Posted on 11/13/2018 10:45:44 AM PST by yesthatjallen
New York state is kicking in more than $1.5 billion in taxpayer-funded incentives for getting half of Amazon's second headquarters located in a section of Queens.
The Seattle-based company made its long-awaited announcement Tuesday, saying Long Island City and Alexandria, Virginia, will each get 25,000 jobs. The online retailer also said it will open an operations hub in Nashville, creating 5,000 jobs.
Amazon will also receive as-yet unspecified incentives from New York City.
New York state's incentives are nearly triple those of Virginia's, while Tennessee's are $102 million.
According to Amazon, the cost per job for New York taxpayers is $48,000, compared to $22,000 for Virginia and $13,000 for Tennessee.
In a statement released by Amazon, Cuomo called the agreement "one of the largest, most competitive economic development investments in U.S. history."
New York City Council Speaker Corey Johnson issued a statement saying: "Amazon is one of the richest companies in the world...I also don’t understand why a company as rich as Amazon would need nearly $2 billion in public money for its expansion plans at a time when New York desperately needs money for affordable housing, transportation, infrastructure and education."
Incentives offered to Amazon:
— Performance-based direct incentives of $1.525 billion, based on 25,000 full-time, high-paying jobs created. This includes a refundable tax credit of up to $1.2 billion calculated as a percentage of the salaries Amazon expects to pay employees over the next 10 years, which equates to $48,000 per job for 25,000 jobs with an average wage of over $150,000.
— Cash grant of $325 million based on the square footage of buildings occupied in the next 10 years.
— Amazon will also apply for as-of-right incentives including New York City's Industrial & Commercial Abatement Program and New York City's Relocation and Employment Assistance Program. There was no dollar figure immediately attached to this benefit.
City Benefits:
— More than 25,000 full-time jobs.
— $2.5 billion investment from Amazon.
It’s never worth it. You give away the farm for what? If being in NY was so attractive, then there’d be wave after wave of companies fighting to get in. There isn’t. But, for Amazon, they get everything on the cheap. LI City and nearby Brooklyn are liberal hipster mecca’s, so they’ll be no shortage of people to choose from. I wonder if any college kid trying to get a job with them knows that not only will they be paying federal and state income taxes, they’ll also be paying a NYC Income tax. So, when all is said and done, if you work in NYC, you’re paying out about 50% in income taxes, before you pay your cell phone bill.
If I’m not mistaken, Michigan stopped giving the film/tv industry tax breaks/incentives because they didn’t see the returns the industry lobbyists were promising. And now, cities are getting wise to the sports team owners as well. But, it’s still done. The middle class still takes it on the chin, every time these decisions are made.
Right now Georgia is crazy with the film industry. Wonder why? It’s a Right to Work state and the film companies don’t have to pay union wages. It’s cheaper. All the liberals that spew all their crap are nothing but a bunch of greedy capitalist, when no one is looking. Let the state of Georgia recognize the film industry unions and they’ll be making their films someplace else in a week.
But I am glad Amazon didn’t pick the Atlanta metro area. Having one of their sweatshops in the area is bad enough. 50,000 hipsters would have been a nightmare.
Is that “net” or “gross”, or some other “journalistic math”.
In the end, will NY have higher or lower revenue (taxes-expenses) with Amazon’s 25k workers paying income tax vs Amazon going somewhere else?
I’d bet Virginia and Tennessee have lower personal income tax rates (I may be wrong). 25k NY workers will be paying income taxes on an average of $150k salary. Did amazon have to jack up average NY salary to $150k in NY but not in the other states to cover a higher city and state tax rate? If so, a higher deduction in corporate taxes wouldn’t be unreasonable.
The way the left calls “missed revenus” a “cost” is disgusting. It may be accurate here and I don’t know all the details of the calculations, but the “cost” of Amazon going to NY is even bigger for Texas, and Georgia and any other state Amazon is not putting HQ2 in - those states “could have” received taxes from 25k workers making $150k/year and that’s a huge “cost”.
Geez, you link to that leftwing trash? It represents an inaccurate reflection of the deal and is expressed in a deliberate partisan manner to injure the Republican governor, which ultimately they were successful in doing.
For decades residents of this state have strived to create a much more technologically diverse economy as witnessed by the billions poured into UW Madison and the UW System for this very purpose.
For decades the state has sought to attract high-quality tech jobs.
