Friday, July 26, 2013

Snyder’s Big Corporate Tax Break Backfires

Amy Kerr Hardin/Democracy Tree

Remember when Gov. Snyder just willy-nilly gave away $1.7 billion in tax breaks to Michigan corporations, all completely untethered to any job-creating requirements, and then assured the state that his business buddies would come through with a flood of employment opportunities? Well, so do the 8.7 percent of officially unemployed Michiganders found in last week’s state jobs report (with a whopping 18 percent in Detroit, and only a .6 percent improvement since he was elected). Compared to the national average of 7.6 percent from the June numbers out of the Bureau of Labor Statistics, Michigan continues to seriously lag.
On Sunday, the tired-looking governor appeared on Meet the Press to discuss the situation in Detroit. He anemically spoke about his committment to “focus on the citizens” of the city by providing them with more accountability in government. He additionally expressed that he was “empathetic” with those public sector workers that will likely feel a profound impact on their pensions and healthcare plans. He also talked about the importance of“blight removal” for the city.
Hello, jobs?
Immediately after Snyder, former Governor Jennifer Granholm came on. She launched into an energetic explanation of how the Motor City can move forward. She strongly advocated for a robust and coordinated federal manufacturing policy — an argument that makes good sense considering the ultimate futility of the ongoing state-against-state fight for businesses to relocate. Democracy Tree reported last month that Michigan has already given away the most corporate tax “mega-deals” in the country — 29 in total, costing an estimated $7.1 billion in tax incentives over the past thirty years, all to mostly Fortune 500 companies.
Barely two months ago, the Bloomfield Hills building firm, PulteGroup (listed as number 501 on the Fortune 1000), announced they were moving to Atlanta, Georgia after having been heavily wooed by their governor and city leaders in a full-court press that bagged the homebuilding giant some sweet cash. While Michigan will lose a little over 300 jobs, the Wall Street Journal reported on the Georgia bargain:
The city [Atlanta]and state are collaborating on an incentive package for Pulte that includes a $1.5 million state grant, as well as a city grant whose size has not yet been determined, according to Brian McGowan, chief executive of Invest Atlanta, the economic development arm of the city.
Georgia’s aptly named Republican Gov. Nathan Deal boasted of his corporate coup thusly:
“Georgia is a natural headquarters for homebuilders such as PulteGroup. Pulte will not only be able to quickly build its growth markets from a strategic central location, it will also thrive in a dynamic business environment powered by the fourth-largest population growth in the country.”
And just today we learn that Georgia’s Department of Economic Developement has lured away Troy-based Field Services Engineering. The firm plans to invest $5 million in expansion and add 50 jobs to the Peach State’s economy.
Gov. Deal isn’t alone. Texas Gov. Rick Perry has been peppering other states with radio and television spots promising a better business environment. In New York state alone, he recently spent one million on TV ads, and $600,000 on radio.  The ads say:
“The new New York sounds a lot like the old New York. Higher taxes. Stifling regulations. Bureaucrats telling you whether you can even drink a Big Gulp. Texas is calling. Your opportunity awaits.”
Republican governors, with their tax deals and deregulation promises, are cutting each other’s throats, while greedy business moguls continue to vacuum up the dollars thrown at them, possessing no sense of corporate citizenship or loyalty to the workers, let alone to these foolish elected leaders showering them with cash.
Will the governors discuss this at their upcoming 30th Biennial Mackinac Republican Leadership Conference scheduled for September 20th through 22nd at the Grand Hotel on Mackinac Island? (Oh, how Democracy Tree would just love to arrange the seating charts at that gala affair.)
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