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$65M available for Russell, nothing for Tacoma's small businesses.
 by fredo on 4/2/2008 @ 8:43am |
Once again the city of Tacoma, which never has any funds to pay for maintenance, has magically found an enormous sum of money to help out the Frank Russell Company.
The items to be funded are too numerous to go into here but especially nervy is the decision to stop charging Frank Russell a B & O tax which all the other businesses in town are required to pay. If the city really wants to improve the climate for business in Tacoma, how about abolishing the B & O tax for everyone? The revenue raised by this tax funds the services many people have come to expect. Who will pick up Russell's share of this tab? No one questions the proposition that Frank Russell is good for Tacoma. However, there is an underlying, and easily rebuttable, assumption that if Russell leaves, new employers will not move into the vacated space and take advantage of the many positives the area has to offer. There is a more troubling assumption at work here. There is an assumption that society has to continually apply a cost/benefits analysis to the handling of every major employer in the area and that without supplying incentives these employers will leave. How about a neutral policy where all employers are deemed to be valuable and pay their fare share of the costs of operating here? Unfairness breeds cynicism. |
 by Erik on 4/2/2008 @ 9:52am | If the city really wants to improve the climate for business in Tacoma, how about abolishing the B O tax for everyone? I think that makes sense from a business and environmental standpoint. The city manager would likely agree with you. The city B - O tax gives any business an incentive to locate in Fife...and many do. Given how easy it is to move goods and drive, this has been a pretty bad policies for cities. However, there is an underlying, and easily rebuttable, assumption that if Russell leaves, new employers will not move into the vacated space and take advantage of the many positives the area has to offer. I think there is a consensus that it is very unlikely that another company would move to Tacoma in the near future if Russell left. Even if one did come in, it makes sense for the well being of the city to keep Russell here in terms of tax revenue, education, downtown health and the arts. Plus, Russell would build another building here likely if they stayed which would be a larger benefit. Unlike a most of the revenue in a service business, Russell brings in money from out of the city into Tacoma. |
 by KevinFreitas on 4/2/2008 @ 9:57am | Well, when we look at a local business like Commencement Bay who, tho they may not have taken care of their house well enough to deserve these fines, it's a shame that so much attention is being thrust upon Russell. Hell, take couple million of that a year to add to help for small or even medium sized businesses in town and my bet is the business climate would fair better overall. |
by fredo on 4/2/2008 @ 8:48pm | I forgot to mention that the Frank Russell Company has more money than God himself! Maybe if they were a professional sports team the subsidy would make more sense.
Regarding the comment that Eric Anderson would agree that the B & O tax should be abolished, I haven't heard any indication of that. Apparently, the B & O tax is only an issue for major local companies whose leases are about to expire. |
by Erik on 4/2/2008 @ 9:47pm | Regarding the comment that Eric Anderson would agree that the B - O tax should be abolished, I haven't heard any indication of that. Read the below documents Fredo from the Service Tax Task Force. Anderson proposed removing the B - O tax and Tacoma's share of the sales tax. www.cityoftacoma.org/Page.aspx?cid=2526 Here was Eric Anderson's initial proposal: www.ci.tacoma.wa.us/cronews/ServiceTaxPr... See page 2. |
by fredo on 4/2/2008 @ 9:58pm | Erik, I didn't see any documents below, but I'll take your word for it and will stand corrected. Thanks for your valuable insight. I would note that his proposal to remove the B & O tax is getting a lot less press than the city's proposal to help out the FR Company. |
by Erik on 4/2/2008 @ 10:14pm | One of the ways Anderson intended to do it would be to impose a "user fee" for services instead based on some criteria. Anderson proposed eliminating the tax exemptions for real and personal property for "non-profits." This would have spread the around to a great number of entities. Tacoma currently has a large number of "non-profits" entities which use many services but are tax exempt. The committee objected to this provision of the proposal by Anderson. You can read the report itself here: www.cityoftacoma.org/File.ashx?cid=3993 Perhaps the "competitiveness" discussions will encourage the city to do something more with it now esepcially since some cities have no B |
by fredo on 4/2/2008 @ 10:55pm | Thanks for providing these links, Erik. The proposals cited appear to be 2 years old so apparently the City Manager didn't have the control and command of the city that Ray Corpuz had. Perhaps, as you suggest, the city will revisit Mr. Anderson's 2006 proposals but I'm skeptical.
