Business and Government: The View from America’s Local Governments

• In Event: Interest Groups: Ideology, Influence, and Strategy

Abstract

In recent decades, the US Chamber of Commerce has aligned firmly with the Republican Party and the conservative movement in national politics (Hacker and Pierson 2017), leading to a common perception that business in the United States is generally anti-government, opposed to taxation, and supportive of cuts to government spending (importantly, though, see Bonica 2016). In this paper, I explore whether that expectation of business-as-anti-government breaks down at the level of US local government--and whether businesses and chambers of commerce have a very different relationship to “government” when the government in question is a city, county, or school district. Not only do local governments play an important role in economic development (Peterson 1981), which affects businesses, but local governments also provide public services that local businesses depend on--and that stand to affect their profitability. Thus, I consider the possibility that under some conditions, especially in local government, businesses and chambers of commerce may actually be quite supportive of strong, well-funded, and effective government.

To explore this possibility, I turn to a new hand-collected dataset of campaign contributions to local tax ballot measures in California. California is a useful state to focus on because 1) it is a large state with many local governments, 2) its local governments vary in size and the partisan and ideological leanings of their residents, and 3) in order for its local governments to raise taxes, such as the sales tax in cities, they have to get approval via ballot measure. Moreover, the California Elections Data Archive (CEDA) assembles key information about each local ballot measure in the state in each year. Using information in the CEDA database, I have completed hundreds of public records requests to acquire the individual-level contribution reports for and against each ballot measure that would increase local taxes, from 2018 to 2020. I am currently in the process of coding all of these individual contributions according to whether the contribution was from an individual, a business, or another kind of organization, such as a labor union. Where applicable, I am also coding the type of business contributing. With these data, I will be able to evaluate the frequency with which businesses and business groups give to tax ballot measures as well as the amounts given. Most importantly, I will assess the degree to which businesses contribute “for” or “against” the tax increases--thus learning about businesses’ positions on local taxation. Finally, I will be able to test expectations about how businesses’ positions on tax increases vary depending on the type of tax (e.g., sales tax versus business license tax), the preexisting tax rate, and the type of business.

In addition to this quantitative data collection and analysis, I am conducting in-depth interviews with the heads of local chambers of commerce in California, in which the interviewees are asked about their organizational membership, political engagement, and their priorities and positions on local policy matters. The paper will also report the results of a national survey of the heads of economic development in US cities, in which those local officials will be asked about the role of businesses and local chambers of commerce in their policymaking. The results of this three-pronged study promise to shed new light on the role of business in American politics and policymaking by shifting the focus beyond the national government to the tens thousands of local governments that make critical policy decisions in areas including housing, policing, fire protection, infrastructure, and public education.

Bonica, Adam. “Avenues of Influence: On the Political Expenditures of Corporations and Their Directors and Executives.” Business and Politics 18, no. 4 (2016): 367–94.

Hacker, Jacob S., and Paul Pierson. American Amnesia: How the War on Government Led us to Forget What Made America Prosper. Simon and Schuster, 2017.

Peterson, Paul E. City Limits. University of Chicago Press, 1981.

Author

• Sarah F. Anzia, University of California-Berkeley