AOC takes victory lap after Amazon goes to NYC — even after she helped block $3 billion in subsidies

[Joes Place]

What in earth are you smoking? Let’s play this out in real simple terms that you probably won’t understand anyway.
Let’s say the city of Ames sets their 2020 fiscal budget. It’s locked in based on known tax revenue from last year. It’s locked in...

now, Amazon approaches the mayor of Ames and says that they would like to build an office building and employ 5000 people in 2020...but Amazon wants property tax waivers for 10 years that would total $20 million.

If the Major says yes, it doesn’t effect the approved budget one bit. Other companies don’t have to supplement lost revenue. If the Mayor says no, it doesn’t effect the budget one bit either. The revenue wasn’t projected and the revenue isn’t lost.

see how easy that is.

Again: go READ how these things play out. You're simpleton analysis ignores most of the underlying facts.

MOST of the time, additional infrastructure is necessary for these new "facilities" moving into areas. Wisconsin diverted many millions from OTHER projects to the FoxConn complex; now FoxConn dropped the job projections by about 10x. Revenues needed for OTHER things aren't there, so people will pay higher taxes to cover those projects. Meanwhile, the spend on the infrastructure for the "new stuff" is a fixed cost, and has to come from somewhere.

Go READ about how these things generally play out.

 

[ihhawk]

Again: go READ how these things play out. You're simpleton analysis ignores most of the underlying facts.

MOST of the time, additional infrastructure is necessary for these new "facilities" moving into areas. Wisconsin diverted many millions from OTHER projects to the FoxConn complex; now FoxConn dropped the job projections by about 10x. Revenues needed for OTHER things aren't there, so people will pay higher taxes to cover those projects. Meanwhile, the spend on the infrastructure for the "new stuff" is a fixed cost, and has to come from somewhere.

Go READ about how these things generally play out.

My simple analysis is called math and logic. try it sometime

 

[unIowa]

How exactly did she save the public billions? She’s not very bright.

Fact: She cost NY tax payers millions.

 

[unIowa]

Again: go READ how these things play out. You're simpleton analysis ignores most of the underlying facts.

MOST of the time, additional infrastructure is necessary for these new "facilities" moving into areas. Wisconsin diverted many millions from OTHER projects to the FoxConn complex; now FoxConn dropped the job projections by about 10x. Revenues needed for OTHER things aren't there, so people will pay higher taxes to cover those projects. Meanwhile, the spend on the infrastructure for the "new stuff" is a fixed cost, and has to come from somewhere.

Go READ about how these things generally play out.

Then Wisco should of built those contingencies/requirements into the FoxConn agreement. That would have been more than fair on their part and my guess is FoxConn would have agreed.

We will give you XYZ tax treatments in exchange for the scope you initially proposed/presented and what was agreed upon.

 

[BioHawk]

She spent $0, got 2500 jobs. Below the 'average' spend trend. Avg cost for that is more like $15-20k/job per Forbes.

You want them to spend $130k/job for allegedly 23k jobs. That is WAY ABOVE the cost trend Forbes points out.

Is that fiscally responsible? Per this Forbes chart, getting 23k jobs you should be spending well below 10-20k per job. 100k+ is a 10x premium.

Again, EDUCATE yourself on this stuff.

Why should they read when Fox News can just tell them what to think. That will save them at least 5 minutes of their time and not even have to stress those brain cells.

 

[BioHawk]

Fact: She cost NY tax payers millions.

FYI: Putting the word "Fact" in front of a statement doesn't make it true.

 

[BioHawk]

My simple analysis is called math and logic. try it sometime

Show your work.

 

[unIowa]

Fact: Putting the word "Fact" in front of a statement doesn't make it true.

FIFY

 

[BioHawk]

FIFY

I don't get it. You changed a word in my statement to make it as ignorant as your statement? What are you trying to prove?

 

[unIowa]

Show your work.

25,000 greater than 1,500 is really all I have seen that we have to go off of.

Do you have the wage layouts for both, if you have that then I can do the math.

 

[Joes Place]

My simple analysis is called math and logic. try it sometime

Your simple analysis leaves out many of the costs that fall onto other taxpayers.
Go LEARN about it.

 

[unIowa]

I don't get it. You changed a word in my statement to make it as ignorant as your statement? What are you trying to prove?

That you were correct in your statement but that doesn't prove I was wrong.

 

[BioHawk]

25,000 greater than 1,500 is really all I have seen that we have to go off of.

Do you have the wage layouts for both, if you have that then I can do the math.

