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BROKEN MEDIA, BROKEN POLITICS

Charlie Baker

 

If Mass journalists were doing their jobs, Baker would not be so popular

 

It’s always funny to hear that Charlie Baker is a very popular governor… The most popular governor in the country at the moment, according to polls. Because he doesn’t do anything very differently than his predecessor Deval Patrick did. Or than Mass House speaker Robert DeLeo does. Or than most any state Democratic leader when it comes down to core economic issues—with the exception of the leaders with little actual power.

 

Baker, Patrick, DeLeo, and all their ilk in both major parties essentially follow the same game plan. They work to lower taxes for those most able to afford them, cut desperately needed social programs to the bone, and give away as much money as possible to giant corporations.

 

Much of the rest of what they do is posturing for the various constituencies that make up their particular electorates. And that’s the stuff that gets the most media coverage. Which is not to say they’re necessarily insincere about such activity. But they’re elected to represent the wealthy interests that run the Commonwealth, and the work they do for that most important constituency is always their top priority.

 

So when Patrick and Baker, for example, shovel over $1.5 billion in free public money at the biotech industry or arrange millions in tax breaks and direct state aid for huge companies that don’t need them on an ongoing basis—with DeLeo’s blessing in both administrations—to the extent those acts get coverage, they’re presented as done deals that are “good for the economy.” Then it’s on to the next press spectacle of the day. Events where they can “show leadership” and the like. As when there’s a snowstorm. In Massachusetts, a northern state noted for its frequent snowstorms. And the current governor gets on TV and says “stay indoors during the snowstorm.” That is apparently showing leadership.

 

Which explains Baker’s high numbers, I think. Simple public relations. Accentuate the positive, eliminate the negative, and all that. With most of the major news outlets gamely playing along. And his numbers are higher than Patrick’s were because he’s a white guy in a super racist state that likes to think it’s super anti-racist.

 

That’s what results in people that don’t pay attention to politics—including the vast majority of white voters—going, “Oh, Baker’s such a nice man” when pollsters ask their opinion of him. More than they did with Patrick. No doubt Baker is a nice man in person or whatever. Lots of people who do bad things when they have power are personally “nice.” Like, I’m sure when some buddy of his from childhood needs money, he’ll give it to him. Or at least loan it to him. But when all the legions of people he doesn’t know personally need good jobs with benefits, need free higher education, need major improvement to infrastructure like the MBTA—because of entrenched structural inequality—that’s a different story.

 

A story whose narrative you can hear if you listen to Baker’s remarks to the 2018 Mass Republican Convention in Worcester last weekend.

 

Stripping away obligatory pleasantries and nods to major supporters, the speech was aimed at the same white middle-class suburbanites who remain the base of the state Republican Party. Baker addressed them directly at one point while enumerating the “successes” of his administration: “We offered early college programs, our Commonwealth Commitment program, which dramatically reduces the cost of a college education. And increases in state scholarships to make the price of college more affordable for moderate- and middle-income families.”

 

See, he thinks they’re so important he mentioned them twice in a row: “moderate- and middle-income families.” No word about low-income families, though. At all. Not even a nod. Sure, working families are discussed. But in Republican-speak, “working families” isn’t code for “working class” as it often is for Democrats. It means “those who work.” As opposed to “those who do not work.” Like all those “lazy shiftless” folks that used to be called working class in more honest times. And those totally nonindustrious [ha!] immigrants. And the “undeserving” poor in general. Everyone who supposedly lives off the bounty of “our”––the good “moderate- and middle-income” people’s, the “taxpayers’”—labor.

 

But no mention of his most important constituency, the one he actually works for, either. “Small business” is mentioned a number of times. But not major corporations and the rich people that own them.

 

Still, they’re there. Lurking behind all of Baker’s remarks. Especially when he said several things that are completely and obviously false to anyone who follows politics reasonably closely. Like taking credit for “dramatically” reducing the cost of a college education. When public higher education is an absolute disaster in Massachusetts. When both the working-class families he seemingly deplores and the middle class he purports to represent—immigrant and nonimmigrant alike—are forced to run up ruinous amounts of debt just to put kids through schools that were once so cheap as to nearly be free. While tuition and fees keep getting raised year after year. Under both Democratic and Republican administrations.

 

The rich and the corporations are there because public higher ed, like virtually every other beneficial government program, is being starved for operating funds. To fatten that 1 percent’s coffers. Because politicians like Baker make a virtue out of cutting taxes. Slashing budgets. Laying off public workers. Privatizing anything they can get away with. As Baker himself has certainly been doing at the much-beleaguered MBTA. Another public service he addressed in Worcester, saying: “We took on the special interests at the MBTA. Created a Fiscal Management and Control Board. And saved taxpayers hundreds of millions of dollars, and we’re rebuilding its core infrastructure.” While, in the real world, that same public transportation infrastructure continues to fall apart for lack of the needed direct infusion of state funds.

 

Is everything Baker does bad? No. Is he as dangerous as federal counterparts like President Donald Trump? Or the feral reactionary theocrat Scott Lively that fully 28 percent of Mass Republican delegates just chose to run against Baker in a primary this fall? No. Not yet at least.

 

But that’s not the point.

 

The point is that a polity where a Charlie Baker can be incredibly popular is a broken polity. And a news media that enables him is a broken news media. Baker does not represent even the interest of the white middle class that keeps voting him into office, let alone the working class as a whole. A media that was doing its job would make that patently clear. Every hour of every day. Yet it does the opposite. Because it too is controlled by the same rich and powerful interests that control politics and ensure pols like Baker keep getting elected. Whether those pols call themselves Republicans or Democrats.

