Priority one for our leaders must be attracting and keeping good paying, high-quality jobs.
To get there, sometimes we need incentives like tax abatements. But what happens when tax breaks go wrong? We all know the worst-case scenario: politicians using these incentives for their own personal gain.
But there’s also a more insidious (and perfectly legal) problem. It happens when leaders let corporations game the system by not keeping their job creation promises.
Property tax breaks are supposed to come in return for a promise to do something good.
Frequently, that includes a commitment to create quality jobs. But here’s the rub. Too often, the penalty for breaking the agreement costs less than actually creating the jobs. You can guess what happens next.
Unfortunately, as County Assessor, I see it all the time:
- In 2021, a metro area pharmaceutical company fell 582 jobs short of complying with their tax abatement agreement. They paid $222,522 – a whole lot cheaper than hiring 582 people.
- Another recent example: an agrochemical company came up 186 jobs short. Their penalty? $27,612, less than one employee’s salary.
Not only are our communities losing out on their tax dollars, but they’re losing out on promised jobs too. As County Assessor, I don’t negotiate these deals, but I see the fallout when promises are broken.
My attitude is that our tax dollars are few and precious. That means we’ve got to make it harder for companies to break their word. I can blow the whistle, but it’s meaningless without tough negotiations up front.
All political leaders should work harder to make these deals accountable from the start.
It’s simple: if you take taxpayer money in return for a promise to create good jobs, you’d better keep that promise. And if you break it, it ought to cost you real money.
JAKE ZIMMERMANN
Assessor, St. Louis County
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