Governor Signs $10,000 Homebuyer Tax Credit Legislation

Governor Signs $10,000 Homebuyer Tax Credit Legislation

SUPERVISOR POOCHIGIAN:
Good afternoon. My name is Debbie Poochigian, I'm Fresno County Supervisor representing District 5, the eastern portion of the county. Happy to be here on the west side, back close to where I grew up, to welcome back the Governor to Fresno County but in particular to welcome you to La Ventana, a beautiful new development by Granville Homes. Thank you, everyone, for coming this afternoon.

I'd like to take one minute to introduce the people up here for you, starting off with Assemblymember Anna Marie Caballero right here; Senator Roy Ashburn; John Young, Chairman of the California Building Industry Association; Jose Plascencia, president of the Central California Hispanic Chamber of Commerce; Secretary Victoria Bradshaw -- come on -- California Labor and Workforce Development Agency; Mike Prandini, the executive director of the Fresno/Madera Building Industry Association; Brad Diede, executive director of the California Professional Association of Specialty Contractors; Darius Assemi, president, Granville Homes and commissioner of the California Transportation Commission and chairman of the Fresno/Madera BIA; George Mees, president of the Fresno Association of Realtors; Scott Miller, vice president, Greater Fresno Area Chamber of Commerce; and Ham Shirvani, president, Cal State University, Stanislaus -- I almost said Fresno -- Stanislaus. (Laughter)

Welcome, everyone. There is a well-known proverb or a curse that says, "May we live in interesting times." The origin of the phrase is not certain but it certainly reflects the reality that confronts us in the San Joaquin Valley, in California and throughout our nation. As we look for ways of meeting the biggest economic challenges we've faced in decades, we must do so with common sense, clear thinking and grit.

Today we have with us a man who, while faced with great challenges and clashes of ideas about how to deal with them, remains keenly focused on solving problems. Never a quitter, Governor Schwarzenegger always meets reality with his signature optimism. The American Dream is about opportunity. Our Governor and many of us here today have been the beneficiaries of that dream. He knows, appreciates and preaches it. The Governor is here to share with us special news about a program that's intended to improve our economic condition while allowing more people, in these most interesting times, to realize the American Dream. Please join me in welcoming Governor Arnold Schwarzenegger. (Applause)

GOVERNOR SCHWARZENEGGER:
Well, thank you very much, Supervisor Poochigian, for your nice introduction. And I also just want to say thank you again to Senator Ashburn for the great work that he has been doing and also to Assemblywoman Caballero. And John Young from the Building Industry Association, I want to thank him also for the great leadership. And José Plascencia, president of the Central California Hispanic Chamber and Darius Assemi, president of Granville Homes and everybody here. So a big, big thank you to all of them.

And I, of course, I'm here today with the good news. As you know, that in my State of the State Address I talked about the importance of job creation and I talked about how important it is for us to make this our number one priority, jobs, jobs, jobs and I laid out a job creation package and asked the legislators to act on them. And I'm very happy to say that they acted on some of those legislations, on some of those bills and one of them we are about to sign here today.

We're talking here about Senator Roy Ashburn's and Assemblywoman Ana Caballero's AB 183, which is to extend the Homebuyer's Tax Credit by $200 million. So there will be $100 million -- (Applause) So I want to thank Senator Ashburn and Assemblywoman Ana Caballero for their hard work. It's really extraordinary to see this action in Sacramento because here are Democrats and Republicans that came together and I want to thank the legislature in general for their action on this because it's so rare when both of the parties come together. But I think that both of them have recognized that the job creation is extremely important.

Now, the Franchise Tax Board will have $100 million available for homebuyers that want to move into a new home that has never been occupied. There also will be another $100 million available for homebuyers that will move into in an existing home. And this is going to help, of course, the building industry and it will create a lot of jobs, because as you know, as we sell those homes, then you have to build new homes. And when you build new homes that means that you will have to hire carpenters, cement workers, electricians, plumbers and roofers and the list goes on and on and that is what creates jobs.

And this is exactly what we want to do. We want to help here the homebuyers but we also want to help the people that need jobs. We have a 12.5 percent unemployment rate in California, so it is extremely important we get those people to work, because this is the only way that we get our economy back. So I'm very happy about this particular bill.

And also, yesterday I signed another job creation bill which is to exempt the green technology manufacturing equipment from the sales tax. The state of California was one out of three states in the whole United States that is taxing this manufacturing equipment. And so we passed that legislation, the legislators did a great job with that also and we signed that bill yesterday. So that also will create a tremendous amount of new jobs in the green sector.

So those are the kind of things that we want to do and I will continue pressing for more job creation bills. I will continue working after Easter with the legislators together to really stimulate the economy, because we are the eighth largest economy in the world and it would be absolutely insane for us to just sit back and wait for the world economy to come back. I think we can do much better than that. We can take the initiative, we can go out there and push and create those jobs and this is exactly what we are doing.

