Posted: Sun May 07, 2006 6:33 am
I believe the structural hazard with Mayor Jackson's Cleveland regional water plan is that it sets the plate for eventual privatization. That is, banks and corporations may eventually suggest the sell off of the public asset with the proceeds going into an economic development fund to create jobs in the region. That's the way the logic of capital is exercised.
Look at the sell-off of public assets in Russia to oligarchs during Yeltsin's time, called piracy now. It's happening in India. Some are pushing Detroit to privatize its water. Cleveland is not a vacuum, immune to the pressures of capital.
Blackwell is talking about selling off the Ohio Turnpike, much like Republicans did in Indiana.
What is Frank Jackson's ideology?
Where did the big idea emerge?
Whose interests planted the seed?
What interests can pirate the assets at a later date?
On another note, I want to address the jobs/growing the pie dilemma, which is slightly off topic, yet broadly connected with the macro-economy that informs the topic.
It is difficult to grow the economic pie with corporations. Last week I was talking to a friend from North Carolina, who mentioned the price point of corporate subsidies in North Carolina had reached $200,000 and $300,000 per job in talks with Dell and Toyota.
The practice is under pressure.
Here’s background:
“Gov. Easley said the Dell project will provide more than $700 million in net revenue to the state over 20 years.
Despite promises that the plant will create 1,500 local jobs, the North Carolina Institute for Constitutional Law filed the lawsuit on behalf of seven small business owners in Forsythe County. The nonprofit group, led by former North Carolina Supreme Court justice Bob Orr, charged that construction of the plant violated state law because officials spent public funds on a record-setting tax package to benefit an individual private business.
For more:
http://news.zdnet.com/Dell+opens+contro ... 89529.html
Some details from the litigation:
The New Tax Credit for Major Computer Manufacturing Facilities
31. The Dell legislation created Article 3G of Chapter 105, Tax Incentives for Major Computer Manufacturing Facilities (codified at N.C. Gen. Stat. §§ 105-129.60-66). This part of the Dell legislation provides a new tax credit for large computer manufacturers against corporate income and corporate franchise taxes. The amount of the credit is based upon the computer manufacturing facility’s unit output and employment level at the computer manufacturer’s North Carolina manufacturing facility.
32. The taxpayer may claim a credit up to 100% of the taxpayer’s corporate income and corporate franchise tax liability, plus additional credit amounts earned that may be carried forward. Most tax incentives under current law allow the taxpayer to offset no more than 50% of its tax liability.
33. Under this new legislation, Dell is expected to be provided tax credits by the State valued at over $225,000,000 over 15 years. The provision includes a 25 year carry-forward for any unused portions of the credit that could mean that Dell will pay no corporate income or franchise taxes through 2044.
34. To qualify for the new tax credit, the Secretary must make a written determination that the taxpayer has employed or is expected to employ at least 1,200 new full time jobs or new permanent part-time jobs converted into full-time equivalences within five years after the North Carolina facility is operational. This legislation represents the first time that the State has allowed the taxpayer to meet the employment threshold requirements either directly or indirectly by including jobs created by one or more “related entities and strategic partners,†as defined in the legislation. N.C. Gen. Stat. § 105-129.62.
35. The legislation also requires the Secretary to make a written determination that the taxpayer either “directly or indirectly through a related entity or strategic partner, has invested or is expected to invest†at least $100,000,000 in private funds to construct a computer manufacturing and distribution facility in North Carolina over a five-year period. N.C. Gen. Stat. § 105-129.62.
36. Upon information and belief, Dell plans to use foreign profits to make this $100,000,000 investment, thus securing a more favorable federal corporate tax rate.
37. The Secretary’s determinations described in paragraphs 34 and 35 are questions of fact and must be made “in any case in which the taxpayer can demonstrate performance or can provide a credible plan for performance.†N.C. Gen. Stat. §105-129.63. Thus, if Dell does not make the required investment of funds and fails to produce the expected jobs as promised, Dell does not forfeit any of the tax credits already taken, unless the assertions made in Dell’s application can be proved to have been false when made and further that the “person making the application knew or should have known that the information was false.†N.C. Gen. Stat. § 105-129.63.
