Brown Touts (Almost) Deal on Jobs

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KQED/John Myers

Governor Jerry Brown was once famous for declaring an "era of limits," and today's news conference on a bipartisan jobs agreement brought to mind that classic quip in that the news was, well, limited: Brown's announcement reached half a deal... yes in the Assembly, not yet in the Senate.

"We celebrate small victories," said Brown with a twinkle in his eye.

The governor knew, too, that the photo op of two Assembly Republicans, small business representatives, and labor representatives might just do some good for his push for some sort of jobs focused legislative package this week, not to mention burnish his own credentials as a guy seeking compromise.

The endorsement of two Republicans -- Assemblymember Nathan Fletcher (R-San Diego) and Assemblymember Cameron Smyth (R-Santa Clarita) -- mean that, if all Democrats also agree, Brown's new proposal is halfway to reality. He now needs two GOP votes in the state Senate.

The proposal has substantially changed from the one he rolled out on August 25. While it still hinges on the slimming down (or cancellation, depending on your perspective) of a tax break given to large national corporations in 2009, the corresponding new tax breaks now offer political appeal to both sides of the aisle.

The plan offers tax incentives to small business through a tax cut on those entrepreneurs that pay personal income taxes (many small companies don't file as corporations), a 10% exemption on the first $50,000 in business income. It also offers a cut in sales taxes paid for manufacturers, albeit a smaller one for established companies than Brown's August proposal. And most notable for all Californians, the governor's bipartisan deal ups the standard tax deduction, an additional $1,000 for individuals and an additional $2,000 for couples.

On stage with Brown, some folks who you won't often see in unison -- most notably, Art Pulaski of the California Labor Federation and John Kabateck of the National Federation of Independent Business.

"I want to further embed this kind of working together," said Brown in why he was calling a press conference without an actual sealed deal in the Legislature. "The people you see here behind me are acting as Californians first."

For the Republicans on the dais, the agreement marked a change in position. "We're closing an indefensible loophole," said Assemblymember Fletcher, who's also now a candidate for mayor of San Diego. But legislative records show both he and Assemblymember Smyth voted for the corporate tax break provisions as part of the 2009 budget deal, the so-called "elective single sales factor" law. A spokesperson clarified this afternoon that Fletcher voted for the bill in question because it was better than no modification to business taxes at all.

But are there enough GOP votes in the Senate for Brown's plan? He needs at least two if all of the Dems jump on board. And the early reaction is that the governor won't be getting help from leadership.

"There is nothing more complex than tax reform, and trying to jam through a proposal on the last day of session without transparency or input from the public and tax experts is irresponsible," wrote Senate GOP leader Bob Dutton in a letter (PDF) to Governor Brown this afternoon. Dutton asked Brown to call a special legislative session on jobs for this fall.

It's hard not to speculate that the governor's chances for getting a package in the next 36 hours that he can tout as pro-jobs may hinge on whether an omnibus deal can be struck on several issues related to the California economy. Also swirling about in the Capitol are talks, and possible deals, on internet sales tax (the 'Amazon deal'), temporary changes to the state's landmark environmental quality act, and more.

Some of those need GOP votes, some do not. Brown clearly was happy today to display some common ground between the warring sides, but he'll need to find more before he can actually declare victory.

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About John Myers

John Myers is senior editor of KQED's new California Politics & Government Desk. He has covered California politics for most of the past two decades, serving previously as Sacramento bureau chief for KQED News and most recently as political editor for KXTV News10 (ABC) in Sacramento. In 2014, he was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.
  • R C Bakewell

    As a small business person, his plan reduces my tax bill – good.