May 22, 2007
Breaks for Big Business
By Steven Josselson
The current standoff between the city and JP Morgan Chase is just the latest example in a long running policy debate. Are tax breaks for big corporations a wise investment to keep jobs, businesses and tax revenue in the city? Or do they amount to corporate welfare?
Despite its hard-line stance, the Bloomberg administration has an impressive corporate-welfare track record, which includes Bruce Ratner's controversial Atlantic Yards project:
"We have basically ended the era of corporate welfare, basically paying people to stay," Deputy Mayor Daniel Doctoroff said in 2003. Doctoroff’s boss – Bloomberg – said, "Any company that makes a decision as to where they are going to be based on the tax rate is a company that won't be around very long."
Despite this rhetoric, Bloomberg has agreed to large subsidies for new stadiums for the Yankees and Mets, and the Atlantic Yards project. He has also given tax credits to large corporations like Time Warner, Hearst, the New York Times, Bank of America, Pfizer, Aon and the Bank of New York.
NoLandGrab: One corporate payoff that didn't make the roster in this article was the Chase-MetroTech deal highlighted in a recent MetroNY piece (Report: City gave breaks to firms that cut jobs):
In one example, the city IDA granted $212 million in assistance to JP Morgan Chase in 1989, in part to build 3 and 4 Metrotech in Brooklyn. Security guards there make as little as $17,680 a year. Due to a series of mergers and acquisitions between 1995 and 2004, the company laid off 13,000 workers, but it will continue to claim tax exemptions through 2014.
FYI: MetroTech was built by Atlantic Yards developer Forest City Ratner.
Posted by lumi at May 22, 2007 9:00 AM