Cost-Effective Management

[Honky Tonk]

$175M Tax Break for Marathon, 15 Jobs for Detroit

http://www.freep.com/article/2014031...-officials-say

[Jimaz]

That works out to $11,666,667 per job. Hmm.

[iheartthed]

That works out to $11,666,667 per job. Hmm.

Those must be some very high paying jobs.

[mwilbert]

$175M Tax Break for Marathon, 15 Jobs for Detroit

http://www.freep.com/article/2014031...-officials-say

I'm not fond of poorly targeted tax incentives, but surely the idea was at least partly to create jobs in Detroit, not just jobs for people living in Detroit. More jobs in the city will ultimately mean more people in the city, even if there isn't a direct correspondence now.

Whether getting a couple hundred jobs in Detroit is worth a $175 million dollar tax break is certainly debatable, but it is a different debate than whether 15 Detroiters getting jobs is worth it.

[Wesley Mouch]

Criticism of deals like this hurt Detroit.

I'm not saying that tax-breaks are a good idea... but that's another discussion.

In the meantime, Marathon has been a Detroit company for years. They pay taxes. They employ a lot of people. They want to stand up for their community. Let's help them be proud of what they've done -- not tear them down because what they're doing isn't perfect in our eyes.

Detroit needs jobs. Metro Detroit needs jobs. Michigan needs jobs. Jobs in any of the three about are very good for the City of Detroit.

Step back and look at the big picture. The $175m isn't for 15 jobs. Its part of what corporations expect. I hate that. But I guarantee you Toledo would give Marathon a tax break if they expanded there instead of Detroit. Its all part of the game. Play or lose.

[MikeyinBrooklyn]

This reminds me of Hollywood companies begging now California to enact tax relief for film production. The ultimate problem for Hollywood is the same one for Detroit: the cost of doing business [[due to taxes first, but also to regulations and union work rules) make things comparatively cheaper to do business in most other states and Canada, so California has lost production jobs every year for more than a decade. The worst part is that Hollywood studios and Marathon plants aren't isolated: lots of smaller, lower-profile firms in different industries also suffer under the taxes, regs, and rules. And when they leave, or don't expand when they otherwise would, you never hear about it. Meanwhile, low taxed states have low unemployment & rapid growth. I understand and agree with what Wes wrote, but the real answer is lowering our taxes and regulations across the board, not in cutting deals for single companies and industries. That would be best in the long run.

[iheartthed]

Criticism of deals like this hurt Detroit.

I'm not saying that tax-breaks are a good idea... but that's another discussion.

In the meantime, Marathon has been a Detroit company for years. They pay taxes. They employ a lot of people. They want to stand up for their community. Let's help them be proud of what they've done -- not tear them down because what they're doing isn't perfect in our eyes.

Detroit needs jobs. Metro Detroit needs jobs. Michigan needs jobs. Jobs in any of the three about are very good for the City of Detroit.

Step back and look at the big picture. The $175m isn't for 15 jobs. Its part of what corporations expect. I hate that. But I guarantee you Toledo would give Marathon a tax break if they expanded there instead of Detroit. Its all part of the game. Play or lose.

Yeah... no. If it costs Detroit $175M for 15 jobs then simple math tells you that Detroit is better off without. Now, if there is a flaw in Detroit's tax code that necessitates it give away these gigantic tax breaks then that's what the politicians should be spending their time working on. Not schmoozing with some company and playing favorites.

[Wesley Mouch]

Yeah... no. If it costs Detroit $175M for 15 jobs then simple math tells you that Detroit is better off without. Now, if there is a flaw in Detroit's tax code that necessitates it give away these gigantic tax breaks then that's what the politicians should be spending their time working on. Not schmoozing with some company and playing favorites.

If its only money for jobs, then it absolutely is a miserable deal -- although maybe no worse than the millions and millions spent creating job programs and training centers. They also probably delivered 5 jobs for every $10m spent.

But back to the point... I agree with you only if you think this deal is just money for jobs. I doubt that's true. Its tax relief.

The other option is to not grant tax relief to Marathon. Watch them move away. And Detroit loses 15 jobs. Wayne County loses 300. Metro Detroit loses 500. Before you even start counting the spinoff.

This isn't money for 15 jobs.

[Kevgoblue]

Interesting way to look at it. I guess there is a net positive effect to the region in having the Marathon plant sitting there polluting the city and it's logistically close residents.

Maybe the region can pitch in to offset the $175 loss of tax revenue that the city of Detroit will not receive.

[nain rouge]

Part of the problem is that if you hire a Detroiter for a well-paying job, they're usually going to try to move out the city. You have your diehards here and there, and the hipsters moving into select neighborhoods, but otherwise, just about everyone else would be happy to leave. I had to take the buses on the west side for awhile, and you wouldn't believe how many Detroiters living near roads like Evergreen, Southfield, and Greenfield pine for the City of Southfield or Oak Park [[which hipsters wouldn't touch with a ten foot pole).

It's a basic services issue. Why do you want to reinvest in a neighborhood where the cops don't respond, where your house will probably be burning down to the ground by the time the fire truck arrives? Maybe at one time Detroit's main problem was jobs, but now it's services. Any jobs you bring in are viewed as an escape route.