 

So to fix politics, we have to fix the media. And I can’t address how that might be done in a single column. But my colleagues and I are trying our damndest to do it in practice at DigBoston and the Boston Institute for Nonprofit Journalism. And the fix starts with journalists who are independent and strive to tell the truth about problems in media and the political system. Every hour of every day. Beyond that, there’s much more to say. So, I’ll plan to talk about specific potential fixes in future columns and editorials.

 

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2018 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

YOUR MOVE, BOSTON

Boston Women's March 2017. Photo by Ryan Dorsey, CC-BY-SA 2.0 Generic.
Boston Women’s March 2017. Photo by Ryan Dorsey, CC-BY-SA 2.0 Generic.

 

Only a massive protest movement can stop government giveaways to megacorps

 

Boston politics—in both its state and local variants—seems to consist largely of backroom deals between government officials and major corporations punctuated by rituals of representative democracy that are increasingly put on just for show. Perhaps it has ever been thus. But that doesn’t mean that Bostonians have to like it.

 

One would be tempted to call this politics incipient fascism were it not all such a desultory affair—unsullied by any ideology other than a very primitive capitalist greed. And in that way, it is reminiscent of current federal politics. The fact that most of the damage is being done by people calling themselves “Democrats” rather than people calling themselves “Republicans” making almost no discernible difference.

 

Which is why it becomes tiresome to write about. One disgusting display of government servility to corporate power replaces another week by week, month by month. The storyline is always the same. Only the brand names change.

 

On the ground—physically close to the halls of actual power in the Financial District, Back Bay, and now the Seaport District, but a million miles away in terms of elite awareness—the situation is dire. People don’t have good jobs. Or affordable housing. Or adequate public schools. Or cheap, safe, frequent, and environmentally friendly public transportation. Or a proper healthcare system. Or pensions. Or sufficient leisure time. Or freedom from several kinds of debt peonage.

 

But city and state political leadership have no plans to fix these problems. Because they can’t do so without discomfiting the ascendant rich and powerful. So they squirrel around the edges. They juggle budget lines, and change program names, and reorganize departments, and send out obfuscatory press releases, and do whatever they can do to cover up the fact that they aren’t taxing giant companies and their owners nearly as much as they should be. And in failing to collect sufficient tax revenue, they lack the needed funds to fix the worst damage done by those companies.

 

Yet they never fail to find millions in ready cash for vast conglomerates like General Electric. And now Amazon. A multibillion dollar trust that did not pay a cent in US income taxes last year, according to the Institute on Taxation and Economic Policy—and is expecting a one-time $789 million break from thanks to Pres. Donald Trump’s kinder, more corporate-friendly tax plan.

 

So, sure, I could write another column this week inveighing against Mayor Marty Walsh’s new scheme to dump $5 million in local tax breaks on Amazon in exchange for bringing another 2,000 jobs to the city. Well, not to the actual city, but to job sites within 25 miles of the city, according to the Boston Globe. And not right away, but by 2025. Maybe. And dumping another $5 million if Amazon brings yet another 2,000 jobs to (Greater) Boston. Not the decent working class jobs that most Bostonians need, of course. Jobs that highly educated people from around the world will come to the area to fill. Exacerbating our housing, transportation, and environmental crises in the process.

 

And, yes, the proposed $5-10 million is not as much as Walsh arranged to throw at GE—in a deal swiftly running off the rails as that corporate behemoth crashes and burns thanks to the gentle ministrations of its own “activist” investors. But once Gov. Charlie Baker adds state money to the kitty, the new Amazon deal will start to look very similar to the earlier deal. Which he will almost certainly do. Given that he’s so excited for Boston to “win” the far larger “HQ2” boondoggle that he wants to pass a new law that will allow the Commonwealth to shovel truly epic wads of public lucre at the rapacious anti-worker multinational, according to State House News Service.

 

Yet with such deals becoming so frequent, it really strikes me that writing is never enough to change the politics that allows this kind of backroom deal making by itself—regardless of how boring or exciting it is for me to crank out. After all, providing information to the population at large only goes so far.

 

Political action is inevitably required. And not just by one journalist. Because stopping the public gravy train for corporations that are also among the biggest donors to state and local politicians’ war chests is going to take truly massive and sustained protest on the part of the people of Boston (and the rest of Massachusetts).

 

How massive? Well, remember last year’s Women’s March of over 175,000? Or last year’s 40,000-strong march against a few ultra-right weasels? That’s the scale of the street actions that would be required on a regular basis—in tandem with concerted and well-coordinated lobbying efforts—to not only stop particular giveaways to corporations like GE and Amazon, but to outlaw them. And, for good measure, start criminal proceedings against politicians and corporate leaders that collude to loot the public till.

 

Who will lead such efforts? Hard to say. But at the end of the day, I think it will be new entrants that will step into the political vacuum I’ve outlined, and directly challenge state and local government deals with major corporations. People like most of my regular audience. Working people, many without college degrees, that will finally decide that enough is enough. I think that the existing oppositional forces—ranging from the left wing of the Democratic Party through formations like Our Revolution to grassroots activist coalitions like Poor People’s Campaign to rising socialist organizations like Democratic Socialists of America to some of the more enlightened elements of organized labor—will play a role in the necessary popular movement that will emerge. But I suspect that the main energy will not come from those forces, but from new ones. As has been the case with the Occupy and Black Lives Matter movements in recent years. The trick will be sustaining early momentum long enough to bring some big corporations down to earth. And then moving on to tackling the truly terrifying federal corruption.

 

Until that happens, it’s going to be one sad government giveaway to huge companies after another in Boston. And I’ll do my best to keep you all up to speed on at least the worst of them. But I look forward to the day that I can help chronicle the victory of a powerful movement for social justice. Rather than merely track democracy’s looming demise.

