CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, AUGUST 25, 2023, OR THEREAFTER
BY THOMAS D. ELIAS
“WHO’S GETTING CALIFORNIA’S
COPIOUS CORPORATE LARGESSE”
In a time of massive criticism of its business climate from both
inside and outside the state, California steadily continues its many policies
of corporate largesse – big handouts to private companies.
Which outfits get the money depends a lot on what a
particular company does and who owns it. That makes these gifts political,
designed to push the agenda of whoever is governor at any moment.
This is nothing unique. Other states do it all the time; in
fact, government handouts in the forms of cash, tax breaks or free land are
some of the driving forces behind California’s loss of about 1 percent of its
populace over the last three years.
When Toyota Motor Co.’s American headquarters and its more
than 6,000 employees moved from the Los Angeles suburb of Torrance to Plano,
Texas, free land and 10 years of tax breaks were at least as big a factor as
the Dallas suburb’s more central location in the nation, even though the
location was all Toyota talked about.
Similar factors were at work when Nissan USA moved from
Carson, south of Los Angeles, to Tennessee. Nevada’s growth also has been
fueled by land and tax giveaways.
But California gives plenty to businesses. There are
minority-owned business grants, often amounting to hundreds of thousands of
dollars each. There are tens of millions of dollars in small business grants
annually, even when the state runs a deficit. There have lately been thousands
of Covid-related grants, many to outfits that retained employees despite vastly
reduced profits during the pandemic. Not to mention tax benefits regularly
given to film and TV producers, which have brought billions of dollars worth of
production back to California from places like Georgia, British Columbia and
North Carolina, which had used tax exemptions to wrest away a lot of California
production.
There is no sign of this phenomenon abating. Just take a look
at the agenda of one recent meeting of the state Energy Commission, whose
members serve at the governor’s pleasure.
Under Republican Gov. Arnold Schwarzenegger, car dealers got
tax breaks and the state Air Resources Board gave many millions to automakers
trying to comply with California’s tough smog standards, which aim for zero
emissions from new cars by 2035 and now will require new trucks sold after 2036
to be electric.
New grants on the consent calendar (where staff-proposed
ideas are usually adopted without discussion by commissioners at their formal
meetings) in May were focused on getting rid of fossil fuels like natural gas
in food production.
It’s not that the Energy Commission is expert in food production.
But the May 10 agenda included a $1.2 million grant to America’s Best Beverage
Inc. for installation of electric coffee roasters to replace gas-powered ones
at the company’s Oakland facility. The grant was specifically designed to be
exempt from the California Environmental Quality Act, so no one will ever know
if the new roasters are environmentally better or worse than the old ones.
Not to be partial to one coffee producer over others, the
commission also handed $600,000 to the somewhat smaller Red Bay Coffee Company,
also in Oakland. Red Bay will also substitute electric roasters. Said the grant
resolution: “The project is expected to provide benefits to priority
populations through pollutant emission reductions.”
Translation:
This was intended to benefit the
health of the mostly-Black populace around the Red Bay
plant.
Then
there was $890,000 for Pacific Coast Producers
to reuse waste steam condensation
to cut energy consumption at a tomato processing plant in Woodland. This one
was also intended to reduce greenhouse gas emissions, a priority of Gov. Gavin
Newsom, but not one likely to be funded by many Republican governors.
Yet another grant, this one $500,000, went to the E&J
Gallo winery for use in three facilities in the Central Valley, where aging and
inefficient electric refrigerating systems will be replaced by newer ones using
less power.
These grants are very like the ones given to new
hydrogen-fueling stations under ex-Gov. Jerry Brown, which neatly fit his
priorities.
So folks claiming California is anti-business have it wrong.
This state is not anti-business, but rather is plenty friendly to businesses –
so long as they’re the correct businesses.
-30-
Elias is author of the current book “The Burzynski Breakthrough: The Most
Promising Cancer Treatment and the Government's Campaign to Squelch It,” now
available in an updated third edition. His email address is tdelias@aol.com
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