As US cities throw billions in tax breaks and build war rooms to strategize on how best to lure Amazon to their city, civic leaders on Tuesday called on the tech giant to pay its fair share.
Amazon’s plans to open a second headquarters, dubbed HQ2, in a major US city have set off an often bizarre bidding frenzy as municipalities pitch for the company’s business. Amazon has promised to create up to 50,000 new jobs at the new site and bids must be in by 19 October.
New Jersey has pledged $7bn in potential tax credits to lure Amazon to Newark. Michigan is preparing to offer similar breaks to woo the company to Detroit. Business leaders in Tucson even tried to mail Jeff Bezos a 21ft saguaro cactus to gain his attention. (Amazon said it could not accept gifts and returned it).
But in an open letter to the Amazon boss 73 civic leaders from cities and states including Arizona, California, Chicago, New Orleans and Tennessee have asked the company to promise quid pro quo for taxpayer support.
“You have your list of things you’re looking for from cities – but we live in these cities, and we’ve got some expectations of our own for Amazon,” the authors wrote. “We love jobs, we love technology, and we love convenience – but what you’re looking for will impact every part of our cities. We built these cities, and we want to make sure they remain ours.”
The signatories called on Amazon to pledge to hire local construction workers, help build sustainable communities, contribute to affordable housing developments, be transparent about the breaks it is receiving and pay state property and income taxes.
“The things about our cities that make you want to move here are the same reasons many of us live here – we have great systems of higher education, museums, and infrastructure that helps move people and things from one place to another. But we got that stuff by collectively paying for it, through taxes, and we’re expecting Amazon to pay your fair share if you end up being our neighbor,” they write.
US states have become increasingly generous in the breaks they have offered to lure tech companies to their cities.
Wisconsin is offering a $3bn subsidy to China’s Foxconn and many other cities and states have given breaks worth hundreds of thousands of dollars per job created to highly profitable companies including Amazon, Apple, Facebook and Microsoft. Many of the jobs created are low-paid, data center staff who are unlikely ever to repay the investment in taxes.
The cost of these deals to taxpayers is currently about $7.7bn a year, according to Washington DC-based research group Good Jobs First, which also signed the letter.
Greg LeRoy, executive director of Good Jobs First, described the New Jersey deal as “grotesque.” “People are really concerned about long-term budget damage. At that price every taxpayer in the metro area would be affected for a very long time,” he said.
The letter was signed by Action Center on Race and the Economy, Chicago Teachers Union, Colorado Jobs With Justice and the New Orleans Worker Center for Racial Justice among others.
