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Open Letter from New York State Budget Director Robert Mujica Regarding Amazon

214 pointsby agreenover 6 years ago

28 comments

ddebernardyover 6 years ago
I suspect I&#x27;ll never get why the notion of giving a tax handout to a company that&#x27;s one of the most valuable in the world shouldn&#x27;t be a non-starter.<p>&gt; Incredibly, I have heard city and state elected officials who were opponents of the project claim that Amazon was getting $3 billion in government subsidies that could have been better spent on housing or transportation. This is either a blatant untruth or fundamental ignorance of basic math by a group of elected officials. The city and state &#x27;gave&#x27; Amazon nothing. Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues. The city, through existing as-of-right tax credits, and the state through Excelsior Tax credits - a program approved by the same legislators railing against it - would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs and thus generated $27 billion in revenue. You don&#x27;t need to be the State&#x27;s Budget Director to know that a nine to one return on your investment is a winner.<p>Actually, you do. Amazon already created jobs in NYC, without any handouts needed. Google recently announced they&#x27;d create more jobs, and they didn&#x27;t expect a handout to do so. By the above logic, a 9:1 return for Amazon jobs is a good deal. What about the Google jobs? Do those count as infinite return?<p>If so, more infinite returns, and less 9:1 returns, please.<p>Or is there something else at work here?
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prestyover 6 years ago
Quote of the Day:<p>&quot;The seventy percent of New Yorkers who supported Amazon and now vent their anger also bear responsibility and must learn that the silent majority should not be silent because they can lose to the vocal minority and self-interested politicians.&quot;
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smallgovtover 6 years ago
I think it&#x27;s sad that the vocal minority was able to alter this decision. As the letter mentions, the project would have brought $27b in revenue to the state. This magnitude of revenue is material considering the fact that the state only collected $76b in taxes in the last reported fiscal year.<p>I think there&#x27;s reason to debate whether large corps should be able to hold an auction like this, but given the place we find ourselves in today, there&#x27;s no question this would have been a huge win for NY.
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protomythover 6 years ago
<i>Ironically, much of the visible &#x27;local&#x27; opposition, which was happy to appear at press conferences and protest at City Council hearings during work hours, were actual organizers paid by one union: RWDSU. (If you are wondering if that is even legal, probably not).</i><p>That is a pretty strong accusation to put in writing. I get the feeling that some investigation is going to happen on that one. Paid protestors presented as &quot;concerned citizens&quot; is not exactly a new tactic, but money is a lot easier to track these days.
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tombertover 6 years ago
As someone who actually lives in NYC and would probably benefit personally from their HQ2 opening since my property-value would probably go up, I honestly wasn&#x27;t terribly upset to hear that Amazon was leaving.<p>I am a little annoyed that <i>only</i> New Yorkers are paying the brunt of criticism on this. &quot;If NYers hadn&#x27;t complained so much then we&#x27;d have $27billion of revenue!!&quot;. But that&#x27;s ridiculous; Amazon <i>left</i> NY because they felt like they had resistance, but you wouldn&#x27;t know this based on the follow-up conversations.
unethical_banover 6 years ago
I understand the tragedy of the commons, cities&#x27; race to the bottom, Amazon not needing breaks, so on.<p>I also think some of this could have been avoided if people felt like they were part of the process, instead of being told by the state &quot;Hey we negotiated with a behemoth company for them to take over your community - trust me, you&#x27;ll like it&quot;.
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imhover 6 years ago
&gt;The seventy percent of New Yorkers who supported Amazon and now vent their anger also bear responsibility and must learn that the silent majority should not be silent because they can lose to the vocal minority and self-interested politicians.<p>This like makes me frustrated. It shouldn&#x27;t be everyone&#x27;s responsibility to go on twitter or wherever and be loud. Maybe politicians should put in real effort to learn about who they represent. They could engage in the same kind of polling they do during election season, rather than just paying attention to whoever is loudest.
