GloFo tax breaks par for the course
“In for a dime, in for $400 million,” might very well be the motto of the Saratoga County Industrial Development Agency as it ponders whether to grant big sales tax incentives on two new GlobalFoundries plants. It’s a lot of money to give up, but more than half of it would be the state’s. And given the numbers of good jobs the company is likely to create with the expansion, plus the fact that life in that part of Saratoga County has already been unalterably changed, it would be hard to do an about-face now.
The real problem, as GlobalFoundries attorney Kevin McAuliffe drove home in filing the application Thursday, is “the rest of the world offers incentives readily.” If Saratoga County were to say no, the company might build its $2.1 billion technology development center and a second chip manufacturing plant elsewhere. Say goodbye to all those construction jobs while the plants are being built; those 2,500 or so permanent, and good-paying, manufacturing jobs when they’re operating; and all those payments in lieu of real estate taxes that local governments and school districts would get in the decades to follow.
Granted Saratoga County, and the state, could use the hundreds of millions in sales tax revenue from the building materials and manufacturing equipment GloFo would have to buy (part of which the state would reimburse it for). But at least neither entity would risk anything if the plant didn’t get built (as with some forms of corporate welfare).
Moreover, the company would still pay the equivalent of local property taxes through a PILOT (payment in lieu of taxes) agreement. And the state would benefit from income taxes generated by GloFo employees, who presumably would also pay local property taxes.
So some sacrifice is worth it. Whether GloFo would really go elsewhere without such breaks seems doubtful, but neither the county nor the state probably want to find out the hard way. Such breaks are clearly the industry norm these days.
What the county can, and should, do, though, is try to lessen the impact of future development within the community that results from GloFo expansion. Certainly, the green space that has already been sacrificed to this project can never be recovered, and the additional people have already exacted an environmental toll. With proper planning and a tougher stance with the company and area developers, the sprawl that accompanied the first phase of Luther Forest’s development can be kept to a minimum.