They say that cities should compete on the basis of the underlying strength of their communities, not handouts.
When Amazon first announced its cattle call for cities to compete for the dubious honor of hosting its second headquarters, I wondered why everyone was so eager to throw money at the company.
It’s almost abusive. After shipping all their retail dollars and after years of losing jobs, sales taxes and so much else to Amazon, cities are lining up to say hit me, hit me again!
And indeed, you could fill an Amazon Air 767 with all the buckets of bucks. Among the short-listed cities, Raleigh is offering $50 million in infrastructure and cancelling taxes for 25 years. Denver: $100 Million. Los Angeles: up to a billion in tax breaks over ten years. Atlanta: a billion in incentives. Columbus, Ohio: $2.3 billion. Newark, New Jersey: over SEVEN BILLION DOLLARS in incentives.
It's not just nuts, it's suicidal. As Joe Cortright wrote in City Observatory,
...while Amazon may turn out to be a winner, it may come at the cost of fiscally impoverishing the city that it chooses to locate in. The other losers will be all the businesses against which Amazon competes, who are too small to have the leverage to insist on a comparable level of public subsidy for their similar operations.
Urban thinker and author Richard Florida thinks it's crazy too, and is calling for a non-aggression pact for all the cities competing for HQ2. He has started a petition, supported by a broad range of urban thinkers, including TreeHugger heroes like Emily Talen, Kaid Benfield, Roger Martin, Charles Marohn, Jennifer Keesmaat, Joe Cortright, Ken Greenberg and Brent Toderian. There are even a few TreeHugger villains like Ed Glaeser and Joel Kotkin. I am a bit sniffy about not being asked, but hey, this is TreeHugger and those are serious people. Florida writes:
We share a concern about the level of incentives and the looming competition between cities over incentives for Amazon’s new headquarters.
Tax giveaways and business location incentives offered by local governments are often wasteful and counterproductive, according to a broad body of research. Such incentives do not alter business location decisions as much as is often claimed, and are less important than more fundamental location factors. Worse, they divert funds that could be put to better use underwriting public services such as schools, housing programs, job training, and transportation, which are more effective ways to spur economic development....
We urge you, the mayors, governors, and other elected officials, as well as economic developers and community leaders, of Amazon HQ2 finalist cities, to put an end to such an imprudent policy.
To do so, we call upon you to forge and sign a mutual non-aggression pact that rejects such egregious tax giveaways and direct monetary incentives for the Amazon headquarters.
States, cities, and metropolitan regions should compete on the underlying strength of their communities—not on public handouts to private business.
It will be interesting to see if any of the competing cities bite or if they would stick to it; non-aggression pacts have a habit of falling apart at crunch time.
Support the petition at Change.org