State, Cities Urged to Bar All Taxpayer Purchases From Chrysler, GM, Other Tax Dodgers While They Refuse to Pay Fair Share
The state’s award of a contract for up to 1,900 Ford vehicles for the California Highway Patrol and other state agencies is a snub to GM and Chrysler, which eagerly sought the prestigious contract.
Consumer Watchdog applauded the tentative award, noting that of the Big 3 U.S. automakers, only Ford is not in a coalition battling to keep a California tax loophole that benefits large out-of-state corporations to the tune of at least $1 billion a year.
The nonprofit, nonpartisan Consumer Watchdog calls on the state and major cities, which it will be contacting, to bar all non-safety-related purchases of Chrysler and GM products until they cease their campaign and pledge willingness to pay the same tax rate that in-state corporations pay.
“Taxpayers shouldn’t be paying millions to automakers that are happy to starve California schools, police departments and disabled people of funding,” said Judy Dugan, research director for Consumer Watchdog. “What’s good for the CHP should be fine for other police departments and government agencies.”
Even with substantial state discounts, the contract for up to 1,800 Taurus-based police patrol cars and 100 Explorer-based police utility vehicles would likely be worth more than $50 million over time. Dealer prices listed online for the civilian models of the patrol car range from about $30,000 to $32,500, without costly additions like bulletproof doors.
The state is sharply cutting back its civilian auto fleet and the CHP has scaled back as well, but wear and tear force the CHP and other public safety agencies to replace vehicles at about 100,000 miles.
The state’s current tax loophole allows many out-of state companies with major sales in California to pay a lower tax rate than in-state companies, depriving the state of $1 billion or more a year, according to the state legislative analyst. Closing the loophole would help restore essential services axed in the current budget crisis, said Consumer Watchdog.
Two other major corporations, Kimberly-Clark (Scott, Kleenex, Huggies products) and International Paper have joined GM and Chrysler in the deceptively titled “California Employers Against Higher Taxes.”
Chrysler more than doubled its state lobbying expenses in the first quarter of this year, to $32,500, as it added two corporate tax reform bills, AB1500 and AB1501, to its lobbying list reported to the Secretary of State. The larger General Motors spent more than $86,000 on state lobbying in the first quarter, and added the same legislation to its lobbying list. If a separately proposed ballot initiative to close the tax loophole qualifies for the ballot, the four companies are expected to up the ante on spending.
“The state and cities of California owe taxpayers the respect of shunning companies that are driving the state further into a hole of debt,” said Dugan. “The CHP contract is a great start. Other agencies should quickly and publicly pledge to stay away from the tax dodgers at Chrysler and GM.”
Resources:
State announcement of tentative award (no other bidders protested the award during the protest period)
Bid pricing list from the state’s request for proposals
Consumer Watchdog’s previous press release on the tax evasion history of the corporate coalition (from which founding member Proctor and Gamble has since departed)