Detroit City Council Weighs Community Benefits ordinance on $15Mil+ Projects

[FlyOnTheWall]

"Detroit city government" has to be the Oxymoron of the week.

BINGO! You nailed it!

[DetroiterOnTheWestCoast]

Perhaps the Council is just tired of deals like the one extended to Marathon. Gobs of tax breaks offered in exchange for jobs that do not materialize. Corporate welfare by any other name ....

[Richard]

The flip side of the coin is it makes for a nice stall tactic,when Mr.Snyder took office and the incentives were up in the air as to the direction they were going,it shut down investment in the city from outside the circle.

For a year,which made downtown ripe for the picking.

This announcement will have the same effect,even though this is only up for concideration unless you know it is not going anywhere you are not going to make any moves as it could lead to a multi million dollar mistake,on the other hand if there was a move that you wanted to make and it was in your best interest ,for interest in devolopement to quickly recede ,it would make you more desirable as the playing field has been cleared.

Risky moves useing the media for personal agendas,as the city employee that called for the Packard plant to be demolished found out.

[Wesley Mouch]

Perhaps the Council is just tired of deals like the one extended to Marathon. Gobs of tax breaks offered in exchange for jobs that do not materialize. Corporate welfare by any other name ....

Corporate welfare does need to be controlled, but it will take some time before I'll believe that the council is acting selflessly and in the citizen's best interests. Only time will tell.

My initial reaction remains that council is simply pandering to the voters. Looking to extract goodies to take home. Buying votes, if you will. See, I stand up for you! I bring you the money from the corporations. They steal from you each and every day, and only I have the wisdom and power to bring it back to you in the form of patronage jobs that I will dispense to you if you will only campaign for me at election time.

Government should stay out of giving things away, and from trying to control market forces. They should focus on garbage, police, health, administration.

[rex]

yea thats a terrible idea.
but but but other cities do it.

Detroit isnt other cities.

[downtownguy]

The latter was a free-for-all of subsidies [[Tesla will get free electricity that, if excess remains after their use, they can resell to the grid for a profit), tax breaks and giveaways.

Tesla gets free electricity? Does anybody else see the irony in that?

[MSUguy]

Corporate welfare does need to be controlled, but it will take some time before I'll believe that the council is acting selflessly and in the citizen's best interests. Only time will tell.

My initial reaction remains that council is simply pandering to the voters. Looking to extract goodies to take home. Buying votes, if you will. See, I stand up for you! I bring you the money from the corporations. They steal from you each and every day, and only I have the wisdom and power to bring it back to you in the form of patronage jobs that I will dispense to you if you will only campaign for me at election time.

Government should stay out of giving things away, and from trying to control market forces. They should focus on garbage, police, health, administration.

Asking for accountability is pandering?. Mind you if Marathon and other had actually followed through no one be asking for this ordinance.

[Hermod]

Asking for accountability is pandering?. Mind you if Marathon and other had actually followed through no one be asking for this ordinance.

They are asking for the ordinance to take care of "friends and family".

[ABetterDetroit]

Compare and contrast the approach of this ordinance to the approach that Nevada, California, Texas and their respective municipal governments to the possibility of a Tesla battery factory:

http://online.wsj.com/articles/tesla...ory-1409871734

The latter was a free-for-all of subsidies [[Tesla will get free electricity that, if excess remains after their use, they can resell to the grid for a profit), tax breaks and giveaways.

Interestingly, the giveaway approach was the same in an all-blue [[CA), all-red [[TX) and mixed [[NV, R governor, L senators leading the charge).

Above is the reality.

Detroit has to compete in that reality.

Making city ordinances that raise the cost of doing business in Detroit is counter productive. City council would serve their constituents far better by spending a lot more time coming up with ideas to attract businesses and economic activity into the city than trying to come up with new ways to tax the ones that are willing to come.

[rex]

They are asking for the ordinance to take care of "friends and family".

did you read that somewhere? if so where?

[anonJD]

Asking for accountability is pandering?. Mind you if Marathon and other had actually followed through no one be asking for this ordinance.

Marathon isn't responsible for an unfit, largely functional illiterate talent pool. Detroit leaders robbed the school system coffers for 30-40 years.

[MSUguy]

Marathon isn't responsible for an unfit, largely functional illiterate talent pool. Detroit leaders robbed the school system coffers for 30-40 years.

Take your bullshit somewhere else.

http://archive.freep.com/article/201...ing-detroiters

To help get the job, Waller, along with a friend, applied for the training program at Henry Ford Community College sponsored by Marathon. The company developed the program for Detroit residents in exchange for receiving a $175-million tax break from the city to expand its refinery seven years ago.
■ Related: $175M tax break for Marathon refinery buys Detroiters only 15 jobs

But Waller, 45, never got hired at Marathon. Neither did his friend, Raynard Hurst, nor their two classmates in the Marathon program. All of them, however, finished the training in process technology, worked a three-month internship at Marathon�s Detroit refinery and obtained an associate degree from HFCC. The entry-level position they applied for at Marathon required only a high school education.

