San Jose City Council visits Animal Farm

We just had a teachable moment at the San Jose City Council about how government and advocates can pervert language to deliver preferential financial treatment to special interests.

At issue during the August 6th, 2019 San Jose City Council meeting was whether the reduction of city fees on developers--specifically fees regarding downtown high rise developments--represents a "subsidy" to those developers, therefore should trigger a series of city regulations preferential to labor unions. 

So let's start with definitions. What's a fee? According to dictionaries it is:

"a payment made to a professional person or to a professional or public body in exchange for advice or services."

Pay special attention to that "payment in exchange for services" idea.

Now what's a subsidy? It is:

"a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive."

Pay special attention to that "money granted" idea.

Here's a quick background of the issue. The city charges various fees to high-rise developers downtown. These fees go to parks, housing, transportation. For example,  there a Housing Impact Fee of $17/square foot on market rate housing.

However, the city has realized that these extra fees deter developers from building in San Jose, because land and building prices are so high they can't get funding for the projects. So to help prompt further high density development downtown, the city has offered to *reduce* some of those fees.

This is where it gets interesting:  the city, labor unions, and most city councilmembers are arguing that the reduction of the compulsory fee payment is really--watch the dance move here--the same as a grant of money--a subsidy. And as a result, the city can demand (because they're offering a subsidy) that businesses receiving this faux grant must accept the following regulations before accepting the tax decrease: they need to hire more union apprentices and hire workers from union-preferred areas and pay them union (i.e. higher) wages.

Alert readers will notice which special interest benefits from these added regulations. 

Fairness in government relies upon clear and honest use of language that is widely accepted by citizens. Does this fee/subsidy bait and switch to pass that test?  It would appear it's like a robber saying: "Because I am taking less from you than I could, I am giving you a present, and I can tell you what to do with the the money I leave you." Or the city saying" "Because I provide services to your building (police, fire), I am allowed to tell you how to run your business." Or the federal government saying, "Because I cut your taxes a bit, I can tell you how to spend your takehome pay."

This overbroad definition of "subsidy" could certainly be viewed as the first step off a very slippery slope,and is a great example of How a State Thinks: to wit, refusing to acknowledge that all state funds come from the people, all state authority comes from the people, and city representatives report to the people, not to shakedown artists and special interests.

George Orwell famously said, “Political language is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind. ” 

He must be smiling from his grave at All Saint's Church along the south bank of the Thames.

--by Christopher Escher, a co-founder of Opportunity Now