By The OC Register with commentary below by Cynthia Ward
The head of the Anaheim Chamber of Commerce said he hopes to retain a $2.9 million, five-year contract to manage the city's enterprise zones, even though the state program is poised for elimination by Dec. 31.
However, Anaheim Mayor Tom Tait said the chamber's deal should be nullified in the wake of legislation signed last month by Gov. Jerry Brown, which dismantles enterprise zones and creates a new series of tax breaks for companies expanding or relocating to California.
Todd Ament, chief executive officer of the Anaheim Chamber of Commerce, is seen in 2011 at the Anaheim/O.C. Job Fair at the Anaheim GardenWalk.
"We're talking to the city on how the contract will transition or wind down," said Todd Ament, president and CEO of the Anaheim Chamber of Commerce.
"It's too early to say what will happen," Ament said. "We have to see how the new legislation will affect job attraction and retention and how we can continue our economic partnership."
The chamber will be working with the governor's office to determine how Brown's new incentive program will be administered, along with how the chamber can find ways to attract businesses to Anaheim.
Mayor Tom Tait said he plans to introduce a motion at Tuesday's meeting for the City Council to terminate the deal when the city's enterprise zone program expires. It's unclear how much money the city would save if the deal is broken, but Tait said the funds would be better spent on hiring police officers or making neighborhood improvements.
"Without an enterprise zone, the purpose for the operation contract goes away," Tait said. "Obviously, with nothing to operate, the city needs to cancel the chamber's contract."
Councilwoman Kris Murray said she was "disappointed" that enterprise zones were eliminated, but believed the city's contract with the chamber simply needs to be amended rather than voided. A city spokeswoman said that officials are waiting for direction from the state's Department of Housing and Community Development on how to phase-out the program.
"As the city analyzes the new tax credit hiring program, I will support our continued public-private partnership for economic development with the Anaheim Chamber and the business community," Murray said. "I anticipate the city will review our current contractual agreement with the chamber and may need to amend and update some of our strategies to obtain, attract and retain jobs in Anaheim."
Anaheim was awarded an enterprise zone designation in December 2010. The city hired the chamber in February 2012 to oversee the program for five years, under an initial $1.8 million contract.
Tait cast the lone opposing vote when the City Council voted 4-1 in May to add another $1.1 million to the deal after chamber officials said they needed to hire additional staff to manage the program – even though Brown had repeatedly called the programs "wasteful" and signaled that he wanted to kill enterprise zones statewide.
While cities have long operated their own enterprise zones, the Anaheim City Council outsourced the work to the chamber because the city eliminated its economic development manager – the person who would normally oversee the program.
Under the chamber's management, Anaheim has issued more than 4,000 hiring credit vouchers, allowing companies to earn up to $37,440 worth of tax credits for each employee added to payrolls and kept for five years.
In turn, the city has seen about $10 million worth of business investment, while Anaheim's unemployment rate has gone from 12.3 percent in 2011 to just over 9 percent as of last month, Ament said.
"It was a very valuable tool that helped create a lot of jobs and investment here in Anaheim," Ament said. "We're disheartened to see the program end."
Comments by Cynthia Ward:
The Enterprise Zones are failures because they were created on the premise that the incentive of a tax credit will encourage a business to hire a worker. Anyone who runs their business that way won't run it for long! Businesses hire workers to fill a need, period. The tax credit therefore is a nice extra "spiff" to a business that was hiring anyway. Earlier the Register told us that Disney just hired 3,000 workers for the new DCA/Cars Land expansion.
I assume that Disney hires represent 3,000 of the 4,000 new jobs Ament is taking credit for? Does anyone out there believe Disney was NOT going to expand DCA or hire new bodies to run it if they didn't get tax credits? A progress report following the first year of the EZ project showed jobs created were in the range of minimum wage to just slightly above, and most offered no benefits, so I am not sure how that is such a benefit to society that we are supposed to reward them with tax credits?
The assumption that when Disney makes more Anaheim makes more forgets that when the Resort District was formed, we froze the tax base from Disney properties at 1995 levels. No matter how much more The Mouse makes, Anaheim’s General Fund does not see the increase! 100% above the 1995 base for sales, property and TOT taxes on Disney properties goes to repay bonds for improvements that benefits Disney and surrounding businesses. Do the math and figure out how rewarding them for increased minimum wage jobs when we see none of the increased tax revenue works out to benefit Anaheim? Now wonder why Anaheim looks like a 3rd world nation in many neighborhoods. Our “partnerships” are not paying dividends, but we keep finding new ways to put tax money into these private businesses.
As far as the Chamber's claim that they merely want to maintain the partnership between the Chamber and the City to create economic development opportunities, I would like them to point to the specific jobs that have been created in Anaheim due to the Chamber's involvement. The list of goals for the Chamber to accomplish for pay are ridiculously thin, without any measurable goals to show their efforts are producing benefits of any kind. We have a bunch of people designing “business development” programs who have little to no experience running businesses in the private sector! Is it any wonder we are such a mess?
Meanwhile, the one leader at City Hall who does have a track record of running a successful private business, offering employment to many people in skilled, good paying jobs, is being ripped to shreds by the Chamber and their paid “consultants” including a website run by a “keyboard for hire” (on Chamber payroll) who launches the most unprofessional, ugly, and personally vile attacks on the Mayor. In fact, anyone who stands up to the crony capitalists at City Hall are routinely bashed and insulted, in a continuation of the disrespect we see in interviews with the Chamber leadership and the Council majority, where they use phrases like "ill advised" "irresponsible" and "reckless" to describe the Mayor's attempts to reign in the deficit spending created by Mayor Pringle that left our General Fund in the hole and our reserves depleted. Living within our means is not "ill advised" unless your paycheck depends on someone else's deficit spending!
Now it is the Constitutional right of the Chamber and the remaining Council to disagree with the Mayor's policies, (especially when his policies try to prevent our tax money from landing in the pockets of them and their buddies) but to flat out pay someone who writes petty insults about Mayor Tait, and anyone who dares to support his policies of smaller government, does NOTHING to promote business in Anaheim! If you were looking for a place to start your business, and you saw that type of contentious bickering and juvenile spending from the Chamber of Commerce, would that say Anaheim is ready for business? What about that childish behavior makes you want to invest there? Come to think of it, go check their website and see how much usable info is actually there. The Chamber website is useless, filled with typos and misspellings, is rarely updated, and that is the public face of business development for the 10th largest City in California. What are we paying for?
From what I have seen of the Chamber's performance (they came back for another MILLION BUCKS within a year of signing the contract, before the audit was even complete to tell us how our tax money had been spent to that point) even if any of these cockamamie "economic development" schemes were a good idea I would like to see someone else administer them please, someone who cares about the taxpayers of Anaheim more than their own bottom line.
Indeed the City's staff report says the projects were outsourced to the Chamber, because we had let go the ONE person on staff that would have done the job. Now I know we are all concerned with how much public employees make (with pensions) but really, how many staff could we have hired for what we pay the Chamber, and we would have had direct oversight of those employees?
On Tuesday, look for the Chamber to hang onto ANY shred of the contract, whether the work falls under the appropriate role of government or not. It is the job of business to promote itself, it is not the job of government to promote business, not when we are still short Police officers and park space. Give me a choice between keeping a library open longer so kids can do their homework or letting the Chamber pay the Director's six figure salary, and you can guess where my priorities are.
Other than that I really have no opinion.