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‘How ’bout No, You Crazy Dutch….’

1:40 pm in Uncategorized by ThirdandState

By Mark Price, Third and State

The Only Proper Villian We Could Find From the NetherlandsOn Monday night, the Lower Allen Township commissioners in Cumberland County considered a proposal from Ahold USA, the corporate parent of Giant Food Stores, for a $400,000 property tax abatement on a meat repackaging plant on which the company has already broken ground. (Ahold USA is itself the subsidiary of the Netherlands-based Ahold.)

The company has neglected a basic principle of the economic development game through which companies extract subsidies and tax breaks from states and localities where they were going to build anyway: until you have the subsidy in hand, don’t give away that it will not impact your location decision.

But since the company made this error, the title of this blog post, taken from the Austin Powers movie Goldmember, should suffice for the township’s answer. (It is pure coincidence that Goldmember, a Dutchman pictured to the right, has a gold G on his velvet sweatsuit.)

Here are two stories on this issue.

The Lower Allen commissioners should continue to say no to Ahold’s request because it is a simple giveaway that diverts needed tax revenue from the township. It would be that much costlier if the West Shore School District (which has absorbed $2.2 million in state budget cuts since 2010-11) and Cumberland County (where property taxes for most homeowners and businesses may rise by 22% next year) follow suit.

The repackaging plant will consolidate meat cutting operations for Ahold USA’s stores in the mid-Atlantic region. Customers will no longer get their meat freshly cut in the store, instead, the meat cutting and packaging function is being moved to a central location with easy access to the interstate. Some meat cutters will lose their jobs in the process, while others might be offered jobs at the new facility, at a lower wage.

For its $400,000, Lower Allen Township is being promised between 450 and 800 jobs; there is no word on how many jobs will be lost at Giant Food Stores in the region or at the company’s Maryland division.

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PA Economic Development Programs Rank 40th on Job Creation, Job Quality Standards

8:14 am in Uncategorized by ThirdandState

A blog post originally published at Third and State.

A new national study sizing up hundreds of state-level tax credit, cash grant and other economic development subsidies has some bad news for Pennsylvania.

The commonwealth scored a D and ranked 40th place among the states in the Good Jobs First report, Money for Something: Job Creation and Job Quality Standards in State Economic Development Subsidy Programs. Some of the five Pennsylvania programs reviewed by researchers lack job creation requirements and wage standards for workers at subsidized companies. None of the programs required companies receiving state tax dollars to provide health benefits to workers in jobs or facilities funded by the subsidy.

Researchers looked at Pennsylvania’s Film Production Tax Credit, Job Creation Tax Credit, Keystone Opportunity Zone (KOZ) Program, Opportunity Grant Program, and Research and Development Tax Credit. Combined, these programs cost state taxpayers $181 million a year.

Learn more about the Pennsylvania findings here.

The Good Jobs First study confirms the Keystone Research Center’s 2010 study which found that nine major Pennsylvania business subsidy programs had low or no job quality standards.

Hopefully, lawmakers in Harrisburg get the message and take steps to improve economic development accountability. Senator Pat Browne has proposed legislation in past sessions to address these issues. Remarking on the Good Jobs First study, he said in a Keystone Research Center press release yesterday: “Certainly, the overall process would be improved by setting clearly defined accountability standards for all of the various economic development programs in Pennsylvania.”