Red Dirt RubyConf 2011

  • Keynote
    Aaron Patterson
    Open source contributions include:
    ARel, Nokogiri, and Mechanize
    Aaron Patterson - AT&T Interactive
  • Keynote
    Dr Nic Williams
    Open source contributions include:
    Hudson.rb, RoR Textmate Bundle, and ChocTop
    Dr Nic Williams - Engine Yard
  • Conference Themes
    nike presto price
    ´╗┐cities hand out billions in tax abatements To some, it may come as a surprise that the bankrupt City of Detroit and the hard hit State of Michigan are subsidizing the Big Three automakers, the pharmaceutical industry, energy companies and virtually every large Michigan business. But a massive giveaway "corporate welfare," both locally and nationally is bankrupting municipalities everywhere as shown by reports from Demos ("The Detroit Bankruptcy"), the New York Times ("United States of Subsidies") and Good Jobs First ("Megadeals"). While making the political decision to use the bankruptcy court to destroy pensions, jobs, city services and public institutions like the Detroit Institute of Arts, the government has been nothing but generous to Fortune 500 CEOs asking for a handout. In a city where citizens routinely wait for up to three hours for public transportation and tens of thousands suffer from utility shutoffs in the dead of winter, more than $20 million a year has been awarded to companies including Comerica Bank, Rock Ventures/Garbsman, the Farbman Group, Quicken Loans, the Detroit Medical Center and multibillion dollar conglomerate DTE Energy. Wallace C. Turbeville's report on the bankruptcy for Demos calls these "extensive subsidies" and suggests the emergency manager "reclaim tax subsidies and other expenditures to incentivize investment in the downtown area" and treat them similarly to the rest of the city's debt. Of course Emergency Manager Kevyn Orr, a Democrat, has been placed into his dictatorial position not nike qvida to penalize his corporate masters but to ensure their interests and lay the basis for their dramatic increase in profit taking. Tax boondoggles in the city include a whopping $285 million to billionaire Mike Ilitch for a 45 block entertainment district and $100 million in tax abatements for Compuware, also a billion dollar company. Smaller gifts were available as well, including $27 million in tax incentives awarded to the Meridian Health Plan building to be built in the central business district. Owners David, Sherry, Jon, Sean and Michael Cotton are real estate developers whose core business is a series of health care businesses in Michigan, Illinois, Iowa and several other states. The Cottons believe they can boost that number to $35 million in public financing through additional credits, according to Crain's Detroit Business. Another recipient of the city's munificence is Whole Foods Market, a wildly profitable firm paying out $500 million last year in stock dividends, which is receiving $4.2 million, but hopes to get more from so called brownfield ("blighted" areas requiring "revitalization") incentives. Detroit has been saddled with 16 "renaissance zones" that were virtually tax free for business and forgave millions of dollars in taxes. At the same time, Detroit homeowners have the highest property taxes among the nation's 50 largest cities, and paid twice the national average in tax. Last September, a frenzy of downtown Detroit developers spurred the first ever Novogradac Historic Tax Credit Conference. It brought them together with hundreds of assorted accountants and tax attorneys looking to parlay the Federal Historic Preservation Tax Incentive program into millions of dollars. The possibility of funding 20 percent of rehabilitation costs with federal dollars has whetted the appetites of the gentrifiers/developers who are in the process of evicting hundreds of elderly and disabled Section 8 renters living in downtown buildings. But it was not just Detroit and federal agencies that contributed to the corporate coffers. The role of the State of Michigan was pivotal to the Detroit bankruptcy on multiple levels. It was Governor Rick Snyder who conspired with law firm Jones Day and Kevyn Orr to declare the city in "financial emergency" and appoint Orr with the prearranged plan to impose bankruptcy, void contracts and loot the city's assets. Not as well publicized was the fact that the "tipping point" in Detroit's cash flow crisis was reached when Michigan's annual state revenue sharing was cut by $67 million per year. "By cutting revenue sharing with the city, the state effectively reduced its own budget challenges on the backs of the taxpayers of Detroit (and other cities). These cuts account for nearly a third of the city's revenue losses between FY 2011 and FY 2012." Turbeville, a former Goldman Sachs accountant, concludes, "Thus, the state was an active player in the events leading to the cash flow crisis." Put more bluntly, Governor Rick Snyder and the state legislature with the full support of both Republicans and Democrats pulled the plug on Detroit, suffering in the aftershock of the Great Recession of 2008. Yet while depriving Detroit, as well as other Michigan municipalities, of desperately needed revenues, the State of Michigan was spending as it has done annually a staggering $6.65 billion on business incentives. Michigan: More megadeals than any other state According to the Good Jobs First report, Michigan possibly the hardest hit state of the "Rust Belt" has offered more large government funded subsidies to corporations than any other in the nation. It identifies 29 megadeals involving awards higher than $75 million. The New York Times series "United States of Subsidies" by Louise Story points out that 30 cents out of every dollar in Michigan's budget goes to this type of "corporate welfare" at the direct expense of support to education, infrastructure and municipalities. The lion's share of these gifts went to the Big Three automakers, now expecting to post all time record profits in 2013, above the already banner year of 2012 at $12.3 billion. General Motors (whose government bailout is now estimated to have cost taxpayers $10 billion) was the top beneficiary receiving $3.3 billion in aid, according to the Center for Automotive Research. The New York Times puts Ford at $1.58 billion and Chrysler at $1.4 billion. Overall national incentives for automakers since 1985 are pegged at an astronomical $13.9 billion. It should be noted that whether Democrats or Republicans were in power, the process escalated. Among others, Story conducted more than two dozen in depth interviews with former GM officials and tax consultants to prepare "United States of Subsidies." She pointed to the role of Argonaut Realty, the automaker's real estate division, in conducting the shakedown of local governments across the US. GM enlisted their tax managers, charities' accountants and union representatives alongside plant managers and executives in a combination of threats and negotiations to rein in the biggest tax boondoggles. "For towns, it became a game of survival," notes Story. The procedure is classic: cities and states are pitted against each other in a reverse auction. Often even the scenario presented was a fraud, perpetrated by the transnational company seeking higher profits. One example in the GM saga was the company's demand for tax cuts in Moraine, Ohio. GM told the city that Moraine was competing with Shreveport, Louisiana and Linden, New Jersey to maintain an auto plant. After the Moraine school board caved and accepted the property tax cuts to education funding, it was discovered that the other towns had not been in discussion with GM. This is a national scourge. As the stakes for jobs has intensified, states are creating more and more incentives. In 2010 alone, 40 new types of tax credits were created or expanded. Oklahoma and West Virginia give up amounts equal to about one third of their budgets, Maine about one fifth. Texas awards $19 billion a year and Alaska, West Virginia and Nebraska give up the most per resident, according to the Times. Because no national database of corporate incentives exists, nike outlet zadar Story and Good Jobs F