Brown: ‘We Celebrate Small Victories’

Jerry Brown
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This week Gov. Jerry Brown gave a thoughtful, smart -- and decidedly strange press conference -- that resembled the sort of event that governors put on when they've made a deal to pass legislation, even though no such deal had been made.

Brown's press conference announced that he had Democratic and Republican support for a bill changing corporate taxation -- but only in the Assembly.

Senate Republicans still oppose it, though Brown was hoping to show momentum that would change that.

"We celebrate small victories," Brown said when asked why he was bothering with a press conference.

The policy he's pursuing -- eliminating the choice corporations had in how they calculate their corporate taxes -- makes sense, according to the non-partisan Legislative Analyst's Office.

By having one corporate tax formula, the theory is that California-based companies will have more incentives to grow here.

Out-of-state companies will pay more in California taxes, and the Brown-backed legislation will turn that money into incentives for hiring and manufacturing in the state.

But the jobs impact of this policy is minimal -- even though this corporate tax change is being sold as a jobs bill.

Asked point-blank how changing this formula would create jobs, Brown answered that it would prevent the destruction of jobs in California -- a worthy goal, but not the same thing.

Brown then explained -- honestly but frustratingly -- that it was difficult to do much given the relatively small amount of money being talked about.

The higher corporate tax -- and the resulting credits -- will be just $1 billion, in a California economy that approaches $2 trillion. Brown said that true stimulus would have to come from the federal government.

The state's perpetually out-of-balance budget makes even "small victories" like this one difficult.

Revenues on the current year budget are running behind projections. This legislation, which produces more revenue on one hand but then gives it away in another for hiring credits, doesn't help.

It seems that small victories are the best California will be able to do -- until it fixes its budget and governing system in ways that make bigger policy changes possible.

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