How does it feel to be a complete sucker, Massachusetts resident?
And what is the state's continuing answer to the problem?
MORE of the SAME FAILED POLICIES!
Isn't that the definition of INSANITY?
Doing the same thing over and over and hoping for a different result?
See where and to whom your tax dollars went for nothing, Bay-Staters:
"Jobs program lost its way — and tax money; Millions have been spent on tax breaks for businesses that promised to create jobs. But in hundreds of cases, few or none resulted, yet companies kept the savings" by Todd Wallack, Globe Staff | March 14, 2010
First of two parts
BILLERICA — The blue sign on the building says Nortel Networks, but it might as well be “Your tax dollars at work.’’
In exchange for more than $2 million in state and local tax breaks, the Canadian telecommunications equipment maker promised a decade ago to expand its campus in Billerica, keeping 2,200 existing jobs and adding as many as 800 more. But instead of adding jobs, the struggling company has steadily slashed its operations for years.
Today, it has 145 employees. It also still has those tax breaks, set to continue through 2014.
And Nortel, amazingly, is by no means an isolated case.
Not anymore, s***-shoveler.
Over the past 16 years, Massachusetts has given away hundreds of millions of dollars in state and local tax breaks for more than 1,300 development projects under its Economic Development Incentive Program, which aims to encourage companies to invest here and create jobs. Often the incentives work and new jobs result. But far too often taxpayers have not come close to getting their money’s worth, a Globe review has found.
But SPECIAL INTEREST POCKETS were LINED -- you know, the same special interests promoted by the Glob!
Hundreds of the projects delivered fewer jobs than promised, and some companies actually slashed employment. Many firms won subsidies for projects they were set to build without state assistance; in some cases, incentives that were approved long after the projects were underway or complete.
Also see: IBM Buys Itself More Tax Breaks in Massachusetts
That's okay; IBM needed the money more than you, Mass. resident.
And many got generous packages though they agreed to create only a handful of low-paying jobs.
A review of state records found that more than 40 percent of the companies that received tax breaks pledged to create 10 full-time jobs or fewer, including nearly four dozen that promised only to add one full-time job. Often, the companies planned to pay new workers little more than minimum wage.
You know, the "good jobs."
Among the tiny projects singled out for subsidies were a pizzeria in Ware, a liquor store in Plymouth, an auto body shop in Fall River, a video store in Somerville, a laundromat in Brockton, a self-storage facility in Somerset, and a hair salon in New Bedford.
“It’s one thing to use this program to attract a state-of-the-art pharmaceutical facility,’’ said Michael Widmer, president of the nonprofit Massachusetts Taxpayers Foundation. “It’s quite another to reward pizza parlors and hair salons.’’
Yeah, ONCE AGAIN the rewards are to go to FAVORED INTERESTS, not YOU, taxpayers!
I mean, it is ONLY YOUR MONEY!
Maybe you would DO BETTER KEEPING IT, huh?!!
Other projects that sounded great on paper, such as the Nortel expansion plan, have fallen far short of what was promised. A Fall River rubber parts maker pledged to create 20 jobs, but cut 36 instead. A manufacturer in Orange promised to add five full-time jobs, but cut a half-dozen or more instead. But even when jobs are cut, the state often takes years to end a tax break, if it takes any action at all.
That is why we NEVER WANT THEM in the FIRST PLACE!
Because they TAKE ON a LIFE of their own after they are passed!
And officials could not name a case in which they asked a company to repay subsidies already pocketed.
And they NEVER WILL!
The politicians are LOOKING OUT FOR THEIR INTERESTS, not yours, Bay-Staters.
“Oversight is practically nonexistent,’’ said Neil Cohen, Massachusetts’ deputy inspector general, whose office has been critical of the program in the past. “The state must ensure that it is getting something for what amounts to an investment.’’
Related: The Massachusetts Oscars
A lot of 'em we are taking a loss on, huh, taxpayers?
To be sure, the economic development program has helped attract life sciences companies, high-tech research parks, and manufacturing plants to Massachusetts.
