SACRAMENTO — California would get a boost under President Barack Obama's jobs proposal to cut taxes and increase spending, but it will not be enough to solve all the state's unemployment and budget problems.
Stephen Levy, senior economist at the Center for the Continuing Study of the California Economy in Palo Alto, said he would have liked to see a larger package for a state with 12 percent unemployment, the second highest in the nation. Obama's plan released this week calls for about $447 billion, about half as much as the 2009 federal stimulus program.
"I like the plan. I would have liked more," Levy said Friday.
According to the administration, California would get more than $13 million to prevent layoffs of teachers and public safety workers, modernize schools and community colleges, and build highways and public transit. It would provide an estimated $4 billion to support 51,500 construction jobs, $3.6 billion to support up to 37,300 teachers and first responders, and $2.8 billion on school upgrades for as many as 36,600 jobs.
The president proposed changes to unemployment insurance, which could help as many as 1 million long-term unemployed Californians. Obama introduced a new "Pathways Back to Work Fund" to provide low income youths and adults with job training.
The program could help 19,800 adults and 58,600 young people in California.
"It's a no-brainer: Congress should pass the bill. Now," said Gov. Jerry Brown, a Democrat.
The jobs plan also calls for cutting the payroll tax in half to 3.1 percent for employers for the first $5 million in wages, which could benefit an estimated 710,000 businesses in California.
The jobs plan would extend the worker payroll tax cut passed last December. By cutting that tax in half next year, a typical working California family with a median income of about $56,000 would get a tax cut of about $1,740.
Jobs and the economy loom over the state's finances. The budget approved by the Legislature's Democratic majority in late June assumed the economic recovery would bring in $4 billion more than projected early in 2011. If that assumption proves wrong, it would trigger billions in additional cuts to schools, universities and other government services.
In July, the number of people unemployed in California was 2,167,000 — up by 34,000 over the month.
Although Obama's jobs package does good things for the state, it's not clear it will help the state with its overall economy, said Christopher Thornberg, a founding partner with Beacon Economics in Los Angeles.
He points out that while the jobs package would boost consumer spending in California by putting more cash into people's pockets and keeping teachers and construction workers employed, it could translate to consumer production outside of California.
"The point of stimulus is to stimulate production," Thornberg said.
He said the job training program will need to be monitored. And he would have liked to hear the president commit to speeding up highway and transit projects so that infrastructure spending can be put to work faster. He said Obama's first federal stimulus program is still doling out infrastructure projects.