So again I want to say thank you very much to the legislators. And now I would like to bring out Assemblywoman Caballero to say a few words about that. And again, I want to say congratulations and thank you very much for the great work. Please welcome her. (Applause)

ASSEMBLYMEMBER CABALLERO:
Thank you very much, Governor. First, let me thank the Governor for his tenacity and his clear thinking about getting our state back on the right track by developing jobs. The Governor has been absolutely clear about this for a long time and but for his hard work in this area it would have been very, very difficult for us to get this through the legislature.

I also want to thank my co-author Senator Ashburn, who has been great to work with. We've been working on a bipartisan basis on a number of issues but this one was particularly important to us for three reasons. We had three goals in terms of working on this tax credit:

* One is, we recognized that it was really important to get the current inventory of homes sold so that we could get them back on the tax rolls for local government, so that we could get families in them. And to provide an incentive for people to get off the fence and move into becoming purchasers was very, very important for us. So we're going to see hundreds of Californians take advantage of this credit and be able to move themselves and their families into homes.

* Second of all, we recognized that it was really important to get Californians back to work. And as you see as you drive around the neighborhood, you get an opportunity to see the beginnings of that because, as the Governor said, once you sell the existing homes then you can start reinvesting back into the economy and building new homes and other kinds of buildings and that's very, very important.

* But third, I as a chair of Local Government had a number of visits from city councilmembers and county board of supervisors who were very concerned about vacant homes in their neighborhoods because they were creating an attractive nuisance, vandalism and a real public safety issue for many of the neighborhoods. Homes were being left and pools were full of water and they bring mosquitoes and all that kind of stuff. And so we were hearing that we needed to get these -- we needed a solution and the best solution was to get them sold.

And so I'm very, very excited to be here today because we can visit with the folks that are back at work and really proud of the fact that we were able to work in a bipartisan basis to be able to get this bill done. It's how things should be done.

And I'm very, very pleased to welcome to this podium my good friend Senator Roy Ashburn. (Applause)

SENATOR ASHBURN:
Thank you very much, Governor Schwarzenegger and Assemblymember Caballero, my partner in this effort and Supervisor Debbie Poochigian and all of our distinguished guests here.

This is a great day not just for our community here but for all of California. As you may have heard, we've got budget difficulties not just in Sacramento but all across the state. And budget difficulties are tied to a very real condition and that is that there are not enough jobs for the people of California. Governor Schwarzenegger, who is very modest about these things, in his State of the State message said, "Jobs, jobs, jobs." So as legislators, we're dealing with the budget. He's been insisting that we must also be talking about job creation, putting Californians back to work.

When people are working they're able to share in the California Dream and their dollars pulsate through the system bringing more revenues to Sacramento and to our local governments and solving our government budget problems at the same time that families are able to enjoy the bounty of our great country. They're in a better condition to pay that mortgage and buy the groceries and put gas in the car and do all the things that families do.

And it's tough times out there, let's make no mistake about that. It's tough times. So Governor Schwarzenegger deserves a tremendous amount of credit for pushing and prodding and encouraging. And when people say, "You know those politicians, Democrats and Republicans, they can't ever get together to do something," we did and the Governor is going to sign that bill in just a couple of minutes.

I want to especially thank our private-sector partners, especially the Building Industry Association, representing builders throughout the state, the people who work so hard in constructing the homes that are the American Dream. And the leader of that organization just happens to be here. It's my pleasure to welcome and to introduce to you John Young. (Applause)

MR. YOUNG:
Thank you, Senator Ashburn. You know, I'm an excited man. I get to go back to work and hire people. It's very exciting. In fact, my remarks will be brief because I want the Governor to sign this bill as soon as possible. (Laughter)

You know, without the Governor and all the lawmakers, this wouldn't have been possible. AB 183, which we know as the Homebuyer's Tax Credit, is going to be signed today and go into law and that will get buyers off the fence and into our models that we build and sell homes. And again, we're able to hire more new people to build our homes. And they're not just the people that you see on the street today. Think of the architects, the civil engineers, the salespeople that sell our homes, the architects, the furniture, the model decoration. There are all kinds of people that are involved in bringing these homes to market.

I also wanted to thank -- because we've been working on this effort for many weeks and of course the Governor has pushed it very hard -- I wanted to give special thanks to Assemblymember Anna Caballero, Senator Roy Ashburn, Speaker John Pérez, pro Tem Darrell Steinberg, Senator Dennis Hollingsworth, Assemblymember Martin Garrick and CBI -- that stands for California Building Industry Association -- is very happy today. And again, we're going to get back to work and hire more people.

And now it's my pleasure to introduce the president of the Central California Hispanic Chamber of Commerce, José Plascencia. (Applause)

MR. PLASCENCIA:
Well, thank you, John. If there is a day that epitomizes the beauty, the strength and the diversity of our beautiful Central San Joaquin Valley, it's this wonderful spring day today. And like this wonderful spring day that we are so happy and enjoy, our local business community is pleased that the legislature agreed to extend the tax credit for first-time homebuyers. This Homebuyer's Tax Credit is creating jobs and it will create jobs and encourage more people to invest in their local housing market. We need this type of leadership in Sacramento to push these initiatives and these bills along. Once again, this is a job creator and it will help everyone in the Valley to get back to work. We need more of this type of leadership.

