A deal for Amazon?

A deal for Amazon?

Pittsburgh, Allegheny County and Pennsylvania officials appear to be falling all over themselves to “submit a winning bid” to Amazon in order to make Pittsburgh the internet retailing giant’s second headquarters city.

 

“HQ2” is what Amazon calls it. And the carrot tied to the stick is a whopper. Well, at least Amazon says it is. Amazon claims it will spend up to $5 billion on a new corporate campus that could be home to as many as 50,000 employees.

 

Amazon makes no bones that it’s looking for public money to offset not only building costs but operating costs. Do tell.

 

Of course, what freebies that are offered “will be significant factors in the decision-making process,” a request for proposal (RFP) notes.

 

The RFP deadline is Oct. 19. A decision on where to plant HQ2 is expected in early 2018.

 

“When you’re talking about this level of economic impact and this amount of jobs, certainly incentives would be something we would be willing to do,” said Allegheny County Chief Executive Rich Fitzgerald.

 

Of course, Amazon, in its RFP, is encouraging “cities to think big and be creative.”
As Garfield, the comic strip cat, was wont to say: “Gimme.”

 

Now certainly is a great time to remind Mr. Fitzgerald, Pittsburgh Mayor Bill Peduto and Pennsylvania Gov. Tom Wolf of a few Amazon particulars:

1. Amazon had total 2016 net income of $2.37 billion.
2. Amazon’s stock late last week was trading at nearly $1,000 a share.
3. Amazon, the world’s largest internet company by revenue (nearly $156 billion in 2016), last year reported $83.4 billion in assets.
4. Amazon’s total 2016 equity was $19.29 billion.
Why should taxpayers be expected to underwrite such wealth? That takes nervy arrogance, does it not?

 

And here’s another interesting nuance:

 

Jed Kolko, chief economist for the jobs site Indeed, tells The Washington Post that “Amazon’s headquarters decision will have an impact on the chosen place – more tax revenue, more economic growth – but at the same time, it will probably mean more congestion and higher housing costs.”

 

The Seattle experience is instructive in that latter regard, analysts have noted. “Amazon’s growth has helped fuel soaring labor and real-estate costs and a shortage of space,” The Wall Street Journal notes.

 

Interestingly, Amazon says it is looking for a “stable and business-friendly environment.” But Pennsylvania hardly offers fiscal stability. One need to only look to the protracted state budget mess and the specter of ever-higher taxes, on top of already onerous imposts and regulations.

 

And, honestly, how attractive is Pittsburgh? Indeed, it is a burgeoning high-tech mecca. But it is one whose water and sewer system is on the verge of collapse, whose public schools are an embarrassment and one whose public pensions continue to be a wreck?

 

But, hey, Pittsburgh does have more and more bike lanes!

 

Given Amazon’s financial health, perhaps officials here should cut a deal. How about, say, The New Pittsburgh Water & Sewer Authority, brought to you by Amazon?

 

In return for that $5 billion investment, Amazon will be forgiven the first $5 billion in taxes it would pay on its new campus. Now that might be a great deal.

 

Why does this keep happening? The Post-Gazette reports that a Washington County woman has been accused of stealing more than $21,000 from a volunteer fire department’s auxiliary unit.

 

It’s the latest in a long string of such alleged thefts from VFDs in Western Pennsylvania over the years. And, sadly, the culprit repeatedly is lax oversight within these departments.

 

As a matter of sound public policy, not to mention maintaining public trust, it behooves these organizations to install strict checks and balances.

For should these types of failures continue as the norm and not the exception, you can bet “The State” will become involved. But it’s always better to police one’s own shop than to be forced to submit to additional government regimens.

 

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).