.

It's a task that will require a lot of heavy lifting, even for a former bodybuilder: The economy is wobbling, the state is broke, there are ample numbers of formidable opponents for each aspect of his plan – and it's even unclear whether state government can directly stimulate the job market.

In his final State of the State address on Wednesday, Schwarzenegger proposed a package that includes subsidized training programs; modified environmental rules; tax breaks for homebuyers and green tech industries; and limiting lawsuits against businesses.

"The first priority for the coming year, obviously, is to get the economy and to get jobs back," the governor said in outlining his plan. "Jobs, jobs, jobs."

It's a familiar theme for the lame-duck governor.

"Creating and retaining jobs _ and the businesses that provide them _ must be a priority of this Legislature," he said in his first State of the State speech in January 2004. "Jobs provide a solid foundation for families. Jobs add revenues to the state budget. Jobs give stability to our society. Jobs. Jobs. Jobs."

In 2006, Schwarzenegger persuaded voters to approve $42.7 billion in public works bonds, in large part by predicting that the spending would create hundreds of thousands of jobs. It didn't happen. A cataclysmic confluence of global, national and California economic catastrophes have conspired to drive the state's unemployment rate above 12 percent _ nearly double what it was when Schwarzenegger took office.

The number of jobs in nearly every major sector of the economy also has dropped. In construction, for example, jobs dropped from 865,500 in November 2004 to 616,200 last November, despite generous infusions of state and federal public-works money.

How much state government can do to stem California's employment bleeding is problematic.

"It's very little in the short term, much more in the long term," said Steve Levy, an economist and the director of the Center for Continuing Study of the California Economy.

Unlike the federal government, Levy noted, the state can't finance a jobs stimulus package by running up budget deficits.

"So the only way to stimulate the economy (at the state level) is to add money to the budget," he said, "and obviously the state's current situation doesn't allow that."

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