Careful who you call ignorant. Local governments set tax rates to pay for local services, such as police, fire, schools, water, sewer, roads, etc. If they allow some taxpayers to pay less than their share, then by definition, the rest of the locality's taxpayers have to make up the difference. The argument that the jobs created offset the shortfall is null, since computing their tax value is speculative, at best, and as far as I can tell, nobody even tries to make this calculation. It's a subsidy, plain and simple. Companies threaten local governments with moving or locating elsewhere, and get a gift of the taxpayer's money.
I have read several of you posts and you have a hard time getting around this concept that the county's tax revenue base is not fixed, it can grow or shrink, depending on the amount of improved property, or sales tax.
Estimating the gain to Travis county's tax base is not speculative. There will be an increase of approximately $304 million in improved property. Travis county's property tax rate for the city of Austin is
0.4811/$1000. That's about $1.47M/yr. The center will employ approximately 3600 people. If the majority of the employees are call center representatives their average salary will be something near
$30K. That's about $108M/yr coming into the county from Apple. There is no income tax, but the local sales tax is 8.25%. If we estimate that one-third of peoples salaries is spent on goods and services, i.e. the local economy, then approximately $8.9M/yr in sales tax will be collected, although I have no idea what part of that will go to the county. These two factors alone suggest that Apple's presence will add somewhere in the neighborhood of $10M/yr in tax revenue to the state and county.
According to the article:
"After the county approved its incentives offer to Apple in principle April 17, the total state and local government incentives package to the company was estimated at $35 million to $36 million over 10 to 15 years.
Of that amount, $21 million would come from the state's Texas Enterprise Fund, $8.6 million would come from the City of Austin, and between $5.4 million and $6.4 million would come from Travis County."
The language "come from" does imply "rebates" or direct payments; more likely it is taxes the state and local governments will forego collecting. It is not paid out from the budget. So they are passing on $36M they would normally collect to get a revenue of $100-150M over 10-15 years. Clearly the state and county are coming out ahead, not to mention the 3600 people that get jobs.
Again, this is not a zero-sum game. There are no other call centers in Austin, to my knowledge. They are not taking business away from a competitor. This is pure commercial growth for the region. I cannot understand your truculence on this subject.