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avarover 6 years ago
&gt; &quot;The RWDSU Union was interested in organizing the Whole Foods grocery store workers. [...]. Organizing Amazon, or Whole Foods workers, or any company for that matter, is better pursued by allowing them to locate here and then making an effort to unionize the workers, rather than making unionization a bar to entrance.&quot;<p>I&#x27;m not familiar with how this works in New York. Someone who&#x27;s registering a company needs to negotiate in advance whether the people they hire are part of some pre-existing union or not?<p>Wouldn&#x27;t Amazon just have started hiring workers, and if those workers decided to organize into a union or join an existing one they&#x27;d have had to deal with that then? It seems not, so how does this work?
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jayventuraover 6 years ago
Interestingly, although 70% of New Yorkers felt positively about the Amazon HQ2, I wonder what that percentage looks like for the actual current inhabitants of LIC. For many of the folks I know who rent in Queens, they were very much against the HQ2 and fearful of how it may affect their ability to afford living in Queens. Additionally, many New Yorkers I know who are around my age were very much against HQ2 because we felt that it was already so incredibly hard to even think about owning property in NYC, and that this was just one more notch that would make us feel like the possibility was slipping away. Not everyone works in tech&#x2F;finance&#x2F;RE and enjoys the salaries in those industries. Another common fear was how will this affect the subway system?<p>For many of the people I know who were against HQ2, it wasn&#x27;t about the tax relief. It was about the feeling that the most valuable corporation in the world was going to move a lot more money into the city, and make it a lot harder for folks not in the industry to live.<p>A lot of these concerns where not addressed. It was always about jobs, jobs, jobs. And if they were addressed, it was not communicated effectively.
viburnumover 6 years ago
If they start handing out billions for corporate HQs it won&#x27;t stop with Amazon. Google and everybody else will like up for theirs too.
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throw2016over 6 years ago
This reads too much like a one sided political letter by a state functionary. It&#x27;s curious no such &#x27;open letter&#x27; was forthcoming from any public functionary accounting for the losses due to the long list of bank frauds and bailouts?<p>Many here swear by free markets, fair competition and a level playing field and yet do not see the contradiction of letting large companies play regions against each other to extract concessions.<p>Too many times we just see pro business narratives that rehash arguments by lobbyists, bought economists and the business press to support specific business interests and these one sided narratives are now being challenged.
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zarothover 6 years ago
Just as a business can grow organically and through capital acquisitions, a city can grow organically or through capital investment.<p>A city can spend money (billions) on infrastructure and public spaces which serves the workers of the companies, and the campuses of those companies. A city can also ask companies to spend billions to help build out those spaces and that infrastructure and in return offer tax incentives. It works out exactly the same. Both subsidies serve the workers and the companies paying those workers in the same fashion.
afioriover 6 years ago
&gt; Ironically, much of the visible &#x27;local&#x27; opposition, which was happy to appear at press conferences and protest at City Council hearings during work hours, were actual organizers paid by one union: RWDSU. (If you are wondering if that is even legal, probably not). Even more ironic is these same elected officials all signed a letter of support for Amazon at the Long Island City location and in support of the application. They were all for it before Twitter convinced them to be against it.<p>Twitter as of now is a cancer in our society. Is is a fine social and sometimes fun, but do not form your opinion on it.
mirimirover 6 years ago
Great letter!<p>And as much as I support unions, RWDSU really messed up on this.
jinushaunover 6 years ago
People are upset about the beauty pageant.<p>If Amazon had never done their stupid HQ2 search which resulted in the two most obiovus cities “winning”, they would have an HQ2 in NYC already with the same tax breaks. It would’ve all happened behind closed doors.
warp_factorover 6 years ago
This story is so good because it perfectly illustrates the issue with politics today:<p>- A vocal minority of leftists managed to force a silent majority. Once they won, they didn&#x27;t really know what to do. Now everyone realizes that New York is worse off.<p>- All of the outrage started and snowballed on Twitter, where self-centered politicians decided to use it as a way to virtue-signal.<p>- The press did an awful job on this story: every article got a baked in narrative (From &quot;Amazon was defeated and NYC won&quot;, to &quot;NYC Lost and Amazon won&quot;). It is simply very difficult to know what actually happened.