Translation: This is BULLSHIT!
For instance, the state helped persuade pharmaceuticals giant Bristol-Myers Squibb Co. to build a $750 million drug manufacturing plant at the old Fort Devens Army base in Devens by offering the company roughly $70 million in tax incentives four years ago. Bristol-Myers has hired 250 employees at the site and plans to hire 100 more when it starts production next year.
Yeah, PRICE-GOUGING PHARMA is going to SAVE US with their UNNECESSARY, "off label" poisons!
See: The Massachusetts Model: Nursing Home Will Make You Nuts
Massachusetts is ill, readers.
But even state officials declined to defend some of the deals. Greg Bialecki, the state’s secretary of housing and economic development, said the program has had “hits and misses’’ over the years.
“I think there were other cases where the amount of tax credits was disproportionate to the amount of job creation and it wasn’t the best investment.’’
Bialecki estimated that the tax breaks, which must be approved at the local level and by a state council, have cost an average total of $25 million a year in lost state revenue in the past few years, and hundreds of millions since it began. But the state has not kept an exact tally and no one has tracked the value of the local tax breaks that are part of the package. Those, Bialecki estimated, have probably amounted to several hundred million dollars over the life of the program.
Yeah, because when you are giving away tax loot to favored friends and clients it is not important.
Now about your audit, taxpayer....
The job creation numbers are even fuzzier.
Bialecki said the program created more than 73,000 jobs and generated $22 billion in investment. But those figures are only what companies promised, he concedes, not what they might have delivered....
Yeah, THEY DON'T KNOW WHAT HAPPENED to YOUR MONEY, taxpayers!!!
Isn't the GALL just a BIT MUCH?
Representative Daniel Bosley, a Democrat from North Adams, was among the legislators who helped craft the original bill, which was signed into law in 1993. Bosley said he still believes in the program, but has been disappointed that the state has not done more to reject questionable proposals or make sure companies kept their promises.
Related: The Big Boss Bosley
The Money Pipeline From Massachusetts to Israel
So that is where ALL the MONEY eventually MADOFF, 'eh?
“It wasn’t intended to just give companies tax breaks,’’ Bosley said. “It was intended to create real job development. . . . It’s kind of gone in different ways than the original intent.’’
I wonder about that, Dan.
It is not just tiny restaurants and retailers that have taken advantage of the program.
The government has approved millions of dollars in incentives for big-box retail chains, including Target, Wal-Mart, Home Depot, Lowe’s, Ikea, Bed Bath & Beyond, and Kohl’s.
Like THEY NEED the $$$$!!!!
Lowe’s received tax breaks for eight locations in the past seven years, including one in Salem in December. But some economic development specialists question whether the state subsidies in such cases make sense, contending that new stores typically take sales from existing retailers.
“You are not really growing the pie very much,’’ said Bialecki, the state’s economic development chief.
In addition, some economists say such stores would probably be built without the subsidies. When Plainville turned down requests for tax incentives from Target and Lowe’s over the past few years, the stores opened in the town anyway.
This just saddens me, readers. This state sucks.
“Most of the time, retailers are making decisions based on where their customers are,’’ said Michael Goodman, chairman of the public policy department at the University of Massachusetts Dartmouth, who sits on the state council that approves the tax breaks.
Goodman said it only makes sense to offer subsidies to retail projects in special cases, such as when the retailer is moving into a blighted building. But when Goodman has voted against retail proposals that do not meet that test, he has always been overruled.
In some cases, there is little doubt the incentives were not needed. The Globe found numerous examples for which the projects were already completed or well underway when the state approved the money — making the tax savings less of an incentive to expand than a cherry on top.
For instance, when the state approved a $75,000 tax break for Bob’s Discount Furniture in 2003 to open an outlet in a busy shopping district in Stoughton, the approval came six months after the store opened.
An executive at Bob’s acknowledged that the tax break played little if any role in the decision about where to open the new store. He said such an incentive would only make a difference if the chain were weighing two comparable sites a few miles apart.