 

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2018 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

TOWNIE: UMB DRUBBING, PAWSOX GRUBBING

UMB DRUBBING, PAWSOX GRUBBING

 

University cuts and a (possible) corporate scam just in time for the holidays

 

November 27, 2017

BY JASON PRAMAS @JASONPRAMAS

 

UMass Boston admin lays off more staff, unions push back

The neoliberal war on public higher education continues unabated in Massachusetts as the UMass Boston administration announced the layoff of 36 personnel last week, and a reduction in hours for seven more. According to the Boston Globe, all of them are “staff who clean the school, help run academic programs, work in the student health office, or in other ways support the daily operations of the university. Some have worked there more than 30 years.” UMB had 2,095 employees in 2016, but has cut 130 jobs so far this year. The university serves over 16,000 students.

 

As of this writing, campus unions are planning protests. Hopefully, such actions will ultimately build a political movement capable of operationalizing the prescriptions of the fine report a coalition of UMB “students, staff unions, and faculty” released in September. Entitled “Crumbling Public Foundations: Privatization and UMass Boston’s Financial Crisis,” it lays the responsibility for the budget crisis currently engulfing the university at the feet of the UMB administration, the UMass Board of Trustees, and the state legislature.

 

As well it should. The legislature has been slashing the state higher ed budget since the 1980s. The board keeps raising the tuition and fees paid by students and families to cover the resulting gap. And the UMB administration continues increasing the number of high-level administrators with questionable job descriptions and fat paychecks who somehow rarely face layoffs—despite costing the school far more per capita than each of the low-level employees who keep getting axed of late. All while expanding the campus in ways that don’t always benefit the urban students that institution was built to serve… running up unsustainable debt loads in the process.

 

The report calls for five major reforms that its authors believe would set the campus to rights:

 

  1. UMass Boston should not be required to show a positive net income in its budget. Instead, it should be allowed to make debt payments using the reserves it’s been forced to build up for the last few years—and the Board of Trustees should “release Central Office reserves” to help with those payments. Rather than compelling students and their families to shoulder such costs through ever-increasing tuition and fees.
  2. The UMB administration should engage in an open and transparent planning process with faculty, staff, and students that will “ensure that the campus can continue to provide an affordable and diverse education along with appropriate support services to its students,” review interest and principal payments, and review the rapid increase in high-level administrator expenses.
  3. The UMass Board of Trustees should endorse the Fair Share Amendment that will levy an additional 4 percent income tax on millionaires and spend the money on public higher education, pre-K-12 education, and transportation if passed by binding statewide referendum next year.
  4. The Mass Legislature should cover the cost of rebuilding crumbling campus infrastructure.
  5. The Mass Legislature should annually increase appropriations for public higher education until we are at least on par with the national average based on our state’s wealth.  The Commonwealth is presently at the bottom of the pack for state appropriations for public higher ed.

 

The white paper concludes with a visionary sentiment that’s worth reprinting in full: “In considering these recommendations, we ask that we all—members of the Massachusetts legislature, the UMass Board of Trustees, UMass Boston’s administration, and the larger community of Boston—remember the purpose with which we are tasked. Chancellor John W. Ryan, at UMass Boston’s 1966 Founding Day Convocation, reminded those gathered that ‘we have an obligation to see that the opportunities we offer… are indeed equal to the best that private schools have to offer.’ This is the expectation that the citizens of our Commonwealth have for themselves and their family members when they come to UMass Boston. This is the responsibility that UMB staff, faculty, and administrators take on each day on behalf of our students. This should be what guides the decision of the Board of Trustees and the Mass legislature as we work to address the crisis at UMB.”

 

PawSox Worcester visit: boondoggle in the making?

Meanwhile, in faraway central Mass, my Worcester Magazine colleague Bill Shaner is tracking what could be another big giveaway of local and state money. Seems that the Pawtucket Red Sox—the BoSox Triple A affiliate team—have been courting Worcester for a few months and might be looking to move there in exchange for lashings of public lucre. Shaner reports that multiple sources said that Jay Ash, secretary of Gov. Baker’s Executive Office of Housing and Economic Development, attended a meeting last week between Worcester officials and PawSox bigs. Though “City and PawSox officials both declined to comment on the meeting, or whether or not it took place.” While “Ash’s staff confirmed he was in Worcester Monday but couldn’t say what for.” All I can say for now is that, like some capitalist Santa Claus, whenever Ash appears corporate leaders can virtually always expect a yuuuuge present from the Bay State and any municipal government in range in the near future. So this nascent Woo-town deal is definitely worth watching.

 

Townie (a worm’s eye view of the Mass power structure) is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

GENERAL ELECTRIC FAIL

 

Conglomerate’s woes throw Boston HQ deal contradictions into bold relief

 

November 15, 2017

BY JASON PRAMAS @JASONPRAMAS

 

What a surprise. General Electric is tanking, and the scheme to bring the multinational’s headquarters to Boston is looking worse by the day. And whom shall the public blame if that once-secret deal cut by Gov. Charlie Baker and Mayor Marty Walsh in January 2016 goes south? Potentially tossing away millions in tax breaks and direct aid to a company that has already done massive damage to the Bay State over the past few decades? Readers of the dozen columns I’ve written criticizing the boondoggle will already know the answer to that question. But for those of you who have made the mistake of believing all the massive amounts of PR bullshit that the Boston Globe and other area press have been tossing around about the affair since that time, here’s a bit of a recap.

 

Where to begin? So, the governments of Boston and Massachusetts agreed to shovel tens of millions of dollars at GE in “exchange” for “800 jobs” in a new corporate headquarters campus in the Fort Point district of the Hub. Many of which would simply be transferred from the old headquarters, and most of which would be executive level jobs that will not help Boston’s struggling, underemployed working class.

