Proof once again tax breaks DON’T prevent job loss

By HHS Network of California


In the weeks leading up to the November 2 midterm election, corporate interest groups poured millions of dollars into a campaign to defeat Proposition 24 (which would have repealed the $1.3 billion in tax breaks to corporations secretly passed in 2008), claiming that losing these tax breaks would cost California thousands of jobs.



Last week, however, Genentech, one of the top contributors to the anti-Proposition 24 campaign, announced plans to layoff 800 California workers.


According to the San Francisco Chronicle, Genentech spent an estimated $1.6 million to defeat Prop 24 – only to waste no time in eliminating hundreds of California jobs while still qualifying for the tax breaks.


Jean Ross, Executive Director of the California Budget Project, aptly summarized Genentech’s actions as “payoffs for layoffs” - observing that the tax breaks are costing California “over a billion dollars a year in tax revenues that could have gone to support schools, health care, and other public structures essential to the state’s future,” but don’t require wealthy companies like Genentech to add jobs in California or even maintain current employment. Click here to read more from Jean Ross.


Given California’s severely strained economic situation, the time has come to stop blindly spending billions on tax breaks that don’t create jobs. Just as health and human services programs have been scrutinized and pared for years to eliminate waste and inefficiency, corporate tax breaks that fail to provide (or at the very least – maintain) jobs for Californians should be scrutinized and pared back; while those that have a proven track record of producing private & public sector jobs (such as investments in health and human services) and business activity should be given serious consideration.


Federal unemployment benefits set to expire Nov. 30


Meanwhile, hundreds of thousands of struggling California families could find themselves in an even more disastrous situation if federally supported unemployment insurance benefits are allowed to expire at the end of this month.


By allowing these critical benefits to expire, Congress would also be jeopardizing California’s economic & family recovery – according to a new report from the California Budget Project. The report shows how, “without UI, these jobless workers would be forced to scale back their spending, which means businesses would have fewer customers and weaker sales – and that could ultimately cost jobs.”

Among the ways in which California would be harmed by the loss of federal unemployment insurance benefits include:


• Hurts small businesses by depriving families of much-needed spending power.


• Cutting benefits right before the holiday season hurts California by inflicting a heavy blow on retailers – one of the largest employers in all of California.


• Abandons one of the most effective means of economic recovery – models show that for every dollar towards unemployment insurance boosts California’s economic activity by $1.56.

Click here to read the report.

And be sure to check back at the HHS Network website for more actions, updates & resources at www.hhsnetworkca.org.