38. Pursuant to the legislation, unlike situations involving other similar tax credits offered by the State, Dell does not have to meet a wage standard to qualify for the credit.
39. The new major computer manufacturing tax credit provided by the Dell legislation is based in part on the maximum increased employment level ever attained by the taxpayer (including the qualified hires of related entities and strategic partners), as opposed to similar legislation like the Bill Lee Act which requires a credit to expire if the jobs receiving state tax credits are reduced in any given year.
40. Thus, once Dell has attained an increased employment level of at least 1,500 it may reduce its employment level by up to 40% per year without being subject to a reduction in the maximum amount of the tax credit for which it is eligible. As a result, Dell and another company having identical output and the same increased employment levels in a given year, may be eligible for substantially different tax credits based on Dell’s increased employment level attained in an earlier year, thus providing Dell with more favorable tax treatment.
41. At the outset of the major computer manufacturing credit portion of the Dell legislation, the General Assembly stated, “It is the policy of the State to stimulate economic activity and to create and maintain sustainable jobs for the citizens of the State in strategically important industries.†N.C. Gen. Stat. §105-129.60(1).
42. Upon information and belief, at the time of filing this complaint, the State of North Carolina has not yet entered into, but is currently preparing, a written agreement with Dell setting forth the promises, obligations, consideration, etc. for implementing the provisions of the Dell legislation.
Enhancements to the Bill Lee Act for the Benefit of Dell
43. Section 2 of the Dell legislation amends N.C. Gen. Stat. § 105-129.4 of the Bill Lee Act by providing enhancements for “major computer facilities†in a new subsection (b7). The Bill Lee Act (Session Law 1996-13es2, as amended) allows a tax credit against the North Carolina corporation franchise tax, corporate income tax, personal income tax, estate and trust tax, or the gross premiums tax for investment in machinery and equipment and certain real property, job creation, worker training, and research and development that occurs in North Carolina. The Bill Lee Act was first adopted in 1996 for the purported purpose of encouraging investment in areas of the State that are less prosperous.
For more:
http://www.ncicl.org/LITIGATION/complaint.html
That’s how deals are being made in North Carolina.
What do you believe is the corporate subsidy (if any) that Lakewood could/should offer for jobs?
Kenneth Warren
Look at the sell-off of public assets in Russia to oligarchs during Yeltsin's time, called piracy now. It's happening in India. Some are pushing Detroit to privatize its water. Cleveland is not a vacuum, immune to the pressures of capital.
Blackwell is talking about selling off the Ohio Turnpike, much like Republicans did in Indiana.
What is Frank Jackson's ideology?
Where did the big idea emerge?
Whose interests planted the seed?
What interests can pirate the assets at a later date?
On another note, I want to address the jobs/growing the pie dilemma, which is slightly off topic, yet broadly connected with the macro-economy that informs the topic.
It is difficult to grow the economic pie with corporations. Last week I was talking to a friend from North Carolina, who mentioned the price point of corporate subsidies in North Carolina had reached $200,000 and $300,000 per job in talks with Dell and Toyota.
The practice is under pressure.
Here’s background:
“Gov. Easley said the Dell project will provide more than $700 million in net revenue to the state over 20 years.
Despite promises that the plant will create 1,500 local jobs, the North Carolina Institute for Constitutional Law filed the lawsuit on behalf of seven small business owners in Forsythe County. The nonprofit group, led by former North Carolina Supreme Court justice Bob Orr, charged that construction of the plant violated state law because officials spent public funds on a record-setting tax package to benefit an individual private business.
For more:
http://news.zdnet.com/Dell+opens+contro ... 89529.html
Some details from the litigation:
The New Tax Credit for Major Computer Manufacturing Facilities
31. The Dell legislation created Article 3G of Chapter 105, Tax Incentives for Major Computer Manufacturing Facilities (codified at N.C. Gen. Stat. §§ 105-129.60-66). This part of the Dell legislation provides a new tax credit for large computer manufacturers against corporate income and corporate franchise taxes. The amount of the credit is based upon the computer manufacturing facility’s unit output and employment level at the computer manufacturer’s North Carolina manufacturing facility.