 

Now there’s a problem. GE’s been losing money all year. According to the New York Times, its stock price had already dropped by 35 percent since January. Then, according to CNBC, the company’s share value dropped another 13 percent this week as of this writing after new CEO John Flannery announced a restructuring initiative—including the one thing investors hate most of all: dividend cuts. Only the second for GE since the Great Depression. So the knives are coming out around the beleaguered behemoth, and it remains to be seen whether some internal reorganization (doubtless costing legions of employees their jobs) and some belt-tightening by its execs will be enough to stop investors from moving to carve the conglomerate up like a Thanksgiving turkey. But let’s not assume the worst just yet.

 

Funny thing about that belt-tightening, though. According to the Boston Herald, cuts are now in store for GE’s still-small local workforce, and construction of the new Fort Point headquarters building was already pushed back two years from 2019 to 2021 in August. The plan is to make do with the two old Necco buildings already being refurbished on the site at first. The PILOT (payment in lieu of taxes) agreement signed by the Boston Planning and Development Agency (formerly the Boston Redevelopment Authority) and the city of Boston guarantees up to $25 million in tax breaks to GE if it provides the much-ballyhooed 800 full-time jobs. But by what date?

 

The discussion around GE moving its HQ to Boston has focused on the corporation creating those jobs by 2024. Herein, then, lies the rub about the PILOT deal: The agreement is framed around GE hiring “approximately 800 employees at the Headquarters Building and the Necco Buildings within eight years of the Occupancy Date.” But that occupancy date is explicitly defined as “the date upon which the Company initially occupies the Headquarters Building.” Which has now been pushed back from 2019 to 2021, according to the Boston Business Journal. So 2024 cannot be the year that GE will need to have 800 employees on its new campus. 2027 would have been the earliest it had to meet that target. And now that’s been pushed back to 2029, given the delay with the headquarters building.

 

Yet it turns out that the PILOT agreement doesn’t actually require 800 jobs to be created. Remember, it starts by stating GE will employ “approximately” 800 people on the Fort Point campus. But further down in the document, in a table explaining the specific tax break the city will actually give the company during each year of the deal, it allows for the creation of as few as 400 jobs in a chart with five tax break tiers between “Job Figure is between 400 and 499” and “Job Figure meets or exceeds 800.” Keeping in mind that the agreement also specifies a “stabilization” period of seven years between 2018 and 2024, during which GE gets $5.5 million in tax breaks no matter what and isn’t required to provide any jobs at all for the first six years. GE is then only required to provide between 400 and 800 jobs from 2024 until the agreement ends in 2037.

 

Job figure table from the GE Boston PILOT agreement
Job figure table from the GE Boston PILOT agreement

 

What’s super puzzling is that agreement first requires the company to start providing annual job figures “from and after” the aforementioned occupancy date. But the agreement already established that it only really has to start meeting any job targets as far out as eight years from the date it occupies its headquarters building. Making the job target requirement trigger as late as 2029, according to current plans. Despite the tax break table in the PILOT agreement using job targets to calculate tax breaks beginning in 2025 based on the 2024 job count.

 

The state, for its part, committed a total of about $120 million to the project. Late last year, GE spent $25.6 million to buy 2.5 acres on the Fort Point Channel that includes the land the existing buildings sit on and the land the new headquarters building will (perhaps) one day occupy from Procter & Gamble. MassDevelopment, part of the Commonwealth’s economic development apparatus, took out a $90 million loan from Citizens Bank—an interesting maneuver worth looking into—using $57.4 million to purchase the two old Necco buildings on the site from P&G, and the rest to refurbish the buildings. The remainder of the state’s “investment” is slated to go to fixing up the area around the site.

 

So, GE is getting basically free rent on the Necco buildings plus free upgrades on abutting public land courtesy of the state. And a big chunk of the taxes it would normally pay over the next 20 years is coming free from the city. Without any real requirement that it actually provide any jobs in Boston for many years, and then only (maybe) 400 jobs by 2029—assuming the headquarters building is built in 2021.

 

Which is the problem with all such erstwhile “economic development” deals in the Bay State. From their origin as a way to help encourage investment in areas of the state that were down on their luck precisely because GE and companies like it moved their manufacturing operations away from cities like Pittsfield, Lynn, and Fitchburg to places without the decent labor and environmental regulation that was in place by the 1970s, they have become yet another way for rich and powerful corporations to get richer and more powerful. Worst of all, such corporations hold all the cards in the deals. If they don’t get lavished with free public money, they can refuse to move their operations here or can leave if they’re already operating in the area. Once they get the cash they’re looking for, they can basically pull out at any time. Or as is the case with GE, they can “alter” the deal Darth Vader-style, leaving our local “Lando Calrissians” like Baker and Walsh to “pray” the deal is not altered “any further.”

 

The Boston Business Journal was correct to point out that GE will get $2.1 million in tax breaks on the Fort Point Complex by 2021—the year that the company now claims it’ll be completing its new 12-story headquarters building on the site. But what if it doesn’t build the new structure at all? It’s not clear. Because the PILOT agreement is pegged to job creation starting as far out as eight years after the headquarters building is built, and then allows for the company providing as few as 400 jobs between 2024 and 2037 rather than the 800 everyone’s been assuming. While not actually demanding any job creation until as late as 2029, making it unclear how the tax break will be calculated between 2025 and 2029 should GE drag its feet for the full eight years. The conditions for the company defaulting on the agreement are also pegged to job creation. Not to the construction of the headquarters building. Oh, and by the way, the PILOT deal only covers the headquarters building and the land the company purchased under and just around it (which the agreement calls the “Headquarters Project”). Not the Necco buildings, now owned by the state. Also, there’s no word about what happens if the company has less than 400 workers in Boston at any point from 2024 to 2037. Do these curious contradictions amount to loopholes for GE to bag the whole deal? It certainly looks that way.

