Bill Aimed at Luring Plant to Pacoima Is Signed

Gov. George Deukmejian late Tuesday signed a bill establishing a tax break for certain types of printing, a measure supporters say is designed to attract a $150-million printing plant to Pacoima.

Deukmejian last year vetoed a similar bill by Assemblyman Tom McClintock (R-Thousand Oaks), but this year was heavily lobbied by the state’s printing industry and his own Department of Commerce to support the measure, which takes effect Jan. 1.

Under current law, department stores and other businesses that have brochures printed and mailed in the state are subject to the tax. But, when the ads are printed elsewhere and then mailed to California, the transaction is not subject to the state tax.

The new law will exempt printers, including a Wisconsin firm that has expressed an interest in building a plant in Pacoima, from paying the 6% sales and use tax on catalogues and advertising brochures sent through the mail. The bill was introduced by state Sen. Alan Robbins (D-Van Nuys) but was also pushed by McClintock.

Competitive Disadvantage

Supporters of the measure argued that the current system places California printers at a competitive disadvantage.

Richard M. Allen, legislative coordinator for the state Department of Commerce, said his agency supported the measure because, under the current law, “we have seen companies from Eastern states, which have indicated they wanted to come here, locate in Arizona and Nevada.”

Allen predicted that, in the wake of Deukmejian’s action, the Wisconsin firm, Quad / Graphics, will reveal its decision soon.

“I feel the chances of Quad / Graphics coming to California are extremely good,” he said.

In the past, officials of the company have said the Pacoima area is at the top of their list for a site to build a $150-million plant.

No Speculation on Site

Nevertheless, Allen would not speculate about where in the state the plant might be located. “We don’t favor one area of the state over another,” he said.

Quad / Graphics is considering a site inside the 6.7-square-mile Pacoima enterprise zone, in which the state grants tax breaks and other incentives to businesses to hire the unemployed. The new plant would be the fifth for Quad / Graphics and would eventually create 1,200 jobs.

The Robbins bill also had included $300,000 to reimburse local governments for the loss of sales-tax revenues. However, Deukmejian deleted the appropriation.

Deukmejian had until midnight to act on the bill, one of at least 170 he acted on Tuesday.