Residents have long bellyached about being stuck in the past as a backward rustbelt state. Now when Trump and Walker bring a true technology game changer to this rust belt state only Liberals and the MJS (one and the same) successfully repackaged this as a political albatross.
Mind blowing. And you apparently have bought into this. Wow.
how are they going to get away from the unions organizing their workers?
So, they get to keep more of the money that they make and the taxpayer doesn’t? The guy that works in NYC has to pay federal, state and city income taxes. Amazon is going to be relieved of some of that because of what? If they don’t meet those conditions, what happens to them? Do they pay more than they’re supposed to? No matter what, what few middle class folks there are in that city, they’re about to get screwed.
Walker and Republicans made this a Right-to-Work state.
Sorry, yes, unions in New York.
As Marco from Tropoja would say, “Good luck”.
OK so enlighten us. How much is Wisconsin throwing at Foxcon in incentives and how many jobs is it is supposed to produce?
That is exactly what so-called economic development is. Every state, city, and town has at least 1 full-time econ development person who gets to spend taxpayer money taking trips and eating out (almost always with local politicians and their families along for the ride) in order to bribe businesses to relocate. It’s a complete scam.
The bottom line is that the already overstretched infrastructure, including housing for those employees and public transportation will not prove nearly sufficient. You have subways and buses breaking down or delayed on nearly every trip. You have bumper to bumper traffic sucking up loads of time waiting to move. You CANNOT find a public parking space for your car when you finally get there. Yeah, this is great. Great for Amazon and for their employees. Not so great for the NYC overtaxedpayer.
In particular, Greenstone, Hornbeck and Moretti (2010) showed that existing firms in counties that have won large investment projects have seen productivity increase by an average of 12 percent five years after the plant opening. Greenstone and Moretti (2004) also found that industry labor earnings in winning counties increased by an average of 9 percent five years after the plant opening, with similar increases in related industries and neighboring counties. Property values, a proxy for the overall net benefits of the investment package, increased by roughly 7 percent in the five-year span. Moreover, they found no reduction in government services, suggesting the incentives did not crowd out other government expenditure.
While large plant openings led to gains on average, there was significant heterogeneity. A leading successful example is BMW, which in 1992 was promised $115 million in incentives by South Carolina for an initial investment with 2,000 planned jobs. Within five years, the plant was supporting over 3,500 supplier jobs, and by 2014, employment at the plant had grown to over 7,600, with an estimated additional 22,000 indirect and induced jobs throughout the state. By contrast, Mercedes in 1993 opened a plant in Alabama, with $450 million in incentives for 1,500 promised jobs. Within five years, the area around the plant had lost more than 800 supplier jobs.
Foxconn has the potential to generate broad gains that go far beyond the official job estimates and tax revenue costs that have dominated the recent discussion. But the gains are by no means certain — they require that the high-tech investment by Foxconn in Wisconsin would induce other firms to invest in the area, cause high-productivity workers to relocate there and lead current workers to improve their skills.
In evaluating the Foxconn package, the uncertain potential gains in jobs, wages, output and property values must be weighed against the certain fiscal costs. This is a risk, but if a new hub of economic activity materializes, then University of Wisconsin-Madison Chancellor Rebecca Blank could prove correct in calling the decision of Foxconn to invest in Wisconsin “a major leap forward for our state’s economy.”
Close. Economic Development spends most of it's time trying to find businesses that are looking to move, not bribing them TO move. The businesses are, if anything, the "scammers."
If you are an officer in a Fortune 500 company and would like to visit, say, San Francisco, all you have to do is let the San Francisco Economic Development Council know that you are considering locating a portion of your business there. They will fly you and your wife out, put you up in a great hotel, feed you at the best restaurants in town and give you a tour of the city.
I totally agree with you! I don’t see the benefits to this. This will drive up living costs as well - can Amazon employees and others afford NYC housing prices?
That wasn’t the question.
IF Cuomo really wanted to help NY. Why wouldn’t they put the Amazon headquarters in Binghamton, Rochester, Buffalo, Syracuse or Utica. One of the more economically depressed places.
Not all of us voted for it. Cuomo only won about 25% of NYS’s 60+ counties.
yep...48,000 per job is a steal
Maybe they can sublet Occasional Kotex's apartment.
That is a great question. I think part of that answer lies with Jeff Bezos who is triangulating with the location in the media capital (NY) and the nation’s lotus of power (DC).
I see this as Bezos’ empire building with the purchase of WaPo and moving to these two influential centers.
There’s also a large empty space right in her head.
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