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charter

Did you hear the good news? Charter Communications, Inc. is opening an headquarters in Henrietta and creating more than 220 jobs! The company, which just purchased Time Warner cable, will invest $2.9 million in the move.

Woohoo!

Governor Andrew Cuomo visited Rochester to make the announcement.

Here’s what was not said.

The state is giving Charter up to $2,5 million in Excelsior Jobs tax credits, meaning the company isn’t investing much at all.

State Comptroller Tom DiNapoli found the Excelsior Jobs program is riddled with problems. Companies collected money without creating the promised jobs. Among them was Xerox, which also got a call center on the taxpayer dime.

Some of these new jobs will be at Charter’s call center. While these jobs are important to individuals, they are bad economic development policy. Call centers notoriously have high turnover and low pay.

The headquarters will be in the Calkins Road area of Henrietta. The first bus doesn’t arrive until around 9 a.m. and the last one leaves before 6 p.m. This means workers will likely have to drive. Transportation is a huge barrier to employment for many people. If we are serious about reducing poverty, we should withhold incentives from firms that do not locate jobs near people or on high service bus lines.

Charter Communications is now the second largest cable provider in the United States. It earned several billion dollars in profits last year. It earns BILLIONS of dollars and wants our help building out an office in Henrietta?

Instead of us helping Charter, the governor should be asking Charter to help us. Hey Charter, will you provide fiber internet, a la carte cable packages and lower charges for equipment rentals?

We need the jobs, especially after Verizon’s announcement is will shut down its Henrietta call center, killing 600 positions. (That’s what’s wrong with the call center economy. There’s no permanency.) But instead of making the business climate better for everyone, the state bribes a select few. The end result is one of the slowest growing economies in the nation. This kind of corporate welfare is not working and it’s not reaching the area’s neediest citizens.

Meanwhile, our cable bills are remain high.

Did you know Wegmans saved $5.41 million on property taxes on its stores in New York state between 2003 and 2009? This is a company that had sales of $6.2 billion in 2011.

The data was contained in a New York Times database. The Times is in the midst of an awesome investigation into local and state subsidies for corporations. Guess what? These incentives, including grants, loans and property tax breaks, often provide dubious benefits.

The Times tallied $80 billion in giveaways every year to companies and believes the true total is far higher:

A portrait arises of mayors and governors who are desperate to create jobs, outmatched by multinational corporations and short on tools to fact-check what companies tell them. Many of the officials said they feared that companies would move jobs overseas if they did not get subsidies in the United States.

Over the years, corporations have increasingly exploited that fear, creating a high-stakes bazaar where they pit local officials against one another to get the most lucrative packages. States compete with other states, cities compete with surrounding suburbs, and even small towns have entered the race with the goal of defeating their neighbors.

While some jobs have certainly migrated overseas, many companies receiving incentives were not considering leaving the country, according to interviews and incentive data.

Despite their scale, state and local incentives have barely been part of the national debate on the economic crisis.

These subsidies are coming as local and state governments cut services and jobs and increase property taxes and fees.

I plugged in “Rochester” into the Times database. A sampling of companies getting breaks:

  • General Motors (Recently pulled out of Honeoye Falls, taking 300 jobs.)
  • PAETEC (Perinton telecom got $7.36 million in corporate income tax credits, rebates or reductions. PAETEC was sold to Windstream for $2.3 billion.)
  • Sibley Building (Rochester taxpayers took a $19 million haircut on that one.)
  • Gannett (The Democrat and Chronicle has repeatedly furloughed and laid off workers.)

Senator Tom Coburn is out with his annual “Wastebook,” in which he questions how federal dollars are spent.

Among the 100 projects listed is improvements to the Genesee Valley Agri-Business Park in Batavia. Pepsico Inc. is teaming with a German company to make Greek yogurt at the facility. Coburn calls it “corporate welfare for the world’s largest snack food maker,” as Pepsico had net revenues of $66 billion last year.

The feds chipped in $1.3 million in infrastructure upgrades at the park, including a new access road and water supply system.

Coburn points out Pepsico Inc. could have paid for the work itself:

Considering the company’s billions of dollars in annual profits and the plentiful demand for the Greek yogurt nationally, Pepsico clearly does not need handouts from the government to subsidize its private business.

Also in the Wastebook:

1. Professional sports loophole, which allows the NFL, NHL and PGA to classify themselves as nonprofit organizations.

2. A federally-subsidized airport in Oklahoma that only gets one flight a month.

3. Moroccan pottery classes to stimulate the Moroccan economy. The classes were a bust, partly because the Moroccan people have been making pottery for a couple thousand years.

4. Food to be served on Mars. Yes, NASA is testing it out.

5. Robotic Squirrel. California colleges built a robotic squirrel to see how snakes react.

A previous Wastebook listed Rochester’s El Camino housing project.