Crony capitalism at the “happiest place on earth”

DisneylandEvery year, millions of families flock to the city of Anaheim to make their dreams come true at Disneyland. On the surface, this seems like a slam dunk for Anaheim. The incredible number of tourists should turn the city into an economic wellspring. However, this hasn’t been the case. In the 60 years of Disneyland’s existence, the per capita income of Anaheim residents has decreased substantially, now 10 percent below the state average. That’s because the relationship between the city government and the Walt Disney Company, ultimately, embodies crony capitalism — favoring the company’s interests at the expense of Anaheim’s residents.

It’s no surprise given Disneyland’s geographical dominance of Anaheim that they are also heavily tied to the city’s political scene. Throughout the years, Disney has continually contributed millions of dollars to local politicians to fight on their behalf. In 2014, Disney poured at least $671,000 into political action committees financing city council candidates.

Last year, Councilwoman Kris Murray, a beneficiary of this political spending, led the campaign for a gate-tax ban for Disneyland. Under this plan, Disneyland is exempt from all ticket taxes so long as they expand by $1 billion dollars over the next 30 years. However, there was nothing to indicate that Disneyland wasn’t already seeking to expand. In order to compete with Universal Hollywood and other surrounding attractions, improvements and expansion were a must. This deal, championed by Murray, was a huge win for Disney.

Other entertainment venues haven’t benefited to the extent that Disneyland has. Movie theaters, concert venues and other private entertainment spaces are not given exemptions on ticket taxes. Thus, the exemption for Disneyland is a clear example of favoritism for a company that helps fund the campaigns of the lawmakers themselves.

In addition to the massive gate-tax ban, Disney has recently requested the largest tax subsidy in Anaheim history. Under the city’s hotel incentive program enacted in 2013, all new “luxury” hotels are eligible to receive a 70 percent rebate on all transient occupancy taxes. Once again, this law seems narrowly tailored to include Disney and a few other wealthy proprietors. Disney has been in the works to build a new luxury hotel and has requested that this new property be eligible for the subsidy, which is worth well over $200 million. Clearly, Disney does not need city money for their projects, as they are more than capable of funding their projects privately. However,  the request has been honored under the current subsidy program.

Finally, Disney has also interfered with a proposed streetcar design in Anaheim by artificially raising its installation cost. Even though the original design was only about 3.2 miles long, its estimated cost sat at around $319 million (or about $100 million per mile). Disney would like the opportunity to expand their resort and attractions, which is only a possibility if cars are taken off the road. Disney wants a streetcar system that doesn’t disturb the park aesthetic and caters to their infrastructure, once again pushing the costs higher.

Not only are these extraneous costs unnecessary, but there isn’t even a market for additional public transportation in Anaheim. ARTIC ridership (the local public transit), has continually fallen well below daily projections. In fact, this proposal brings no notable improvement to the lives of Anaheim residents. Still, Disney continually pushed the streetcar costs astronomically high in order to cater to their needs.

Disney and the city of Anaheim share extremely close ties. The subsequent effect of this relationship has been an increase in subsidies and special privileges for Disneyland at the expense of Anaheim. Crony capitalism abounds in the city of Anaheim, and its residents have suffered as a result.

Matt Smith is a fellow in public policy at the California Policy Center in Tustin, California. He is a graduate of Baylor University, and is currently an M.A. candidate at Princeton Seminary with a specialization in Religion and Society. In addition, he is visiting a student in the Princeton University Politics Department doctoral program.

California Is Not Disneyland

At the Howard Jarvis Taxpayers Association, we have seen Proposition 13 blamed for just about everything. A national publication blamed the tax limiting measure for the not guilty verdict in the O.J. Simpson murder trial, while a high school physical education coach wrote in a community paper that the loss of shots by his track and field team was due to the lack of money to cut the grass, and this, of course, was due to Proposition 13.

Now we’re seeing attacks on HJTA sponsored Proposition 218, the Right to Vote on Taxes Act, which makes the taxing process more democratic by allowing voters to decide on local tax increases and to assure property owners that they would have a meaningful say on new assessments, fees and charges. One such attack was a recent opinion piece, calling for the repeal of Proposition 218, because it robs voters of their “democratic power.”

This critic argued that, because Proposition 218 guarantees the voters’ right to approve or reject new taxes, it prevents politicians from matching revenue to their spending: “ [L]ocal officials can give big pensions to cops, but don’t have the power to raise taxes to pay for those pensions.”

But this begs the obvious question: If officials are going to provide benefits to government employees that are unsustainable, wouldn’t it make more sense to limit spending rather than having an open season on taxpayers who are already among the most taxed in all 50 states?

Pundits who call for the repeal of Prop 218 are naïve. They see the state of our political environment as if it were from a sanitized civics textbook or perhaps like Disneyland, a well ordered theme park where fantasies can be made to come true.

DisneylandThe Magic Kingdom may seem genteel, filled with reasonable and well behaved people, when viewed from a tower in the Sleeping Beauty Castle, but outside the park in Realville, a battle is raging between those who work hard to support themselves and their families and those who believe politics is an extension of a grand spoils system where taxes are the preferred weapon to extract ever more money from those who earn it.

California politics is a bare knuckles contest where, by far, the largest and most powerful competitors are the government employee unions. Because of their ability to turn out members to vote for the union label and their ability to use mandatory union dues for any political purpose, they are able to elect a majority to the Legislature, a majority that owes them allegiance.  At the local level, they are just as influential, controlling a majority of votes on many city councils.

And the unions do not adhere to Marquis of Queensbury rules. In San Diego they sent out goon squads to intimidate signature gatherers for a reasonable ballot measure to reform pensions. And in Costa Mesa, they went so far as to hire private detectives to follow city council members, who refused to roll over under union pressure, in an effort to find incriminating information about them.

The result of this union power is evidenced by the recent bankruptcies of cities like Stockton and San Bernardino, where union-beholden council members voted increases in pay and benefits that were unsustainable.

Ironically, had officials been able to raise taxes without going to voters as required by Propositions 13 and 218, the communities would be worse off because California taxpayers and businesses have learned that they can vote with their feet by fleeing to more tax friendly communities or states.  Jurisdictions which lose their tax payers and are left with nothing but tax receivers don’t do very well.

In the real world of California politics, Propositions 13 and 218 are important checks against a corrupt political establishment that is beholden to special interests. So let’s not pretend that this is Fantasyland. The only thing that California politics has in common with Disneyland is that most of the laws enacted that hurt taxpayers are downright goofy.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piece originally appeared at HTJA.org

Vaccine Critics Get Defensive Over Measles

As reported by Jack Healy and Michael Paulson of the New York Times:

Their children have been sent home from school. Their families are barred from birthday parties and neighborhood play dates. Online, people call them negligent and criminal.

And as officials in 14 states grapple to contain a spreading measles outbreak that began near here at Disneyland, the parents at the heart of America’s anti-vaccine movement are being blamed for incubating an otherwise preventable public-health crisis.

Measles anxiety rippled thousands of miles beyond its center last week as officials scrambled to contain a wider spread of the highly contagious disease – one that America declared vanquished 15 years ago, before a statistically significant number of parents started refusing to vaccinate their children. … 

Read the full story here