Governor Highlights Green Tech Manufacturing Equipment Sales Tax Exemption


MR. NOBLE

Well, I'll just speak loud, how's that? Governor, welcome to North Palm Springs, in the city of Palm Springs. We appreciate you coming down here and we particularly appreciate your initiative to get some manufacturing done in California.

These windmills were made in Denmark; those windmills were made in Japan. And there's a guy in the audience, John Cole, who can build them in California and the only thing holding him back is the cost of manufacturing in California. If you can get this initiative through and get some help on the cost of manufacturing, we can go through here and replace hundreds of old machines with windmills manufactured in the state of California.

Welcome, sir. (Applause)
 
GOVERNOR SCHWARZENEGGER

Thank you very much. Thank you. Thank you very much, Fred, for the great job you're doing. Fred, of course, is the owner of Wintec Energy. And it's great to be back here in Palm Springs, it's a place that I love to come to. The whole 40 years since I've come to this country I've always come to Palm Springs for a little bit of vacationing, a little golfing, shopping, having a good time.

But today we are here to talk about this very important job creation package and so I want to thank Fred Noble for his great leadership here in creating jobs. And Assemblyman Manuel Pérez, thank you very much for being here today and caring about renewable energy. And also Mayor Pougnet, we want to thank you also for being here. And Secretary Vickie Bradshaw, Secretary of Labor and then John Pivinski from the Palm Springs Chamber of Commerce, thank you very much for being here.

And then, of course, Mary Bono Mack, our congresswoman, great congresswoman, wanted to be here because this is something that she's very interested in, renewable energy and job creation. But she was notified too late in her office in Washington, so -- that was a little bit of a mix-up. So she wanted to come here very badly, so we want to thank her for her great leadership because she is doing -- what we are doing in California with renewable energy and with environmental issues, she wants to do also on the federal level and is working very hard.

So as I said, it's a great pleasure to be here in Palm Springs and Wintec is one of California's leading providers of wind-power energy and so we wanted to just come out here and put the spotlight on them and on their company. You see around here a lot of action and windmills in the background -- there are 4,000 windmills around here. And Wintec has been in operation for more than 25 years, so they have done this way before it became kind of hip to be involved in wind or in renewable energy. So they were visionaries and they were thinking way ahead.

And the reason why we're here today is because there are so many things that they are doing. One of them is to help California meet our greenhouse gas targets under AB 32, which is to reduce our greenhouse gas emissions by 25 percent by the year 2020 and also to reach our renewable energy standards, which is 33 percent by the year 2020 -- which will make us the leader, you know, in the world, by reaching this kind of a goal. And we are way ahead, of course, of any other state in the United States.

But the only way we'll reach that goal is by having more wind, more solar energy, more geothermal, more biomass, more fuel cells and so on. That's the only way we're going to have this renewable portfolio and also that we go and get off foreign oil, which is an important factor here. So what Wintec does is helps us in all of those different areas. And like I said, what is good for the economy is also good for the environment and the other way around. What's good for the environment is good for the economy. And the proof of that is that here this company, Wintec, is creating 60 jobs.

Now, the exciting news here is that in these economic downturn times and when the economy is not doing so well in California and all over the world, this company is interested in expanding. It just shows to you, green technology is good for the economy. They're interested in expanding but they need a little bit of help. For us what is important is that when they create these extra 60 jobs -- which they want to do -- we want to make sure that those jobs all stay here, right in California, that when they expand it's not outside the state in a neighboring state but it's right here in our state.

And that's why in my State of the State Address I announced a Jobs Initiative to help make it easier for businesses like this one here to grow and to expand and to create jobs.

One piece of my proposal is to exempt the purchase of green tech manufacturing equipment from the sales tax. We are one of three states that are still charging a sales tax on manufacturing equipment. All the other 47 states are not charging it and this is why California -- as you just heard from the gentleman -- we are not competitive and we want to become more competitive. My proposal will help California attract and retain green businesses like Wintec. And of course it will send a clear message to every CEO and entrepreneur and innovator that if you invest in the green future of California then California also will invest in you.

And of course we are very happy to know and pride ourselves that 57 percent of all the venture capital in America that's invested in green technology comes here to California. So we are leading the way but we can do even do much better than that.

