You’d think the priority of the Chair of the Assembly Committee on Jobs, Economic Development and the Economy would be creating and protecting jobs. You’d never know it after a committee vote today on AB 1278. By voting against AB 1278, Committee Chair V. Manuel Perez stalled important legislation that would have prevented companies from laying off workers to claim big tax breaks as part of the flawed Enterprise Zone program. The bill, authored by Assemblymember Jerry Hill (D-San Mateo), sought to protect jobs in today’s harsh economic environment while helping end the practice of rewarding companies that lay off workers with taxpayer subsidies. The bill failed to get out of the committee on a 3-3 vote. Perez joined the two Republicans on the committee in voting against the bill.
California Labor Federation Executive Secretary-Treasurer Art Pulaski:
At a time when we’re hovering at 12 percent unemployment, the state should not be in the business of giving fat tax breaks to companies that are eliminating jobs. It’s hugely disappointing that the Jobs Committee Chair has chosen to side with big corporations over workers’ jobs.
Prior to today’s committee vote, workers from VWR, a medical supplies facility in Brisbane, testified about the economic hardship they’ll feel as a result of the company’s decision to move its facility to Visalia, which is located in an Enterprise Zone. As a result of the move, VWR is laying off 150 workers in Brisbane and stands to receive a $37,000 tax credit for each worker they hire at lower wages in Visalia. The company has been a vital part of the community of Brisbane since the Gold Rush.
Joan Beighley, a member of Teamsters Local 853, and 14-year worker at VWR:
What’s outrageous is that they’re using our taxpayer dollars to kill our own jobs.
Over the last several months, State Treasurer Bill Lockyer, Congresswoman Jackie Speier and a host of elected officials, community leaders, unions, taxpayer advocates and others have sharply criticized the Enterprise Zone program for being a waste of precious taxpayer funds and incentivizing the destruction of jobs.
The Public Policy Institute of California released a study in 2009 finding that Enterprise Zones have “no statistically significant effect on either employment levels or employment growth rates.” In addition, the California Legislative Analyst’s Office has issued several reports concluding that the Enterprise Zone program does not create jobs, finding that the program is “expensive and not strongly effective.”
Gov. Brown sought to end the flawed program as part of this year’s budget, but his efforts were blocked in the legislature.
It makes absolutely no sense for the state to be giving hundreds of thousands of dollars to companies that displace workers. We should be providing incentives for companies to create new jobs. Instead, Assemblymember Perez and the Republicans on the committee sold out workers so they could continue giving big corporations handouts at taxpayer expense. During a severe recession, that’s a chilling message to send to California families.
Despite this vote, there’s a growing urgency to end the failed Enterprise Zone program and invest in real job creation programs. It’s time we started taking job creation seriously in this state instead of doling out billions each year to big corporations that aren’t doing their part to help our economy. Learn more about Enterprise Zones.