Oh, so you are just going to ignore all the evidence that says the job numbers companies promise to municipalities vs. the number of jobs they actually bring in are completely different things. You also seem to be ignoring the cost analysis evidence of how much it costs the municipality and taxpayers to bring in each of those jobs as well. How Republican of you.

 

[Joes Place]

Then Wisco should of built those contingencies/requirements into the FoxConn agreement.

This IS the problem.

Large companies have far more sophisticated lawyers and actuaries to figure out their risks/benefits. Most municipalities, particularly smaller ones, do not. And they end up with unanticipated costs which they have to now shift onto other businesses and residents.

Again....go READ about how most of these things play out. If YOUR locality is looking to do this, point them out to the pitfalls so they perform adequate due-diligence so they are NOT victimized by it.

 

[Joes Place]

Oh, so you are just going to ignore all the evidence that says the job numbers companies promise to municipalities vs. the number of jobs they actually bring in are completely different things. You also seem to be ignoring the cost analysis evidence of how much it costs the municipality and taxpayers to bring in each of those jobs as well. How Republican of you.

The friggin' "liberal CATO INSTITUTE" has pointed out the problems.

That ain't "conservative" enough for them.

Their issue here is that AOC is (probably falsely) claiming credit; the fact a Dem did something that back-doored into being the correct call is too much for them to swallow.

 

[Joes Place]

my guess is....

Uh huh.

 

[unIowa]

Your simple analysis leaves out many of the costs that fall onto other taxpayers.
Go LEARN about it.

And your "no analysis" doesn't take into account the potential income tax revenue the state/city would have received via the income of 25,000 tax payers. Some of that added revenue may have been cannibalized from other sources, some of it may have been brand new, we really don't know. It may have also provided more stable and predictable tax revenue for the state/city as well, hard to say as none of us have a crystal ball in regards to what the economic future might hold in the near, mid, long term. It likely would have created added sales tax in and around the area as well.

You are also, wrongly, taking into account potential corp tax revenues that may never happen without the amazon project.

Lastly, NYC is the financial and commerce center of the earth so that in of itself puts them in a better negotiating position than say Des Moines, IA or Columbus, OH so while NY may have come out a winner in this case I wouldn't necessarily suggest these same hard ball tactics for smaller/regional cities where more jobs should almost universally be considered a good thing.

 

[Joes Place]

And your "no analysis" doesn't take into account the potential income tax revenue the state/city would have received via the income of 25,000 tax payers.

Yes. It does.

READ the articles I've linked. In many cases, ROI for these boondoggles can be upwards of 4 decades.
The local tax money they take in is very small.

Forbes article has lots of good numbers in it.

Again, this doesn't mean EVERY incentivized tax break is bad; but on the whole, MOST of them are.

 

[TJ8869]

Again, this doesn't mean EVERY incentivized tax break is bad; but on the whole, MOST of them are.

Which, again, is why I'm withholding judgment on this particular deal between northern Virginia and Amazon.

 

[Hawk and Awe]

What in earth are you smoking? Let’s play this out in real simple terms that you probably won’t understand anyway.
Let’s say the city of Ames sets their 2020 fiscal budget. It’s locked in based on known tax revenue from last year. It’s locked in...

now, Amazon approaches the mayor of Ames and says that they would like to build an office building and employ 5000 people in 2020...but Amazon wants property tax waivers for 10 years that would total $20 million.

If the Major says yes, it doesn’t effect the approved budget one bit. Other companies don’t have to supplement lost revenue. If the Mayor says no, it doesn’t effect the budget one bit either. The revenue wasn’t projected and the revenue isn’t lost.

see how easy that is.

The biggest problem with these deals IMO is this misperception. It’s nowhere near this simple.

Just off the top of my head... An office complex with $20 million in subsidies may create traffic problems and have utility needs so there’s definitely some infrastructure to think through.

And what happens in 10 years? Can they pickup and leave?

And what if my website company down the road is competing with them for talent. I have to pay property tax and he doesn’t - those dollars could go right into stealing my people.

And most importantly - why can’t Amazon pay for it themselves as designed? If the answer is because a neighboring town is willing to do it I think that sucks.

I saw these deals in KC where companies were attracted to move from one community to another. In one instance there was a huge TIF deal given out to get a software company to move about 5 miles down the road (from Shawnee to Lenexa). That’s not always the case - I’ve seen plenty of real estate projects where it can be win/win - but to try and simplify like you did is ridiculous

 

[THE_DEVIL]

So 25,000 down to 1,500. Are we to believe Amazon is so pissed at the state they will sabotage themselves by spitefully only hiring a small amount of people and end up paying those 1,500 workers overtime for years on end? Or...those jobs were never coming in the first place

 

[Joes Place]

The biggest problem with these deals IMO is this misperception. It’s nowhere near this simple.