“These incentives are really nice to get, but they are not going to drive our strategy,’’ said Bill Ballou, chief financial officer of Bob’s.
Since then, Bob’s has opened six more stores in Massachusetts without obtaining tax incentives, though Ballou does not rule out tapping the program at some point down the line.
Yeah, SOMEONE is getting TAPPED!!
Another case that fits this pattern is that of the drug company Sepracor Inc., which won $7 million in state and local tax breaks to expand its Marlborough headquarters last year — though the company had already finished the bulk of the construction.
“While I am very happy to have Sepracor here in the city, I was concerned that we were giving a tax incentive for something that they were doing anyway,’’ said Paul Feero, a dissenting member of the City Council that approved this deal.
Sepracor, which outlined plans to build two buildings next to its headquarters, had already completed the larger of the two buildings when the state ratified the deal in March 2009. The company is unsure when it will build the other building.
Every incentive grant must first be approved at the city or town level. But many local officials are hesitant to say no, sometimes because of fears that a neighboring community might attract an employer by voting in the tax breaks.
Why? They SAY IT TO the CITIZENS and VOTERS often enough!!!
“It’s a poker game,’’ said Joseph Fernandes, the town administrator for Plainville, which has approved incentives for just one company.
Yeah, let's PIT OURSELVES against each other, U.S.A.
And WHO WIN$ then?
And sometimes it is an easy yes for local officials because the program is set up so the state often picks up much or all of the tab.
Either way, that means YOU, taxpayers!
For example, when the Wild Oats Cooperative Market in Williamstown decided to move down the street the town offered the small natural foods store a 10-year tax break potentially worth more than $50,000, though the grocer pledged to create only one full-time $20,000-a-year job and several part-time jobs. The tax breaks will probably cost the town just $2,800 in lost property taxes, with the state absorbing the rest.
And some communities said the tax breaks wound up costing them nothing. Though the law technically requires communities to offer a local property tax break to participate in the program, some officials said they found a loophole by asking companies to reimburse them for the local portion of the tax breaks.
For instance, Stoughton helped Kohl’s obtain more than $339,000 in state tax credits after the company built a store in a busy section of town alongside Route 24 in 2004. It also received a 20-year discount on its property taxes. But Kohl’s agreed to write a check to the town equal to whatever money it saves in local taxes.
Do you get a 20-year discount on your taxes?
“It’s not going to cost us anything,’’ said Paula Keefe, Stoughton’s chief assessor. “If the state wants to give them a tax break, that’s up to them.’’
The attitude is similarly casual at the state level, where every tax break deal must be approved by a 10-member state board, the Economic Assistance Coordinating Council, which is made up of designated state employees and members appointed by the governor. But this is a council that just cannot say no.
Because it is NOT THEIR MONEY, readers!
Out of nearly 1,400 applications brought to the board since 1994, the board has only rejected one — a proposed tax break for Security Federal Savings Bank in Falmouth — and that was because the property tax break approved by Falmouth officials was not big enough.
Pffffft!
Bialecki, whose staff members chair the council, said the council members felt obligated to approve the applications because they did not want to block cities and towns from using tax incentives to spur local development.
But he said that starting this month, the state would exercise more discretion in deciding whether to piggyback state investment tax credits onto local tax breaks. Under the original legislation creating the program, companies automatically received a 5 percent tax credit when the state approved the applications. But under the new law, signed last year by the governor after the Globe first raised questions about the program, the state can kick in anywhere from a 0 to 10 percent credit.
“It’s going to be a very positive development,’’ Bialecki said.
Just as it has often failed to weed out dubious proposals, the state has also done little to make sure companies live up to their promise of creating jobs and new investment.
Again, it SHOWS YOU WHO they are REALLY WORKING FOR!
And for the same swill to be propounding the SAME FAILED POLICIES as SOLUTIONS stinks!
Although the state requires companies to report how many jobs they have added each year, the government does not ask companies whether these are new jobs — or simply positions moved from other locations in the state. Nor does it use outside sources, such as tax data, to verify the reports.