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tamaharborover 6 years ago
Has anyone from NY tried to get Amazon back?
numairover 6 years ago
The fact that this guy is writing this open letter on behalf of the governor’s office, and seems to believe we still live in a 2008-esque Change-We-Can-Believe-In view of tech company largesse, shows how clueless Albany really is.<p>If we have ACTUALLY learned anything from the past century of corporate relationships with muncipalities, it’s that you really do NOT want to encourage corporate monocultures within your cities. It distorts the local economy, creates its own social subculture that often overtakes the town’s existing culture, and presents a giant economic and existential crisis should the corporate giant need to downsize or exit the city (which they seem to always do, and always for someplace that has far more diversity, or a new host for their parasitism).<p>New York State is, if anything, Exhibit A for all of this. The story of Kodak and Rochester, and the years of decline in Kodak’s absence (and before anyone mentions it, yes, I know there’s been a very recent Renaissance) is a story known to pretty much every urban planner who’s been educated in the past 25 years. Yes, you get a really easy bump in total jobs that is hard to replicate through more organic means; but you know, if you want to live in an interesting, dynamic society, you’re going to choose to go about it the hard way.<p>Maybe the evil labor unions ruined the deal. Maybe the politicians flip-flopped. Maybe the tax credits pencil out. It doesn’t matter. There are large numbers of people who didn’t want Long Island City to turn into another Rochester. Or, to put it in a context that might be more understandable to the crowd here, they didn’t want to see Amazon do to their neighborhood what Snapchat and Google did to Venice Beach over the past 10 years. I’m sure the tax receipts are way, way up in 90291; at the same time, it’s not really Venice anymore, and those revenues have allowed the tech firms to hold the community hostage for whatever they want (for example, Google had an arbitrarily placed stop sign and crosswalk put in for their use, and managed to get the LAPD to cart off longtime homeless residents in the process (who, by virtue of the law of unintended consequences, have been replaced by far more aggressive and transient homeless people)).<p>I’d love to see some of these politicians run on the “I stood firm on welcoming Amazon” platform for their next election. I don’t think the ones who flip-flopped into the negative are idiots; rather, they’re smart enough to see the writing on the wall. The tide is shifting, and fast.
sitkackover 6 years ago
TIL Amazon sells Banana Republics and we all clamor for canoes and paddles.
starpilotover 6 years ago
San Francisco-ization it seems. Liberals going against their own interests. Reminds me of an apartment complex under construction in SF that was forced to include a larger amount of low-income units. The builders found it would no longer be profitable, and ceased building. So lose-lose, prisoner&#x27;s dilemma, vocal social media forces &quot;won,&quot; lacking the cooperative biases that humans normally have. They all end up with nothing.
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gammateamover 6 years ago
&gt; The union that opposed the project gained nothing and cost other union members 11,000 good, high-paying jobs.<p>I want to see this feature film so people stop wasting their time with them
droithommeover 6 years ago
Every NY voter needs to read this letter.
gcb0over 6 years ago
&gt; First, some labor unions attempted to exploit Amazon&#x27;s New York entry.<p>When a company sees a market opportunity and increases prices to take advantage of it (or benefit from tax exceptions, which is the same as generating inflation on everything but their prices), it is praised. When a labor union does the same, it is evil.<p>The 1% want to have the capitalism cake and eat it too.<p>And for some reason we are boasting a letter from the person bought to defend the tax break in the first place. If you want one single proof that this is an &quot;advertisement&quot; for public opinion, i will give one on the very first paragraph: he compares &quot;25,000-40,000 jobs&quot; as if 100% oscillation is an acceptable negotiation scale (hey, i can pay you $100 to $200k a year if you accept <i>now</i> to work 12h a day every day!&quot;) and then proceeds to compare it to non-tax exempt jobs. Which is like comparing one thing to another completely different, for either incompetence or malice. Since he is a Budget Director, i will bet the later.
blacksqrover 6 years ago
&quot;If New York only allows unionized companies to enter, our economy is unsustainable&quot;<p>Dear workers: you must remain poor and powerless forever, for the greater good.
