City Looking at Changing its Rules to Grant Tax Breaks to New Employers

Mayor Nirenberg and County Judge Nelson Wolff famously declined to play along with Amazon's request for tax breaks in exchange for locating its second headquarters in a city, a move that appears to have been vindicated by the embarrassing spectacle of communities throwing billions of dollars at the feet of the world's wealthiest person and one of the globe's richest companies, News Radio 1200 WOAI reports.

Now, the City of San Antonio is looking at revamping its procedure for offering tax incentives for corporations to locate in the city, a controversial process that many critics refer to as 'corporate welfare.'

One proposal, according to Adrian Perez of the city's Economic Development Office, is to grant the tax breaks not only to companies that agree to locate in specific parts of the city, about 22% of the city's neighborhoods, which are designated as the lowest income, but to collect tax breaks, companies have to agree to hire from those neighborhoods as well.

"If somebody approaches us and says 'I'm willing to focus on those areas for hiring,' we consider that exceptional," Perez said.  "That is a challenge for an employer."

Perez says not only will companies have to pay all employees a 'living wage' of $12.07 an hour minimum, but 70% of the jobs that are created will have to pay at least $16.65.

"We want to get as many looks as we can, as many good projects as we can, because what we really want are those $50,000 a year jobs and the $70,000 a year jobs."

He says precedence will be given to employers who are willing to locate in what are called 'City Centers,' which are the seven parts of San Antonio designated by city planners as central locations not only for employment, but for other amenities like housing, shopping, and recreation.  The idea behind the City Center concept is to cut down on traffic congestion by reducing cross city commuting, and encouraging people to live, play, and shop around the area where they work.

Companies getting tax breaks must also commit to the city's 'sustainability' goals, by doing things like encouraging telecommuting and providing bus passes to employees.  Perez says precedence will also be given to companies who want to move regional or corporate headquarters to San Antonio, because of the impact that has on local companies, ranging from marketing and PR firms to law offices, all of which could do business with the company.

And he says a training aspect must be included as well, though internship programs.

"Helping them train their workforce pipeline, but also providing local colleges and high schools the opportunity to have these kids get a sense of what its like to work in the company, and also so they will be encouraged to stay in San Antonio and not leave because they think there's not enough jobs in San Antonio."

The issue of granting property tax abatements (not reductions in school property taxes, that's prohibited by state law) has long been controversial, but the unseemly rush to shower Amazon with amazing benefits...including one town which offered to change its name to 'Amazon,' has demonstrated the length to which cities are willing to 'give up the farm,' in Nirenberg's words, in order to attract new jobs.

In their letter to Amazon declining to participate in the bidding war, Nirenberg and Wolff said they would prefer to spend taxpayer money on the sorts of local amenities, from streets and parks to libraries and police and fire services, which would make employers want to come to San Antonio.

But there is a large constituency that supports tax breaks as a necessary tool to use to attract the new employers which are critical to a city's future growth and prosperity.

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