I would like to add that the city threw FR a bone a few years ago when it reduced the B & O tax for "international financial services companies." The city is nothing less than consistant when it comes disproportional administration of tax policy. |
 by beerandhotdogs on 4/2/2008 @ 11:39pm | I do not heart the B&O Tax.
C@TRH |
by fredo on 6/18/2008 @ 7:18pm | Ten weeks has passed and FR still hasn't indicated if they want to stay in Tacoma or not. Apparently, if they stay on the sidelines long enough their patience will be generously rewarded. According to the Trib the pot is now over $100M including state contributions. On top of this Tacoma has applied for a LIFT grant which would be $25M over 25 years. The location of the LIFT improvements? I'll give you the answer later. |
 by Twisty on 6/18/2008 @ 8:31pm | Here's a novel idea: let's get rid of B&O and replace it with a municipal income tax. That way, the city's fortunes rise and fall with those of its citizens, and there is a genuine incentive for the government to actually drive personal growth instead of punishing business owners. |
 by escaping slave on 6/19/2008 @ 6:42am | Why wait for the government to give you anything, especially a tax break. Why not just take it?
Paying taxes is just like voting, which is like applauding....it only encourages them. Stop encouraging the bastards. We are in a different era now, but an Essay on Civil Disobedience by Thoreau still holds true. |
by fredo on 8/14/2008 @ 7:29pm | City tax revenue is down, down, down. Yet tax giveaways for FR are moving steadily forward. In just a few years the B&O tax for FR will be phased out. Of course, all the rest of the businesses in town will keep paying the B&O. Thanks to the non-International Financial businesses, Tacoma will be able to continue providing 1st class services to FR. By the way, does anyone think this is an equitable way to operate the city? |
by Erik on 8/14/2008 @ 7:41pm | If the City of Tacoma fails in keeping Russell in Tacoma, Tacoma is going to experience a minor version of "Roger and Me" as they did in Flint, Michigan. www.youtube.com/watch?v=d-sD6boQfvk There won't be any tax relief if Russell leaves. The city B and O tax has been a disaster for the city and kept alot of businesses out to locate in the suburbs or cities without the B and O. www.youtube.com/watch?v=6Vk-IntX6aQ |
by fredo on 8/18/2008 @ 7:47pm | Erik@ No one wants FR to leave Tacoma. However, the city should not use the tax code to reward well-connected corporations and to penalize small mom-and-pops. If the B&O is hurting FR then it's hurting all the businesses. Let's scrap it.
Furthermore, elected officials have a duty to make sure that major corporations which locate in our city pay a fair proportion of the infrastructural costs of the city. These corporations don't really address their civic obligations by having a large payroll. |
 by NineInchNachos on 8/18/2008 @ 9:18pm | amen! |
by Twisty on 8/18/2008 @ 11:39pm | What we have here is a very clear example of government over-reach. It's not the city's job to worry about the comings and goings of individual businesses. The city should concern itself - first and foremost - with fulfilling its core mission of providing basic city services: infrastructure, police and fire protection, and enforcement of the city codes. The people running Tacoma are abject failures in all of these areas, with or without the Frank Russell Company.
People can talk all they want about the normative pros and cons of keeping FR here, but it won't change the very basic fact that this $65 million in public largess to a very, VERY wealthy company will be paid for by ordinary citizens in the form of reduced services and/or increased taxes. It's wrong, and it shouldn't be allowed to happen. I offer that it would be much more productive to ponder what went wrong in the first place. Why would a company that has been located here for many years decide to up and leave? Might it have something to do with what I have posited in the first paragraph? Could it be that FR has grown weary of being associated with a corrupt and mediocre city? I, for one, don't give a rat's ass if this one company stays or goes. The departure of FR will not cause Tacoma to magically cease being my life-long home. Keeping them here won't fill the potholes on my street. OTOH, a $65M hit to the city treasury WILL affect my relationship with the city government, one way or another. Don't let the door hit your ass on the way out, Frank Russell. |
by NineInchNachos on 8/19/2008 @ 12:00am | twisty your comments are like golden sunshine. Yo ho! |
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