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In
1995, Philips received $50 million in taxbreaks in order to expand its
Albuquerque Factory. Philip's '95 IRB proposal pledged 440 new jobs
to the area. At the time, 1500 were employed at the Albuquerque factory.
Presently, there are 950 employees. They actually lost jobs.
The new IRB proposal offers no new jobs.
"All we
are saying," says SWOP Co-director Michael Guerrero, "is that there
has to be some accountability built into this agreement. We can't just
give away tax breaks, then watch this company fire its workers, and
sit back and say 'That's OK'. Somebody on the top floors of City Hall
should be protecting our interests."
"This is
not an anti-business position," adds SWOP organizer Robby Rodriguez,
"It's a common sense position."
Key issues
about Phillips IRB...
Philips
was issued an IRB in 1995. Today the City of Albuquerque and other local
governments are left with a net economic loss of $10,223,555.
If City
Council were to deny Phllips' 2000 IRB request, the company will still
receive the following tax breaks:
- 30 million
in property taxes
- $9 million
in abated compensating taxes (95 IRB)
- $9 to
$14 million in Investment Tax Credits for jobs never created.
- $1 million
in Corporate Income Taxes.
Total
= $50 million or $50,000 per job.
If the City grants Philips the 2000 IRB request, the company will receive
another $20 MILLION in Investment Tax Credits.
Investment
Tax Credits
- Investment
Tax Credits (ITCs) are credits given to companies for each job created.
According to Macdonald, Philips received ITCs from the '95 IRB--$9
million to $14 million for jobs that were never created. Phillips
is proposing no new jobs in the 2000 IRB request. Thus, Philips
should be ineligible for ITCs under the 2000 request.
- If the
2000 IRB request is passed Monday night, the City of Albuquerque and
other local governments will see a net loss of $13,682,445.
Economic
Benefits: Will they ever be realized?
- Brian
Macdonald's analysis shows that the City of Albuquerque will not
see a net economic benefit from the 2000 IRB until 2008.
- By 2001,
at the end of Philips' property lease, the expected benefit to the
city is roughly $2.5 million. MacDonald's analysis does not include
impacts to other local governments and the State from the 2000 IRB.
If other local governments are included in the analysis, the net
loss by 2011 is over $13 million.
- Philips
will be back before the year 2008 for more subsidies...The life of
the equipment to be purchased by with the 2000 IRB will expire within
5 years.
- In other
words, WE WILL NEVER SEE A NET ECONOMIC BENEFIT FROM THE 2000 IRB.
|FACTSHEET/SUMMARY|
SWOP STUDY| PROPOSED
AMENDMENTS| |WHO IS PHILLIPS??|
|WHAT YOU CAN DO!|
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