Now, investing in homes has a very big ripple effect on our local economy. Buying a home usually means hiring the contractors, as the Governor mentioned, who paint the home, hiring the plumber to put the plumbing in, a builder to put the fence. But it even has a larger ripple effect than that. It helps the ice cream vendor travel down a cul-de-sac like this and sell those tasty treats to our children where we make our home.

GOVERNOR SCHWARZENEGGER:
Obesity.

MR. PLASCENCIA:

There you go, obesity. (Laughter) Governor, always with the heath, always with the health, aren't you. I'm telling you. Well, you know, this all helps. It all helps. You know, greasing the wheels of our local economy is exactly what this home buying credit will do.

And turning around our local economy, as well as our state economy, is kind of like turning around the great big Queen Mary cruise ship on the open seas. You can't do it on a dime. It takes incremental steps, it takes right decisions like these, it takes collaboration and bipartisan agreement. And this extending the homebuyer's credit is a large component in turning around this Queen Mary of an economy and I'd like to commend the Governor and his staff in working with the legislature to make this happen. So turning around the eighth largest economy in the world, these incremental betterments impact all participants in this economy and this home buying credit is helping us turn the Queen Mary economy of California back to a safer and more prosperous harbor.

Now, ladies and gentlemen, let's get to the moment we've all been waiting for and that's signing the legislation.

GOVERNOR SCHWARZENEGGER:
There's one more.

MR. PLASCENCIA:

We have one more person? Very good. Sorry about that, it's not on here.

MR. ASSEMI:
Governor and the members of the press, please take a look at the empty lots behind you. As a result of this, the Governor's signature, these lots -- you come back in a few weeks we'll be starting with new construction, putting people back to work immediately.

Governor, on behalf of the Central California Fresno/Madera BIA and the CBIA and all the people that you're going to put back to work and Senator Ashburn and Assemblymember Caballero, thank you so much.

GOVERNOR SCHWARZENEGGER:
Absolutely. Thank you. (Applause)

SECRETARY BRADSHAW:
We're going to ask everybody to move over here. The Governor is going to be signing five copies of the bill and the first copy will go to Assemblymember Caballero. (Applause)

The second copy will be going to Senator Ashburn. (Applause)

The third copy will be going to Supervisor Poochigian. (Applause)

The fourth copy of the bill will be going to John Young. (Applause)

And the fifth copy of the bill will be going to José Plascencia. (Applause)

Congratulations. Now the Governor, if you have any questions.

QUESTIONS/ANSWERS:

GOVERNOR:

All right. Any questions about this?

QUESTION:

Real quickly, Governor, as much as you talk about saving money in the state these days, how important is it to spend money wisely in order to get out of the (Inaudible)

GOVERNOR:

I think that if you are in an economic crunch like we are in or if you are having a booming economy, in either case it is extremely important for the state to act responsibly fiscally and to only spend money that we have.

And it's also very important for the state to think always about a rainy day fund and this is why it is extremely important that now, after Easter vacation when we come back, to talk about reforming our budget system, because we should never, ever be caught again as state with no rainy day fund, no fund set aside for a downturn in the economy. This is now the fifth time in a row that the state in the last three decades has gone through that; under Deukmejian, where major cuts had to be made and tax increases, under Governor Wilson, under Governor Davis, now with me again. For decades that has been going on and this state has not made a commitment to have a rainy day fund. I think we must put aside 12.5 percent of our revenues and put it aside, just for a rainy day. That's the number one thing that has to happen.

The second thing that has to happen -- and we're going to work on that with the legislature -- and that is to do tax reform. Our tax system is too volatile. We are counting too much on income tax; 53 percent of our total revenues come from income tax. That's the highest of any state. And so when we have an economic downturn, even a slight downturn, then all of a sudden, because people invest on Wall Street, so we are now relying on Wall Street, kind of. As soon as Wall Street takes a crash like this last one, went from 14,000 to 6,500, so that was an enormous hit. So we lost 60 percent of our income tax revenues, so that's a tremendous hit. That's why we had in one year a $60 billion deficit and this year a $20 billion deficit.

So we must fix those things. It is OK if you get hit with those kinds of things once but you don't want to do it over and over again and take our children on this rollercoaster ride with their education funding and with our health care funding, our prison funding, our law enforcement funding. All of those things are on a rollercoaster ride. So we have to do better. So it's very important that we are responsible, that we act on that and it should never, ever happen again. That's the important thing.

Any other questions? Thank you very much, all of you, for being here today. I just want to say that the last time we were here this house behind us was under construction and now we're here two months later and we are signing the bill. That particular thing that I've proposed, the job creation package, is done and the house is done, so this is perfect timing.

So I just want to say congratulations to the homebuilders. Thank you to the hardhats, the people that are working up there, that we talk about, creating the homes. We talk about building more homes but they are the ones that actually make that wish become a reality. Let's give a big hand to the hardworking people that are working on these homes. (Applause)

Thank you very much. Thank you. (Applause)

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