Dan Walters of the Sacramento Bee has attacked California governor Jerry Brown for allegedly favoring what he calls “rent-seekers,” those who use government largesse to improve their “private” investments.
In a column this week, Walters alleges that Brown “has become the rent-seekers’ friend, eager to give hundreds of millions of dollars in subsidies from the state treasury and consumers’ wallets to a favored few.”
Walters notes that the state legislature trashed two subsidy programs that had long been controlled by local governments, redevelopment and “enterprise zones.” He asserts that the legislature viewed the programs as too expensive and ineffectual with regard to private, job-creating investment and urban renewal .
The legislature wanted the programs replaced by state-controlled “incentives” for investment. Some of those incentives included a sales tax break for manufacturing equipment and a fund for Brown to use for attracting business to the state.
Meanwhile, the electric power system of the state was undergoing a massive change, from what had been based on fossil fuel and nuclear generation to subsidies of billions of dollars to “renewable” power and electric vehicles.
Walters targets Elon Musk, who builds Tesla electric cars, and whose Solar City is California’s leading installer of photovoltaic electric panels. Walters notes that Musk’s SpaceX firm wants to lead the country in conveying satellites, and Musk also has plans for an immense battery factory.
All of the Musk actions that Walters mentions have received direct and indirect state subsidies: Tesla has been given money directly and zero-emission credits that Tesla in turn sells to other firms.
In 2014, Brown has signed one budget “trailer bill” that offers subsidies for solar panels, another bill that leaves the SpaceX property free from taxes, and a third bill to fund construction of a new strategic bomber but also has a section of the bill that would subsidize a battery factory.
The AP revealed the section of the bill that helped fund the battery factory, enlightening legislators, who were unaware of it. Walters reports that Brown and his minions are trying to pass an incentive that simply incentivizes battery factories.