Jobs Plans Dominate 2011 State of the State Speeches
By Pamela M. Prah, Staff Writer
Governors of both parties are taking aim at stubbornly high unemployment rates with ideas for creating jobs, ranging from "angel" investment tax credits for tech startups in Nebraska to cutting red tape in Colorado and South Carolina to make their states more business-friendly.
The most sweeping employment proposal may be the one put forward by the new Republican governor in Michigan, a state that lost more than 850,000 jobs in the past decade. Governor Rick Snyder's blueprint includes building a new bridge from Detroit to Canada that supporters say will create 10,000 construction jobs. He also is encouraging highly skilled immigrants to come to the state to work. "Simply put, job one is jobs," says Snyder, who was a venture capitalist before he won the governorship in November.
More than half of the nation's governors have laid out their plans for the coming year in "state of the state" addresses to newly convened legislatures. Calls for deep cuts in spending, shared sacrifice and overhauls of state government are common themes as states prepare for what could be their most challenging budget year of the ongoing fiscal crisis. Much of the federal economic stimulus money runs out this year, while demand for state safety-net services remains high.
Strengthening the fragile economic recovery also is center stage. Governors want to show businesses that their state is "open for business," as both the governors of New York and New Mexico said in their state of the state speeches.
After some talk of possibly not giving a formal state of the state speech, Californian Governor Jerry Brown will give his on Monday (January 31) followed by Wisconsin Governor Scott Walker on Tuesday (February 1).
In Michigan, Snyder articulated a job-creation philosophy that focuses more on "gardening," or building businesses that already exist in the state, rather than "hunting" for out-of-state businesses with tax breaks. He said he wants to create a statewide network of "talent coordinators" responsible for connecting entrepreneurs, innovators, management talent and job seekers with established companies.
Snyder also said he would make good on his campaign promise to get rid of the Michigan Business Tax. That tax essentially is a 22 percent surcharge on gross receipts; Snyder would replace it with a flat 6 percent corporate income tax. Snyder has said the plan will reduce the corporate tax burden by $1.5 billion, putting that money "back in the hands of employers who will be able to invest in Michigan and hire unemployed workers."
Snyder also used his state of the state address to unveil Michigan Dashboard , an online feature that tracks 21 different measures on how the state is doing in five key areas, including unemployment. "You don't need to be an economist or scientist to understand it," said Snyder, who has never held public office before.
High-speed rail in Nevada
In Nevada, Republican Governor Brian Sandoval proposed something that his Republican counterparts in Ohio and Wisconsin have publicly rejected: high-speed rail. In his state of the state speech, Sandoval said he wants to build a new high-speed rail line from Las Vegas to Phoenix and to Southern California, arguing that it will boost tourism and jobs.
To help lower the state's 14.5 percent unemployment rate — the highest in the country — Sandoval said he wants to create a $10 million "Catalyst Fund" that he says would close business deals and finance infrastructure. Meanwhile a new $10 million "Silver State Works" program would target job-seeking assistance to veterans, welfare recipients and ex-offenders. He also would set aside $3 million to help residents in rural Nevada use broadband access to start businesses or telecommute.
"Unemployment, foreclosures, bankruptcy — the cure is not more government spending, but helping businesses create jobs," Sandoval said.
Sandoval, a former regulator of Nevada's casinos, also has ordered regulators to look at changes to help "modernize" the state's gaming industry that appears to be rebounding after suffering a 10 percent decline in revenue in 2009. "Nevada started this industry," Sandoval said. "We shaped its development, and we must remain the undisputed leader in the gaming economy."
Reinventing government in New York
In New York, Governor Andrew Cuomo used his state of the state address to outline an ambitious plan that he said would radically overhaul state government and make New York more business-friendly.
"New York has no future as the tax capital of the nation," the governor said in a 47-minute talk that backed by a PowerPoint presentation. "Our young people will not stay. Our business will not come. This has to change."
To make the state more welcoming to business, the former attorney general vowed not to raise taxes. He promised to cap spending and property taxes. And he said he would "fix" the recently enacted Excelsior Tax Credit Program that gives $5,000 for each new job created, including streamlining the application process. He also would like to set up 10 regional public-private councils across the state to create jobs and compete for $200 million in funding.
"What made New York the Empire State was a not a large government complex, it was a vibrant private sector that was creating great jobs in the State of New York," said Cuomo, whose father was governor from 1983 to 1995. "That's what made us the Empire State once and that's what's going to make us the Empire State again."
New York's 8.2 percent unemployment rate is actually lower than the national average of 9.4 percent. But the state lost 22,800 jobs in December, the largest amount among all the states, new federal data show. Even worse, the state faces a $10 billion budget deficit. "We need a new approach, we need a new perspective and we need it now," Cuomo said.
Elsewhere, governors used their state of the state addresses to propose a number of ideas to create jobs at home:
- Colorado Governor John Hickenlooper said he wants to require "a regulatory impact statement" to all new legislation that estimates the cost to businesses of new regulations.
- Mississippi Governor Haley Barbour urged that a Civil Rights Museum be built in the state to draw tourists.
- New Hampshire Governor John Lynch called for the creation of a state infrastructure bank to help local communities pay for road and bridge projects.
- New Mexico Governor Susana Martinez said she would encourage small businesses to hire unemployed workers by covering part of the workers' salaries for the first six months through the unemployment fund.
- Nebraska Governor Dave Heineman said he wants to offer angel investment tax credits and internships for college students at Nebraska companies.
- Washington State Governor Chris Gregoire pledged to reduce by 48 percent the amount businesses pay to fund unemployment insurance and cut the workers' compensation rate.