The problem here is: HE is this "simple" (the poster you're replying to) and incapable of understanding the problems or reading about the direct experiences outlined for communities this has cost dearly.

The Cost Per Job is the key metric here, because when accounting for the benefits, you need to make sure you're getting an ROI that is less than a decade, and that the externalized costs aren't being pushed onto the other businesses. Those become a drag on the rest of the community, and it's why municipalities need to do their homework and not be afraid of walking away from a 'bad deal'.

All too often, the minions fall back on "Reps wanted this - it must be BAD" or "Dems wanted this - it must be BAD", rather than investing the time to understand any of it themselves. It is exactly what is happening here - people are triggered because AOC 'associated' herself with it. Whether she really "did" anything, or not.

 

[wausauhawk]

Go back and read how FoxCon conned Wisconsin. Taxpayers will be paying for that mess for the next several decades - and they could have had light-rail between Madison and Milwaukee for much less than they are paying.

As a WI resident I guarantee the way Walker & Republicans bungled the Foxconn deal was the main reason they lost every statewide election last Nov.

 

[joelbc1]

What in earth are you smoking? Let’s play this out in real simple terms that you probably won’t understand anyway.
Let’s say the city of Ames sets their 2020 fiscal budget. It’s locked in based on known tax revenue from last year. It’s locked in...

now, Amazon approaches the mayor of Ames and says that they would like to build an office building and employ 5000 people in 2020...but Amazon wants property tax waivers for 10 years that would total $20 million.

If the Major says yes, it doesn’t effect the approved budget one bit. Other companies don’t have to supplement lost revenue. If the Mayor says no, it doesn’t effect the budget one bit either. The revenue wasn’t projected and the revenue isn’t lost.

see how easy that is.

depends on what "Amazon" wants and expects in city services....Do they want/need water/ sewage/ streets/electricity provided for them...or all they already in existence? There is a cost involved...even if it is the city who performs the service.....Who pays for these services? The taxpayer does.....sooner or later.

 

[HawkeyeShawn]

I'm curious, has your town of 700 seen significant growth in it's population in the last 12 yrs? New housing starts and such?

Depends on your definition of significant. We have had a new housing project over those years and have added about 10 new houses. When you look at our small town, that is significant. I’ve lived here 22 years. This town was dying the first 10. We lost our school to consolidation. Houses were dirt cheap. We bought our first house for $56k. The grocery store and hardware store closed. The elevator closed. We lost population. The city also did not have the funds for any improvements. I don’t think anyone here really wants to grow substantially in population. The housing market has rebounded and 3 new homes are under construction currently. During this 12 year timeframe, we also helped subsidize a major construction project and turned our old school into apartments. That alone added 30-50 to our population as it’s been at full capacity since opening day.

 

[joelbc1]

Then Wisco should of built those contingencies/requirements into the FoxConn agreement. That would have been more than fair on their part and my guess is FoxConn would have agreed.

We will give you XYZ tax treatments in exchange for the scope you initially proposed/presented and what was agreed upon.

This agreement was ramrodded by Republicans in Wisky....they took the bait hook, line and sinker w/o checking if the bait was any good.

 

[HawkeyeShawn]

FYI: Putting the word "Fact" in front of a statement doesn't make it true.

He should have used “Fun Fact”. That adds much more credibility to arguments.

 

[Menace Sockeyes]

And the best part about this deal for NYC is that before they were only going to get 25,000 new jobs. With this deal they get 1500.

Wait...

LOL if you think that is anywhere close to accurate.

 

[Menace Sockeyes]

Honestly...how realistic was the 25k number? Sounds like a lot of corporate BS and blue sky to me. I am just a small town Iowa boy, but I have NEVER healed of a company coming to a new location and providing 25000 new jobs.

EXACTLY. Death, taxes, and companies begging for a public handout not creating near the amount of jobs they promise.

 

[joelbc1]

EXACTLY. Death, taxes, and companies begging for a public handout not creating near the amount of jobs they promise.

These agreements need to be constantly reviewed and if they don't meet criteria, they need to be dropped immediately. Iowa is a great example of this kind of thing. A major reason Hubbell lost his governor's bid because he advocated reviewing these "deals" made and dropping the ones that don't measure up. Business loves $$$$$$ and they don't care where the money comes from. Meanwhile, folks who need the money don't get the money.

