Is the Timing Right For An Incentive Program?

By Connie Conley


In reading Agenda Item 8.2 for tomorrow's city council meeting regarding creating an Economic Incentive Program, I had a déjà vu moment. Back late 2005, early 2006 when running for Elk Grove City Council, then candidate Pat Hume, as one of his position papers, proposed a similar plan.

Before then, in late 2004, several of us approached the city council asking them to be forward thinking and while “we were hot” to start planning ahead and recruiting more large businesses to Elk Grove through business incentives that wouldn’t put a burden on us taxpayers.

We met with council members at the time but were turned away with “Elk Grove will never have trouble attracting businesses.” I personally met with Rick Soares and Sophia Scherman at city hall. Only Jim Cooper was receptive, but he was only one vote and could not get consensus for our proposal. (We submitted it two times before taking the proposal to Pat Hume.)

Now fast forward six years and here it is. But is the timing right? The city is hurting, meaning the budget, sales tax revenue is down and the worse is yet to come.

Moreover, has the Economic Development Corporation been successful? We committed $775,000 of our tax dollars over five years. We were promised quarterly reports, yet we have only to hear one report in the last two years. Why is that?

It is a fact that business activities often impose expensive burdens upon the community for capital improvements related to law enforcement, fire protection, roads, schools, sewers, water, waste disposal, health care, environmental protection, parks, recreation, libraries, housing and other similar public facilities and services.

Without a doubt this city council is eager, and should be, to provide a friendly business environment. However, sins of the past council strayed from the path of fiscal fairness: It collected more than the full share of these fees and expenses from developers and businesses both large and small.

How many business did not open because of the road fees alone? How many businesses have closed because fees put them so far in debt that they never recovered? Sadly, we are seeing the results all around us with so many businesses closing and we are now paying the price for those sins.

Now to the present: With tough economic times, would this new incentive program be fundamentally unfair to us taxpayers who will ultimately have pay for more than our share? Will there be any drain on public resources?

And what about capital improvements? Is it the duty of businesses to pay their "fair share" for public capital improvements? Are we now instituting “public welfare?” Are we distorting so-called free-market investments by allowing some businesses to pay less than the full costs of their operations?

I honestly believe the “Fair Share Calculation” must now come into play with some incentives that would benefit everyone.

What that is, only the council can decide.