Corporate Welfare Weekly Issue 58

Groups Leery of Cat Policy…

 

 

According to the Winston-Salem Journal, “Forsyth County's board of commissioners voted unanimously last night to offer Caterpillar Inc. a $10.15-million incentives deal to help bring the heavy-equipment manufacturer to the county.”

 

The City Council's finance committee approved a similar incentive package from the city of Winston-Salem, which will head to the full council after a public hearing. 

 

In addition to the county’s offer, Winston-Salem is offering Caterpillar $13.3 million in incentives and the N.C. Commerce Department is contemplating offering them $50 million in state incentives.

 

The proposal has angered not only city residents but also independent local pharmacy owners who are concerned that the preferred prescription-drug agreement that Caterpillar has with Walgreens and Wal-mart could put them out of business. 

 

"With Caterpillar's policy, if one of our customers gets hired by Caterpillar, we could lose them. This, combined with the fact that our own tax dollars were used to entice Caterpillar, and it becomes wholly unacceptable," said Dave Marley, the president and chief executive of Marley Drug in Winston-Salem.

 

And here’s what a few local residents are saying about the deal: 

 

“Sounds like another Dell, maybe the mayor needs to ask the "former" Dell employees what they think about this or go to Clayton, NC where Caterpillar rumors layoffs and ask those employees what they think about incentives somewhere else. Stop paying companies to open facilities at the expense of their employees in other places. We were "Dell" casualties and if Caterpillar has the same "great employer" attitude as Dell, Winston or no one else needs them. Better read the fine print and by the way has the "fine print" been made 100% available to taxpayers?”

-Posted by (shutterbug53) on 07/06/2010 at 06:17 am

 

“The mayor has an interesting slant on math when discussing these deals. Last week he implied in this paper that the Cat incentive would not employ any tax dollars. That all the incentive money would come from Cat's future property tax bills and the money returned to the City by Dell. Mayor, where did the money you got back from Dell come from? I believe those funds started out at tax dollars donated by your constituents.”

- Posted by (Bluboy) on 07/05/2010 at 10:31 am

 

“Companies would like things other than money. They'd like to be able to get to town someway other than "motor coach" or car. They'd like a prosperous downtown and some amenities for the employees. I hope they don’t use temps which traditionally get minimum wage but they are paying the agency $15 an hour and counting that as the payroll amount.”

- Posted by (gt350) on 07/05/2010 at 05:34 pm

 

Lights, Camera, Film Incentives!

 

 

 

North Carolina became the latest state to give in to the film industry. 

 

Before adjourning in the wee hours of the morning on July 10th the General Assembly passed a bill allowing the state to offer a bigger tax break to movie producers who film here. 

 

Legislators upped the current incentives cap from $7.5 million in tax credits to $20 million. They also agreed to eliminate the 6.9 percent state tax that companies must pay on the incentives. North Carolina was the only state in the country still charging that tax. 

 

The new bill also lifts a cap that restricted how much Hollywood salary could be included towards the tax credit. Greensboro News & Record reporter Mark Binker breaks it down accordingly: 

 

“One thing that bugged me back when I wrote my first story about the incentives was I couldn’t tell how much of the $44 million the state had issued in film credits had merely offset tax liability and how much had been sent to filmmakers as a check.

 

The film credit, you see, is refundable. That means if a taxpayer’s credit exceeds their tax liability, they get the excess credit back in the form of a check backed by the taxpayers of the state.

 

It turns out, those checks total $25 million since 2006.

 

Amount refunded per year:

 

2006 - $457,248

2007 - $8,682,998

2008 - $15,236,107

2009 - $1,329,713

 

None of that is to say the credit is good or bad. But if the credit is expanded, as appears likely, the amount of checks taxpayers will be writing to film producers will almost certainly go up.”

 

IBM Offered Incentive Money to Hire Workers in RTP

 

 

 

As reported in the Charlotte Observer, IBM will add and fill 600 additional jobs at its RTP campus over the next two years. 

 

Gov. Perdue announced last Thursday that NC has promised the technology company as much as $7.79 million in incentives if the company meets its hiring goals and retains the jobs over the next 10 years. 

 

But why do large, successful corporations like IBM keep receiving these perks, while small business owners can barely stay afloat in what continues to be a harsh economic climate? 

 

And does this scare anyone else?: “IBM's expansion plans come against a backdrop of an intermittent stream of layoffs in recent years at the company, which typically doesn't disclose specifics and sometimes doesn't even confirm that job cuts occurred. Ex-IBMers and a union that is trying to organize the company's workers have said IBM is shifting U.S. jobs overseas, where labor costs are cheaper.”

 

Similarly, WRAL’s Local Tech Wire points out, RTP’s gain is Charlotte’s loss. Back in March, IBM’s Terry Hansen, manager of Public Partnerships, wrote a letter stating: 

 

“Due to the unexpected economic downturn, plans for expansion of the Charlotte facility were not met and IBM does not expect to meet its original goals at that location.”

 

Meanwhile, IBM had acquired another firm in the mortgage field as Hansen went on to explain:

 

“The acquisition has led to the development of new client contracts resulting in the need for IBM to expand employment for this business at one of several facilities where the company owns excess office space. Therefore, this letter is submitted to serve as notice to the Department of Commerce of IBM’s intent to terminate the 2008 Job Development Investment Grant agreement with the North Carolina Economic Investment Committee.”

 

So IBM’s announcement is the end result of the demise of a previous project in Charlotte and incentive money was used to shift 50 jobs from the Queen City to the Triangle.