And in addition to the green tech manufacturing initiative, my job initiative also has four other pieces, which is:

The $500 million for hiring incentives,

Then the measure to streamline the permitting of construction projects,

The extension of the homebuyers tax credit,

And the tort reform to eliminate frivolous lawsuits that hurt businesses and that kill jobs.

We estimate these reforms will create or help keep 100,000 jobs.

I want to stress that we must act quickly, because every day the legislature doesn't act we lose jobs or we stop people from hiring new employees. So today I'm calling on the legislature once again. I mentioned all of this, this job creation package in my State of the State Address on January 6th, so it almost two months ago and they have not acted. So I want to ask them once again to act quickly, to come together, Democrats and Republicans and to sit down with us and let's put out there a job creation package so that we can put people to work.

I'm interested in putting every Californian to work that is willing to work. That is our intention here, because it is painful for people in this state and in other places that have no job. It's not just that you have lost a job but that means that you have no money to provide for your family, you don't have the sense of belonging and that you feel productive. That really is a depressing kind of a thing, to lose a job. And this is why -- I mean, I've met many people that can tell you horror stories of what it is like to lose a job and so I think it's our responsibility as public servants to go and do everything that we can and to work day and night to create those jobs. And so I ask the legislature to take this seriously. They have a job, they're happy, so let's go and create jobs for everyone else too.

So with that I want to say thank you very much. And now I want to bring out Assemblyman Pérez to say a few words. Thank you. (Applause)
 
ASSEMBLYMEMBER PÉREZ

Good morning, everyone. We are honored to have our Governor and Secretary of Labor Vickie Bradshaw with us this morning. And a welcome to all of you, our family and friends here in the Coachella Valley. I just want to also welcome and thank IBW for being here with us. And I also want to thank Palm Springs Mayor Steve Pougnet and the city of Palm Springs but a special appreciation to Fred Noble for hosting us today.

Governor, I want to report to you that just last Friday our local governments, along with the Agua Caliente band of Cahuilla Indians broke ground on two major overpasses largely funded by the federal Recovery dollars. We're talking about over 850 jobs that will be immediately created with those ARRA dollars. And I want to thank you for lobbying our president, President Obama and the United States Congress on those important funds to California. Moreover, I also want to thank you for initiating the first MOU with the federal government. Your MOU will help us fast track renewable energy projects here in California. (Applause)

It's a real pleasure to take part in this morning's gathering and to be able to welcome you to the 80th district. And given the topic that has brought us here, we surely could not have a more suitable location with this backdrop of clean energy wind turbines right behind us. It's fitting that the Governor decided to visit the 80th district to discuss his job creation proposals, particularly those that relate to supporting the green economy. This unique corridor, from the Arizona border to the Imperial Valley and throughout the Coachella Valley, these areas are known as the crown jewel for renewable energy whether it's solar, throughout the entire 80th, whether it's wind here in the Palm Springs area, Desert Hot Springs area, whether it's geothermal in the Salton Sea area, or biofuel like in Niland, where you have algae farms.

As chair of the Assembly Jobs Committee my top priority has been economic recovery and job creation. My committee colleagues and I have worked hard to elevate the issue of economic recovery in the legislature.

For instance, over a year ago the Jobs Committee outlined a Strategy For Economic Recovery. That strategy recognized the primacy of manufacturing jobs, something we are all talking about here today. Manufacturing is truly the gold standard in jobs, providing good wages and benefits for all our employees.

Manufacturing also has a significant multiplier affect on our economy. As a matter of fact, did you know that for every manufacturing job there are over 2.5 jobs created in other sectors? As well, that ratio grows to creating 16 jobs in some fields within manufacturing. And at the end of the day the average salary ranges, within manufacturing, ranges between $60 and $80,000 a year.

Ultimately, we know that government and businesses working together as partners can create jobs and that's why we policy makers must maximize the tools we have available to us all to help businesses do what they do best; innovate and put people back to work. We must redefine a vision for business in California that reflects the opportunities of our global economy and that is based on innovation. In this new vision doing what's right for the environment is good for business but also for workers, communities and the climate. At the end of the day people need quality jobs and the financial means to support and protect their families.

The green collar economy can offer these economic opportunities but only if we are prepared to seize the moment. A green tech manufacturing incentive is an idea whose time has come. This is about competitiveness and making sure California does not miss out on the opportunities of the green economy.

