Jobs are becoming the No. 1 economic issue in the Tri-Counties.

As Stephen Nellis reports in the current issue of Pacific Coast Business Times, bigger employers have eliminated at least 1,700 jobs in recent months. Add to that any number of jobs cut at government agencies and nonprofits and you have the ingredients for an extended slowdown.

Part of the cure for a weak jobs environment is stimulus to help fund public sector projects that can put contractors and others in the construction sector to work. And stimulus funding also may generate some jobs in the “green” sector — a grab bag of opportunities that may or may not prove economically viable over the long haul.

But getting the region’s job market back on track won’t happen with federal and “green” jobs alone. It is going to take a concerted effort to create a new class of successful smaller companies. Only through the creation of new enterprises in the private sector can our economy get back on track. Some thoughts:

• Exempt small businesses and startups from capital gains taxes. By applying a nearly 10 percent flat tax on capital gains and dividends, California provides a huge disincentive for small business starts. Carving out an exemption would provide a much needed carrot for creative entrepreneurship.

• Give small businesses a tax holiday for new hires. If we truly are going to fend off a depression-like slump, we’re going to have to provide creative ways for companies to add workers. Temporarily exempting small employers from federal payroll taxes and also California’s draconian regime of unemployment and disability payments would be a start.

• Get regulators off the backs of small companies. City and county governments provide their own burdens for small companies and startups. There are myriad small ways to cut paperwork and speed the process of forming a small business.

• Provide incentives for small-business growth and development. With our big employers either out of business, in bankruptcy or hobbled by a lack of credit, the entire California economy depends on small companies to form, find financing and start to regenerate the state’s economy. There’s just no other way to do it, and every once in a while one of the little guys grows up to be the next HP or Amgen or eBay. These days, California is in danger of falling far behind in the race to produce the next technology superstar.

• Resolve California’s budget gridlock. If the private sector is bleeding jobs this is not the time for state, county and city governments to be undergoing extended furloughs and trying to purchase goods and services with IOUs.

Sensible reform must come to the entire budget process, and government must be re-engineered to serve smaller companies, not use the private sector as a piggybank that can be robbed time and time again to serve the needs of government.

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