The Statecraft of Floracraft

[XLFD]

At the December 9th, 2019 meeting of the Ludington City Council a public hearing was held on the granting to Floracraft of an Industrial Facilities Tax Exemption (IFTE) for a 27,000 sq. ft. warehouse they would be adding onto their property.  The exemption would last for 12 years on the $1.2 million estimate of real property and 6 years on the $74,000 of personal property, effectively cutting taxes for both by 50% over there respective terms.

I came to this meeting prepared to speak briefly on the topic, I was a bit more energized to do so when I arrived and saw a triumvirate of panhandlers from Floracraft sitting in the front row, with former Councilor Wallace Cain taking my semi-reserved seat, third from the left of the podium.  I sat two seats further down.

At 14:30 into the meeting, Eric Erwin (above) , Floracraft President and CEO rose to talk about how Floracraft has been an "unbelievably great citizen of Ludington for over 70 years" in a brief presentation of why the council should pass the tax abatement.  I got up shortly thereafter as an unbelievably grating citizen of Ludington and made the following observations at 17:25 in:

December 9th, 2019 Ludington City Council meeting from Mason County District Library on Vimeo.

"In my recollections of people coming before the city council urging lower property taxes or complaining about high property taxes in Ludington, I have yet to see anybody from Floracraft among their number.

Yet, I see them regularly coming before the council looking for another special tax exemption or abatement from taxes that other companies and individuals bear without seeking exemption or abatement. I regularly see councilors approve these tax abatements as if they are routine costs of doing business, but I've yet to see them pass a tax break for everyone.

I hope the good people of Floracraft and the good people on this council reflect on fairness for all this holiday season. [END]"

President Erwin felt he had to address this impertinence, by reminding everybody of a fact that I was well aware of, Floracraft giving their employees back nearly $4 million last year.  Instead of directing his comments at the chair, he frequently glowered noticeably in my general direction in telling of how they were going to be doing more things like that this year.  

I was half-prepared to mention that Steve Carlson, Chief Operating Officer of Floracraft, who could not make it to the meeting because he had to attend the Ludington school board meeting, and Floracraft owner Lee Schoenherr, who spearheaded and financed the effort to dramatically increase everybody's taxes with the $101 million school bond proposal, were instrumental in raising everyone else's tax burden and making 'community schools' a thing of the past.  Less than a fraction of one percent of those received any part of the Floracraft's employee appreciation giveaway.

Councilor Brandy Henderson tried to salve any wounds created by my 'impertinence' by roundly praising the company.  Councilor Angela Serna asked the questions that filled in the blanks left out in the application, the job that councilors should be doing when granting such abatements.  Councilor Les Johnson recalled one time when Floracraft asked for a tax abatement, City Clerk Deb Luskin couldn't recall whether there were any IFTEs that Floracraft was still in.  

Floracraft actually came to council an average of every other year for tax abatements and exemptions back between 1998 and 2009.  Here are those six times, the last one showing best how the company approached getting tax breaks from Ludington: 

As I noted, over the last two decades plus, Floracraft has came before the Ludington City Council looking to receive a sizeable tax break, quite often using a subliminal threat of moving out of the city if those tax breaks aren't given with unanimity and high praise by the council.  

There is no records of individual officers or employees of Floracraft appearing at 'truth in taxation' hearings or offering public comment requesting tax breaks for everyone-- President Jim Scatena did come before council and lobby for tax breaks for the Ludington Daily News similar to what Floracraft had been getting the previous decade.  

Yet, the Floracraft owner and officers seem to have bankrolled the school bond issue raising taxes for all of the Ludington school district, taxes they are now looking to get out of paying as best as they can while telling us that they are the bestest ever citizen of Ludington. 

We should all be thankful for what Floracraft actually contributes to the community, but when they act this way, it all seems somewhat hypocritical if you ask me.

[XLFD]

Good recap; nobody wants to deny these employers or anybody else from getting a better deal on taxes, but whenever any one entity gets a special tax break, other entities are typically burdened with making up the difference as their pound-of-flesh to the taxman.  Fairness is why you'll generally never see me advocate for a business receiving a tax abatement, because it is having the government choose favorites, and is rife for corruption.

[David A. Carlson]

As Willy points out, this local $ problem is pretty obvious.  And pervasive too, everywhere in USA.  So why give tax breaks to some businesses (and giant banks, and really big corporations, with reduced or no taxes on profits) but not others?  Is there Payola?  Are US Senators mostly multi-millionaires?  Mitch McConnell is.  We now know that "trickle-down economy" is a huge lie.  I have mature relatives who are employed in Muskegon industry, making maybe $12 per hour, scarcely enough to buy a carton of cigarettes every 2 days......who cannot buy a house.  4% unemployment would be great, if dollars were valuable.  But not anymore they are not. 

[XLFD]

I think we are in some agreement over the fairness of these tax abatements for those who qualify and pursue them, it's akin to the government showing favoritism and leads to corporations extorting local and state governments by threatening to pull out or not locate there in the first place.  This leads me to a question of you, David...

Economics is regarded as a social science because it uses scientific methods to build theories that can help explain the behavior of individuals, groups and organizations.  Supply side economics (aka trickle down economics) is an established theory with many adherents; many would claim it can be used successfully with the right economic climate present (such as enterprise-killing tax rates and regulations). 

Yet, scientist that you are, you claim that this theory is a lie, even though it has worked according to plan in the proper Petri dish.  At the same time, you seem to be promoting Anthropogenic Global Warming, even though there is no proof that humans are significantly affecting world climate one way or the other.  How do you square that circle?

[Willy]

We are in a time when inflation is low, prices are not rising, wages are increasing and jobs are in abundance. Unless someone cannot work because of physical or mental defects, there is no reason for anyone to be on welfare or food stamps. Even part time help in many areas are receiving up to $15 per hour. A couple who are employed have a potential of earning a combined $25 to $30 per hour for just menial work. I'd say that would be considered a very good situation and it is only getting better. Democrats can keep coaxing people to play the victim role but I would say it's time for all the free loaders to get off their behinds and contribute to their own general welfare.

[David A. Carlson]

There is a lovely essay with analysis in the current Economist.  Dec 14-29, 2019 

plus a goodbye to ex-FED chair Paul Volcker, died Dec.4, age 92. He is said to have killed massive inflation (12%) in 1979 through this office,  via setting the price of money.  Interest finally crashed back to 2% in 1982.  He then worked for Obama after Republicans formally met on Inauguration Day, and formally stated they would force him to fail by cooperation in nothing.  This is the new age for Congressional Republicans...do nothing. Very, very strange they would abandon the All-American effort to always do better and try harder.  

[XLFD]

David, a couple of observations about what you consider are truisms.  Whenever somebody dies, their achievements throughout life are often overstated.  Volcker's Fed policies at the time lined up with Reagan's economic team ideals of getting inflation under control; you never heard them criticizing Fed policy during the 1981-82 recession when others were.

Let's also recall that in 2008, when Obama was elected president for the first time, he had control over both houses.  Even had the Republicans semi-secretly dedicated themselves to preventing Obama getting his policy through (like Democrats and the media have been doing openly since 2016 to Trump), they were in the minority, treated that way by the media, and really had no power to do so at the time.  After the mid-terms in 2010, you didn't see the Republicans nearly as antagonistic to Obama as the Democrats have been to Trump this year after mid-terms once again made power split between parties.