I am committed to helping us get there. We hear a lot that manufacturing is leaving the state of California. But I will say this -- with the Governor's proposal California will retain manufacturing and will continue to lead the world in innovation-based green technology.

I want to thank you and I'd like to turn this over now to our mayor, Mr. Steve Pougnet. (Applause)
 
MAYOR POUGNET

Thank you, Manny and good morning and welcome. Certainly, Governor, it is a pleasure to have you back in the beautiful city of Palm Springs, California and Secretary, welcome as well.

I have the honor of talking a little bit about the new innovation HUBZone, which goes hand in hand with this job creation initiative that the Governor has. But I think it's very important to -- here we are today at this podium with this fabulous backdrop and we're here because 30 years ago Mr. Noble from Wintec had the vision, knowing that we would get the technology and the expertise to actually be here to make things economical, that we can move projects forward.

The Governor, from the first day of his administration, has pushed for clean tech renewable energy and knows that's part of the future of the economy of the state of California. For Assemblyman Pérez, since his election, he's always talked about the greening of the economy. As Mr. Noble likes to say, there is no better place on the planet in the state of California, the latitude, than where we are today. So a special thanks to all of them.

And then, of course, it comes down to local jurisdictions coming together, working together to create jobs. So I'm going to talk about the innovation hub and I want to announce again that this is a collaboration between the city of Cathedral City -- and I believe we have Mayor DeRosa here somewhere, Mayor DeRosa from Cathedral City back here. (Applause) The city of Desert Hot Springs, where we have three councilmembers; Mayor pro Tem Scott Matas, Russell Betts and Karl Baker. And then from the Palm Springs City Council we've got Councilwoman Ginny Foat, Mayor pro tem Rick Hutcheson and Councilmember Lee Weigel. Those three jurisdictions -- in addition there are two, the representatives from both county supervisors Benoit and Ashley who couldn't be here.

Those three jurisdictions came together to submit a proposal to the state for the new Innovation iHub Program, which goes hand in hand with job creation, OK? Just three weeks ago Secretary Bonner sent to the city of Palm Springs and our jurisdictions a letter identifying this area right here as the future of innovation for clean tech renewable energy in the state of California. Only six were picked, two from Southern California, so one right, right here.

As Fred has mentioned many times, it makes no sense that these are being manufactured somewhere else. The technology has gotten so good, OK, we should have solar parks here. This is all zoned for industrial manufacturing. There's no reason that they shouldn't be located here. And this sales tax, OK, credit, will go a long ways to ensuring that that happens right here in the wonderful state of California. We all know, OK, that there are incredible amounts of venture capital money in this state funding all sorts of different projects, OK? There is no reason that they shouldn't be incubating the companies in our innovation hub, 50 by five years, right here in Palm Springs, Cathedral City, Desert Hot Springs and the rest of the Coachella Valley. This is the spot.

We want to keep that money in California, we want to create those jobs in California and export that to the rest of the country. California has always been a leader and innovator, entrepreneurship. This bill with the innovation hub goes hand in hand.

So it's a delight to be here and we'll look forward to answering some questions. So thank you again, Governor, for being here and talking about job creation in the state of California. Thank you. (Applause)

I believe now it's Chamber of Commerce Executive Director Mr. Pivinski.
 
MR. PIVINSKI

Thank you. I really appreciate the opportunity to be here today. The Chamber of Commerce has over 800 members and we are very excited about some of the Governor's proposals. With new hotels coming online in Palm Springs and more in the planning stages, the Chamber sees this proposal as helping us not only create jobs but training those workers entering our workforce. Additionally, streamlining regulations to get projects started sooner will make sure that we don't have long delays while we wait for these new hotels and shopping areas to come into being. Also, with the Valley's dedication to renewable energy and other clean technology projects, the Chamber is very excited about a sales tax exemption on the purchase of manufacturing equipment.

We wholeheartedly support the Governor's initiative and we hope that we can do everything we can to make it come to a reality. Thank you.

And now (Applause) Secretary Bradshaw.
 
