Schwarzenegger to propose spending $500 million for worker training

Reporting from Sacramento — 

Gov. Arnold Schwarzenegger today will lay out plans to spend $500 million on worker training in an effort to create 100,000 jobs, along with other measures to stimulate the economy, as a centerpiece of his policy agenda for his final year in office.

Schwarzenegger is set to announce the proposal this morning in his last State of the State address to lawmakers, in an attempt to stem the bleeding of jobs in a state that had a November unemployment rate of 12.3%.

The new spending to train workers is part of a five-pronged proposal Schwarzenegger is calling the California Jobs Initiative, according to a draft obtained by The Times. It includes legislative proposals to extend a tax credit for first-time home buyers, reduce sales taxes for the green technology sector, limit lawsuits against businesses and make it harder for opponents to block big construction projects by using environmental regulations.

“Improving our economy is really the only long-term solution to our budget crisis,” said Allan Zaremberg, president of the California Chamber of Commerce and an ally of the governor.

He said the package “is not only going to benefit the state’s revenues, but it’s going to accelerate income in the private sector and improve people’s quality of life.”

Approval of these plans by lawmakers is far from certain. The portions of the package relating to environmental laws and class-action lawsuits are likely to draw opposition from Democrats. Those that require new funding may be difficult to realize as the Legislature and Schwarzenegger face a $20-billion budget gap.

Although Schwarzenegger has taken a combative approach in addressing lawmakers in the past, he is expected to praise them this time for working together last year on the budget and for continued cooperation on that issue and other plans, including proposals to change the state’s election and pension system and put an $11-billion water bond on the November ballot.

On Tuesday, he extended an invitation to every state lawmaker to have lunch with him at a restaurant near the Capitol after the speech.

“We can accomplish great things together over the next year, and I want to get that important work started off with a bang,” his invitation said.

In his address, Schwarzenegger is expected to tell lawmakers that the training proposal could give new skills to 140,000 workers, leading to 100,000 jobs. A state board called the Employment Training Panel would spend $200 million over 18 months on contracts with employers or employee associations to train workers. The cost of the training, an average of $1,400 per worker, would be reimbursed after the employee has worked for three months.

The governor will propose an additional $300 million to pay employers $3,000 for every person who, after receiving unemployment benefits, is trained in a job and stays in it for nine months.

Stephen Levy, director and senior economist at the Center for Continuing Study of the California Economy in Palo Alto, said such training would be “a great investment” but that in terms of job creation, it would be more effective if the economy improved and companies could afford to start hiring again.

“I think the incentive will look better in 18 months than it does right now,” Levy said. “There are a lot of trained, unemployed people. No one would train a new construction worker when they could hire a 20-year veteran.”

Schwarzenegger is expected to propose an additional $200 million in tax credits for first-time home buyers, on top of the $100 million that lawmakers approved last year, which is tapped out. The program previously applied only to newly built homes; the governor would let buyers of existing homes receive aid too.

He will propose that lawmakers give him the power to inoculate developers of about 20 large projects from lawsuits over environmental regulations if they have already obtained approval of required plans to address environmental effects.

That is similar to what the governor and lawmakers did in the fall for the City of Industry football stadium project. At the time, lawmakers said they did not intend for that legislation to set a precedent.

Under Schwarzenegger’s new proposal, his administration would select the projects before he leaves office a year from now, and lawmakers could not reject his choices.

He would also give sales tax credits, totaling up to $100 million, to green technology companies such as those that produce solar panels, for purchase of manufacturing equipment. This would bolster the fast-growing sector in California, the governor believes.

And Schwarzenegger will attempt to “eliminate frivolous lawsuits that punish California’s small businesses,” according to his plan. He would set stricter guidelines for filing class-action and product liability lawsuits and cap punitive damage awards, among other changes.

Assembly Speaker Karen Bass (D-Los Angeles) had not seen the plans but said the portions on tort reform and environmental review appeared to be geared more to the governor’s Republican ideology than to the budget or economy. She said she was interested in worker training but would prefer first to restore funds for the training of welfare recipients that Schwarzenegger and lawmakers eliminated last year.

Bass said she would like to extend the home buyers’ credit -- in an ideal world.

“It’s been very positive, but can we afford it right now?” she asked.

“I would also like to restore the funding from foster care, the $80 million that was cut. . . . If those kids fall through the cracks, they cost us so much more down the line.”

michael.rothfeld@latimes.com

Times staff writer Shane Goldmacher, in Sacramento, contributed to this report.