As expected, California Governor Arnold Schwarzenegger on September 18th terminated a bill that would have made big box retailers pay for economic impact studies of their proposed projects. Without such studies, officials in local communities are operating without financial data on the true impacts of a project on public revenues. All too often, officials simply use the jobs and revenue estimates they get from companies like Wal-Mart, which usually show only the gross gains caused by a project, not the offsetting losses that will occur as well. This distorted picture of good fortune can be tested by conducting an independent economic impact statement, but the Governor of California evidently doesn’t want local officials to even ask for such data. Schwarzenegger instead sided with big business in vetoing S.B. 1056 that would have required local governments to prepare reports on the economic impact of giant retail superstores before approving new construction. The reports would have been paid for by the applicants or retailers, not taxpayers, and would have applied only to stores larger than 130,000 s.f. and with more than 20,000 units in stock, so it would not have affected small and medium sized outlets. Last month, the Los Angeles City Council passed a similar law. “Local communities are already free to decide between rejecting or embracing any retail development,” Schwarzenegger wrote. “By requiring the approval of an economic impact report prior to approval of a development project that includes a ‘superstore retailer,’ this bill would create a system of costly hurdles that these retailers would need to overcome before opening a new facility in a city or county.”
Approving a giant retail store could be “costly” to local government. But who wants to really find out? Better not to know, seems to be the Governor’s approach. Don’t Ask, don’t tell. Schwarzenegger had the choice of siding with the people in small towns and neighborhoods across California, or supporting large corporate retailers, most of whom are headquartered out of state. He chose to back the corporate interests. For an earlier story on this bill, and Schwarzenegger’s point of view, search this database by “economic impact.” This California bill would not have been precedent stetting. Other states, like Vermont, have required broader economic impact statements for decades. But most states have no such legislation. It remains unclear if California lawmakers will try to override the Governor’s veto of this bill, which came on the same day he vetoed raising the California minimum wage — another bill disliked by his corporate friends.
