(Posted by Steve Smith, California Labor Federation)

The campaign to repeal the egregious corporate tax giveaways that were part of the last budget deal is gathering steam. Thanks to Brian and David for their coverage of this issue – it seems to being having some resonance with folks who are fed up with sweetheart deals for corporations at the expense of the rest of us.

To continue the momentum, the California Labor Federation is organizing statewide actions tomorrow at Chevron gas stations to raise awareness about how desperately flawed these tax breaks are. The actions come on the heels of last week’s letter to the governor and legislative leaders, signed by 75 organizations,  calling for the repeal of corporate tax breaks before an additional dime is cut from services.

Why Chevron? Because there couldn’t be a better example of how upside down our budget process has become.

(Edit by Brian, see the flip)

As Calitics has noted, the last budget deal included corporate tax breaks that will cost the state billions in revenue, including a tax giveaway just like the one that Chevron’s been lobbying to get for years. These giveaways amount to $2.5 billion a year, every year, permanently, to Chevron and a handful of the world’s largest corporations.

To get those huge tax breaks, Chevron has invested heavily. Chevron has six separate lobbying firms working for them in Sacramento. They racked up more than $6 million in lobbying bills in just five years. And that doesn’t include the $48 million they’ve on spent California campaign contributions since 2005.

It’s clear that all the corporate tax giveaways and high-powered lobbyists are paying off for Chevron. During just three months of 2008, Chevron raked in $7.9 billion in profits – more than doubling their profits from a year earlier.

Chevron’s abuse of corporate tax breaks is costing us all. Because Chevron’s not paying its fair share, we’re looking at fewer teachers in our classrooms, fewer firefighters and police protecting our families, and almost a million more kids without health insurance.

We hope you can join us tomorrow to shed some light on how these corporate tax breaks are impacting all Californians. You can find all locations and times for the actions at our Facebook group, No More Budget Cuts Until Corporate Tax Breaks Are Shut Down . And if you haven’t signed the online petition to repeal corporate tax giveaways, please take a second to do so.

(Updated with action items. – promoted by Brian Leubitz)

UPDATE: The Cal Labor Federation has set up an online petition and a Facebook group to oppose the corporate tax cut. Hit ’em both up.

David Dayen has been tracking the status of the corporate tax cuts that will net a very small number of corporations a very large tax savings, even pointing out programs that could be saved if we eliminated this corporate tax shelter. Slowly, but steadily the story of this little escapade of corporate indulgence in a period of desperate economic straits.

During the state’s last two budget impasses — when the Legislature slashed $20 billion from its budget in the face of massive deficits — many said there were no winners in the process. But some did win, and win big, according to a recent report from the non-partisan, nonprofit California Budget Project.

As a part of its September 2008 and February 2009 budget deals, the Legislature enacted three changes to California’s corporate income tax laws that departed from long-standing policies and will result in an estimated $640 million hit to this fiscal year’s budget and, at full implementation, an expected annual revenue loss of $2 billion. It will also mean millions in annual savings for some of the state’s largest corporations.

The changes — which allow corporations to choose between two methods of determining their taxable income, to share tax credits and to claim refunds on previous years’ taxes — were enacted without any public hearings or public testimony. (Times-Standard 6/11/09)

The elective sales factor, as this cut is known, is a tax cut. There is no other way to describe it. It is selfish and short-sighted. Do its supporters, like Walt Disney, Apple, and Intel, really think that they can function in a California without basic services? Do the Silicon Valley companies think they can continue to hire good talent when our universities crumble and when our public infrastructure makes living in the region unmanageable? Or are they content to play California off other states in budget crisis mode to beat down the level of government.

While these corporations are talking about a simple procedural option, the fact is that this is new.  Other states do not allow this elective sales factor option. It makes California something of a tax haven, and in a time when we are cutting education to unprecedented levels, it makes no sense. From both a fairness and a fiscal perspective, allowing this tax cut to take place is sheer madness.

This tax cut must be first in line on the chopping block. While the Republicans will pretend that this is somehow a natural born right for all corporations, these are not popular tax breaks.  We have room here to push, and we must do our best to make it clear to every Californian how this came about and how it must end. A large coalition of labor, good government, child welfare, and seniors groups have joined to issue a letter to Legislative leadership saying pretty much that:

There must be no more budget cuts until corporate tax cuts are shut down. The most recent corporate tax breaks give away $2.5 billion a year, every year, permanently, to a handful of the world’s largest corporations.

