Zombie Loopholes Are Eating California’s Budget Alive

(This post originally appeared in Labor’s Edge, the blog of the California Labor Federation)

Zombies are everywhere these days. They’re on popular TV shows. They’re in the movies. They’re in our nightmares. But what many Californians don’t know is that zombies are a primary reason of our ongoing budget crisis.

Yes, that’s right. We call them Zombie Loopholes, and they’re devouring our state’s budget.

Today, the California Labor Federation launched a new website to highlight the devastating impact that budget-killing corporate tax breaks are having on our state.ZombieLoopholes.com brings a number of wasteful corporate tax breaks that are bleeding our state of billions each year out of the shadows so the public is aware that they’re contributing to deep budget cuts to school funding, services for seniors and public safety.

With the state facing another budget crisis and more cuts to services we value, you’d think eliminating Zombie Loopholes would be a top priority. Think again. Republicans have repeatedly refused to even consider getting rid of these loopholes, despite the fact that there’s almost no evidence they help our economy or create jobs. In fact, they’re just big fat giveaways to corporate bosses and multi-millionaires, secretly inserted into previous budget deals by Republicans.

Unlike the fake zombies on TV, these zombie loopholes really do harm us. And, thanks to our zombie-protecting two-thirds majority rule to get rid of any tax break no matter how wasteful, these zombies are EXTREMELY hard to kill.

So if politicians won’t do anything to stop the zombies, maybe heightened awareness among the public will do the trick.

California Labor Federation Executive Secretary-Treasurer Art Pulaski said,

“While, fortunately, it doesn’t appear a ‘zombie apocalypse’ is anywhere on the horizon, Zombie Loopholes pose a very real and immediate threat to schools, public safety and other essential services our families and communities rely upon. This new website brings these zombies out of the shadows so the public can see for themselves how much the state is wasting each year on ineffective corporate tax breaks.”

Today, we’re ramping up a big effort to raise awareness about zombie loopholesthat will include a social media campaign and online petition that will be delivered to California legislators.  The website and social media efforts renew our call for the legislature to conduct a thorough review of corporate tax breaks — eliminating those that are not benefitting the state’s economy — before any additional cuts are made to services.

The site highlights four Zombie Loopholes and the related revenue those loopholes are ripping from the state that could go instead to closing our budget gap and funding education, services for those with disabilities and other vital programs.  The site’s “survival guide” offers an emergency plan for the legislature to deal with these Zombie Loopholes.

On ZombieLoopholes.com, each tax break has been assigned a “kill capacity” equal to the amount of revenue it’s draining the state that could be used for vital programs and services:

• Elective Single Sales Tax Zombie Loophole
  Kill Capacity: $1 billion for schools, public safety and essential services
• Oil Severance Tax Zombie Loophole
  Kill Capacity: $2 billion for schools, public safety and essential services
• Change-of-Ownership Zombie Loophole
  Kill Capacity: $2 billion divided between local government and schools
• Enterprise Zone (EZ) Zombie Loophole
  Kill Capacity: Quality, good-paying jobs and $500 million a year for schools, public safety and essential services

The loopholes highlighted on the site were recently identified in a report by California Tax Reform Association Executive Director Lenny Goldberg, which found that wasteful corporate tax breaks are costing the state more $6 billion per year.

Pulaski warns, “Our state doesn’t have to be entombed in perpetual budget crises. Zombies may not be real, but the choices the state has to balance the budget are. We can either continue allowing these zombie loopholes to drain the life out of our state’s economy or we can eradicate them now and begin investing in California’s future.”

Don’t let California become a casualty of Zombie Loopholes! Join the fight by signing the petition. ‘Like’ the Facebook page. Help us spread the word. Our best defense is standing together.