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Schwarzenegger Highlights Homebuyer Tax Credit Proposal in Jobs Initiative

ASSEMBLYMEMBER TRAN:

I'm not on your agenda.

GOVERNOR SCHWARZENEGGER:

Don't worry about the agenda. (Laughter)

ASSEMBLYMEMBER TRAN:

Well, thank you, Governor. You got my vote and you have me as a co-author for the legislation, of course, for the credit, the tax exemption for the house building. And it's very important that we work together as a state to bring the state and the people out of this economy as we go into 2010 and 2011. And definitely I will talk to my leadership and caucus members again as we go through the state and push through the legislation that's needed so that the people of California will have the jobs and, of course, the construction as we see here this morning, continue on. So thank you again for the opportunity.

GOVERNOR SCHWARZENEGGER:

Absolutely, thanks very much. Thank you. (Applause)

Thank you very much. And of course I always like to have the legislators with me - one of them, two of them, 10 of them - because, you know, the way it works is that the governor makes proposals and he recommends things at the State of the State Address but then you need the legislature to go, introduce the bills and to go and vote on those bills and send it down to our desk.

So that's what I'm waiting for, that's the process that I'm waiting for. We have made the proposal more than two months ago, and we want now the legislators to create that action. So I'm glad of what you said, to go back there and to inspire them and to tell them to vote on this, because as I said, inaction is no option. We cannot wait for the world economy to slowly come back. That's not our style. We've got to create the action here in California; we've got to come up with ways of creating those jobs.

And by the way, let's give a big hand to the hardhats back there that are working so hard on those homes, (Applause) because they are the ones that are creating the jobs and they are the ones that are building those homes and making our vision become a reality.

So it's a kind of a team effort and we want to put those people to work so that everyone can go home and have a paycheck because, you know, having a job is not just having a job. It is the money that you make, you can provide for the family, you can afford the education for your kids. You have pride, a sense of belonging and that you're wanted and needed and all those kind of things. That's why all of this is so important.

So I will continue going up and down the state until the legislature acts and sends me a bill down that creates jobs. That's what this is all about.

So if you have any questions about that, please feel free. Yes, please.

QUESTIONS/ANSWERS:

QUESTION: You may have already said this, Governor but what's the price tag for this plan and -

GOVERNOR: Two hundred million dollars. The first one was $100 million, the Homebuyer Tax Credit and that ran out very quickly, it became very popular. We saw home sales go up dramatically during that time but then it ran out. So this is why I'm proposing now $200 million, so that we can extend that homebuyer tax credit and again put people to work.

QUESTION: Can we afford it?

GOVERNOR: Yes, because it's an investment. See, when we put people to work it will have a spillover effect, because then they go pay taxes, they're off the unemployment, you don't have to pay for their unemployment. And they go and they buy things and that money stimulates and that's what gets the economy going. You cannot bring the economy back if people don't have jobs. So that's the way it works. And this is why we have to have, you know, a vision for the future and we've got to go and look at this as an investment for the future of California.

Sure. Yeah, please.

QUESTION: While we're talking about the creation, there are thousands of teachers that are getting their pink slips today. What would be your message for them?

GOVERNOR: Well, I think that these are tough times and there is only so much money to go around. We have a $20 billion deficit this year and we have to make cuts in various different programs. But the important thing is that we are protecting education, we are protecting Proposition 98. And we also increased, actually, funding for higher education, for the universities and community colleges, because that's extremely important.

But you know, when you have a $20 billion deficit it's tough. You've got to make cuts that sometimes you don't want to make, because the key thing for us is to recognize that we have a failed budget system and a failed tax system. That's what does us in, really, in the end. It's not the world economy being down, because our California economy has decreased in activity by 2.8 percent but our revenues dropped by 27 percent.

So we've got to have a better tax system and a budget system where we have a rainy day fund so when our revenues drop that we have enough money available to substitute and to go and afford still the schools, keep the teachers employed and keep also the money flowing to the universities and Cal Grants and all of those kind of programs, things that we had to cut.

Any other questions? Yeah, please.

QUESTION: It sounds like a great program for first-time homebuyers. Is there anything being done to help those who have homes in foreclosure, any programs in place?

GOVERNOR: Not in this particular package, no. But we have, of course, done loan modification programs and so on and on the federal level there is even more action going on. But you know, to have an effect on all of those foreclosures is almost impossible because some people, you know, went too deep into it, didn't put enough money down and then the values dropped.

But I think a lot of banks are giving breaks now and working with their homebuyers, reducing the interest rate or amortizing it over a longer period of time, the loan payments and so on. But, you know, that has been a big, big challenge, to deal with the foreclosure rate.

Thank you very much. Thank you all. Have a good day.