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Opinion

Commentary: Of Comcast, Roche, tax breaks and layoffs

Dan Morain - The Sacramento Bee

November 22, 2010 12:39 PM

What perverse thank-you notes we Californians received last week.

To secure approval of last month's budget deal, Gov. Arnold Schwarzenegger and the Legislature granted a sweet little tax break to our friendly Philadelphia-based cable company, Comcast.

Comcast told state authorities on Wednesday that it plans to lay off as many as 212 California workers at the start of the year, moving at least 150 jobs from Livermore to Utah.

On Election Day, voters overwhelmingly defeated an initiative that would have repealed $1.5 billion in corporation tax breaks approved by the governor and Legislature in 2009.

Swiss pharmaceutical giant Roche, through its California subsidiary, Genentech, was the largest donor to the campaign to kill the initiative, Proposition 24, essentially acknowledging that Roche will benefit mightily from the 2009 deal.

With its California tax break secure, Roche last week issued an announcement from its headquarters in Basel, Switzerland, saying it would be implementing its "Operational Excellence Program."

Translation: Roche would be laying off 4,800 people worldwide including 840 Genentech employees in the San Francisco Bay Area and from its Vacaville facility after the start of the year.

What interesting timing. No political consultant would have ever advised that Roche announce lay-offs in the days leading up to the Nov. 2 vote on Proposition 24.

Sophisticated political player that it is, Comcast surely would not have announced that it was shipping jobs to Utah if the California tax legislation had been pending.

Comcast is not the only beneficiary of legislation. It applies to other out-of-state companies such as Microsoft that sell so-called "intangible" goods into the state, including cable or software licensing agreements. California authorities estimate the provision will save such companies $100 million a year.

To read the complete column, visit www.sacbee.com.

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