[Source: Orange County Register] Amazon’s second headquarters, a shiny object dangled in front of revenue-hungry government officials across the country, appears to be headed for someplace other than California.
The project known as “HQ2” is likely to land in northern Virginia, some observers believe, where Amazon recently located the headquarters of its cloud business a short distance from the site that was pitched for HQ2. It’s also close to the 44-acre site where the company is planning a new data-center campus.
Other Amazon-watchers predict that Atlanta will get the nod for the project, which the company says will bring $5 billion in investment and 50,000 jobs, many of them paying six-figure salaries.
One California bid made Amazon’s list of 20 finalists, something that probably would not have happened if Gov. Jerry Brown had not written a letter to Amazon CEO Jeff Bezos promising a long list of incentives, breaks and assistance.
It reads like a confession of everything California is doing to kill businesses.
The governor bragged that the state is the “epicenter of climate action” without mentioning that laws mandating renewable energy and greenhouse-gas reduction have contributed to the state’s high electricity rates, roughly 30 percent above the national average.
He boasted of the plan to invest $52 billion over the next decade to “rebuild roads and bridges” and “expand mass transit” without mentioning that the money is coming from higher fuel taxes, which have sharply raised the cost of transportation.
He offered Amazon a “strike team” of state employees to help cut through the regulatory morass that routinely imposes years of delays on projects in California, and he promised to support legislation to grant the company an exemption from the California Environmental Quality Act similar to the one that expedited construction of a new arena for the Sacramento Kings.
Brown cited the excellence of California’s universities and noted the high number of graduates in science, technology, engineering and math. He didn’t mention the state’s K-12 education system except to say that the state would provide workforce training to assist Amazon in meeting its hiring goals.
Brown wrote that he would work with the Legislature to help Amazon have the “certainty” of income tax credits to offset the state’s high tax rate. He said he was committed to “innovative partnerships” to address workforce housing issues. He offered state incentives to help the company buy zero-emission shuttle buses for its employees.
He mentioned the possibility of property tax abatement, research credits, even film and TV production credits.
It’s a useful list for the next governor, and for anyone who wonders why there’s no gold rush of businesses moving to California.
State lawmakers should be studying that list and talking to business relocation specialists about how to make California an attractive destination for companies seeking to expand. Instead, current proposals in the Legislature seek to increase taxes and regulatory burdens further.
For example, Senate Bill 993 would place a sales tax on services. Assembly Constitutional Amendment 22 would increase the corporate tax rate from 8.84 percent to 18.84 percent. Assembly Bill 2351 would target some high earners for an income tax rate increase from 13.3 percent — already the highest in the nation — to 14.3 percent.
Outside the Legislature, a proposed initiative would revoke Proposition 13 protection from commercial and industrial properties, raising the assessed value to market rate and repeatedly raising property taxes as real estate prices rise.
We have to do better in California if all those STEM graduates are going to find good jobs without moving to other states. A governor’s list of indulgences is not an economic policy.
Source: Opinion/Orange County Register
April 7, 2018
