State’s Failed Enterprise Zone Program & Tax Subsidies Cost Taxpayers More Than $35 Billion

Commentary:
By Willie L. Pelote, Sr.

Recent news reports concerning lower than expected revenues in California during the month of July have prompted some to ask whether it will be necessary to enact additional budget cuts at the state level.

   According to H.D. Palmer, a spokesperson for Governor Jerry Brown’s Department of Finance, such talk is premature.

   Palmer said that more sales tax receipts have recently come in, and that July is not a big month for revenues.

   Aside from the fact that all of this could have been easily avoided by extending revenues from expiring sales, car, and state income taxes, as the governor initially proposed, this new development presents another opportunity to point out where the real waste in Sacramento lies.

   If further budget cuts are needed, the ax should fall first on the state’s failed enterprise zone program.

   This useless program has been shown to be ineffective at creating jobs and funnels about $500 million of our precious taxpayer dollars annually into the pockets of private businesses through wasteful tax subsidies.

   California could also save about $35 billion immediately by eliminating the practice of paying private contractors to do jobs that civil servants can perform for half the cost.

   None of these actions requires a two-thirds vote.

   These common sense moves would spark a robust economic recovery in California and free up resources to shore up many of those education and health and human service programs that have been shredded over the last several years.

   It’s curious that such common sense measures are considered bold in Sacramento.

   Fortunately, it seems that voters have come to realize that California needs a fair tax system to fund our state’s future.

   A recent Gallup poll found that 66% of Americans support raising taxes on millionaires and billionaires.

   This includes 45% of Republicans and 37% of Tea Party supporters.

   Meanwhile, polls in March and April in California found similar results.

   Almost 80% of California voters supported raising the personal income taxes of individuals making $500,000 or more (78%).

   As we move further into the fiscal year, it would behoove our elected officials to heed the will of the people.

Willie L. Pelote, Sr. is an Assistant Director of the American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO.