While 400 workers at the Honda Center in Anaheim are trying to figure out how to make ends meet when they all lose their jobs at the end of next month, their employer is set to collect as much as $14.8 million in so-called “job creation” tax credits – and it’s all thanks to the flawed Enterprise Zone program.
According to Voice of OC:
The company, Anaheim Arena Management, can take advantage of the tax break because it is within the city's enterprise zone, a program designed to spur investment and job growth in economically depressed areas. Last week, the workers were given notice, effective June 30, that they will lose their jobs when the company ends its contract with Aramark, the Honda Center's longtime food service concessionaire. On Tuesday, the company announced it will hire 500 new workers for food jobs at the city-owned arena, which is home to the National Hockey League’s Anaheim Ducks.
Not surprisingly, the company made all these decisions behind closed doors, and the workers were kept in the dark. For weeks, they tried to meet with the arena management, but the executives refused to talk with them face to face about what’s going to happen to their quality, union jobs. The workers even took their plea directly to their customers, collecting signatures from Ducks fans in an effort to save their jobs.
Ada Briseno, secretary-treasurer of Unite Here Local 11:
Make no mistake, this is an attempt by Anaheim Arena Management to undercut workers’ rights, reduce wages and cut benefits. And because the Honda Center is in an enterprise zone, they will receive millions in tax breaks for firing the workers and hiring replacements. It is corporate welfare at its worst, and taxpayers will foot the bill.
So let’s review: Under this wasteful mess of a program, a company can fire workers, hire replacement workers at lower wages, and taxpayers are forced to foot the bill. And it probably won't surprise you to learn that the Honda Center workers aren’t the only victims of the EZ program. Workers at VWR, a medical supply company in Brisbane, were laid off en masse in 2010 when their employer chased EZ tax credits to Visalia. And Blue Linx workers in Newark were also left out in the cold when the company relocated to an enterprise zone in Tracy – and to make matters worse, it’s their own taxpayer dollars that are being used to incentivize their employer to fire them and replace them with lower-wage workers.
But the difference between these workers and the Honda Center workers is that the Honda Center isn’t going anywhere — it’s already in an Enterprise Zone, and yet the employer can STILL collect the credits for “new hires” in an EZ, even if they’re replacing “old hires.” We all knew the EZ program is flawed, but what’s happening at the Honda Center is simply outrageous, and it amplifies the need for immediate reform.
The Enterprise Zone program may seem good in theory, but in reality, EZs in California are completely out of control. They’re costing our state $700 million a year (while creating essentially no new jobs), and that figure is increasing by 30% a year as more and more employers exploit the broken EZ system to fire workers, slash wages and collected huge sums of money from the state in the process.
The good news is that Gov. Brown recognizes that EZs need reform, and has proposed a number of important fixes to the EZ program in his new May Budget Revise released this week. Sen. Jerry Hill has also been working to end EZ abuse. His bill, SB 434, would address the most egregious flaws of the program and make sure our tax dollars aren’t going to reward companies who fire and replace their workers to pad their own pockets.
