Macy's to Open Distribution Center - 1,500 jobs

[Conan71]

I'm kinda with the Artist on this one.  If a city or state wants to incentivize businesses to come here they ought to do so by providing across the board benefits. If a tax break is going to get Macy's to come, why not extend that break to everyone and watch everyone benefit?

How many other large companies would move to Tulsa if they received the same benefits we are extending to Macy's?  Even better, how many SMALL businesses would move to Tulsa or incubate in Tulsa if they had those same incentives?

It's unfair for a community to say "I'm going to tax you less because you are so big."  It's also insulting to the very people that are working hard to support that community.

 

I understand the points you two make and agree it would be nice to see more incentives for small businesses.  However, it almost seems as if no one recognizes that a sudden up-tick of 1500 jobs brings a large economic impact and imports money to our economy from every other state that someone like a Macy’s serves.  There is very little doubt that many locally-owned businesses will benefit from the construction and operation of the MDC.

I think the nature of corporate incentives sucks completely.  How do you change the nature of corporations to gravitate toward economic incentives thrown at them?  Until you can change that dynamic, it’s what is required to play on a national level.  We need a mix of local as well as national employers and there are incentives for local businesses like the quality jobs act (or whatever the proper name is), if a local company were looking at adding 1000 jobs and a huge new center, I’m quite certain there would be incentive funding on real estate taxes and infrastructure improvements.  I don’t believe this is reserved simply for national chains.

Simply handing out $20,000 per small business (absurd example, but just illustrating a point) so that they may or may not provide quality jobs is a very questionable investment.

[LeGenDz]

Kinda like what NY is doing..

There’s a new advantage to doing business in New York. A big one. START-UP NY, Governor Cuomo’s groundbreaking initiative, is creating tax-free zones across the state for new and expanding businesses. Now businesses can operate 100% tax-free for 10 years. No business, corporate, state or local taxes, sales and property taxes, or franchise fees.

http://startup-ny.com

Sent from my HTC One using Tapatalk

[guido911]

Who's damned fault is this?

Tulsa’s BizJet International Sales & Support could hire as many as 250 new employees in the area.

http://www.tulsaworld.com/business/aerospace/tulsa-s-bizjet-international-sales-support-to-hire-up-to/article_5425c256-a0a6-11e3-884c-0017a43b2370.html

I know, these are crappy jobs that will go unfilled because Tulsans are too good for that sort of work.    But I am happy to see this.

[Townsend]

Who's damned fault is this?

The $5.7 million?  Commies

[guido911]

The $5.7 million?  Commies

I know. More freakin corporate welfare.

[cannon_fodder]

$23,000 government subsidy for every job.  

Tell me more about small government, welfare reform, and how corporations make it on their own (id est, without help from government).

Again, not necessarily against the handout - it make make sense.  But every actual tax payer in the state just hand Lufthansa a few dollars.  It would be interest to see if we spend more on education or handouts, tax breaks, and corporate subsidies.  Counting state, county and city.

That said - Bizjet is a fine company. Ive heard good things about their new boss man in Tulsa.

[rebound]

I guess I haven't had enough coffee yet this morning.  I can't figure out who is being sarcastic and who is actually against this.

Do I read correctly that this is a tax abatement, not a direct payment?  So we're talking we're talking a decrease in the upside tax revenue, with no possibility of an actual decrease in actual taxes, correct?

[BKDotCom]

Do I read correctly that this is a tax abatement, not a direct payment?  So we're talking we're talking a decrease in the upside tax revenue, with no possibility of an actual decrease in actual taxes, correct?

Quality Jobs program, which could give the firm about $5.7 million in payroll rebates if it hits maximum hiring goals.

Whatever that is.   Are these incentives ever cutting a check?  Aren't they always tax cuts/rebates, tifs, etc?  Either way, their cost of doing business is decreased by $5.7 million

[rdj]

Employers pay a tax to the state on every employee.  The program allows them to get a portion of or all of that back in the form a rebate.  But, they have to have the employees on the books, have to pay the tax and then request the rebate.  Not that dissimilar to you buying a "Free" item for $29.99 + tax from a Best Buy then sending off a form and UPC codes, etc to the manufacturer and getting a check back for the cost of the item not including the sales tax.

