| SACRAMENTO, Calif.
SACRAMENTO, Calif. Aug 19 Tax credits aimed at
persuading businesses to locate in California would be subject
to detailed performance reviews to make sure they are boosting
the state's economy under a bill passed on Tuesday by the
The bill, which will now go to Democratic Governor Jerry
Brown, aims to measure the effectiveness of tax credits. The
issue is in the public eye at a time of controversy over
proposals to grant nearly $1 billion in tax relief to
entertainment and aerospace businesses.
"Who among us in investing our personal dollars would not
have a goal in mind and plan to review the investment to see if
it's meeting the goal?" said state Senator Mark Leno, a Democrat
from San Francisco and the bill's author. "You would call any
personal investor who didn't minimally attend to that a fool."
The bill requires new tax credits offered by the most
populous U.S. state to include specific measurable goals such as
the number of jobs created by its recipients or the boost that
their presence in the state gives the economy.
It comes as the California State Legislature is set to
debate a proposed $400 million annual tax credit for the
entertainment industry and just days after a nearly $500 million
tax credit was offered to persuade aerospace companies to build
the next generation of stealth fighter planes in the state.
According to Leno, California already offers companies $47
billion in tax relief every year with no way of measuring the
success of the state's investment. It's important to do so, he
said, because by reducing a corporation's tax bill, the state is
essentially cutting revenue that could otherwise be used for
needed programs and services.
"It's an expenditure of taxpayer dollars," he said of the
tax credits, adding that it ought to be measured.
A similar bill was passed by the Legislature two years ago,
but vetoed by Brown, a centrist Democrat who has worked to bring
business to the notoriously expensive state, at times supporting
programs offering tax credits.
In his veto message, Brown said he opposed a provision that
would have forced tax credits to automatically expire 10 years
after they were granted.
That provision was removed from the latest bill, Leno said.
Brown has not commented on the measure.
(Reporting by Sharon Bernstein; Editing by Jan Paschal)