These times are challenging. We understand that you face tough choices. But you do have choices. The $2.5 billion in unnecessary corporate tax giveaways could be used instead to help keep teachers in the classroom, public safety personnel on duty, infrastructure projects moving, and our treasured state parks open.

So, the question to the Legislature is then, do you represent corporations or Californians?

Full letter over the flip.

Dear Senators Steinberg and Hollingsworth and Assemblymembers Bass and Blakeslee:

There must be no more budget cuts until corporate tax cuts are shut down. The most recent corporate tax breaks give away $2.5 billion a year, every year, permanently, to a handful of the world’s largest corporations.

These times are challenging. We understand that you face tough choices. But you do have choices. The $2.5 billion in unnecessary corporate tax giveaways could be used instead to help keep teachers in the classroom, public safety personnel on duty, infrastructure projects moving, and our treasured state parks open. It would mean fewer of our most vulnerable citizens – children, seniors and the disabled – go without the services they desperately need.

These egregious giveaways have no value to the state or the majority of its businesses. Tax cuts like the elective single sales factor, tax credit sharing, and net operating loss carrybacks not only weaken our state in the current crisis, they will create a bigger budget gap in future years. And these tax giveaways do nothing to help create jobs or soften the economic blow so many families are facing.

Fairness dictates that everyone shares in the pain. And that includes some of the world’s wealthiest corporations. Before considering additional cuts to programs Californians care so deeply about, we ask that you shut down these corporate tax giveaways.

Sincerely,

California Labor Federation

ACORN

American Federation of State, County and Municipal Employees (AFSCME)

Asian Pacific American Legal Center

Asian Pacific Environmental Network (APEN)

Association of California State Supervisors

California Alliance for Retired Americans (CARA)

California Budget Project (CBP)

California Church IMPACT

California Conference Board of the Amalgamated Transit Union

California Conference of Machinists

California Faculty Association (CFA)

California Federation of Interpreters

California Federation of Teachers (CFT)

California League of Conservation Voters

California Nevada Conference of Operating Engineers

California Nurses Association (CNA)

California Pan-Ethnic Health Network

California Partnership

California Primary Care Association

California Professional Firefighters (CPF)

California Reinvestment Coalition

California Rural Legal Assistance Foundation (CRLAF)

California School Employees Association

California State Employees Association

California Tax Reform Association

California Teamsters Public Affairs Council

California WIC Association

California/Nevada Community Action Partnership

CALPIRG

Center for Environmental Health

Child Care Law Center

Children’s Defense Fund-California

Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA)

Coalition of California Welfare Rights Organizations, Inc.

Communication Workers of America, District 9

Congress of California Seniors

Consumer Attorneys of California

Consumer Federation of California

Consumer Watchdog

Consumers for Automobile Reliability and Safety

Friends Committee on Legislation of California

Glendale City Employees Association

Guam Communications Network

Having Our Say Coalition

Health Access California

International Longshore and Warehouse Union, Northern California District Council

International Longshore and Warehouse Union, Southern California District Council

JERICHO, a Voice for Justice

Latino Health Alliance

Lutheran Office of Public Policy – California

Madera Coalition for Community Justice

National Lawyers Guild Labor & Employment Committee

National Lawyers Guild, Los Angeles Chapter

Older Women’s League of California

Organization of SMUD Employees

Parent Voices

Professional and Technical Engineers, IFPTE Local 21, AFL-CIO

Public Advocates Inc.

Rural Community Assistance Corp

San Bernardino Public Employees Association

San Luis Obispo County Employees Association

Santa Rosa City Employees Association

Service Employees International Union, Local 1000

Services, Immigrant Rights, and Education Network (SIREN)

State Building and Construction Trades Council (SBCTC)

Time for Change Foundation

UAW Local 2865

UAW Local 4123

UNITE-HERE

United Food and Commercial Workers, Western States Council (UFCW)

United Transportation Union (UTU)

UPTE-CWA, Local 9119

Western Center on Law and Poverty

Women’s Foundation of California

Cc: Governor Arnold Schwarzenegger