The Press Wants the Governor to Give Away More To Big BusinessPosted: August 3, 2015
A front page article in the Sunday, June 21st, of the Press informs the reader that NYS is not doing enough to keep businesses in the state. The headline reads, “State Makes Little Effort to Keep Businesses from Leaving.” An editorial accompanying the article instructs NYS Governor Cuomo to call any business that is thinking of leaving NY, and “tell these businesses that if there in anything you possible can do, you will do it to keep those jobs in New York State.” So in order to keep businesses from leaving NYS, the taxpayers should give the business owners more. The only way to understand this is to know that this statement coming from the local organ of big capital.
How Much More Can You Afford?
Since the governor is a stand in for you-and-me, it comes down, in Press terms to: how much more can WE do? As taxpayers (and we are all taxpayers), how much more money do you think you can give to NYS businesses? (Think big business since small ones do not fit into most of these schemes).
All of this “funds for business” is a trickle down program to bring jobs to the Southern Tier. We give the businesses public money, the businesses shares a large chuck of that with the CEO, the CEO’s job is to make profits for the stockholders and somewhere down the line some workers may get hired and paid something.
NYS and Income Distribution
Our current giveaway system to big business has resulted in NYS having the most unequal distribution of wealth in the nation. It could, of course, get worse.
IBM, EIT and Jobs is One Example
In 2001 IBM, was leaving its home in Endicott, NY. New York State stepped in and provided some well-connected locals about $80 million to take over the IBM operation. Local governments provided millions more in tax breaks. The purpose of this massive public expenditure was to retain the 2000 existing IBM jobs. What private money, if any, the locals put up has never been clear. Within weeks of the deal being finalized the new company, called EIT, began laying off workers. Today the number of jobs has shrunk to approximately 400. Were taxpayers of NYS ever reimbursed by the owners of EIT for the failure to retain the other 1600 jobs? No. NYS and the local governments never required it.
Taxpayers Funding a Shell Game
Many other existing publicly sponsored job programs have resulted in few if any jobs and a diminished tax base. The Metro Center Mall in Binghamton was sponsored with NYS dollars and a 99 year property tax break. The businesses renting in that Mall moved there from other locations in the area.
The Press was given millions in tax breaks to move from Vestal to Johnson City while also consolidating their operations here from Ithaca and Elmira. The Press was able to build a new plant, eliminate jobs and get long term tax breaks.
The Broome County Industrial Development Agency (BCIDA) has provided hundreds of millions in tax breaks to hundreds of corporations from both inside and outside the state to create jobs in Broome County. Yet, while the taxpayers have footed the bill, no one knows the number, if any, of jobs created in this long running scheme. The BCIDA has never kept track of them. We do know, however, that the jobs are not here.
Labor Costs—Not a Part of the Press Article
Part of the equation of jobs leaving one area and moving to another, whether in-state or not, is that many long term workers are eliminated when companies move from area to area. This process creates new, lower paid workers with lower benefit in the new plants. If a new worker in Arizona is paid $3 an hour less in pay and benefits than one in NYS, this amount can then go into the pockets of the CEO’ s and stockholders of the company. Saving $3 an hour each, for 200 workers, amounts to a company savings of $4,800 daily savings or $12,480,000 annually. Giving the company state, local property, sales tax breaks, and other financial incentives is just a bonus to the rich. When businesses leave the US shores for China, Mexico, etc., the savings is much greater. Of course the reverse is also true. Companies coming to NYS from someplace else can dump their long term workers for newer, lower paid ones here.
Many years ago the BCIDA advertised to developers nationwide that Broome County was the right location for their operation. Our local workers were educated, more productive than the national average, loyal (meaning not unionized) and cheap.
Cuomo Helping to Bring Down Labor Cost
Since labor cost is the main expense for the corporations, how do we cheapen down our labor costs to entice the corporations? We must eliminate or seriously reduce the size of the few remaining unions and jobs that pay a living wage. Cuomo does not have to be asked to help on this; he is already the darling of big capital. He is doing a good job busting the teachers and eliminating public service jobs. A bit more help from Cuomo and the Southern Tier will look better to capital investment. We will be competitive with Haiti. Did your party endorse Cuomo?
Maybe Bake Sales for the Corporations?
If we follow the Press’ suggestion of doing all we can to bring new corporations here, we will have to ask the taxpayers to provide more incentives. There is not much left in our wallets, but the residents could prepare dinners and bake cookies daily to give to CEO’s who are thinking of leaving town. Think bake sales and car washes.
No Free Enterprise System Here
Why have the heads of the BCIDA, the editors of the Press, local Democrat and Republican parties not heard of the Free Enterprise System? For whom do these people speak? Under Free Enterprise, capitalists put up their money and the profits belong to them. It is not for the people to put up the money with the profits going to the corporations (although historically that’s how things go in New York). The Press, the Chamber of Commerce, and the state and local development agencies are shilling for a system where the people put up the money and the people absorb any losses. The public also has to make improvements to the infrastructure for many new and existing businesses. New roads, off ramps, water and sewer lines, and industrial parks are a public expense that, with tax breaks are never repaid. Not to mention environmental clean-up programs like the Brownfield tax credits, wherein pollution produced by private companies is scrubbed, with tax payer dollars, for further private gain.
What If the Corporations Paid Their Fair Share?
Just think of how great life in Broome County would be if each existing corporation paid its fair share of taxes. Our schools, general services, infrastructure all could be improved. Why is the Press asking the average taxpayer to pay more of the corporations’ share? Let’s begin with the existing corporations paying their fair share.