Tick Tock - Memphis - Tick Tock The citizens of our city need to not only be aware of the tremendous amounts of money that are being spent by this cities mayor, the city council and the Chamber of Commerce on the PILOT (Payment in Lieu of Taxes) programs: $66 million on Raleigh Springs Mall $68 million on Beale Street Landing $21 million on AutoZone/Redbirds $12 million on Overton Square Parking $15 million on Sears Crosstown Renovation $48 million on the Pyramid $ 9 million on Harahan Bike Bridge -------------------------------------------- $239 million -- $239,000,000.00 dollars And this is what the Memphis Firefighters Association discovered about these PILOT grants from a recent report by Good Jobs First, a national economics studies organization, that stated the tax incentive program costs the city $42-million a year, an amount that will increase in years to come. Channel 24 in our city interviewed Memphis City Councilman Jim Strickland who had this to say about these PILOT grants - the city hands out too many PILOT grants, more than the rest of the state combined. He says the program is worthwhile, but needs tweaking like shorter terms. The Memphis Firefighter Association also stated - ...two performance audits found that more than 63% of the PILOT grants were not meeting job creation, wage and or capital investment goals. There has also been another article written about the Memphis PILOT grants from the Good Jobs First group, which stated that - ...state and local governments are wasting billions of economic development dollars each year on getting companies to relocate, instead of focusing on the creating completely new jobs. The report, titled ‚The Job-Creation Shell Game, details case studies and provides recommendations for solutions on the state and federal levels to stop what they call, state job fraud. Greg LeRoy, is the executive director of Good Jobs First and principal author of the report. He stated that the result is a vast waste of taxpayer funds, paying for the geographic reshuffling of existing jobs rather than new business activity. By pretending that these jobs are new, public officials and the recipient companies engage in what amounts to interstate job fraud. The case studies include the Kansas City metro area, where companies have been getting eight-figure subsidy packages to move from the Missouri side to Kansas, or vice versa. The report authors call Georgia the Poach State, which stunned officials in Ohio by successfully luring the headquarters of NCR from Dayton, where the company had been based for 125 years. According to the report, Mississippi is poaching jobs from Memphis, TN, while Tennessee created a new subsidy program to lure the North American headquarters of Nissan from California. The 16 counties in North Carolina and South Carolina are poaching from each other, and Illinois is being blackmailed by Sears Holding Corp., which has continued to shed jobs despite getting a second nine-figure retention deal from Illinois. The costs are high and the benefits are low, since a tiny number of companies get huge subsidies for moving what amounts to an insignificant number of jobs, added LeRoy. The flip side is job blackmail: the availability of relocation subsidies makes it possible for companies that have no intention of moving to extract payoffs from their home states to stay put. The report lists the largest relocation subsidies provided ever, with the $275 million Sears got last year to stay put in Illinois at the top of the list. The second one is Prudential Insurance, which got $250 million from New Jersey in 2011, also to stay put. The third one is Nissan, which got $244 million in 2005 from Tennessee to move its headquarters from Gardena, California to Nashville. The report does say that as many as 40 states have clamped down on this by making some incentive programs unavailable for jobs that are being moved around in-state. The report also recommends that states end their business recruitment activities that are explicitly designed to pirate existing jobs from other states. It also suggests the federal government should reserve a small portion of its economic development aid for those states that amend their incentive codes to make existing jobs ineligible for subsidies and certify that they no longer engage in interstate job poaching. These PILOT grants are what our city leaders are betting the future of our city on, and they are using the cities employees pensions and our insurance coverage as the chips in this high stakes game of finical poker. Tick Tock - Memphis - Tick Tock
Posted on: Tue, 15 Jul 2014 02:28:19 +0000
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