 

[Tom Paris]

She spent $0, got 2500 jobs. Below the 'average' spend trend. Avg cost for that is more like $15-20k/job per Forbes.

You want them to spend $130k/job for allegedly 23k jobs. That is WAY ABOVE the cost trend Forbes points out.

Is that fiscally responsible? Per this Forbes chart, getting 23k jobs you should be spending well below 10-20k per job. 100k+ is a 10x premium.

Again, EDUCATE yourself on this stuff.

The righties hate her because they are told to hate her. They don't actually listen to her. She's not perfect but she owns a lot of people when she is questioning them from her committee seat. She's spot on a lot, but these guys hate everything about her. For no real reason other than they don't think for themselves.

 

[unIowa]

This agreement was ramrodded by Republicans in Wisky....they took the bait hook, line and sinker w/o checking if the bait was any good.

Ok...so those govt officials doing a poor job automatically means that tax incentives to bring corporations into a state or city are automatically a bad idea? That is the argumentative position that Joe seems to be taking here.

 

[Jan Itor]

Again, go read about the FoxCon con.

Check the tower logs

 

[joelbc1]

Ok...so those govt officials doing a poor job automatically means that tax incentives to bring corporations into a state or city are automatically a bad idea? That is the argumentative position that Joe seems to be taking here.

It is also a large part to whom receives these "tax credits"....If you donate to Republicans, you are eligible for tax credits....Kum N'Go moved their hdqtrs. from WDM to DSM a few years ago...and they received a $4M tax credit....Now where in hell is Kum N'Go going to move if not Iowa? They really needed the $4M to stay in Iowa...and move 3 miles? And that is but a sample of how the Ioway Legislature has decided to spend its tax money......you want me to start on crony capitalism at its Ioway best...we can start talking about MedicAid "privatization".....That to date has been nothing short of thievery of tax money by the private sector.

 

[aflachawk]

And the best part about this deal for NYC is that before they were only going to get 25,000 new jobs. With this deal they get 1500.

Wait...

While I'm sure the number is lower, it was never going to be "25,000". Probably 2500-3000.

And, just like Wisconsin, most of those sweetheart deals never pan out for municipalities.

that was the original story. Where's your proof on the lower number you have

 

[Joes Place]

He should have used “Fun Fact”. That adds much more credibility to arguments.

Totally

 

[Hawk and Awe]

we also helped subsidize a major construction project and turned our old school into apartments. That alone added 30-50 to our population as it’s been at full capacity since opening day.

This is a great example of a project where TIF is wonderful tool. You removed blight, generated economic activity (without stealing it from a neighbor) and if it was done correctly took the developer from an ROI that would be rejected (based on risk) to something competitive.

Housing projects make for easy to understand win/win scenarios. Other opportunities are much less straight forward and I wish the city governments did a better job explaining it. Des Moines City’s are doing this more and more and it doesn’t seem like they’re transparent enough to understand it it’s a good deal or not.

 

[unIowa]

It is also a large part to whom receives these "tax credits"....If you donate to Republicans, you are eligible for tax credits....Kum N'Go moved their hdqtrs. from WDM to DSM a few years ago...and they received a $4M tax credit....Now where in hell is Kum N'Go going to move if not Iowa? They really needed the $4M to stay in Iowa...and move 3 miles? And that is but a sample of how the Ioway Legislature has decided to spend its tax money......you want me to start on crony capitalism at its Ioway best...we can start talking about MedicAid "privatization".....That to date has been nothing short of thievery of tax money by the private sector.

I wouldn't call Bezos a republican.

 

[Legend12]

So 25,000 down to 1,500. Are we to believe Amazon is so pissed at the state they will sabotage themselves by spitefully only hiring a small amount of people and end up paying those 1,500 workers overtime for years on end? Or...those jobs were never coming in the first place

Wut?

 

[HawkeyeShawn]

This is a great example of a project where TIF is wonderful tool. You removed blight, generated economic activity (without stealing it from a neighbor) and if it was done correctly took the developer from an ROI that would be rejected (based on risk) to something competitive.

Housing projects make for easy to understand win/win scenarios. Other opportunities are much less straight forward and I wish the city governments did a better job explaining it. Des Moines City’s are doing this more and more and it doesn’t seem like they’re transparent enough to understand it it’s a good deal or not.

Our city administration and council did not fully understand TIF until we hired a consultant. That consultant was a bargain compared to the amount the community benefited from. Yet we had old folks with torches and pitchforks storming our council meetings claiming were were bankrupting the town.