“It’s on the honor system,’’ said Cohen, the deputy inspector general.
Unreal. Are you on the "honor" system, American?
And after companies admit they did not add the jobs they promised, the state is often slow to end the tax breaks — if it does so at all.
For instance, when C.H. Yates Rubber Corp., a Fall River company that makes plastic and rubber wheels, failed to create the jobs it promised, the state simply reduced the local portion of its tax break and changed its agreement with the company so it would “not be held accountable for continued job creation.’’
What more is there to type?
And it took eight years to end a 10-year tax break to Echo Industries Inc., a company in Orange that makes steel shelves and other products, after the company started cutting jobs instead of adding the five it had promised.
In both cases, the companies were able to keep the money they had already saved in taxes — Yates kept $75,000; Echo $76,000.
All YOUR TAX DOLLARS, Bay Staters -- as you face service cuts and ever-increasing taxes.
Bialecki said the state is addressing the issue.
I won't hold my breath.
The legislation signed by Patrick late last year will make it easier for the state to recoup foregone tax revenue from projects that do not deliver on job promises.
Why should we have to SPEND TAX MONEY to RECOUP TAX MONEY?
Let's NOT GIVE IT AWAY in the FIRST PLACE!
“If you agree to create jobs and you don’t, then we should get our money back,’’ said Bialecki, the state’s economic development chief.
Whose money? Shouldn't he have said yours?
But Bialecki said the change only applies to tax incentives approved starting this year; he said the state cannot do much about projects already approved....
Yeah, the state sure is impotent when it wants to be, huh?
And NO SURPRISE where the TAX BREAKS WENT!
"Rich towns get ‘distressed’ status; Millions in tax breaks routed to companies locating in affluent suburbs" by Todd Wallack, Globe Staff | March 15, 2010
Second of two parts
Hingham boasts million-dollar estates along its scenic shoreline, stately antique houses on Main Street, and boutique shops around the town square. The median household income is nearly $113,000 a year, well above the state and national average, while unemployment is well below the statewide rate.
Yet Massachusetts has long classified Hingham as “economically distressed.’’
Now I am feeling some distress.
The South Shore town is on the state’s list of economic target areas, allowing several companies, including a six-screen movie theater and a clothing store, to qualify for special tax breaks in exchange for a promise to open there.
Just throwing tax loot at Hollywood, aren't we?
And Hingham is not the only unlikely-seeming hard luck case. Over the last 16 years, the state has designated “economic target areas’’ in 209 of the state’s 351 cities and towns, making companies eligible for tax breaks if they expand there. Among them are such other comfortable suburbs as Hopkinton, Bedford, Lexington, and Westwood.
Though lawmakers originally created the Economic Development Incentive Program in 1993 to nudge businesses to invest in decaying cities and other areas scarred by poverty and unemployment, such as Fall River and Lawrence, the state has, over time, expanded the program to include almost any municipality that applies.
“The original intent of the program has been lost,’’ said Fall River’s former mayor, Edward Lambert, now director of University of Massachusetts Dartmouth’s Urban Initiative, which studies ways to assist the state’s aging cities. “You’re asking older urban areas and communities with higher-than-average unemployment to compete with wealthy towns for economic development.’’
Like EVERYTHING THEY DO around here!!!
A 2008 study by MassInc., a nonprofit research group in Boston, found that affluent suburbs landed many of the biggest, most desirable economic development projects subsidized by the program, such as high-tech manufacturing plants and research parks. By contrast, struggling communities often used the program for discount stores, fast-food restaurants, and other businesses that generally create few high-paying jobs.
“It’s supporting high-value economic activity in affluent locations and marginal activities in low-income towns,’’ said Benjamin Forman, research director for MassInc.
Consider two towns that have taken advantage of the subsidies, one upscale, the other struggling.
Boxborough, an affluent bedroom community northwest of Boston, used the program in 2000 and 2004 to support two major high-tech projects — a $675 million Cisco Systems Inc. office complex and a $157 million Interactive Data Corp. expansion — that promised to create or retain hundreds of high-paying jobs.
