- Rochester’s David Cay Johnston, a tax expert who writes for Reuters, took on the Medley Centre project in a must-read column. He calls developer Scott Congel’s proposal to use sales tax incremental financing for mall construction a form of corporate socialism:
Nationwide state and local subsidies for corporations totaled more than $70 billion in 2010, as calculated by Professor Kenneth Thomasof the University of Missouri-St. Louis
In a country of 311 million, that’s $900 taken on average from each family of four in 2010.
Subsidies for retail businesses are the worst kind of corporate welfare because, as the end of the economic chain, retailing grows only when population and incomes increase. If population or income falls, then subsidies for new projects like Congel’s damage existing businesses, where people would otherwise be spending their money.
My due diligence shows that total inflation-adjusted income in Monroe County fell by $2.5 billion, or 13 percent, from 2000 to 2008, the latest data. With such a steep drop in incomes it seems unlikely that Medley Centre sales could grow 14-fold.
Congel may never get $250 million of taxes, but if he does it will cost taxpayers whether they visit his mall or not, while weakening or destroying existing local businesses.
That’s how corporate socialism works — privatize gains, socialize losses and destroy competitors who do not get subsidies.
I am very much hoping Congel will come forward and discuss his plans in detail. We don’t even know what the project looks like right now, as it has expanded since first announced. He will have to make his case to the public. Until then, the public thinks it’s crazy.
Johnston’s column can be applied to so many taxpayer-financed projects in our area, including College Town, Xerox’s call center and the Greece Ridge mall renovation. It’s worth reading again and again.
- A University of Rochester researcher found a couple booze drinks a day – 14 drinks week – can be good for you. But if you drink 14 drinks in one weekend, you have problems.
- Rochester police want to know “Where the party at?” The city launched a campaign to get people to report house parties, which can be potentially dangerous. I’m not sure how I feel about this campaign. The lingo strikes me as condescending and almost mocking of youth.
– Attention journalism majors! My young friend Amanda Seef lost two jobs in the last year, despite being hard-working and passionate about the industry.