[nathanm]

Does it really matter whether we're cutting a check or foregoing revenue that would otherwise be collected? The net effect is the same either way.

[rebound]

Does it really matter whether we're cutting a check or foregoing revenue that would otherwise be collected? The net effect is the same either way.

I understand the concern of some on here related to the perceived unfairness of these type incentives, and that greater argument is much more broad than I want to wade into.   But there is a difference in cutting a check up-front and forgoing possible future tax revenue.  An up-front investment by the city or state to attract a company and/or the related jobs is a very active position involving money that the govt entity already has.  It is an active "let us give you money to help you locate here" type of engagement.  Whereas a tax deferment (or rebate, or similar), while it is still a monetary incentive, is much more passive.  It requires the business entity to invest upfront, and only reap those deferment rewards when and if certain conditions are met.  (In this case, they actually add the jobs.)

In the first scenario, there is actual risk that current money will be lost.  In the second there is no risk of lost money, only the known percent reduction in possible future revenue, and is a much safer way to attract new business.   The question to be asked is are we "foregoing revenue that would otherwise be collected" if those jobs are never created?  If we think they would have added the jobs anyway, then the incentives leave money on the table.  If we think the jobs would have gone somewhere else, then the incentives are almost certainly justified. 

[nathanm]

Presumably if we were to just write checks, they would still be contingent upon the receiving entity actually doing what they said they would do. FWIW, I don't think it's at all settled that it's even worth it knowing that jobs would depart in the absence of incentives. There is nothing stopping a company from taking the money, waiting until the 5 year period is up, and moving on. Happens all the time, actually.

[rebound]

Presumably if we were to just write checks, they would still be contingent upon the receiving entity actually doing what they said they would do. FWIW, I don't think it's at all settled that it's even worth it knowing that jobs would depart in the absence of incentives. There is nothing stopping a company from taking the money, waiting until the 5 year period is up, and moving on. Happens all the time, actually.

I agree on the issue not being settled, and that is what I was referring to with regard to the various opinions on these types of incentives in general.  My question is, would Tulsa be better off having these 250 new jobs for five years, even with the incentives?  Or would the city be better off not having had them at all?  I realize it's not a 100% either/or, but that's the crux of the discussion.

[cannon_fodder]

Rebound -

My concern is that the jobs are not a zero sum game.  The company wants to hire 250 workers because those 250 workers will make them money.  Those jobs are not contingent on a governmental kickback.  The incentives are cities and states racing to the bottom to attract those jobs - and THAT race is a zero sum game.

And I'm not complaining about the incentives per se, because I realize under the current rules we have to play the game or we simply lose.  Particularly with an established company I'm probably OK with such rebates (as opposed to subsidizing BizJets competition to come and compete with them and steal their labor, while BizJet gets nothing having already been here).

My real concern is that we have no one really looking at the math to see if the incentives make sense.  No one is reviewing the process to see if the company has a way of screwing tax payers.  No one is checking to see if the incentives are actually bringing in jobs, or if they are just gravy being paid for by taxpayers to companies that would have hired people anyway (of course the companies are going to say they need them, just like the car dealer can't drop his price anymore without losing money).   There is a chance that every family in Oklahoma is being asked to hand $5 to BizJet for no real reason. 

We need to make sure the incentives make sense.  Overall, the system should be changed to limit corporate extortion of taxpayers. 

[swake]

Macy's now says they will hire 1,500 at opening and will ramp up to a total of 5,000 jobs during the Christmas season and maintain 4,000 year round.

They may not be great paying jobs, but that's a lot of jobs.

http://www.tulsaworld.com/homepage2/owasso-official-macy-s-could-hire-up-to-for-tulsa/article_e0a18cbb-c5b8-58ea-bbc3-032d77aca2b7.html