Armed Polite Society
Main Forums => Politics => Topic started by: zahc on September 23, 2019, 12:15:39 PM
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A company I used to work for just got a 500 million dollar grant to build their new factory in NYS instead of NC.
Half a billion dollars is higher than I usually hear about, and it's not tax incentives or loans. They are calling it a grant. That's almost a free factory.
What do you call it when a state has insane taxes, so businesses all leave, then they try to straight up give away wads of cash to get companies to come back? Wouldn't it be better to just have a better business friendly environment to start with?
Also, at what point do the feds step in and stop it? Is there not a legitimate interstate commerce issue with these kinds of "incentives"? I'm sure states aren't allowed to impose tariffs on each other, and they have usually played this game by offering "tax incentives", but at some point does NC take NYS to court over buying NC businesses with public money?
https://www.wraltechwire.com/2019/09/23/cree-picks-new-york-for-new-1b-chip-plant-lands-500m-state-grant-other-incentives/
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I'm not a lawyer at all, but I would think the state has the right to squander it's money as it sees fit. The citizens also have the right to vote the incumbents out of office or move to a state that's more responsible. If it comes to a Fed Gov bailout, then the landscape changes.
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Yes, giving away money you don't have. Makes perfect sense.
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Washington state has given Boeing billions in grants, tax exemptions and other financial incentives to 'keep jobs in Washington'. Asking the state for the actual or projected return on investment is largely met with embarrassed silence. Meanwhile, Boeing continues to increase operations in South Carolina.
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Washington state has given Boeing billions in grants, tax exemptions and other financial incentives to 'keep jobs in Washington'. Asking the state for the actual or projected return on investment is largely met with embarrassed silence. Meanwhile, Boeing continues to increase operations in South Carolina.
IIRC, Obama's Labor Department ORDERED Boeing to NOT operate in SC, since it would be "unfair" to Boeing workers in Seattle.
That touched off a real firestorm, with most people (including congresscritters) asserting that the order was null and void since they didn't have that authority. Boeing's attitude seemed to be "Find a Federal judge to back you up and cite the law letting you pull this cr@p, otherwise we're proceeding."
Union & Boeing settled, labor department backed off saying the settlement made the issue moot.
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So...
Build "free" factory in NY.
Operate till taxes overcome profit.
Bail out with no real monetary loss.
I can't see any potential downside for the company.
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So...
Build "free" factory in NY.
Operate till taxes overcome profit.
Bail out with no real monetary loss.
I can't see any potential downside for the company.
This. They'd be dumb if they didn't. Take the savings and (quietly) plow it into capital investments/improvements at facilities in more business-friendly states, or establish satellite offices that just accidentally get built to the spec of a production facility, or at least the necessary shell space. A ready-made place ready for use when the NY incentives sunset.
Brad
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It's a warehouse for air. A wairhouse, if you will.
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The suspicious part of my mind wants to know what local permitting and approvals would cost (among other things) should they take the grant and build in New York. I suppose it would take a lot to eat up that kind of money, but I would still want to be certain. If it was LA or San Francisco, I think it would be no.