By contrast, New Bedford, a traditional fishing and manufacturing hub that has been plagued by high unemployment, approved 90 subsidized projects, but most were small, including a laundromat and a hair salon. Diman Coin Laundry promised to invest $100,000 and create two full-time jobs. Tropical Unisex Salon pledged to spend $200,000 and create one job.
Under state rules, the companies approved for the program were eligible to receive both a discount on their local property taxes and a state investment tax credit of 5 percent of the money they invested in the project. So the more money companies invested, the bigger the incentive. (Under legislation recently signed by Governor Deval Patrick, the state will be able to adjust the size of the tax credit — from zero to 10 percent of money invested — for new projects approved starting this month.)
In the case of Boxborough, companies promised to invest nearly $832 million, more than double the total figure for New Bedford firms, which would make them eligible for as much as $42 million in state tax credits, compared with $17 million for the companies in New Bedford.
Mayor Scott Lang of New Bedford said he does not begrudge the state helping Boxborough and other affluent communities land major companies like Cisco. “Any jobs brought to the state are good,’’ Lang said.
But Lang said the state should “supersize’’ the incentives for companies that expand into struggling old manufacturing hubs like New Bedford.
Greg Bialecki, the state’s secretary for housing and economic development, acknowledged the program has strayed from its initial goal.
“The original intention of the program was clear: These incentives were to be made available in economically challenged areas,’’ Bialecki said. “That doesn’t seem to be happening.’’
Bialecki, who has been working with Patrick and the Legislature to overhaul the program, said the problem is that state lawmakers created too many ways for communities to qualify for the subsidies....
I agree, they are a problem.
To be sure, simply creating an economic target zone is not enough to qualify for the subsidies. Both the municipality and state board must also certify that the particular patch of land, building, or neighborhood where a company wants to expand is “blighted,’’ “decadent,’’ or “substandard.’’
However, state Inspector General Gregory Sullivan concluded in a 2004 report that officials “either ignore these legal definitions or stretch these definitions to the point where they are rendered virtually meaningless.’’
The state, right?
For instance, Sullivan pointed to a $7 million incentive awarded seven years ago to Manulife Financial, the Canadian parent of the John Hancock life insurance company, to move into a new office tower on South Boston’s waterfront. The neighborhood was designated as an “economic opportunity area’’ years ago, but Sullivan said the neighborhood was prime development land and did not need tax incentives to get new tenants.
But as long as they are passing YOUR TAX LOOT around.... !
And in 2008, the state approved $3.5 million in incentives to encourage investment banking giant JPMorgan Chase to move its operations to a gleaming (though largely empty) office tower in the neighborhood, despite objections from Boston activists who complained the area did not need special assistance.
They gave millions to a fucking looting bank, huh?
Pffft!
“The seaport area is a thriving economic hub,’’ said Ned Flaherty, an urban planning activist from the South End, adding that developers have regularly built projects there without public subsidies.
But John Palmieri, head of the Boston Redevelopment Authority, defended the designation: “It’s becoming a more desirable area, but it’s still the new frontier.’’
Related: How Big is Your BRA, Boston?
So that is what they are calling looting these days, huh? The "New Frontier?"
In practice, the state appears willing to approve tax incentives for the development of almost any partially empty building or parcel, including empty swaths of land in suburban areas, often prized by big-box retailers and office developers. In one case that drew fire several years ago, a $1.2 million tax break was approved in 2001 to help Affiliated Managers Group, an investment firm, move its headquarters to an estate in Prides Crossing, a wealthy enclave in Beverly. That award drew notice because Sean Healey, the chief executive of Affiliated, is married to Kerry Healey, the former lieutenant governor.
Affiliated, seeking to quell the political furor, later returned the money.
(Blog editor just shaking his head at the rank corruption in this state)
State officials could not think of any examples of the Economic Assistance Coordinating Council — the board of state employees and gubernatorial appointees charged with overseeing the program — turning down an application for an economic target area or economic opportunity area.
