Over the past five weeks, Anaheim residents have turned out in large numbers to express outrage and disappointment with the city’s decision to approve a $158-million bed tax subsidy for luxury hotel developers in the resort district.
For the next 15 years, the subsidy will give away 80 percent of the bed tax revenue from these hotels, depriving vital city services of necessary revenues while getting nothing for the community in return. What’s worse, this giveaway was approved at a time when the city is already cutting the library budget and outsourcing important services like park maintenance and graffiti removal.
Simply put, the city got a bad deal: no guarantee that the jobs will pay a living wage and provide benefits like health insurance; no commitment to hire and train local residents; no provision for vital community resources such as parks and libraries. When developers came forward asking for $158 million, the city had a tremendous opportunity — now squandered — to negotiate a great deal for Anaheim residents and workers. But instead of negotiating, the city gave away the store.
Already the children of Anaheim don’t have enough access to libraries, parks and open space, and by giving away future revenues, this $158-million subsidy ensures that our kids won’t have those resources for the next 15 years. For kids who are in grade school today, this giveaway will reduce resources and opportunities until after they graduate from high school.
Supporters of the giveaway have said that it’s all about creating jobs in a bad economy. It’s certainly true that these are bad times, and a lot of people are hurting, but giving away public resources doesn’t help the situation.
The city’s own analysis pointed out that the $158-million subsidy would enable hotel investors to achieve a rate of return approaching 16%, which makes us wonder: Is this $158 million about creating jobs, or is it about guaranteeing a high rate of return for investors, whose identities are currently unknown to the public? We can’t say for sure, but we do know that city staff studied the impact of the subsidy and recommended against it, only to be overridden by a council majority.
This giveaway is not just a poor investment of public resources, and it’s not just a bad idea. It represents an unfortunate mind-set that puts the interests of developers ahead of the public interest. Fortunately, there are laws in place to prevent special interests from capturing public resources for private gain, and we believe that this subsidy is an illegal gift of public funds.
Dr. Jose Moreno is president of the Anaheim activist group Los Amigos and a board member of the Anaheim City School District. Eric Altman is the executive director of Orange County Communities Organized for Responsible Development (OCCORD). Both are members of the Voice of OC Community Editorial Board.