Brown Calls For Bipartisan Support On Jobs Plan

SACRAMENTO (AP) -- Gov. Jerry Brown on Thursday called for bipartisan cooperation on his California jobs plan, which he said would end a "toxic tax loophole" and use proceeds for small businesses and working families.

The governor announced an agreement with Democrats and Republicans in the state Assembly in the waning hours of the legislative session, but he acknowledged he had yet to gather bipartisan support from the Senate.

Brown's plan calls for closing a 2009 tax loophole that benefited large, out-of-state corporations by allowing them to choose between two formulas and thus, lower their tax liability. He wants them to follow one formula by calculating it solely on the portion of sales they have in California, which would generate an estimated $1 billion in additional revenue for the state each year.

The governor proposes to use the proceeds on tax breaks for California manufacturers and small businesses by encouraging them to buy equipment and expand in the state. He also would use some of the money to increase the standard deduction on the state income tax, which would provide more cash to more than 4 million working Californians.

"What it does is eliminate a toxic tax loophole that favors keeping jobs out of California and penalizing people when they do invest in bricks and mortar or put jobs in the state," Brown said during a news conference Thursday.

The bill, AB40x1, was being carried by Democratic Assemblyman Felipe Fuentes of Sylmar with some Republican support. It passed the Assembly Thursday night, 54-10, and will go to the Senate. The proposal needs two-thirds support in each house.

"The intent is to put money back in the hands of Californians who will spend it," said Assemblyman Cameron Smyth, R-Santa Clarita, one of the GOP co-authors of the bill.

Many GOP lawmakers objected to first seeing the bill about an hour before the measure came to the Assembly floor. Assemblyman Jim Nielsen, R-Gerber, argued that relying on staff analysis wasn't good enough when it comes to rushing through a major shift in state tax policy.

"This is not a `no-big-deal;' we're talking about a billion dollars," he said.

Several Democrats defended the bill, saying it would simultaneously reward companies that keep jobs in California, provide tax breaks for small businesses and manufacturers and give money back to average working Californians.

"Make no mistake, for those who do vote not vote for this measure, there is no way to explain this to the voters," said Assemblyman Charles Calderon, a Whittier Democrat.

Senate Republican Leader Bob Dutton of Rancho Cucamonga said Thursday he was not aware of the governor's proposal. He sent a letter to Brown asking him to call for a special session to deal with economic growth rather than rush through a plan in the final day of the legislative session.

He said Republicans have pressed the majority party to work on job growth.

"Now all of a sudden, on the last day of session, they want to try to ram something that nobody has seen," Dutton said.

Brown responded by saying the Senate needed to take action immediately on a bipartisan plan. The Legislature has no time to spare. Friday is the last day of this year's legislative session.

"Now, small businesses and working families in California are counting on the state Senate to do what is right by closing this toxic tax loophole, acting as Californians first and putting our state back to work," the governor said in a statement.

(Copyright 2011 by The Associated Press. All Rights Reserved.)