 

The minimum GE will get in tax breaks from the city of Boston over 20 years is $5.5 million by 2024 plus whatever breaks it qualifies for between 2025 and 2037. However, the amount the company actually puts out in annual PILOT payments after 2024 is calculated by a complicated formula based on the taxes that would have been assessed without the PILOT agreement. And the assessed value of the relevant property could change from current projections. So it’s hard to know what the total value of the PILOT deal will ultimately be to GE, other than that it will be a bunch of money… however many jobs it actually creates.

 

But why exactly are Boston and Massachusetts giving a huge company that’s still profitable any money at all? And what happens if GE bails on the scheme by hook (simply running and fighting its PILOT default in court with its vast legal department) or by crook (not building the headquarters building at Fort Point and possibly getting away with delaying the job creation target trigger until the deal ends in 2037)? And what happens if worse comes to worst for GE, and the company actually does collapse?

 

These remain my central questions. And I continue to encourage all of you to ask those and related questions to every Boston and Massachusetts politician you can find. And ask the Globe while you’re at it. They’ve got a loooot of ’splaining to do about their cheap boosterism… which they’ve become awfully quiet about of late. Preferring, it seems, to focus on the next giant company that’s demanding public bribes to come to town, Amazon.

 

A shorter version of this column appears in this week’s DigBoston print edition.

 

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

TOWNIE: TAX DELINQUENT, TAX GIVEAWAY

 

Crutchfield sues Mass over online taxes, unions protest Siemens

 

Online retailer tries to duck sales taxes

For a long time, the internet was like the Wild West for online sales. Companies sold products to consumers all over the US, and the feds and many states were slow to tax those transactions. You know, because “innovation goooood” and all that. On Oct 1, Massachusetts finally started collecting its standard 6.25 percent sales tax on internet sales from out-of-state companies with 100 or more online transactions last year. And last week, according to the Salem News, “online car stereo and electronics retailer, Crutchfield Corp., says Massachusetts’ policy violates interstate commerce laws and is therefore unenforceable.”

 

Why? In its legal challenge the company is basically saying: You collect taxes on us, but not on other companies who might do the same business by other means. Virginia-based Crutchfield also says it’s covered by a Virginia law designed to protect businesses in that state from having to pay taxes in other states where the business has no brick-and-mortar presence. Yet the Commonwealth has already argued that under a 1992 Supreme Court decision, having “cookies” stored on consumer’s computers from companies like Crutchfield counts as a physical presence in the Bay State. The Salem News also notes that NetChoice—a group representing online retailers like eBay and PayPal—is arguing “that the Baker administration doesn’t have the authority to tax businesses with no actual presence in Massachusetts.”

 

What’s most fascinating about these developments is the lengths big online retailers will go to avoid paying very standard state taxes (and, of course, federal taxes) in places where they do a significant amount of business. Any corporate victory on this front translates to millions of dollars being effectively stolen from the public that could be used to pay for social goods like education, housing, environmental, and welfare programs. Just what we don’t need.

 

German multinational faces protests over job promises, tax breaks

Walpole is a town with a population of 24,000 at the 2010 Census, but it’s punching above its weight in lavishing tax breaks on the huge German conglomerate Siemens. And area labor unions—led by the Building and Construction Trades Council of the Metropolitan District (Metro BTC)—are not happy. According to Wicked Local Walpole, hundreds of residents and area union members turned out for an Oct 19 protest on Walpole Common to demand that Siemens Healthineers, the goofily renamed healthcare division of the company (formerly Siemens Healthcare Diagnostics Inc.), follow through on its 2016 promises to the community.

 

In March of that year, the Walpole town meeting representatives voted 76-51 in favor of giving tax breaks worth millions between 2018 and 2037 to Siemens—an average savings of 75 percent on its property tax for the 20 years, according to the Brockton Enterprise—in support of the $300 million expansion of its existing plant there. The company said it would add 400-700 “permanent jobs” to its existing workforce of about 700 by 2026.

 

But at the recent rally, Walpole Selectman David Salvatore told the crowd that Siemens has “only hired 32 Walpole residents” to date out of the 170 jobs the company says it has created since the deal was cut. In an earlier Boston Globe article—released just after the town meeting vote on the agreement—he had provided more background: “The benefits of this project are regional, and the burden is local. Of the 620 current employees at the Siemens plant, a mere 33 are Walpole residents; most are not even from Norfolk County, and 83 are from Rhode Island.” So, Walpole is putting a bunch of money on the table for a big company that has thus far only created about 60 jobs for town residents.

 

Union leaders, according to an Oct 16 press release, are angry that Siemens has not committed to using union labor to build the 300,000-square-foot expansion of the factory or to hiring more local workers—especially since it’s getting such a large tax break. Their pressure campaign is calling for “slowing down the slated expansion for further community input and review.” One would think that a company with a market capitalization of $109.8 billion in May, according to Forbes, can afford to work things out with its critics. But it will be interesting to see how the situation plays out, regardless.

 

Townie (a worm’s eye view of the Mass power structure) is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

AMAZON OCTAGON

Mass pols stand ready to fight each other for the right to bribe a multinational

October 10, 2017

BY JASON PRAMAS @JASONPRAMAS

 

At least 17 Massachusetts cities and towns are now preparing to do battle with each other—and hundreds more municipalities nationwide—for the dubious “honor” of “winning” the right to throw enough public money and tax breaks at Amazon to become the site of its new Headquarters 2 (HQ2). Despite the fact that such a “victory” will result in a worse regional housing crisis, provide mainly low-paying unstable jobs with subcontractors to working class natives without college degrees while tossing thousands of good jobs to software engineers from out of state, and give the vast corporation far too much power in state politics.

