Hey, you want to read something that’ll make your blood absolutely boil? Trust me, you don’t, but you should.
Louise Story of the New York Times spent 10 months reporting for a series about state government handouts to corporations. Yesterday’s installment was all about the Texas’ big business “bonanza.”
A few years ago I heard a good-guy lobbyist rail that Governor-for-Life Rick Perry was bleeding the state dry by calculatedly enriching certain businesses and political supporters. Since I’ve been so disgusted by state politics for so long, I believed him, but I didn’t really understand the process.
Story explains that process. In detail. And names names. Chief among them is G. Brint Ryan. What’s this guy’s job? Selling his access to Rick Perry’s largesse with corporate incentives.
Here’s an example of how it works:
•A corporation wanting to start a project (a new facility, an expansion, etc.) hires Ryan to lobby the governor’s office for incentive money. The incentives are supposed to insure that the business’s project and its resulting jobs locate to (or remain in) Texas.
•The Governor’s office grants millions in incentives, often in the form of local school district tax breaks.
•The Governor’s office convinces the local school board to give up the money to the corporation, and promises to make up that money dollar-for-dollar from the state’s corporate incentive slush fund.
•The school board gives up the money. The state reimburses them, as promised. The corporation gets to skip paying school taxes for a number of years, or gets a cash payment, or sometimes both.
•G. Brint Ryan’s company gets 30% of the incentive millions off the top, then makes huge political contributions to the Governor, the Comptroller, and everyone else who will help keep his gravy train running.
•Whoops! But that means fewer tax dollars for schools are coming in overall. So guess what: the next time the school board seeks money from the state? Their budget is slashed. In fact, all schools’ budgets are slashed, statewide. Every year, businesses keep getting more and more property tax money from middle class homeowners (like me!), while our state does less and less for the citizens it is supposed to help.
And the corporations? They aren’t held to any standard in terms of how much economic benefit they return to the state. Check this: Story cites a case where Amazon was given $250 million in incentives for a project that would generate 2,500 warehouse jobs. That’s $100,000 per job. Now, just to be fair and to keep the math simple, let’s pretend those jobs average $50,000 per year, which, of course, they don’t. That leaves Amazon with $125,000,000 IN PROFIT. For doing something they needed to do anyway.
Key quote: “King White, a consultant who helps Amazon choose locations… said that companies had come to view incentives as entitlements. (yeah, emphasis mine) ‘Everybody thinks they deserve something,’ Mr. White said. ‘If I’m creating jobs, what’s in it for me?’”
Whose recent political rhetoric does that statement turn on its head?
You gotta read it. You also gotta read Jason Cohen’s coverage of the reaction to the story on TM Daily Post.
Hey, and in today’s installment Story explains to Michiganders how bad they’re getting screwed.
And I didn’t even mention the part about how G. Brint Ryan sued AMD for failing to screw the state out of tax revenue, thus denying him his cut. Breathtaking.