Thanks for explaining. I guess it's hard for me to think of these things in isolation. Tax revenue is one factor in the equation; employment levels are another.
One thing the state presumably would like to do with the tax revenue is promote job creation. Having 7,000 extra jobs available would bring all sorts of great benefits to California - some of which are easy to quantify, and some of which aren't.
The whole situation reminds me of a little skirmish recently between the San Francisco board of supervisors, and Twitter. Twitter was willing to move its main offices to a slightly run-down section of San Francisco in exchange for some city tax breaks; otherwise, they'd relocate to (I think) Burlingame instead. Twitter was going to have those jobs SOMEWHERE; the only question was whether it was going to be in SF, or somewhere else. And it didn't make economic sense for them to set up shop in SF without the tax breaks.
Providing jobs in an area, as well as the local business benefits of those people spending their salary in that location, was expected to bring enough benefit that the tax breaks were given, and Twitter decided to stay [0]. A lot of people were howling about corporate subsidies, though.
This whole subject is near and dear to my heart. One primary goal with my own startup is to create jobs that help financially support people and their families.
And on that note, back to work ;)
[0] http://venturebeat.com/2011/04/22/twitter-san-francisco/