To prevent those unfortunate outcomes, here’s a non-exhaustive list of local, state, and federal public officials that should be contacted by constituents and reminded of their responsibilities to defend the public interest. Like, immediately. The deadline to submit HQ2 bids to Amazon is Oct 19. Careful readers will note that many of these bids are being pushed hardest by private developers and by “economic development” nonprofits and government offices that are basically run on behalf of private developers. Fancy that.

Local Government

BOSTON

Mayor Marty Walsh is all over this one. Fresh off of colluding with Gov. Charlie Baker to cut a secret deal to lavish tens of millions on General Electric to bring its once-and-future headquarters to the Hub, he’s back to his old tricks with Amazon. Four possible HQ2 sites are being considered, according to the Boston Globe: putative front-runner Suffolk Downs (partially in Revere), Widett Circle in South Boston, Beacon Yards in Allston, and an area adjacent to South Station.

REVERE

At a Sept 29 meeting, the Revere City Council Economic Development Sub-Committee reacted positively to the Suffolk Downs proposal presented by developer Thomas O’Brien, managing director of the Boston-based Hym Investment Group that owns the property. According to the Boston Herald, committee chair and council vice president Councilor Patrick M. Keefe Jr. then called Amazon the “1A plan” for the land.

SOMERVILLE

CommonWealth reports that Mayor Joe Curtatone is working on a proposal that would include buildings along the Orange Line from Assembly Row in Somerville to North Station in Boston. Which is, according to a DigBoston investigative series, perfectly in keeping with his track record of making a big stink when developers come to town, then ultimately giving them exactly what they want.

ABINGTON, ROCKLAND, and WEYMOUTH

Kyle Corkum, CEO and managing partner of LStar Communities, the company developing Union Point—the former US Naval Air Station—is pushing a bid for the property. According to Wicked Local, Weymouth Mayor Robert Hedlund is supportive of the bid. Rockland Selectmen Chairman Ed Kimball said, “Rockland will extend open arms to them and Abington will receive indirect benefits as well.”

HAVERHILL, LAWRENCE, METHUEN, AND NORTH ANDOVER

Haverhill Mayor James Fiorentini, Lawrence Mayor Daniel Rivera, Methuen Mayor Stephen Zanni, and North Andover Town Manager Andrew Maylor are all preparing a joint proposal featuring the former North Andover Lucent site—which I addressed in detail in my Sept 26 column—likely in tandem with other nearby sites.

BILLERICA, LOWELL, AND TEWKSBURY

According to the Lowell Sun, Lowell Mayor Edward Kennedy has said “we should at least take serious look” at the possibility of bringing Amazon to the area. Also, “City Manager Kevin Murphy said he has already directed his staff to begin working with the Middlesex 3 Coalition, an organization of nearby communities, to explore the possibilities.” Wicked Local reports that Billerica selectmen unanimously support the effort. Billerica Community Development Director Rob Anderson also supports the bid. One possible site is Riverview Technology Park at 495 Woburn St in Tewksbury.

NEW BEDFORD

The entire city council sent a letter to Mayor Jon Mitchell enjoining him to support an Amazon bid, according to the New Bedford Standard-Times, and he’s been in touch with Mass Secretary of Housing and Economic Development Jay Ash about pursuing a bid. The city has a 100 acres of a municipal golf course that has been slated for business development.

FALL RIVER

According to the Herald News, Fall River Office of Economic Development (FROED) Executive Vice President Ken Fiola—a key figure behind bringing a huge Amazon warehouse to the city—is pushing hard for the Amazon HQ2 contract but apparently doesn’t get along with Mayor Jasiel Correia II. WJAR-TV reports that his challenger in the upcoming election, Councilor Linda Pereira, is attacking Correia for resigning from the FROED board. So it’s not clear if Fall River will manage to field a proposal.

WORCESTER

The city council is unanimously in support of an Amazon deal but was not initially in agreement about whether HQ2 should be sited in Worcester or Boston. Councilor-at-Large Konnie Lukes has been the most vocal supporter of a Worcester site, pushed for council discussion about the deal, and requested that City Manager Ed Augustus Jr. prepare the application. According to MassLive.com, Augustus and some of the council were initially leaning toward supporting a Boston bid, but the city is now planning an independent bid for the contract. According to Worcester Magazine, “Councilor At-Large Kate Toomey said the south side of Worcester, by the intersection of routes 20 and 146, would be an ideal location” for HQ2.

WESTERN MASS

The Republican reports that Springfield Mayor Domenic Sarno and the entire city council are supporting a bidwith other Connecticut River valley communities (the so-called “Knowledge Corridor”) in Massachusetts and Connecticut. Enfield, Connecticut, is a possible site. The main Bay State booster of the plan is Rick Sullivan, president and CEO of the Economic Development Council of Western Massachusetts.

State Government

GOV. CHARLIE BAKER

The governor said that the state won’t back a specific site and has urged local governments to “go for it.” Strongly in support of spending public money to bring the Amazon HQ2 to Massachusetts. According to the Boston Herald, Baker has recently stated that the Commonwealth’s request to Suffolk Superior Court to order Amazon to provide records for any third-party vendor who “stores or has stored” products in Massachusetts since 2012 was “routine” and shouldn’t affect an HQ2 deal. The order could result in a flood of similar legal actions around the US to collect back state sales taxes—which will probably tick off the tax-shy multinational.

SECRETARY OF HOUSING AND ECONOMIC DEVELOPMENT JAY ASH (D)

An important public servant, though not an elected one. Totally in support of an Amazon HQ2 deal for Massachusetts. In his role as chairman of the quasi-public agency MassDevelopment, he has already overseen a vote “to increase its contract with consulting firm VHB Inc. by up to $200,000 for a technical analysis” in support of the state’s Amazon bids. His bio brags that he “has played a leadership role in the recruitment and expansion of major employers, including Amazon, General Electric, IBM Watson Health, Kronos, and Siemens.”

