Pot Calls the Kettle ‘Shady’

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Assembly Speaker John Perez was quoted in a New York Times story last week saying this about a California city: “How shady its practices have been. And the more I looked at it, the more I realized this was really the center of tremendous corruption.”

He’s talking about Sacramento, right? Or maybe Los Angeles?

Nope. He’s referring to Vernon. A town comprising 5.2 square miles and 80-some residents. In Perez’s mind, tiny Vernon is the source of most of the depravity here in California.

That’s why Perez wrote a bill to disincorporate the town, and he took the time to tour Vernon with a New York Times reporter. And it’s why the Los Angeles City Council last week voted unanimously to support Perez’s bill.

Now, to be sure, Vernon is not as pure as the Archdiocese of Los Angeles. OK, bad analogy. But some funny stuff has definitely gone down in Vernon. Since the 30 houses in that town are owned by the city and the residents are city workers who pay low, low rates to live in those homes, Vernon has created, ummm, shall we say, a pliant electorate. A cleanup is in order.

But disincorporation? Isn’t that a little extreme? Maybe Perez’s next bill can call for life sentences for traffic offenders.

And excuse me, but shouldn’t the Los Angeles City Council and the California General Assembly be tending to their own crises? You know: the ones they created.

We all know that the dominant political players in both Sacramento and Los Angeles are bought and paid for by unions. And for payback, those dominant political types have given the public-sector unions plump salaries and guaranteed huge pensions. So much so, that those obligations are bleeding the state and the city into bankruptcy.

I mean, if Perez really wants to see shady practices and tremendous corruption, he could take a look at Sacramento and Los Angeles.

Now, we can see what’s really going on here. The state and the city want to dissolve Vernon so they can get a shot at taking over its tax base. The one thing Vernon has been very successful at attracting, other than crooks, is business. Vernon reportedly has 1,800 businesses with 50,000 workers.

The businesses are attracted there because of a rarity in Los Angeles: low taxes and low electricity rates, thanks to Vernon’s city-owned utility. One Vernon business told the Business Journal’s Alexa Hyland last November that his $30,000 a month electric bill would jump to $40,000 if Vernon was taken over by Los Angeles or to $46,000 if it were taken over by the county. And his company’s taxes would shoot up from about $1,000 a year to $174,400.

Of course, that’s exactly why Perez and the Los Angeles City Council are rubbing their hands. That fresh tax money from all those businesses will help them patch the yawning budget holes they created, thanks to their profligate spending. All that new tax money will help them pay off their union bosses.

The businesses, of course, will be the ones stuck with shocking bills. And you know what the eventual result will be. A few businesses will stay and grow. A few will leave. Probably most will stay but slowly shrink, choosing to expand in other more business-friendly places.

In the end, Vernon will no longer be a business magnet, creating thousands of jobs. It will probably become much like (or maybe even part of) its larger neighbor, Los Angeles. You know, the city that hasn’t created one net new payroll job in more than 20 years.

Thank you, Mr. Speaker.

Charles Crumpley is editor of the Business Journal. He can be reached at [email protected].

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