Opinion: Charter Amendment E? What’s that?
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‘It sends a statement to the world that L.A. voters want L.A. city to compete.’ –Los Angeles City Councilman Greig Smith, Yes on E
‘City Hall is robbing Peter to pay Paul and you’re Peter. This Measure E would authorize more welfare for the rich.’ –Mayoral candidate Walter Moore, No on E.
The Times editorial board has listened to the campaigns for and against Charter Amendment E, one of the five measures of the March 3 Los Angeles city ballot, and we are preparing to discuss, deliberate, and endorse a yes or no vote. Schedules change, but our current plan is to endorse on Sunday, Feb. 22.
We would like you to join the discussion. In a departure from our usual process, we invite you to listen to our talks with the campaigns, see and hear their remarks, ask questions we didn’t get to, and offer your thoughts and comments.
Charter Amendment E would allow the City Council and mayor to offer cash, tax reduction, or other incentives to businesses to come here. The Community Redevelopment Agency already tries to entice businesses to particular zones using various incentives. Even outside redevelopment areas, the city has offered incentives. But is it legal? Can the city, not including the CRA, offer cash to or cut taxes for one business and not another? Isn’t that an improper gift of public funds? It’s not clear. This measure would allow it.
The language of Charter Amendment E is short. “Should the charter of the City of Los Angeles be amended to clearly express the authority of the City of Los Angeles to provide incentives to businesses that will encourage economic development and provide public benefits to the City of Los Angeles and its residents?”
To see the ballot measure, the charter change, the independent analysis, and the ballot arguments for an against, check your sample ballot. You can find it online here.
Here are a few portions of our discussion with the proponents:
You’re listening to Councilman Greig Smith, chief proponent of Charter Amendment E; Smith’s chief of staff, Mitch Englander; and Los Angeles Area Chamber of Commerce President Gary Toebben. They are answering questions posed by Editorial Pages editor Jim Newton and editorial writers Jon Healey, Dan Turner and Robert Greene.
Here are some things that stuck in our minds:
Mitch Englander: That charter amendment is really, and I’ll put this out there, it’s symbolic. As a charter amendment, it doesn’t do a lot.
Greig Smith: This would give us the tools, and we’re going to find [for example] if you bring 50 employees, we can give you this, 100 employees, we’re going to get you that, you bring us 500 employees, we’ll give you eggroll. Whatever it is. Whatever you need, we know in advance what the answer is, and we can go in and talk like legitimate business people and make a deal, because we don’t have that ability now.
Jim Newton: But that also sounds like a recipe for a lot of discretion to the government, to council members, to make deals with friends….And so I guess I wonder why we should grant the council, or the government, that kind of authority to make those deals.
Smith: And there’s two answers. That’s probably the best argument that anyone has made yet, is, Why do we trust you to do that? And I think the answer is two. We’re not saying that we’re going to make deals with people that are here unless they are going to grow. And we’re not going to make deals with people who want to come here unless they’re going to bring us something. And so the answer to that is, today we have this, and we’re not going to get any more than that if we don’t make deals. And if we make a deal, we can get so much more. And that means creation of jobs in all cases, and creation of economic investment in all cases. Without those two criteria, we’re not making deals.
Jon Healey: When Walter Moore was in here the other day he made the point that what you’re setting up here potentially is different treatment of folk in the same business doing the same thing. Let me give you an example. You say to Disney, “Bring your studio into L.A. and we’ll do this for you.” You’re not doing that for Paramount. Paramount is already here. Why should Paramount have a poorer deal than Disney. How is that fair?
Smith: And the answer will be to Paramount is, “Grow and we’ll help you grow.” This is about creating jobs in an economy that needs jobs. In a city that’s been losing jobs while its population has grown. That is a disaster of an economic policy.
Audio from our discussion with Moore is here.
Here are some especially interesting parts:
Walter Moore: City Hall is robbing Peter to pay Paul and you’re Peter. This measure E would authorize more welfare for the rich. Of course, they never call it that. It’s presented as a way that we’re somehow going to boost employment by taking money away from you and giving it to billionaires and others to bribe them to do business here. And the problem with that is, we already do that now and it’s a disaster.
Moore: But I didn’t find anything in the city charter that expressly authorizes subsidies to particular businesses and not to a whole area. So my best guestimate as to why they’re doing this is that someone issued a legal opinion saying, you know what, all these subsidies, not actually legal, we better change the charter.
Moore: To me, it’s the epitome of special interests taking over City Hall. Because if you not only get subsidies but if you and I have competing businesses and I’m getting lower taxes and I’m getting subsidies and I say, “You know what, I think he should pay his employees more; And why don’t you set his room rates.” I think it’s not fair, and it’s not good for business, unless you’re one of the chosen few.
*Photo of Greig Smith: Anne Cusack/LAT
*Photo of Walter Moore: Judy Moore