SCHOOL BOARD STANDS UP TO BAD DEAL
I’d like to shake the hand of each and every member of the Greece Central School board of education.
I’d like to thank them for striking a blow for freedom and common sense.
Earlier this week, amid the mind-numbing minutiae of a routine school board meeting, this particular body of elected officials became the first voice to raise against the pernicious practice of handing out welfare checks in the name of “economic development.”
Here’s the background.
In New York, and in many other parts of the country, free enterprise has been perverted by a dependence on the dole. Politicians have taken to giving out loans, grants, abatements and credits to select businesses. If a company expands or moves or hires, it comes hat in hand to the local politicians, expecting to be rewarded.
It is an obscene system which picks winners and losers, short circuits competition, misdirects tax money, and has a funny habit of putting money in the pockets of businessmen who put money in the campaign chests of politicians.
Here’s the case in point.
Greece is in Monroe County, an area plagued by something called COMIDA – the County of Monroe Industrial Development Agency. This cabal of political pals passes out money left and right, typically for spurious projects that seem to be little more than shuffling chairs. Businesses line up for their place at the trough, checks get written and the taxpayers who foot the bill for the whole thing are told how grateful they should be for the privilege.
COMIDA has recently concluded an agreement with Wilmorite, a mall-development company owned by the Wilmot family, one of the Rochester region’s wealthiest clans. It involves something called a “payment in lieu of taxes.”
A payment in lieu of taxes is when I owe you a hundred dollars, hand you a five dollar bill, and pretend that that squares us.
Specifically, in this deal, COMIDA seems to want to reward Wilmorite for knocking down a part of its Greece Ridge mall – the old Bon Ton store – and replacing it with restaurants.
More specifically, COMIDA wants to freeze Wilmorite’s property taxes at their current levels for 25 years, on the Bon Ton parcel.
And on the rest of the mall.
And on a nearby movie theater.
And a McDonald’s.
And at a Target store.
No increases for 25 years, except for a token six-tenths of a percent each year.
That is one-fourth of the current inflation rate, and the current inflation rate is coincidentally just below the average inflation rate for the last 10 years. Which means if you increase your property tax six-tenths of a percent each year, your true property tax is falling 1.8 percent a year.
So that’s not a tax freeze, that’s a tax cut.
How much of a tax cut?
Well, if you take X and subtract 1.8 percent of X from it, and you do that 25 times, your total reduction is just under 50 percent.
So COMIDA proposes that the Wilmorite company, for improving a small portion of its mall, be awarded a 25-year, 50-percent inflation-adjusted property tax break on the entire mall and on several nearby commercial properties – no matter what improvements or increased assessments might be made over the next quarter century.
Which is a point worth noting. The net financial benefit to Wilmorite only increases as it builds new on or improves its property – improvements that can’t be taxed – over the next 25 years.
For improving its own building for its own profit. For engaging in what is essentially routine maintenance of its building. For doing something which will allow it to make more money.
It is completely illogical.
It is an insane giveaway.
Wilmorite should update and improve its properties as a natural part of being in business. It should not need to be bribed or rewarded, or fattened on corporate welfare. Heaven knows it doesn’t fail to collect rents and percentages from its tenants. Its operating revenues should fund all its business expenses, including maintaining and improving its property.
Yet COMIDA wants to give it what amounts to a massive present.
Of other people’s money.
Because every dime that isn’t collected in taxes rightfully owed by Wilmorite will have to be made up by an extra dime’s tax on other Greece taxpayers.
Widows and young families and real businesses that haven’t figured out how to suckle at the teat of government.
Families and businesses struggling to make staggering property tax payments will be paying theirs and the mall’s. Instead of good policy – which would be to lower everyone’s property tax – a wicked policy of playing favorites has developed, in which some walk free and some lose their land to a tax auction.
And the school district is caught in the middle.
And it put its foot down.
This week, the Greece Central School board voted unanimously to tell COMIDA to pound salt. It said the deal is unacceptable.
And, in fact, it isn’t.
It is immoral, unfair and un-American.
It throws the notion of all men being created equal out the window, and it impoverishes one to enrich another. It is the soul- and society-destroying poison of welfare introduced into what’s left of capitalism. It is redistribution of wealth writ large.
It creates a whole new class of welfare queen.
And it is wrong.
Not just this deal, but this concept.
Companies must sink or swim on their own strengths. The public treasury is not the bankroll of private enterprise. We need a vibrant private sector to be the engine of our society and prosperity, and the private sector can only remain vital and strong if it is truly free of government meddling – including subsidies like this.
If you want economic development, lower taxes and reduce regulation, and it will occur naturally as a function of the free market.
If you want economic development, disband COMIDA and abandon the foolish idea of stimulus. It is wrong in Washington and it is wrong at home.
And few instances illustrate that better than this deal between COMIDA and Wilmorite.
The Greece school board is right, and it is leading.
And the rest of us would be wise to follow.
- by Bob Lonsberry © 2012