Yes, it was a semi-cheesy, made-for-media event — two state legislators standing in front of a suburban Sacramento strip club to complain for TV cameras that it got corporate tax breaks meant to help the poor.
But Monday’s event featuring state Sens. Jerry Hill, D-San Mateo, and Anthony Cannella, R-Ceres, dealt with a real issue: the evolution of well-intentioned economic development programs into crony capitalism.
Two years ago, Gov. Jerry Brown and the state Legislature did away with local redevelopment agencies that had gone down that path.
A post-World War II program to clean up urban “blight” had morphed into a vehicle by which local politicians could subsidize development projects proposed by those with inside pull.
Redevelopment was, in effect, shifting billions of tax dollars that should have been spent on schools, police patrols, fire protection and other public services into welfare for the wealthy.
City officials screamed when redevelopment was erased, and legislators are busily attempting to resurrect it, albeit under other names. It will be interesting to see whether Brown stays the course. Meanwhile, Brown has also set his sights on enterprise zones, another vehicle that allows local officials to hand out goodies to favored businesses — with the tax benefits, about $750 million a year, coming directly out of the state treasury.
As with redevelopment, there’s a well-oiled machine to defend enterprise zones as boons to the economy, including local officials, businesses that benefit from the tax breaks and “consultants” who advise businesses on how to claim the credits, even retroactively, and take a cut of the action.
Every objective study — those not paid for by the enterprise zoners — has found that the tax breaks have no net positive effect on job growth, sometimes just paying businesses to shed jobs in one locale and create them somewhere else.