I'm saying this as somehow who now lives in Detroit. Outside of the hip neighborhoods, there's a real "get out of Dodge" vibe. Not many people are optimistic.

[Hypestyles]

Maybe at one time Detroit's main problem was jobs, but now it's services. Any jobs you bring in are viewed as an escape route.

I'm saying this as somehow who now lives in Detroit. Outside of the hip neighborhoods, there's a real "get out of Dodge" vibe. Not many people are optimistic.

Yep. I gotta go.

[douglasm]

Can you not hire someone if they don't live in Detroit? There is an interesting legal question there that I can't answer, and no one has mentioned.

I did note that the article would generate $181M in taxes and fees over a 20 year period, and I assume employees at the plant are paying city income tax no matter where they live, so there is a net plus to the whole thing, not to mention taxes paid by employees on any purchases [[lunch, beer, whatever) made in the city.

And one other thing not noted anywhere is the condition of the plant. Would Marathon have considered closing the plant [[thus killing all the jobs) if the expansion were not undertaken?

Judging the value of a project over 15 jobs is a really silly way to judge if it was a good investment or not.

[Cliffy]

If its only money for jobs, then it absolutely is a miserable deal -- although maybe no worse than the millions and millions spent creating job programs and training centers. They also probably delivered 5 jobs for every $10m spent.

But back to the point... I agree with you only if you think this deal is just money for jobs. I doubt that's true. Its tax relief.

The other option is to not grant tax relief to Marathon. Watch them move away. And Detroit loses 15 jobs. Wayne County loses 300. Metro Detroit loses 500. Before you even start counting the spinoff.

This isn't money for 15 jobs.

Well Wesley its obvious you have never driven down there because you would realize Detroit and Michigan is better off with Marathon taking those jobs and shoving them up their ass and hitting the road. They are killing everyone down there with their pollution. It is the most polluted area in the state. Your throat burns when you get out of your car in that area. Delray is basically hell on earth. Why anyone would be just ignore simple things like air pollution over money is beyond me.

[Wesley Mouch]

Can you not hire someone if they don't live in Detroit? There is an interesting legal question there that I can't answer, and no one has mentioned.

I did note that the article would generate $181M in taxes and fees over a 20 year period, and I assume employees at the plant are paying city income tax no matter where they live, so there is a net plus to the whole thing, not to mention taxes paid by employees on any purchases [[lunch, beer, whatever) made in the city.

And one other thing not noted anywhere is the condition of the plant. Would Marathon have considered closing the plant [[thus killing all the jobs) if the expansion were not undertaken?

Judging the value of a project over 15 jobs is a really silly way to judge if it was a good investment or not.

EO 4 Executive Order No. 4 establishes the Detroit-Based andSmall Business Program [[DSBP). EO 4 targets thirty percent
[[30%) of the total dollar value of all contracts awarded by the
City of Detroit for Detroit-Based and Small business
Enterprises.
EO 14 Executive Order No. 14 establishes HRD identification and certifications of Minority Business Enterprises [[MBE) and
Women Owned Business Enterprises [[WBE). Requirements
include at least fifty-one percent [[51%) bona fide ownership of the business enterprise by minorities or women, and control by minorities or women of the direction, policy and overall operations of the business.
EO 22 Executive Order No. 22 requires that worker hours on publicly funded construction projects be comprised of not less than 50% Detroit Residents; 25% Minorities and 5% Women.

So it may be illegal to require Detroit residents, but it apparently isn't [[wasn't) illegal to not hire those who don't.

You can do what you wish, but the City of Detroit cares about what you do and cannot give you a contract if you don't do what they want.

Is this really something we want our city to be doing? Do you really think the end result of these kind of programs is a vibrant, diverse, community-based workforce? Or is it kickbacks, shell companies setup to comply on paper but avoid real compliance, and of course greatly inflated costs to the city. Not to mention the cost of running a 'Human Rights Department' at all.

[Kevgoblue]

Wesley......why do you think Executive Orders like the ones you posted exist?
Did vibrant, diverse, community based workforces exist previously?

[Wesley Mouch]

Wesley......why do you think Executive Orders like the ones you posted exist?
Did vibrant, diverse, community based workforces exist previously?

No. You're quite right. The problem was [[and is) real.

The question is what's the best solution, not whether there's a problem.

I applaud the goal, but the effect of quotas [[which is what they really are) costs the city a lot of money better spent elsewhere, and results in very inefficient government -- the point of this thread.

A tax-rebate to Marathon is abhorrent to me. Yet it is doubtless more efficient that all of our government-mandated preferences combined.

From my libertarian [[non-tea party) perspective, I think the left's big mistake is investing too much in government as the solution to inequality, poverty, wealth redistribution. I join the call for wealth redistribution on a federal level. At the city level -- let's just hire the best people at the best price and make Detroit the best city where people WANT to live.

Cut all the preference crap. Well-intended and needed doesn't make effective.

[MikeyinBrooklyn]

Your throat burns when you get out of your car in that area. Delray is basically hell on earth. Why anyone would be just ignore simple things like air pollution over money is beyond me.

What I am puzzled by is that there are people who didn't take the buyout. Marathon tried to [[and largely did) buy out the nearby property owners. Those who didn't take it live in pollution with a property that will essentially have no value going forward.

[GUSHI]

They should of moved, they had the offer they didn't except, how is that Marathons fault,/problem,