Rejections such as these have led Detroit City Council recently to question Marathon's hiring practices

.

[animatedmartian]

They got three-month internships and sponsored training. Why don't the students just find other jobs that match their newly acquired skill sets?

[motz]

They got three-month internships and sponsored training. Why don't the students just find other jobs that match their newly acquired skill sets?

Because they were trained in a very specific field for a very specific job that they had been promised but were then denied because reasons? How can you not see that that entire charade was a steaming load of bullshit on Marathon's part?

[animatedmartian]

Because they were trained in a very specific field for a very specific job that they had been promised but were then denied because reasons? How can you not see that that entire charade was a steaming load of bullshit on Marathon's part?

There's nothing in the article that says Marathon promised jobs to those who got training. Marathon simply provided training and now there's more people with the necessary skill sets to work in Marathon-like jobs.

[Wesley Mouch]

Asking for accountability is pandering?. Mind you if Marathon and other had actually followed through no one be asking for this ordinance.

No. Accountability is reasonable. The original request of jobs in exchange for tax rebates was almost as big an error as the tax rebates. Two wrongs.

The tax rebates are unfortunately and sadly a fact of life. Our system requires 'corporate welfare', so even good companies with honorable leadership must ask for them. To do otherwise would be a breach of their duty to the pension funds that own them. But to ask for jobs for people other than the best qualified is a mistake. In one thread here, there's criticism of a firms management for a 19th century boiler explosion -- then here a request for hiring based on residency and not on qualifications. Geez.

As to your second point, rest assured that this request was not because of Marathon's failure to hire those that they trained. Community Benefits Agreements is the new tool that will be asked for in each and every project, and not just those with tax rebates but each and every project in the city. These CBAs are a bad idea. Not because they hold corporations accountible, but city's should not be telling corporations how to be a good citizen. I trust evil corporations more than I trust Detroit City Council to make good business decisions that will result in more employment in Detroit. Maybe in this matter, DCC is doing the right thing. But in the next Agreement, and there will be a next agreement, it may be civic pork.

CBAs like this are a tool cities should not have.

[MSUguy]

There's nothing in the article that says Marathon promised jobs to those who got training. Marathon simply provided training and now there's more people with the necessary skill sets to work in Marathon-like jobs.

Marathon promised they would make hiring Detroiter a priority when got the abatement. Marthon added 320 jobs as part of the expansion 15 we're Detroiters and then they have gall to say they couldn't find qualified candidates despite starting training program. Mind you not ONE of the people who finished the program have been offered a job

[animatedmartian]

Marathon promised they would make hiring Detroiter a priority when got the abatement. Marthon added 320 jobs as part of the expansion 15 we're Detroiters and then they have gall to say they couldn't find qualified candidates despite starting training program. Mind you not ONE of the people who finished the program have been offered a job

A priority. Not an entitlement. Of the 320 jobs added, how many were entry-level? Of the Detroiters hired, how many were experienced?

[Wesley Mouch]

Marathon promised they would make hiring Detroiter a priority when got the abatement. Marthon added 320 jobs as part of the expansion 15 we're Detroiters and then they have gall to say they couldn't find qualified candidates despite starting training program. Mind you not ONE of the people who finished the program have been offered a job

So what do you think happened here?

Marathon decided to piss off Detroit by choosing better qualified candidates?

Or should Marathon have hired Detroiters based on their zip code rather than on qualifications?

Does 'finishing the program' mean you should be hired?

[erikd]

No. Accountability is reasonable. The original request of jobs in exchange for tax rebates was almost as big an error as the tax rebates. Two wrongs.

I really agree on this specific point of your argument, and I will take it a step further.

Trading tax revenue for jobs is a terrible strategy, period.

Marathon said that they would create 135 new jobs with the refinery expansion. The fact that only 15 of those jobs went to Detroiters has people riled up, because we have effectively paid $11.7 million for each one of those 15 jobs that went to a Detroiter.

The real problem is not that we ultimately gave away $175 million for 15 jobs for Detroiters, but rather the fact that we willingly gave away $175 million for the promise of 135 jobs, which is still $1.3 million dollars per job.

We would have been better off by scrapping the $175 million tax credit, using $67.5 million of that to fund a lottery where 135 Detroiters get a half million dollars each, and then use the other $107.5 million for police, fire, parks, busses and streetlights.

[erikd]

Asking for accountability is pandering?. Mind you if Marathon and other had actually followed through no one be asking for this ordinance.

MSUguy,

While I do agree with Wesley on many of his points about the underlying issues with the system of trading tax breaks for jobs, I also agree with you that IF we agree to trade our taxes for jobs, the companies that promise those jobs should either deliver them, or not get the tax breaks.

I am not a fan of the CBAs, or trading taxes for jobs, but I even less of a fan of trading taxes for a line of bullshit with no recourse.

I would rather not give these tax breaks, collect the additional revenue to fund city services, and let the number of jobs created just pan out naturally.

However, I am also a realist, and I recognize that that isn't a likely scenario. Therefore, a CBA is actually a prudent requirement for companies seeking large tax subsidies from the city.