32. The taxpayer may claim a credit up to 100% of the taxpayer’s corporate income and corporate franchise tax liability, plus additional credit amounts earned that may be carried forward. Most tax incentives under current law allow the taxpayer to offset no more than 50% of its tax liability.
33. Under this new legislation, Dell is expected to be provided tax credits by the State valued at over $225,000,000 over 15 years. The provision includes a 25 year carry-forward for any unused portions of the credit that could mean that Dell will pay no corporate income or franchise taxes through 2044.
34. To qualify for the new tax credit, the Secretary must make a written determination that the taxpayer has employed or is expected to employ at least 1,200 new full time jobs or new permanent part-time jobs converted into full-time equivalences within five years after the North Carolina facility is operational. This legislation represents the first time that the State has allowed the taxpayer to meet the employment threshold requirements either directly or indirectly by including jobs created by one or more “related entities and strategic partners,†as defined in the legislation. N.C. Gen. Stat. § 105-129.62.
35. The legislation also requires the Secretary to make a written determination that the taxpayer either “directly or indirectly through a related entity or strategic partner, has invested or is expected to invest†at least $100,000,000 in private funds to construct a computer manufacturing and distribution facility in North Carolina over a five-year period. N.C. Gen. Stat. § 105-129.62.
36. Upon information and belief, Dell plans to use foreign profits to make this $100,000,000 investment, thus securing a more favorable federal corporate tax rate.
37. The Secretary’s determinations described in paragraphs 34 and 35 are questions of fact and must be made “in any case in which the taxpayer can demonstrate performance or can provide a credible plan for performance.†N.C. Gen. Stat. §105-129.63. Thus, if Dell does not make the required investment of funds and fails to produce the expected jobs as promised, Dell does not forfeit any of the tax credits already taken, unless the assertions made in Dell’s application can be proved to have been false when made and further that the “person making the application knew or should have known that the information was false.†N.C. Gen. Stat. § 105-129.63.
38. Pursuant to the legislation, unlike situations involving other similar tax credits offered by the State, Dell does not have to meet a wage standard to qualify for the credit.
39. The new major computer manufacturing tax credit provided by the Dell legislation is based in part on the maximum increased employment level ever attained by the taxpayer (including the qualified hires of related entities and strategic partners), as opposed to similar legislation like the Bill Lee Act which requires a credit to expire if the jobs receiving state tax credits are reduced in any given year.
40. Thus, once Dell has attained an increased employment level of at least 1,500 it may reduce its employment level by up to 40% per year without being subject to a reduction in the maximum amount of the tax credit for which it is eligible. As a result, Dell and another company having identical output and the same increased employment levels in a given year, may be eligible for substantially different tax credits based on Dell’s increased employment level attained in an earlier year, thus providing Dell with more favorable tax treatment.
41. At the outset of the major computer manufacturing credit portion of the Dell legislation, the General Assembly stated, “It is the policy of the State to stimulate economic activity and to create and maintain sustainable jobs for the citizens of the State in strategically important industries.†N.C. Gen. Stat. §105-129.60(1).
42. Upon information and belief, at the time of filing this complaint, the State of North Carolina has not yet entered into, but is currently preparing, a written agreement with Dell setting forth the promises, obligations, consideration, etc. for implementing the provisions of the Dell legislation.
Enhancements to the Bill Lee Act for the Benefit of Dell
43. Section 2 of the Dell legislation amends N.C. Gen. Stat. § 105-129.4 of the Bill Lee Act by providing enhancements for “major computer facilities†in a new subsection (b7). The Bill Lee Act (Session Law 1996-13es2, as amended) allows a tax credit against the North Carolina corporation franchise tax, corporate income tax, personal income tax, estate and trust tax, or the gross premiums tax for investment in machinery and equipment and certain real property, job creation, worker training, and research and development that occurs in North Carolina. The Bill Lee Act was first adopted in 1996 for the purported purpose of encouraging investment in areas of the State that are less prosperous.
For more:
http://www.ncicl.org/LITIGATION/complaint.html
That’s how deals are being made in North Carolina.
What do you believe is the corporate subsidy (if any) that Lakewood could/should offer for jobs?
Kenneth Warren
