Stop Blaming Unions - And Response

Sunday, June 23, 2013

Roy, stop blaming unions for VW’s decision to locate their expansion in Chattanooga or Mexico.

 

There are some basic facts that cannot be overcome. The absence of unions will not impact a decision for VW to expand in Chattanooga.

VW will make a decision that is based on their bottom line. Also, why would 700 of Roy’s neighbors be nervous? Are they stockholders waiting on dividend checks?  They are not paying additional property taxes based on the municipal revenue.

 

1)         VW received $212 million in local corporate welfare bond issues, infrastructure, and facilities from Hamilton County and the city of Chattanooga taxpayers.  These incentives simply made us the highest bidder, and that is why VW located in Chattanooga.  It is comical to read elected officials' statements that this German pragmatic corporation located in Chattanooga for the art scene - more than funny.  Oh yeah, VW is here for the blue rhino and the art. Money has nothing to do with it.

 

2)         The original University of Tennessee economic study made some fatal assumptions in the economic benefit of giving this windfall of corporate welfare to VW.  The purpose of the study was to determine if an economic return could be gained from the taxpayers in exchange for this over-the-top investment in a private corporation. 

 

The true measure of whether we are receiving a return is in actual municipal revenue, not theoretical Chamber of Commerce multiplication factors. We have actual data now.  Why are the Chamber and UT still using the economic multiplication factors to measure success? 

 

The real question is why does Hamilton County and Chattanooga think that this private corporation is a government function?  Commissioner Tim Boyd and these elected officials need to focus on the function of government service delivery that needs a lot of work, i.e. the prison, I mean school system. 

 

Further, the greatest private employer in the state is small to medium-sized businesses. Why is small business being mandated to subsidize 51 corporations’ share of services in Hamilton County?   Our local governments need to stop acting like some type of corporate raiders and work on their chartered or constitutional office functions.

 

The original economic study assumed that the majority of the supplier stream would be located in the region.  The study did not anticipate that VW would ship engines from Mexico.  The mass supplier chain did not locate to the region.  Reasonably, VW is and should be about profit. It is less expensive for VW to ship from a country that turns a blind eye to worker safety, and increasing the profit margin by discharging untreated metal compounds to surface water and air.  This is why we should not be exempting corporations from property taxes - it forces small business to subsidize the big corporation’s share of services, infrastructure, emergency services. Heck, the taxpayers' built VW their own fire hall.

 

The original study also assumed that VW would sustain 2,000 for 30 years of being exempt from paying property taxes and stormwater fees.  This duration is not a likely scenario. 

 

3)         Wages and benefits are the largest expenditure for manufacturing.  Regardless of union presence or not, Chattanooga and Hamilton County will never be cost competitive with Mexico.  The issues raised by Roy can only be true if you believe that we could compete with Mexico, wages or otherwise.  I guess if we allow illegal child labor, soluble metals to be discharged into surface water and air, and pay slave wages, we could compete with Mexico.

 

4)         Property and sales tax revenue for the city of Chattanooga are flat from both pre- and post-VW and the list of 51 corporate welfare recipients in pilot agreements facilitated by the Chamber of Commerce and their members.  There is a more interesting relationship between the taxpayers' corporate giving and the poverty rate in Chattanooga has climbed to an estimated 27 to 31 percent, since the taxpayer base is now required to fund services for the elite list of 51 corporations.  

 

Each time our local government approves a PILOT agreement, small business and property owners pay the corporation's share of services. We need to start viewing these incentive agreements as a tax increase to small business and property owners.  There is no refuting the fact that the little guys are being mandated to fund the big guys in PILOTS and other incentives.

 

These corporate welfare gifts are marketed and packaged under a smoke screen of what is really bad for us trickle-down economics.

 

5)         The local Chamber of Commerce receives $1.1 million annually of local property and sales tax revenue from the city of Chattanooga and Hamilton County.   The Chamber uses public money to perpetuate the VW corporate welfare untruths.  In fact, for almost four years, the Chamber of Commerce received an additional $900,000 a year in taxpayer-funded consulting fees to serve this trickle down economy that is making our community more impoverished.

 

The Chamber of Commerce administers the Payment in Lieu of Property Tax program (PILOT) that is limited to giving tax emptions to companies with a $5 million capital investment, and the creations of 50 new jobs. What is really absurd, Roy, is that the Chamber of Commerce has no enforcement mechanism to ensure that the jobs are really created and sustained over a period of time.

 

Show me with real data the return from over-the-top corporation welfare programs in municipal property or sales tax, waiting….

Until then, the municipal revenue data speaks volumes.

 

April Eidson

aprile@comcast.net

* * *

Mr. Exum,

I fully appreciate the freedom that all people have, the freedom of speech.  There are several reasons why I disagree with you, and I have that right. It’s unfortunate that you have a pulpit to stand on to spew your hate, while I, a simple man who actually works at the best workplace in Hamilton County, has no outlet for his or her side. Since it seems you have connections to get your views printed, aired or simply published online.

    With that all being said, I, Edward Hunter, a worker on the assembly line at Volkswagen Chattanooga, offer to you a public debate on what seems to be your favorite subject.  You pick the time and day and I guarantee that I will be there to refute you and give the public both sides.

So what do you say, Mr. Exum? Want to put your money where your mouth (or pen) is? I look forward to hearing from you soon.
 
Respectfully,
Edward Hunter


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