SECRETARY BRADSHAW

Thank you. And thank you again for hosting us in the Coachella Valley. We love it here, the scenery is beautiful. I've traveled with the Governor enough to know there are at least two things other than a great cigar that really make him excited and that's the thought of great job creation and tying it to the green economy. He has been, from day one, focused on jobs and also making sure that the next industry sector, the natural successor to biotech and high tech, clean tech continues to thrive in California.

California is the leader in clean tech. we have the largest number of businesses, more than 12,000. We have the largest number of employees in that sector, almost 160,000. The Governor mentioned that we attract 57 percent of the venture capital to California and we have the largest number of patents. And we got that because we worked hard at it, all of us worked hard at it.

Clean tech has some advantages over both biotech and high tech to become a major economic driver in California. First of all, rather than being concentrated just in a couple regions in this state, clean tech and the green economy are statewide. It takes advantage of each region's natural assets, wind, for example and allows not only clean energy but economic growth in every region in California. And unlike some industry sectors, clean tech is the entire career ladder, not just at one end but the entire spectrum, from solar installation to electric battery manufacturing to, as the Governor has said, research on biofuels, turning diesel from algae and also new conversions of wind turbines using new technology. All of that happens throughout the state.

But most importantly for California, clean jobs are growing faster and have grown faster than any other job sector, or even the jobs in total, for more than 15 years. Between 1995 and 2008 California's clean jobs grew at 36 percent when the overall jobs grew at 13 percent -- 13 percent was a great clip, 36 is phenomenal. And even though those tough years of 2007-08, clean jobs continued to grow at five percent while overall jobs dropped one percent.

The Governor has known from the beginning -- and he's tried to educate us all and he is succeeding -- that our economic future is also tied to the green economy, that the recovery is in a lot of areas hinging on the green economy. That his proposals, his job proposal not only wants to ensure California's number one position in the green tech sector but also to make sure that all the things that come from providing good air also provide great jobs and there is a great future in the green economy for every community in the state of California. And we're very excited because all five of his proposals act as incentives to create jobs in California, get employers back into the job market and to make sure California remains number one in innovation and number one in the green economy.

So with that, I'm going to turn it back to the Governor. (Applause)
 
GOVERNOR SCHWARZENEGGER

Thank you very much, Vickie.
 
MR. NOBLE

May I make a presentation to you, sir? We don't give these to just anyone. (Laughter)
 
GOVERNOR SCHWARZENEGGER

I guess not.
 
MR. NOBLE

This is a Wintec hat. Wear it with comfort.
 
GOVERNOR SCHWARZENEGGER

Well, thank you very much. And I hope this doesn't cost more than $300, otherwise I have to -- (Laughter) I have to report it otherwise.
 
MR. NOBLE

They're made by a nonprofit group down the street, actually.
 
GOVERNOR SCHWARZENEGGER

OK. Well, very nice. I appreciate that very much, thank you.

I think that you have heard every angle about job creation and why it is important to keep jobs here and to create jobs here. But if there are any questions about any of that, feel free to ask me or anyone else that is here, in case there was something not clear. Yes?
 
QUESTIONS/ANSWERS
 
QUESTION: Aside from the incentives offered in the package, what else specifically will be offered to innovation hubs like Palm Springs?

GOVERNOR: Well, I think that the most important thing is that we right now look at this, you know, because if the legislature passes this -- and also what is important is the legislature has their own ideas of job creation. Democrats have ideas, Republicans have ideas. What I want them to do is to come to our office, negotiate, put all of those ideas together and create jobs. That's the most important thing, because I think with a little push and with a little incentive we really can get people to work, just as you have seen here, the examples that we just mentioned.

And I think what is important here is, as the mayor was saying, there is no reason why we shouldn't have all the action right here, why we shouldn't be producing the windmills right here. Why do we produce it overseas?

Why shouldn't we have this also be filled with solar farms and having solar all over this place? Look at the natural resources we have. We have the sun, an endless amount of wind and sun. That creates energy and it does not make us dependent on foreign oil and it does not create global warming, so it is natural. So why not here? This is a perfect place.

