California lawmakers will soon oversee billions of stimulus dollars and pass a state-level coronavirus recovery package. But a loophole in California’s public records law may prevent workers and communities from seeing real benefits.
When the Los Angeles Lakers received $4.6 million dollars from the federal government’s small business relief program, fans were outraged. Why was the richest sports franchise in the country accepting public dollars intended for small businesses to pay workers? Eventually, the Lakers returned the money, joining the ranks of other massive corporations — from Ruth’s Chris Steak House to Shake Shack — that have attempted to siphon away public dollars for corporate gain.
But if a handful of corporations were pressured to return the money, many more continue to receive stimulus dollars with few strings attached and dramatically reduced capacity for oversight. According to some experts, the approximately $500 billion that the federal government allocated for corporations is nothing more than a slush fund — with even less public oversight than the infamous 2008 TARP program. In 2008, the multi-billion TARP bailout famously lacked any conditions over aid given to corporations and allowed big banks to “bleed homeowners to rebuild their capital.”
As in 2008, we simply can’t expect the trillions of public dollars our government has invested in the economy amidst the COVID-19 pandemic to do much if the only accountability mechanisms in place are angry sports fans and people on Twitter.
Soon, California policymakers will oversee billions of public dollars allocated to our state from the four federal stimulus bills, and may eventually pass California’s own economic recovery package. Californians will see billions of our taxpayer dollars go towards grants, loans, bonds, tax incentives, and government contracts in hopes of putting people back to work and kick starting our economy. If we want to see real return on our investment, Californians need to be proactive: we need to make sure we have public oversight over our state’s recovery spending.
The reality is, right now, all Californians can expect in return for our stimulus dollars is little more than an empty promise. That’s because a loophole in the California Public Records Act allows corporations that receive government contracts and tax credits to evade public oversight over their commitments to taxpayers. Corporations can hide the commitments they made around job creation, quality, and access by asserting that this information is a trade secret. In other words, corporations that receive public dollars by promising to create a certain number of jobs don’t actually have to show the public whether or not they’ve followed through.
California legislators have an opportunity to close this loophole this year by passing legislation stating that information pertaining to job creation, quality and access disclosed as part of a tax abatement program or public contract is not a trade secret.
As in 2008, we simply can’t expect the trillions of public dollars our government has invested in the economy amidst the COVID-19 pandemic to do much if the only accountability mechanism in place is angry sports fans and people on Twitter. The economic recovery package that was passed in response to the Great Recession promised to create millions of jobs. But without public oversight of that stimulus, corporate greed dominated and many of the promised jobs turned out to be low quality, low wage jobs — or simply did not materialize.
In the wake of the coronavirus pandemic, we have an opportunity to learn from these mistakes. Recovering from COVID-19 will require creating good jobs, lifting labor standards, protecting our environment, and prioritizing long-term climate resiliency — not bailing out corporate shareholders, CEOs, and huge corporate chains. But without access to information about the number of jobs actually created through public investment — not to mention critical information about job quality, like wages and benefits, or plans for how people with barriers to employment can access these jobs — how can Californians expect a real recovery?
California lawmakers stand at a crossroads. We can continue down a path of allowing corporations to take advantage of our public dollars, or lawmakers can pass policy to make sure that the public — that’s us! — actually benefits from these expenditures. We urge lawmakers to close the loophole in the California Public Records Act as part of the passage of the budget this year. It’s a common sense solution that goes a long way to make sure that our precious public dollars are putting people back to work in good jobs, not just into the pockets of corporations.
Abhilasha Bhola is a California Senior Policy Coordinator at Jobs to Move America.