Public Shells Out Dollars for Jobs Not CreatedPosted: November 20, 2016
By: Dave Duncan
On Sunday September 25, the Press & Sun-Bulletin ran a decent article outlining problems created when companies get property and other tax breaks for creating jobs. It asked what happens when those jobs fail to materialize and/or the company that was to provide the jobs flies away to get a new deal in some other geographic area. Cited was the 1998 expansion of Penguin Putnam, a book publishing plant in Kirkwood. A plant addition was built to create an additional 100 jobs to the Penguin workforce. For these additional jobs the Broome County Industrial Development Agency (BCIDA), now masquerading as the Agency, assessed the new addition at a very small fraction of the real property value, giving Penguin a big tax break. Seventeen years later, in June 2015, Penguin took off for a better deal in another state, leaving 286 workers without jobs. The BCIDA Director Kevin McLaughlin was quoted saying “there is nothing we could do.”
There Is Something the BCIDA Could Do.
Every company that requests tax breaks for creating jobs can put up a bond that they will forfeit if they do not create the promised number of jobs for the period of the tax break. The amount of the bond can be set according to the total tax break and give some leeway so it is permissible to only create and maintain 80% of the stated number of jobs promised. Having no penalty for companies grabbing taxpayer loot and running away is insane. Mr. McLaughlin should check with the Broome County Department of Social Services to see what the penalties are for taking $300 in Food Stamps under false pretenses. Is there no will in the BCIDA or County government to treat wealthy corporations the same way poor people are treated?
The BCIDA Rewarded the Gannett Corporation for Eliminating Jobs
The Gannett Corporation, parent company of the Press & Sun-Bulletin, the Elmira Star Gazette and The Ithaca Journal, was handed a multi-million dollar tax break when they built their new $50 million dollar plant in Johnson City, NY in 2005. Not only were there no jobs created in the Southern Tier of NY when this new plant was built, but the actual number of Gannett employees declined in the region. Gannett, with the use of modern technology and the consolidation of the Binghamton, Elmira and Ithaca papers, was able to affect cost cutting measures by eliminating workers. For this, the BCIDA gave Gannett access to the taxpayer’s wallet. The sales tax on the approximately $40 million in new equipment and building material and mortgage recording fees were waived by the BCIDA, plus they gave Gannett a 15 year 50% property tax break. Add to this the Gannett Company’s buyout of long term workers and the hiring of lower paid workers, we, the taxpayers, got a very bad deal.
Under our current economic system we cannot easily stop the profit hungry corporations from screwing the workers, but it should not be acceptable for the BCIDA or our elected officials to make the workers and the general public pay for the privilege given to Gannett and other corporations.
The BCIDA—Over 40 Years of No Accounting
For many years the People’s Press has been publicly lamenting that the BCIDA has been awarding hundreds of millions in tax breaks to local corporations without any accounting of the number of jobs created, the pay provided to the workers and the cost per job to the taxpayers. Maybe with the Gannett Corporation now on the scene, this problem will receive more attention unless, of course, it involves Gannett itself.