SPEAKER ROBERT DELEO (D-WINTHROP)

Flacking for the Suffolk Downs site. Completely on board with dumping public money on Amazon and has “said he’s open to legislation that would include financial incentives to draw Amazon to the state regardless of the location,” according to the Boston Globe.

SEN. JOSEPH BONCORE (D-WINTHROP) AND REP. ADRIAN MADARO (D-EAST BOSTON)

Support the Suffolk Downs bid, according to the East Boston Times-Free Press.

SEN. CINDY FRIEDMAN (D-ARLINGTON) AND REP. MARC LOMBARDO (R-BILLERICA)

Support the Billerica, Lowell, Tewksbury bid, according to Wicked Local.

Federal Government

US REP. STEPHEN LYNCH (D-SOUTH BOSTON)

Supports the Weymouth proposal, according to the Boston Herald.

And a Few Cool Kids

REP. MIKE CONNOLLY (D-CAMBRIDGE), SEN. PAT JEHLEN (D-SOMERVILLE), REP. MARJORIE DECKER (D-CAMBRIDGE), AND SEN. JAMIE ELDRIDGE (D-ACTON)

Among the only politicians in the state to speak against spending public funds to “win” the Amazon HQ2 “contest.”

Rep. Connolly of Cambridge put his opinion succinctly on the matter in a Facebook chat to me Monday: “I was asked about it by some Cambridge residents last week and here’s what I told them: ‘I think it’s reasonable for cities and the state to want to be in the discussion, but at the end of the day, when/if I have to vote on something or support a proposal, I am not going to support a neoliberal approach to economic development, so if a deal is on the table I would be looking to scrutinize it in terms of whether it helps the folks who we represent in our communities and in the neighborhoods I represent right now.’”

Massachusetts needs more pols like these. Fast.

UPDATE 10/12/17: LYNN

A reader just pointed me to an article indicating that there is some interest in bringing Amazon to the “City of Sin.” According to The Daily Item, “Mayor Judith Flanagan Kennedy said the city is in no position to compete with Boston, Revere, Lawrence and Worcester to bring the world’s largest e-commerce company’s second headquarters to Massachusetts.” However, City Councilor-at Large and Rep. Daniel Cahill (D-Lynn), Senator and mayoral candidate Thomas M. McGee (D-Lynn), and Charles Patsios—the Swampscott developer who plans to transform the 68-acre former General Electric Co. Gear Works property into a $500 million neighborhood—are all supportive of a Lynn bid.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

AN AMAZON NORTH ANDOVER DEAL?

Sketch of the Merrimack Valley Works plant at North Andover while under construction in 1955

Merrimack Valley pols courting the tech behemoth have forgotten recent history

Sept 26, 2017

BY JASON PRAMAS @JASONPRAMAS

A couple of weeks ago, I criticized the possibility of an Amazon Boston deal—on the grounds that most of the jobs it would provide would be for software engineers, not our struggling local working class. And that allowing a single company to build a 50,000-employee operation here overnight would give it way too much political economic power in our region. However, it’s not just Boston politicians who are hot to dump vast amounts of public funds on the huge multinational. Several other Massachusetts cities and towns are following suit.

Perhaps the strongest proposal of that group of entrants is coming from four municipalities in the Merrimack Valley region of the state: Haverhill, Lawrence, Methuen, and North Andover. They are offering to broker a deal with the owners of the underutilized 1.8 million-square-foot industrial facility called Osgood Landing in North Andover. This could conceivably fit Amazon’s bill, although the site is not located in the midst of a major city. Which the company has made clear is a priority. Also at issue is that Osgood Landing’s owners have been working to build a giant marijuana farm on the site instead. But the siren call of ready corporate cash will likely be enough to change their minds given that they’ve already signaled their support for the new venture.

Lost in most of the media chatter about the drive to “win” the Amazon deal is the fact that Osgood Landing was once a Lucent plant—and the context of its shutdown is completely absent. Lucent was the successor corporation to Western Electric. Which was better known as the old AT&T’s manufacturing division. And the North Andover plant was once Western Electric’s Merrimack Valley Works. Which built the transmission equipment that kept the nation’s phone system going. The company set up shop in Haverhill and Lawrence during World War II—just as the region’s famed textile and shoe industries began to decline. In 1956, it opened the North Andover plant and consolidated its regional operations there, becoming the new dominant industry in the area.

Video: “AT&T Archives: In the Merrimack Valley” [1959] (hat tip to Ryan W. Owen’s website for the find)

The jobs at the Merrimack Valley Works were mostly unionized, and they raised thousands of local families into the ranks of the middle class. But the chaos following the federally ordered breakup of AT&T’s near-monopoly of the US telephone system in 1984 saw the plant’s workforce fall from over 12,000 at the height of the Western Electric era in the 1970sto 7,000 in 1991, to 5,500 under Lucent in 2001 (well into a quick collapse five years after taking over the Western Electric business)… to zero in 2008, after the French telecom multinational Alcatel bought Lucent in 2006 and ordered the facility’s shutdown. The plant itself had already been sold to current owner Ozzy Properties in 2003. Alcatel-Lucent ended up being absorbed by Nokia in 2016.

Ironically, this sad outcome was predicted by local policy experts. In 1991, according to the “History Corner” of the Lucent Retirees’ website, “the Merrimack Valley Planning Commission investigated what the potential loss of … the Merrimack Valley Works might cost the region. The study found that a worst case decline that eliminated the plant’s then 7,000 jobs would cost 15 Valley communities $880 million. Lost supply orders for smaller companies in the area would eliminate another 7,700 secondary jobs.”

