08/20/2010 02:33 pm ET Updated May 25, 2011

Schwarzenegger Touts His Anti-Tax Stance, Citing Grim Jobs Report

With California's unemployment rate stalled at 12.3 percent, Gov. Arnold Schwarzenegger is using a report issued today by the California Employment Development Department, to tout his policy of slashing taxes.

California's unemployment rate of 12.3 percent was unchanged from June to July, and one half-percentage point higher than it was a year ago. The national unemployment rate, which hovers at 9.5 percent, also remained unchanged from June to July.

The state is in a fix: With a deficit over $19 billion, furloughs for 144,000 state workers going into effect today, and officials threatening to pay state bills with IOUs in as little as two week's time, something has to be done. And Schwarzenegger has long favored spending cuts over tax increases, putting him at odds with the Democrat-controlled state legislature.

The state is now 51 days into the fiscal year with no budget in sight, and little evidence that a consensus will be reached soon.

"In order for California to experience a full recovery, there must be robust hiring in the private sector. That is why I have been so adamant in my opposition to tax increases -- both because additional burdens on employers will stymie growth and because we shouldn't penalize private sector employment in order to subsidize public sector wages and retirement benefits," said Schwarzenegger in a statement Friday.

Job losses in July were primarily in government jobs, while the private sector saw a jump of 13,700 jobs. The government job dip was largely due to temporary federal census jobs drawing to a close.

Still the governor used the opportunity to tout his view of the private sector: a job creation engine fueled by lower taxes.

"As days continue to pass without a budget," Schwarzenegger said, "the state gets closer to issuing IOUs and is already holding up state bond funding for construction projects -- threatening thousands of California jobs. This is unacceptable. The legislature must pass a responsible budget without tax increases..."