A goal without a plan is just a wish. -- Antoine de Saint-Exupery
A businessman, a boro' president, a business paper: anti-corporate welfare
Not just reformers but money-makers, too, want justice. We trim three 2008 articles: from the Lockport Union-Sun & Journal of June 16 by Mark Scheer and two by Clawback, a project of Good Jobs First.
by Jeffery J. Smith, August 2008Scheer: Lee Bordeleau, owner of an investment company in Lockport New York, paid for a billboard that proclaimed his Niagara County in New York state as the highest taxed county in America. He has raised $3,500 from residents willing to join him as plaintiffs in a suit against the state. They intend to prove in court that New York lawmakers violate the state’s constitution (Article VII, Section 8) each time they offer cash assistance in the form of tax dollars to business owners.
“They are robbing you and me and they are giving the money to a private corporation,” he said.
Bordeleau, who is working on the project with Buffalo attorney and Free Buffalo founder Jim Ostrowski, said the suit also will challenge the legality of “member item spending”, a practice in which state lawmakers set aside tax revenue to be used at their own discretion to curry favor with community organizations and finance pet projects.
As part of the suit, the plaintiffs will seek compensation for their legal costs from the state. If they are successful, Bordeleau will return the start-up dollars to each individual who participates.
Neither the state’s constitution, nor subsequent amendments, provide state government with the legal right to support what Ostrowski calls “corporate welfare.”
JJS: Elsewhere in New York state, the Big Apple dishes out big breaks for the big boys.
Clawback, Aug 6: Chain stores are proliferating in New York City, their bottom lines are uplifting, and they owe a lot to public money. Some chains, who’re already making millions, receive subsidies: Dunkin’ Donuts, McDonald’s, White Castle and Rite Aid. And many of these chains benefit from property tax breaks.
As big box stores creep into the city, they too have been subsidized. Most of the city’s seven Target and seven Kmart stores have received tax breaks from one legal entity, ICIP. The ICIP, which provides property tax breaks, has cost the city over $409 million in 2007.
In May, the Manhattan Borough President issued a report criticizing the ICIP tax breaks. The report noted that only about 12% of ICIP benefits for Manhattan retail went to independently owned businesses in 2008, with the remainder going to the more politically powerful chain stores.
Editor’s Note: Borough President Scott Stringer also supports the shift of the property tax from buildings to locations, which would spur owners to quit wasting so much prime land in Manhattan (whether they’re speculating, procrastinating, or whatever their reason).
Of course, providing tax breaks to chain stores isn’t something limited to New York. Cities and states across the country give millions in subsidies to chains, including big box stores such as Wal-Mart and Cabela’s.
Clawback, Aug 7: Outside of New York, another business entity, a leading Indiana journal, calls for a halt to the subsidy “charade”.
Reacting to a recent spate of taxpayer-subsidized corporate relocations from existing central Indiana sites to nearby communities, the state’s leading business paper has urged officials to be more tight-fisted when confronted with business threats to relocate outside the region or state.
In a recent article, Indianapolis Business Journal reporter Peter Schnitzler begins with Bowen Engineering receiving a property tax break worth $290,000 over seven years to move its headquarters and 103 jobs from suburban Fishers in Hamilton County to Indianapolis -- a distance of 8.5 miles.
Since Indianapolis and other central Indiana cities claim not to poach each other’s companies, officials of the unified Indianapolis/Marion County government approached Bowen only after the company threatened to leave central Indiana entirely if its space needs were not met.
Such relocations have been accompanied by substantial subsidies -- at least $23.4 million. Subsidizing intra-regional relocations most often aggravates suburban sprawl at the expense of needier urban areas.
State and local officials claim they are doing whatever’s necessary to keep companies in the region.”
Good Jobs First Executive Director Greg LeRoy countered that the recently subsidized companies were very likely not about to bolt: “Companies want to retain their skilled employees and proximity to suppliers and customers.
In a subsequent editorial, the Business Journal said the “rumblings about leaving the area” that accompanied the recent subsidy deals “all seem like a charade to us,” adding that the easy availability of incentives makes “companies feel like suckers if they don’t seek a handout.” The editorial urged state and local officials to end the charade and be stingier with such hand-outs.
Jeffery J. Smith runs the Forum on Geonomics.
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