New Law Supports Job Creation in California’s Space Industry

​Cross posted with the Los Angeles News Group

Alan-Zaremberg-2009-300x300Recently, Gov. Jerry Brown signed AB 777, by Assemblyman Al Muratsuchi, D-Torrance, a bill that will help ensure that California creates a competitive environment and jobs within the emerging multibillion dollar space travel and supply industry.

California has long been the home of the world’s most advanced aeronautics and aerospace companies. Recently, the industry has seen exciting new innovations and advancement with the privatization of spaceflight transportation.

Historically, the space industry has been within the nearly exclusive purview of the federal government. However, with the government doing less in the areas of space programs and aerospace research, the industry is becoming heavily dependent on the private sector. The space industry is now more closely aligned and reliant on the private sector than ever before. This presents a great opportunity for California’s economy.

Commercial space transportation currently delivers satellites into orbit and cargo to the International Space Station. Companies like SpaceX operate huge manufacturing facilities, pay millions in property taxes each year to fund essential programs like education and health care and, importantly, they create jobs. Speaking of jobs, with an average annual salary of $94,354, employees in California aerospace’s industry are paid nearly twice as much as the average salary in California. Furthermore, the industry is tied to 429,216 jobs here.

A problem the industry faced — that has now been fixed — was with an inconsistent tax classification required by the Los Angeles County assessor, which forced them to pay property taxes they should have been exempted from paying in the first place. Smartly, the Board of Equalization recognized this and opined that the industry qualified for an existing exemption. The Legislature and governor agreed, seizing the opportunity to correct the problem and provide incentives for job creation here.

While tax experts describe the new law as codifying a BOE opinion, it is so much more than that. This bill creates an opportunity for new investment and new innovation in California. Policymakers need to be doing a lot more of this. AB 777 can serve as a model of cooperation for the private sector, legislative and executive branches to identify and knock down obstacles to well-paid middle class jobs for California.

As we look forward, it is clear that the space industry has the potential for exponential growth. Not only does the spaceflight transportation industry create high-pay manufacturing and engineering jobs for thousands of Californians, it draws billions in foreign and domestic investment. When space tourism begins, millions more in revenue will flow into the state in the form of tourism dollars. The growth of this industry is poised not only to be an economic shot in the arm, but also the next phase of California’s innovative prowess.

There is no getting past the fact that California is an expensive state in which to manufacture and do business. As such, it is critical that we help companies control costs and keep expenses as low as possible. Aerospace is an industry that relies on highly skilled and highly paid workers — think rocket scientists. Workers of this caliber are hard to find in other states. Our top-notch universities are key to the success of the industry and the innovation it will need to continue its trajectory skyward.

Aerospace companies have a long, rich history in California. AB 777 will help them add to their story. This new law is an important and encouraging step forward. Job-friendly policies like this will help California come back and come back strong.

Allan Zaremberg is president and CEO of the California Chamber of Commerce.

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