Bialecki, the state’s economic development chief, said the state, while not barring applications from more affluent communities, plans to award bigger subsidies to projects in struggling cities and truly beleaguered areas.
Lambert, however, remains a skeptic, saying it is “still an open question’’ how much of the state support will go to decaying urban areas.
Yesterday, the Globe reported that Massachusetts has used the program to award hundreds of millions of dollars in state and local tax breaks to companies that pledged to create new jobs and make investments over the past 16 years. But the Globe found hundreds of the projects would have been built anyway, and many created few high-paying jobs or delivered fewer jobs than promised....
Hingham first used the tax incentive in 2001, when it teamed up with Rockland to offer a five-year tax break to Serono Labs, now called EMD Serono, a biotechnology company that planned to create 142 jobs on property that straddles the two towns.
Keep them out of here, too.
A year later, Hingham offered a five-year tax incentive to ADP Investor Communications Services, now called Broadridge Financial Solutions, to create 26 new jobs in a South Hingham office park. And in 2004, Hingham approved a tax break for the owners of the former Hingham Shipyard, where developers are building a shopping district and luxury homes.
Is that really where you wanted your tax dough going, taxpayers?
The initial tax break for the shipyard covered only a sliver of the project: two new buildings in the marina. But Hingham designated the entire property as an “economic opportunity area’’ to help developers attract other businesses with the promise that they could apply for tax breaks of their own.
The rich town taking from the public till, 'eh?
Yeah, this is AmeriKa!
In December, the state approved provisional tax breaks for seven more businesses in the shipyard: a movie theater (Patriot Cinemas), two retail chains (Old Navy and Bed, Bath & Beyond), a Supercuts hair salon, two casual restaurants (Pizzapalooza and Panera), and a high-end grocery store (Fresh Market), though all had already committed to moving into the complex.
Looks like the richers got all forms of the breaks, huh?
Two of the businesses, the movie theater and Bed, Bath & Beyond, opened in July, five months before they received the tax incentives. And Old Navy is simply relocating an existing store in North Hingham to the waterfront.
To help the companies obtain the state tax credits, Hingham was required to chip in a property tax break of its own. But it worked out an agreement with the firms to reimburse the town, so the deal will not cost Hingham a cent.
Yeah, and somehow that is all right, huh?
So when do TAXPAYERS get a DEAL CUT for THEM, huh?
A Hingham selectman, Bruce Rabuffo, said the program was instrumental in jump-starting construction at the shipyard, which was dominated by empty warehouses for decades. And though Rabuffo acknowledges that Hingham is relatively affluent, he said the project will benefit the entire South Shore by creating jobs available to residents in neighboring cities.
“If we are successful,’’ Rabuffo said, “it helps everyone.’’
Do you know how sick we are of bullshit promises?
On a recent weekend afternoon, the shipyard still felt empty, because most of the planned stores have yet to open. But most of the aging buildings have been replaced by shiny new residential towers, offices, and an outdoor retail plaza.
Sort of like Flint, Michigan, 'eh?
Residents had mixed reaction to the decision to subsidize the businesses.
Muriel Long, an artist who was shopping at Bed Bath & Beyond, said she thought it made sense to encourage companies to open in Hingham.
“It’s bringing jobs and I think that is a good thing,’’ said Long, 59, who lives in neighboring Hull. “There should be tax benefits to anyone trying to stimulate the economy.’’
But two friends, who came to the shipyard theater for a movie, said they were shocked to learn that Hingham was considered an economic target area.
One of them, Gerri Daigle, a 58-year-old hairdresser from Braintree, said she thought the money could be better used elsewhere.
Yeah, like BACK in the TAXPAYER'S POCKET!
“I don’t quite understand why Hingham is classified as an economic target area,’’ Daigle said, adding that her Weymouth hair salon has not received any tax breaks. “Hingham is one of the richer towns in the state.’’
And to the richers go the tax spoils in Massachushitts.
