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New York community worries about impact of new Amazon distribution center [1]
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Date: 2022-09-09
“[Niagara County] is being asked to subsidize the biggest, most powerful e-commerce corporation in the world, and by doing so they are directly harming their own small local businesses,” said Pat Garofalo, the director of state and local policy at the American Economic Liberties Project.
The American Economic Liberties Project, along with several other labor and watchdog organizations, sent a letter to the NCIDA urging them to oppose the deal. The letter, dated Aug. 5, states that Amazon’s promises of job creation and economic growth may not be met, and instead may lead to lower wages and lost jobs over time.
The letter also underscores the negative impacts the deal will have on the Niagara-Wheatfield Central School District, which receives almost half of its revenue from property taxes. Amazon has applied for a payment in lieu of taxes incentive, and a large portion of their $123 million tax break will be redirected revenue from the local school district.
“[T]he biggest loser in terms of which public services suffer the most are the public schools,” said Greg LeRoy, the executive director of Good Jobs First, another organization that signed the letter opposing the Niagara County deal.
Amazon receives tax subsidies to build their facilities in areas that are beneficial to their business—areas near arterial highways, major cities, and with a high number of Prime members, all to expedite shipping.
“If you look at where their warehouses are, they place them very strategically,” Garofalo said. “So you’re punishing the local school district and depriving it of funds that they would have had anyway to just pay Amazon to do what is in its economic interest to do.”
Both Good Jobs First and American Economic Liberties Project research how tax subsidies for large corporations like Amazon impact the communities surrounding their facilities and have found that schools are the most negatively impacted. Garofalo and LeRoy said corporations like Amazon do not need incentives to move into an area, and these deals are ultimately harmful for the communities that Amazon chooses.
Good Jobs First reported that in fiscal year 2019, public school districts in 27 states lost $2.37 billion in revenue because of tax abatements for large corporations like Amazon. The report also found that Black, Latinx, and low-income students were disproportionately impacted due to districts with higher proportions of these students losing larger shares of tax revenue.
“Everything about the quality of schools suffers. It means that teachers don’t get raises, that schools don’t have as many counselors or nurses as they should, [and] it means the classroom sizes remain too big,” LeRoy said.
According to the organizations that signed the letter, Amazon has yet to deliver on their promises of job creation and economic growth in communities that entice them with these tax subsidies. The Economic Policy Institute’s study also concluded that county-wide employment does not increase two years after Amazon moves into a community.
“This is just a raw deal for the community, and you’re paying Amazon a huge sum of money to do what it was always going to do anyway,” Garofalo said. “And in the process, [you’re] harming the folks in the community, whom the government is supposed to be protecting, not actively undermining.”
LeRoy urges communities to consider the effects of giving corporations like Amazon large sums of taxpayer dollars to build their facilities.
“[W]hat’s the net benefit, and what else could the money be better spent on? And why subsidize a company that’s going to do what it’s doing anyway?” LeRoy said.
Jenika McCrayer began her freelance journalism career in 2014 with Everyday Feminism and has since covered issues related to gender, mental health, and social justice. Follow her on Twitter @JenikaMc.
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