re post #330. There is so much more to life than those fiscal reports. Think quality of life. Florida’s educational system is certainly not in the top tier like its fiscal status. Amazon may be a business but its employees are people. It has to pick a location with advantages for its workers. Many do eventually marry and have kids who need an education. It certainly will be interesting to find out the choice. I know son won’t discuss it (another on his long list of reasons to hang up).
Not accurate. The State of Michigan is currently running a fairly substantial budget surplus.
The tragic situation with Flint’s drinking water had many causes including incompetence on the part of the managers of the city’s water supply system and gross negligence on the part of state officials, some of whom are now facing felony charges. Race and partisan politics may have had something to do with it. Flint is heavily black and overwhelmingly Democratic, and the party in charge in the state capital apparently just didn’t care.
Interesting idea about state’s financial management, though. If I was running a large company and looking for a site for up to 50,000 workers, I would take financial management of the new state into consideration.
That would be the kiss of death for Chicago as an option. Jersey is pretty poor as well but not as bad as IL.
State credit ratings:
http://www.treasurer.ca.gov/ratings/current.asp
Minnesota put in a proposal for the Twin Cities but our governor made it perfectly clear we’re not getting into a bidding war on public subsidies. They can get up to $3 million (yes, million with an “m”) under an existing state economic development program. That’s it. We’d be happy to have the additional tax revenue but it’s a fool’s errand to give away billions today in exchange for an unenforceable promise to return billions later in other people’s taxes. Many of these boondoggles don’t work out so well for the governments that shovel out all those subsidies. In some cases, the thing never gets built. Or it gets scaled back. Or it gets built and voila, the company figures out that it no longer needs as many employees as it projected. Or it gets phased in much more slowly than promised, so the return on public investment is eroded by the time value of money. Or it gets built, operates for a while, and then the company goes bust or otherwise scales back. Too many things can go wrong that are not in the control of the government shelling out all that money…
And when you consider the opportunity cost—like the improvements you could make to your health care or educational systems with all that money—it’s just not worth it to put that much taxpayer money at risk. But the time horizon of elected officials rarely extends beyond the next election, and they want to claim credit now for bringing jobs and economic growth to their cities or states. So they line up to give away our money on big splashy promises—and at the end of the day, that’s all you’re buying, unenforceable promises.
Wisconsin just agreed to give $3 billion to a Taiwanese manufacturer of flat screens to bring a large factory to southeastern Wisconsin. Fools. Brazil shelled out billions to the same company a few years ago on a similar kind of deal, and ended up getting approximately bupkes in return. What happened? “Market conditions changed.”
https://www.nytimes.com/2017/09/20/business/foxconn-trump-wisconsin.html
Again, unless there is a capital outlay, there are no cash outflows. All the state is doing with subsidies is deferring inflows that otherwise would not exist anyway. It is not as though Wisconsin is flushing $3B down the drain.
Subsidies look bad, but can actually work out very well as long as existing companies don’t expect the same deal.
This isn’t accurate, or at least it’s highly misleading. Wisconsin is giving Foxconn $250 million a year in refundable tax credits for 15 years. This could easily exceed what would otherwise be its state tax liability. The key here is “refundable tax credits.” If the tax credit exceeds the company’s tax liability, the state of Wisconsin writes Foxconn a giant check. Over and over again.
The state’s nonpartisan Legislative Fiscal Bureau estimates it will take 25 years for the state to recoup the windfall it’s handing Foxconn—longer, if some of the workers live in neighboring Illinois, just a few miles from the planned manufacturing facility, which is almost certain to be the case. And that’s assuming the plant gets fully ramped up to the most optimistic projections and is still operating at that level in 25 years. Good luck with that, given the rate of creative disruptions in tech industries.
Bribing corporations to create jobs in your community is a sucker’s game.
Tax incentives, hoping for trickle-down seems so incomplete. If they’re busy focusing on projects to satisfy the newcomer, say, improvements to Rt 1a in Revere, MA, extending a subway in another city, building bike paths, constructing new water and electric supply veins to the new complex, and more, they aren’t paying for that from new revenue. Where do they find that money?
Borrow, raise local taxes? Or rob Peter to pay Paul, skipping other local needs, say, police, schools, neighborhood infrastructure, in order to use that for Amazon? So it’s not just incentives to lure. It’s the real cost to the community that exists now.
Add me to the list of people souring on this. It feels like triple cost. Lost revenue, increased costs, affect on local residents.
Here is a article in my local paper about my city’s bid.
http://www.timesunion.com/business/article/CEG-spent-100-000-on-itsy-pitch-to-Amazon-12323229.php
And here is the article in The Onion about my city’s bid. We have to be the only city that got The Onion to sit up and notice!!
https://www.theonion.com/jeff-bezos-heart-breaks-a-little-reading-albany-s-amaz-1819819152
Denver’s infrastructure may not be up to par, says a study. (Locals say “duh!”)
https://www.denverite.com/colorado-amazon-chances-unlikely-45136/
And SAN DIEGO, CA wins the bid!!! Congrats SoCal!!
http://chicagotimesnews.com/amazon-chooses-san-diego-ca-for-hq2/
Which part of San Diego?
Broadcom will take over Qualcomm and move to San Diego too.
I am considering buying real estates in San Diego.
Where is the rest of the media? Don’t see anything anywhere else. Hmmm…
Right now, that link is the only news I see on this. Others?
Fake Russian news?
Seattle Times would have been all over it…
San Diego Union Tribune would also have been all over it.
Fake, or maybe someone was writing it for fun and it accidentally got published. I think it’s some kind of blog, definitely not any actual news organization publication. Notice it’s the first story in a year. How did this even get onto someone’s radar?
(1) Story say “After months of deliberation and exhaustive analysis taking into account lifestyle, talent markets, and cost-of-living, the company has finally come to a decision.” Um - it’s been days or maybe a couple of weeks, not months. Also Amazon themselves say that they will be narrowing down the options in the next few months and not making a decision until 2018.
(2) Actual Amazon bid was produced by the “San Diego Regional Economic Development Corp”, not “Prosper San Diego,” which doesn’t seem to even exist.
DS and I would both love it to be true but alas, not so.
Idk doschicos, could be fake? I didn’t see anything else other than that. Marilyn, yes I didn’t see SDUT write anything either…hmmm
Bummer
San Diego Union Tribune has been dead a long time ago.
Amazon did recently announce some smaller expansions in cities which already had offices. SD may be one.
In September, Amazon signed a lease for 107,000 square feet near UCSD, enough for 500 employees. It’s a development that includes former Qualcomm buildings. They didn’t announce what they will be using it for, but analyses of job postings suggest “game development, software engineering and machine learning/data science, among other fields”. Amazon already has a small tech office in Solona Beach - postings in that office are what initially got DS onto Amazon’s radar which led to a job in Seattle HQ overlooking the Biosphere.
And it took a while to get used to the U-T after 40 years of the Chicago Tribune, but I’m finding it adequate for local news.