Subsidies for Developers: The Same Old Tired Strategy?
By EGP Editorial
Is it prudent for the City of Los Angeles to offer tax incentives to project developers who say they can’t consider a project without subsidies?
Especially at the same time they are considering asking voters to pass a $4 billion sales tax measure to help pay for sidewalk and road repairs?
We won’t even get into whether it is fair that some big businesses are allowed to keep the tax revenue their projects generate, while other businesses, some smaller, some not, manage to complete and expand their projects without a gift of city funds,
At issue for us is city of L.A. officials considering millions of dollars is subsidies for downtown developers when the city if facing a possible $240 million budget deficit, and they are considering asking regular Angelenos to raise the sales tax on product they buy. We are constantly told that without large tax breaks and incentives businesses will not come to Los Angeles, and those that are here will not stay. Without tax breaks, they will not create invest in growth or create new jobs.
That was the same thing we were told about the importance of shoring up Wall Street, which today has rebounded from Great Recession, mostly by cutting jobs and the size of paychecks.
Have our elected officials grown so out of touch with voters that they think they will agree to tax themselves at a higher rate and not see how lopsided the subsidies are?
The “Time for Action” report released Wednesday by the Los Angeles 2020 Commission proposes a number of steps and structural changes aimed at putting the city on solid financial ground, and does not solely rely on more tax breaks.
We hope the City Council will take a close look at the report and find more creative approaches to improve the local economy, and not just fall back on the same old strategies.
Mayor Eric Garcetti will deliver the Annual State of the City Address today, and we hope he will deliver a more inspired view on how the city can move forward to benefit all its residents.
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April 10, 2014 Copyright © 2012 Eastern Group Publications, Inc.