Well he is referring mostly to moving companies to the upstate region which actually really needs it. But I guarantee it is not convincing a company to bring 100 jobs to NYC. If Amazon wanted to build HQ2 in Utica NY or Buffalo I'd say give them all the breaks they want. But they were always going to move to a NY, Boston or DC for the talent and the contest was a sham.
Just some friendly advice from a Wisconsinite, you might want to walk that statement back a bit. Because that kind of attitude is how we ended up on the hook for $4 to $5 billion for Foxconn. (And that's for not even HALF the jobs that Amazon is talking about. All of them paying less than the Amazon jobs too.)
People have to start getting rational, and giving out benefits packages that actually make sense. "Give them all the breaks they want!!!", can lead to some really dark places.
On the other hand, misery loves company, so, yeah, I suppose if New Yorkers are that anxious, there's plenty of room down here to join us as the nation's corporate welfare laughing stock.
I feel like this argument is leaning too hard on a single example of a poorly-structured subsidy program. I don't think we should demonize all such efforts based on the Foxconn example. The Amazon HQ2 subsidies in NY are mostly from existing programs that have been operated for a long time, and those programs are structured so that the subsidy is available only when some requirement is already met (like a new job).
For example, most of the NY state subsidy is from the Excelsior program, which is issued in the from of a tax credit for jobs that were created (in the past) and other types of investment. See https://esd.ny.gov/sites/default/files/Excelsior-Regs-2818.p... (PDF) for the details of the program:
> "Net new jobs" means jobs created in this state that: ([1]i) are new to the state,(ii) have not been transferred from employment with another business located in this state including from a related person in this state or through an acquisition, merger, consolidation, or other reorganization of businesses or the acquisition of assets of another business,(iii) are either full-time wage-paying jobs or equivalent to a full-time wage-paying job requiring at least thirty-five hours per week,and (iv) are filled for more than six months.[and in excess of both the applicant’s employment as of the date the applicant is admitted into the Excelsior Jobs Program and the applicant’s employment base calculated as the average of the applicant’s employment in New York State for each of the four quarters immediately prior to the date it was issued a certificate of eligibility, or, if the applicant was not in business in New York State during all four quarters, the employment base shall be calculated as the average of the applicant’s employment in New York State for each of those quarters immediately prior to the date it was issued a certificate of eligibility in which the applicant was in business in New York State;]
Isn't that money only to be paid out if Foxconn actually hires all the people they said they would? Last I heard, Foxconn wasn't even sure that they were going to hire as many people as they originally thought they would.
That's the bad news, only about 4 of it is contingent. The rest we've already started gleefully spending. And it's on stuff we won't need if there is no 15000 worker plant there. I don't even want to get into the fact that we gave Foxconn real estate assets at wayyy below market value. Which assets were essentially confiscated from families that had been on that land for generations. (And to top all that off, the losses we took on those real estate deals are actually not counted in the 4 to 5 billion!)
And then there's the "nice to haves". Believe it or not there is a trolley car they're building in Milwaukee connected to all this. Those are the kinds of projects we should be waiting on until this whole thing is finished, and we're starting to collect on all that new tax revenue (profit) that everyone says we're gonna get. Then we should do that trolley car and all the other "nice to haves". Actually, we probably still shouldn't because we're not likely to be making much money on this deal at all, but if it's something people are just going to insist on then do it AFTER the money starts coming in.
I shouldn't complain, I suppose it's not like Wisconsinites are the only people out there who gleefully spend money before they get it. Worse, before they get it from someone who is CLEARLY doing this deal under duress. They don't even want to do the deal.
Arrgh. It's just the spending combined with the high likelihood that we're gonna be on the losing end of this deal just gets to you sometimes.
It's like Wisconsinites never heard of "risk mitigation"????
Yes, that's correct. No tax break is structured as a check that just shows up. They're usually contingent on meeting hiring thresholds or tenure. Amazon's tax breaks were going to be by head over several years.
Significant parts of the Wisconsin Foxconn deal were structured that way (such as development of infrastructure, etc).
The Amazon deal only benefits Amazon if they put money in, AFAICT. The government isnt on the hook to build anything for them. They get tax breaks on property and income taxes.
How is Wisconsin on the hook for billions of dollars if all they did was _not_ collect taxes? They shouldn't be able to be on the hook for anything if that's all they did. You sure they didn't get some kind of kickbacks as well?
We don't really have corporate taxes in Wisconsin per sé.
So this deal is structured as a series of payments to Foxconn of cold hard cash. In cartoonishly simplified terms - I pay my state taxes, and the state puts it in boxes of cash, and gives it to Foxconn at the rate of roughly $200,000 to $300,000 per job they create.
Good news is the factory isn't open, so payments haven't started. So, if we can get a little lucky, the whole thing will fall through and we can just eat the losses we've taken to date instead of staying at the table and putting the really big money into the pot.
