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Monday, August 04, 2014


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Media Advisory
The Schwab Taxpayer Handout Effect
Will Austin Voters revolt or just be revolted?
Who:  David King and Ed Wendler, Jr.

When: Tuesday, August 5th, 10 am (or shortly after the Commissioners vote on the Schwab incentive)

Where:  Travis County Commissioners Court Meeting, 700 Lavaca, 1st Floor

Background:

In a rush deal, Travis County Commissioners Court majority appears hot to trot to pass an $8.5 local incentive (including an outright grant) to Charles Schwab Corp., a company that claims $2.4 trillion in client assets.

Have any of the commissioners demonstrated how the deal will make Austin more affordable for people who must pay taxes? Will those taxpayers be safer, healthier, or better off if you vote for the Schwab tax gift?

David King is an Austin city activist. Ed Wendler, Jr. is a real estate developer who has been calling for incentive reform for years.

ChangeAustin.org will add a little spice to the affair by providing the answers we received from candidates for Austin City Council, including Austin Mayor, to this question: "If the Schwab incentive came to you as a City Council member, how would you vote on it."

The full contract has yet to be made public, despite that the Commissioners plan to vote on it tomorrow.

Tomorrow's agenda:

For more information:


Linda Curtis
ChangeAustin.org
512-535-0989 * cell 512-657-2089


Travis County Commissioners Court will hold a “public hearing” tomorrow on a $8.5M (over 10 years) subsidy that includes a $3.6M County grant to Schwab. What would happen if the city council had to vote on it?

Monica Guzmán for Austin City Council, District 4 comments to ChangeAustin.org on Corporate Incentives (Schwab)

My knee-jerk response is No, I will not vote for it. The issue is so complex, so much secrecy it blows the mind. Keeping up with the news and Austin Neighborhood Council message board posts makes my head spin.

I will never understand why local and state governments pay incentives up front before a company delivers on the proposed goods. Change that practice! Pay it out by the year, make it “performance-based” (ie, jobs created), etc. No suing for lower property taxes on commercial property; residents, home owners and renters alike, are already paying more than their fair share, commercial properties need to pay up.

Recommendations/comments:
  • Pay construction workers a living wage. I support the Davis-Bacon prevailing wage, with an appropriate wage floor. I also recommend using the Poverty in America Living Wage Calculator as a supplemental guide.

  • As for the proposed 800+ jobs to be created, tie the incentives to creation of said jobs, paying out periodically (ie, annually) as jobs are created/hired locally. Pay a living wage based on the Poverty in America Living Wage Calculator.

  • Why the recommendation against public reports on political contributions and workforce demographics? What conflicts of interests are being hidden? If none, Schwab, being a public corporation, needs to step up regarding transparency.


     Tax incentives end up costing taxpayers more than expected to benefit in ROI. Need to
     reconsider who receives tax incentives and how much; greater benefit to Austin economy
     when invest in local businesses (multiplier effect: 45% of every dollar stays in Austin economy).

     "... there’s a very strong bias in these incentive programs toward established corporations
     that may bring a big number of jobs that makes for a good headline and helps advertise the
     success of the program,” Fisher said. Consequently, he added, governors and mayors are
     missing an opportunity to instead “stimulate innovation that would lead to probably far more
     jobs down the road.”


Austin residents are hurting financially; economic segregation (aka gentrification) has squeezed out long-term residents due to their inability to pay property taxes, rising costs of rents/mortgages and utility costs, forcing them to move farther out as wages/salaries remain stagnant or decrease. Moving away from the urban core may lower living expenses but transportation costs increase, contributing to suburban poverty.

We must protect Austin residents, especially the most vulnerable populations who most often are hit hardest. Instead of giving incentives to Schwab, why isn’t the State of Texas investing in job-training programs? [Ref: Statesman | Dan Zehr July 23, 2014 “Comptroller: State needs to boost support for job-training programs” & Brenda Bell June 16, 2012 “In Texas, working poor families struggle to get ahead”] While Bell’s article is older, the information still applies. Investment is lacking for the job-training programs, the same issue addressed in Zehr’s article.

How can the Travis Co Commissioners Court consider approving an $8.5M incentive proposal, when almost 1 in 5 Travis Co residents lack access to enough food? Also take Travis County’s rate of growth and increased poverty level into consideration. “While Travis County’s population grew 12 percent from 2007 to 2012, the number of those living below the poverty level grew by more than three times that rate over the same time period.” [Ref: Statesman | Farzad Mashhood May 15, 2014 “Survey: Austin-area poverty growing, wages lag pre-recession levels” & Source: CAN Dashboard Food Insecurity]

If Travis County and the State of Texas intend to incentivize Schwab instead of investing in local, previously identified needs and programs, then Schwab must be made responsible for contributing to both job-training programs and affordable housing programs for the low and near low-income populations here in Austin.

Answering this as a Council Member, I represent the people, people who deserve to know the truth, deserve transparency, and deserve a better quality of life long overdue. Approving such an incentive proposal only serves to continue an already established pattern of income segregation. It needs to stop. I vote NO.

https://www.facebook.com/notes/monica-guzm%C3%A1n-for-austin-city-council-district-4/corporate-incentives/1518069635073573

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