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alexandercrohdeover 6 years ago
Reads as unreliable (presumably factually accurate but too motivated to be trusted as presenting a full picture).<p>Anybody who pretends to be thinking about &quot;loss for the city,&quot; is full of themselves. It&#x27;s all politics, and disingenuous to imply otherwise. And morally, most other areas in the country need this more than NYC does.<p>It sounds like the thrust of the article is &quot;Look how stupid the decision making process was!&quot; Well, true politics is petty and unreliable especially at large-scale. But that has no bearing on the larger issue.
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gesmanover 6 years ago
While economical illiteracy of loud-voiced minority politicians is a fact that played here, I think Bezos just made out of himself a &quot;rich jerk cry baby&quot; who threw &quot;i&#x27;m in control and don&#x27;t need your candy&quot; tantrum.<p>Lose-lose.<p>PS: That said, I&#x27;d be scared of how that would affect NYC traffic patterns if plans would go forward.
matchagauchoover 6 years ago
RWDSU... you really need to wake up. The Labor Union movement was making <i>great</i> progress with AMZN, raising the minimum wage of fulfillment centers to $15 hr.<p>Negotiating is a series of compromises. AMZN basically reflected your brinkmanship strategy back into your face.<p>While I wish corporate America was above this, the Unions are the ones that need to learn a lesson here.<p>AMZN conceded to 11,000 Labor Union jobs for construction and services. But RWDSU, you wanted it all... including operational jobs.<p>AMZN just will <i>not</i> capitulate to these tactics. And in fact, they&#x27;ll go so far as to punish them and set precedence for future projects.
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graycatover 6 years ago
The problem is old, going back, one example after another, continually to a famous quote of Jefferson about sewage news at<p><a href="http:&#x2F;&#x2F;press-pubs.uchicago.edu&#x2F;founders&#x2F;documents&#x2F;amendI_speechs29.html" rel="nofollow">http:&#x2F;&#x2F;press-pubs.uchicago.edu&#x2F;founders&#x2F;documents&#x2F;amendI_spe...</a><p>So, for a fix, first, mostly ignore the newsies (a word from a Bogart character in the movie <i>The Maltese Falcon</i>).<p>Second, much of <i>politics</i> is trying to get votes from name recognition from shocking statements based on gossip, lies, distortions, made up nonsense, etc.<p>Well, then, the newsies and the politicians have a strong interest in common: For name recognition for votes the politicians want their shocking stories told, and for ad revenue from eyeballs the newsies want shocking stories to tell. There was a similar remark in the movie <i>Lawrence of Arabia</i>.<p>So, the second step is mostly to ignore the politicians.<p>A third step is, for information that might be in the news, fall back to and insist on at least common high school term paper writing standards, rational, responsible content with thorough references to objective, credible, primary sources. With this third step will entertain:<p>Believe none of what you hear and only half of what you see and still will believe twice too much.<p>Measure twice and saw once.<p>Essentially everything you see in the media was put there and paid for by someone who wants to influence your opinion (Sharyl Attkissson).<p>It&#x27;s not what you don&#x27;t know that gets you into trouble. It&#x27;s what you do know for sure that just ain&#x27;t so (In the movie <i>The Big Short</i> and there attributed to Mark Twain).<p>Will conclude that for nearly all the news, printed on paper it can&#x27;t compete with Charmin and on the Internet is useless for wrapping dead fish heads.<p>A hope is that the Internet will enable many more new information sources with some with lots of credibility and narrow specialization and that the best of these sources will help the US and civilization.