That all came to pass by 2008. Compounding the damage already done by the loss of the other 5,000-plus jobs at the plant between the 1970s and the early 1990s. Lucent’s unions slowed but ultimately could not stop the destruction of thousands more good jobs in the Merrimack Valley.

Which highlights the problem of spending public money to attract giant corporations like Amazon. Big companies can change their plans at the drop of a dime. And, without the kind of government regulation and unionization that major companies like AT&T had to operate under between WWII and the 1970s, the promised 50,000 jobs can become no jobs in the blink of an eye. Because who’s to stop an anti-regulation, anti-union company like Amazon from shutting down an operation as fast as it sets it up in this era? No one. No one at all. And, naturally, regions that fall for this “jobs creation” shell game have no plan B.

One would think that political leaders in Haverhill, Lawrence, Methuen, and North Andover, informed by their own regional planners, would remember such history and focus on more sustainable economic development options. After all, the 2013 Merrimack Valley Comprehensive Economic Development Strategy produced by the Merrimack Valley Planning Commission stated, “The region’s best prospects for future economic growth are its local entrepreneurs.” Local entrepreneurs like the Osgood Landing owners, if they choose to start their marijuana farm rather than grab for the brass ring Amazon could offer them. A sustainable “growth” industry if ever there was one that could provide an estimated 2,500 good jobs to the region—two-thirds of which would not require college degrees. But it seems like local residents, perhaps with former Lucent employees in the lead, will now have to remind their elected officials. If not in lobby days and protests prior to an Amazon deal, then definitely at the ballot box come next election should such a disastrous initiative ever actually come to pass.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

STOP THE AMAZON BOSTON DEAL

Stop the Amazon Boston Deal

 

Locals have until Oct 19 to say ‘No Public Bribes to Corporate Scofflaws’

Sept. 12, 2017

BY JASON PRAMAS @JASONPRAMAS

Fresh off of throwing tens of millions of dollars at General Electric, Boston Mayor Marty Walsh and Massachusetts Gov. Charlie Baker are now planning to enter the international horse race to convince Amazon to let the city and the commonwealth shovel vast amounts of public money at it in exchange for building a new second headquarters (“HQ2” for short) here.

But this HQ2 won’t be just any corporate headquarters. No no no. None of this GE business — with maybe kinda sorta up to a piddling 800 jobs at a new Boston HQ at some point. Amazon plans to put 50,000 workers in its new digs. Fast.

Thing is, the bulk of those jobs are apparently slated for software developers. Which, true, our colleges produce in some numbers. But most of the students who train for high-tech jobs are from “outta town.” So the new jobs are not going to benefit our shell-shocked Boston-area working class. If the Seattle experience is any guide, the gigs they’re going to get from the deal will be the same unstable jobs as subcontractors — ranging from cafeteria workers to security guards — that they’re already struggling to survive on now. And those jobs do not “raise” any “boats” in anyone’s fantasy scheme of how capitalist economics works.

For both the city and the state, there’s another big red flag: Amazon proposes to spend $5 billion building a campus of around 8 million square feet. Leaving aside the lack of the necessary 100-acre plot in or near downtown Boston, that kind of build-out is going to place a huge burden on both our metro housing and transportation infrastructures. Yet Amazon is coming on to cities like Boston with hand outstretched. Looking for the tax breaks and direct aid (read: bribes) that all big companies expect when they move to a new location these days. And after starving even more social programs to pay for this latest boondoggle, what are working families going to get back from the huge multinational?

Probably not much. According to the New York Times, Amazon only paid an average local, state, federal, and foreign tax rate of 13 percent between 2007 and 2015 — far less than the official federal corporate tax rate of 35 percent alone, and less than even the 15 percent corporate tax rate that the Trump administration is trying to pass. Given that Boston real estate developers have been allowed to build primarily “luxury” condo complexes in the last many years, vacant units will be quickly snatched up by Amazon employees, and then the remaining downmarket properties will be upgraded by landlords looking to cash in. The result will be even more Bostonians without decent housing, legions more homeless people, and little new tax revenue to pay for the mounting social crisis thus created — or for making the desperately needed repairs and upgrades to our crumbling and utterly underfunded public transportation infrastructure.

Back on the labor tip, Amazon has gone out of its way to crush even the most insignificant union drives at its facilities worldwide since its inception. As when a small group of maintenance and repair technicians at its Middletown, Delaware, facility voted 21–6 against joining the International Association of Machinists and Aerospace Workers after an intense management campaign against the workers. Meanwhile, in Germany, where better labor policies and worker militance have forced Amazon to accept some unionization, management was recently shown to be “using peer pressure” to convince workers to not use their government-guaranteed sick days. No surprise, for a company which has made some of its warehouse workers walk 15 miles a day on a typical shift.

So is this the kind of company we should let state and local government bigs lavish public money on?

Hell no. And there’s one big reason, aside from the above, why we shouldn’t. Allowing a company as large as Amazon to suddenly parachute a huge operation into our midst means it will immediately command an inordinate amount of political and economic power in Boston and Massachusetts. Particularly, the ability to threaten a capital strike in the form of leaving the area if any future demands for public lucre aren’t met.

Once Amazon arrives, it is going to distort the metro political economy so severely that we’ll be stuck with it. The ultimate white elephant.

Which is why any potential Amazon Boston deal must be stopped — with even more finality than the Olympics deal was torpedoed. Fortunately, unlike the GE Boston Deal — that got sprung on Boston and Massachusetts residents after months of secret negotiations — there’s still time to organize a very strong “NO” campaign. The deadline for Boston to get a proposal to Amazon is Oct 19.

Readers have a bit over a month to force Walsh, Baker, and other local pols to stand down on this one. I recommend hitting the ground running.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.