Wednesday, July 30, 2014
PLACERVILLE, CALIFORNIA
99 CENTS

Crony capitalism

By
From page A4 | February 28, 2014 |

Every day thousands of vehicles drive on Latrobe Road between the highway offramp and White Rock Road. Each day they go by a large building with landscaping and a well-manicured lawn. That large single-story building has been empty for about a decade. It once was home to a manufacturing company that made plastic cases for DVDs.

El Dorado County’s economic development manager and the Board of Supervisors were so eager to get a business with jobs that they reduced the property taxes for the business. Then, after less than two years, the manufacturing operation closed and the building has been empty ever since.

Meantime no one else has gotten a break on their property taxes. Never fear, we have a new Board of Supervisors, a new CAO and new economic development manager. That means more special deals for special people.

Here’s the nickel summary of the policy from the Business Alliance newsletter:

“The policy would use public funds and rewards as encouragements to private companies that ‘benefit the greater public’ and would be monitored. The policy suggests that ‘particular business sectors’ be targeted and included examples such as ‘Advanced Manufacturing,’ ‘Research and Development,’ ‘Alternative Energy/Green Technology’ and ‘Health and Wellness’ sectors.”

We can think of a number of businesses that have recently opened that fit every one of those descriptions. They didn’t need public financial incentives. They either had an entrepreneurial drive or they moved an existing business here because they liked the area and also because they liked living near their work.

“Financial incentives being considered are sale tax reductions and deferred or reduced property taxes for a specific number of years. Other incentives include consideration of assistance with EDC’s permitting process and/or reduction of impact or permit fees,” according to the Business Alliance summary.

Look at those business categories again. Can any of our readers figure out which ones would pay sales tax? Has anyone at the county considered the property tax that goes to the El Dorado Irrigation District before they start reducing property taxes? And why not reduce property taxes and impact fees for any new business anywhere in the county? Why should one specially favored business get special favors from the government? How about directing business to Georgetown where unemployment is 12 percent?

That is our tax money that is being given away. Our road improvement money that is being given away. When government chooses the winners it is called crony capitalism. If anyone thinks this is going to be a clear, policy-driven process they would have guessed wrong. You can be sure individual board members will be pressuring for one favored business friend or another. Green technology? Give us a break. The county might as well be spending our tax dollars on shamrocks and leprechauns.

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