So we have to do everything we can with the permitting to make sure that we are not in our own way, because sometimes we with our permitting process -- and I have been trying to get a power line going for six years. It takes in California sometimes too long to get the permits, so we are derailing ourselves. This has nothing to do with the global economy being down; these are self-inflicted wounds. What we as a state have to do and what the legislature and the Governor's Office has to do, is work together to eliminate the obstacles that we have created over the years, which is labor laws, the most tough labor laws in the nation we have here in this state and it kills jobs. So we have to go -- or the permitting process. We have, for instance part of my package is to speed up the permitting process. Not to circumvent CEQA, we don't want to circumvent CEQA or to not to do the environmental studies but we want to go and do it faster. There's no reason that we have to hold it up and with lawsuits hold it up more and then all of a sudden it takes 10 years to get the permits.

So we have to just speed all this up and that's how you create jobs. There is a chance for us to go and push this through. I think now we have a new speaker, Speaker Pérez, which is, of course -- are you related to --

ASSEMBLYMEMBER PÉREZ: No, we're not related.

GOVERNOR: Not related but it happens to be the same name. So whenever there is a change in leadership like that, you know, then always everything comes to a grinding halt for a little bit and then it just picks up again. So I hope now with him being sworn in that the whole thing will pick up and we get the action going in Sacramento.

Any other questions? Yeah, please.

QUESTION: You were talking about streamlining things and I know we already have the MOU for the solar in the east valley. But would the protection from frivolous lawsuits apply to those projects?

GOVERNOR: Well, any project that we can move forward. We've got to go and find a way so that we do the study on the environmental studies and that we approve them and then get the permits and start building. That's what we want to do, rather than having, you know, people try to sue because they want to just, you know, stop you because -- the way the laws are written with CEQA, CEQA is meant to do really great things for California and for the environment. But the language was written in such a way that it can also be abused. And I think that is what is wrong here with our state's kind of environmental process. We like to do environmental studies, we like to go and protect the environment but we'd like to cut down on the amount of abuses of the laws that we have in place.

QUESTION: Are you satisfied with the progress on the MOU projects, the fast-track projects?

GOVERNOR: There are some that are fast tracked. But I just, you know, to me everything is too slow. You know, anything that has to do with the public process is too slow because anytime you don't move fast you lose jobs and you lose opportunities. And I'd like to move as fast as we do in the private sector also in the public sector. There's no reason why we can't do that.

All right? Yeah, there's one more. Yeah?

QUESTION: How much longer before the DMV is put in the private sector and get rid of some these problems with the delays at the DMV? That's on the table, isn't it, the DMV is for sale to the private sector, other than driver's license?

GOVERNOR: No, I don't think -- I think that when you see delays -- you know, we have the furlough right now, the three-day furloughs, so there are some people that are not working certain days and therefore -- because of our budget problem, because we have a $20 billion shortfall this year, we had a $60 billion shortfall last year. So these are enormous cuts that we had to make. And also, with the public employees we had to go and say OK, we've got to have three days of furloughs where you don't work, unpaid vacation and this is why you will see slowdowns in various different departments, if it is in the unemployment department, if it is DMV or in other areas. And so we just have to get the economy back as quickly as possible and this is why what we are all talking about here is so important, because the only way you get the economy back is by creating the jobs and making everyone again work.

And you know, it's almost kind of déjà vu for me, because when I came into office in 2003 we had a huge unemployment problem and then when I came into office we created a million jobs. And then we were hit now with a second recession and that happened to be the biggest recession since the big depression and now we lost those million jobs. So now we've got to go and rebuild those millions jobs as quickly as possible again. That's, I think, what we have to do. But we need everyone's help and so I hope the legislature, Democrats and Republicans work together and work together on this.

And Mayor, do you want to answer some question about the Coachella here, about this area and about the job creation?

MAYOR POUGNET: Yeah. I think, you know, when we're talking about the innovation hub and the question on the innovation hub, clearly the parallel to this initiative, jobs initiative, is clear, clear, direct impact on the companies that we'll be incubating here. Trust me, I met with the first company yesterday about the possibility of coming to Palm Springs. Adding this onto it -- OK, this wasn't necessarily a manufacturing job but you add that, OK, as Fred mentioned, to the piece of the puzzle that always comes together to create the jobs, it's explosive. It is a huge, huge opportunity. So they will go hand in hand. You know, the innovation hub is another tool in the toolbox of the Governor's plan to create jobs. So we're excited about it. They will work hand in hand to create -- California's the leader in clean tech, as the Secretary mentioned and we should always remain so. So it will work.

Good. Thank you. Thank you, everybody. Have a good day.