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Old 03-05-2015, 07:31 AM
 
Location: Atlanta
3,472 posts, read 4,134,640 times
Reputation: 2177

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Now it's come to this. The shakedown. Sounds like a plot for a HBO miniseries.

What next, Lockheed Martin? The Weather Channel?

This corporate welfare stuff is getting out of hand.

This state needs to get on the ball with encouraging more homegrown businesses...rather than handing out goodies to existing ones who are already at the limits of their growth.

So much for so-called efficiently governed Cobb County.

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Old 03-05-2015, 08:12 AM
 
Location: Home of the Braves
1,164 posts, read 931,853 times
Reputation: 1148
Quote:
Originally Posted by Tarzanman View Post
Sounds like free money to me.
Really? So your bank gave you "free money" to buy your house? They must love customers like you!

IRBs are often called pass-through bonds (or at least they were in my day). A private entity (in this case, The Home Depot) borrows money by issuing bonds. A bank purchases the bonds, thereby providing financing to the company. The bonds "pass through" an economic development agency in order to be classified as tax exempt -- meaning the investors who purchase the bonds do not have to pay taxes on the interest income. This makes the bonds more attractive, reducing the interest rate the company must pay on the borrowed money, and thereby reducing their financing costs.

The local government economic development agency isn't on the hook for the principal or interest. It isn't spending taxpayer dollars on "corporate welfare." In fact, the increased economic activity in the local jurisdiction typically means that tax revenues increase. In this case, Cobb County will directly gain approximately $400,000 per year in additional revenues just from The Home Depot spending its borrowed money in the county, setting aside the revenues gained indirectly from the company's expansion in the county.

What's really hilarious about seeing this kind of thread on the C-D Atlanta forum is that IRBs really took off in the South after WWII -- it's how we lured a lot of that Northern industry down here. They became so widespread during this period that restrictions were ultimately slapped on them. It's a fair bet that more than one of the less-than-informed critics in this thread owes their job to IRBs.

But I guess it's increasingly the case that "public-private partnerships" are only popular around here when someone gets trains or bike paths out of it. Jobs and economic growth are a scandal.

ETA: It's like trying to explain something to a brick wall. Back to lurking!
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Old 03-05-2015, 08:13 AM
 
9,994 posts, read 6,989,380 times
Reputation: 3068
Quote:
Originally Posted by AcidSnake View Post
What next, ...The Weather Channel?
Already happened last year: The Marietta Daily Journal - The Weather Channel threatens to pull up stakes if it doesn t get incentives from Cobb

Fiscal conservatism in Cobb is the biggest joke ever.
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Old 03-05-2015, 08:19 AM
 
Location: Atlanta
3,472 posts, read 4,134,640 times
Reputation: 2177
D'oh!!!

Quote:
Originally Posted by jsvh View Post
Already happened last year: The Marietta Daily Journal - The Weather Channel threatens to pull up stakes if it doesn t get incentives from Cobb

Fiscal conservatism in Cobb is the biggest joke ever.
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Old 03-05-2015, 10:01 AM
 
Location: Johns Creek, GA
1,960 posts, read 2,016,390 times
Reputation: 2217
Quote:
Originally Posted by Cameron H View Post
Really? So your bank gave you "free money" to buy your house? They must love customers like you!

IRBs are often called pass-through bonds (or at least they were in my day). A private entity (in this case, The Home Depot) borrows money by issuing bonds. A bank purchases the bonds, thereby providing financing to the company. The bonds "pass through" an economic development agency in order to be classified as tax exempt -- meaning the investors who purchase the bonds do not have to pay taxes on the interest income. This makes the bonds more attractive, reducing the interest rate the company must pay on the borrowed money, and thereby reducing their financing costs.

The local government economic development agency isn't on the hook for the principal or interest. It isn't spending taxpayer dollars on "corporate welfare." In fact, the increased economic activity in the local jurisdiction typically means that tax revenues increase. In this case, Cobb County will directly gain approximately $400,000 per year in additional revenues just from The Home Depot spending its borrowed money in the county, setting aside the revenues gained indirectly from the company's expansion in the county.

What's really hilarious about seeing this kind of thread on the C-D Atlanta forum is that IRBs really took off in the South after WWII -- it's how we lured a lot of that Northern industry down here. They became so widespread during this period that restrictions were ultimately slapped on them. It's a fair bet that more than one of the less-than-informed critics in this thread owes their job to IRBs.

But I guess it's increasingly the case that "public-private partnerships" are only popular around here when someone gets trains or bike paths out of it. Jobs and economic growth are a scandal.

ETA: It's like trying to explain something to a brick wall. Back to lurking!
You seem excited. No one is upset with you, but they are upset over a deal which has many of the hallmarks of yet another cash rich corporation (that probably already cheats on their taxes) that is already established in Cobb County getting an 'sweetheart' deal from the local government.

This isn't the 1940's and Home Depot's market cap is currently 152 *billion* dollars. They do not need and do not deserve (IMO) tax relief in order to raise capital. There are plenty of other tools available to them which won't add to the sorry state of corporate welfare in this country.

Its like I'm trying to explain the obvious to someone who should already know better.
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Old 03-05-2015, 10:16 AM
 
Location: Home of the Braves
1,164 posts, read 931,853 times
Reputation: 1148
Quote:
Originally Posted by Tarzanman View Post
They do not need and do not deserve (IMO) tax relief in order to raise capital.
Quick correction, and then I'll jump out again. The tax abatements are estimated at $3 million over ten years. This is more than offset by incremental revenues from THD direct spending in the county. Fiscally, it's a win for Cobb County and it's a win for the company.
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Old 03-05-2015, 10:31 AM
 
9,994 posts, read 6,989,380 times
Reputation: 3068
Quote:
Originally Posted by Cameron H View Post
Quick correction, and then I'll jump out again. The tax abatements are estimated at $3 million over ten years. This is more than offset by incremental revenues from THD direct spending in the county. Fiscally, it's a win for Cobb County and it's a win for the company.
So by your logic, Cobb should be offering to pay me $200k in tax credits if I buy a $250k house in Cobb since the county as a whole will come out ahead $50k? And that would be a fiscally sound thing for the county to do?
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Old 03-05-2015, 10:34 AM
 
Location: Downtown Marietta
1,066 posts, read 700,823 times
Reputation: 1349
Quote:
Originally Posted by jsvh View Post
So by your logic, Cobb should be offering to pay me $200k in tax credits if I buy a $250k house in Cobb since the county as a whole will come out ahead $50k? And that would be a fiscally sound thing for the county to do?
Your math and logic are so messed up, I don't know where to start. If you buy a $250k house, $250k doesn't go to Cobb. It goes to the seller. Cobb County doesn't sell houses. The parallel is non-existent.
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Old 03-05-2015, 10:39 AM
 
Location: Home of the Braves
1,164 posts, read 931,853 times
Reputation: 1148
Quote:
Originally Posted by jsvh View Post
So by your logic, Cobb should be offering to pay me $200k in tax credits if I buy a $250k house in Cobb since the county as a whole will come out ahead $50k? And that would be a fiscally sound thing for the county to do?
No? Seriously, man? I'll try one more time:

* The Home Depot is borrowing $200 million from a bank.
* They have agreed to spend that $200 million in Cobb County, if
* Cobb County provides tax abatements amounting to $3 million.
* Cobb County has agreed to do this, because tax revenues on the $200 million in spending are approximately $4 million, and $4 million > $3 million.

If Cobb's economic development agency makes the agreement, THD spends $200 million in Cobb County and Cobb County net tax revenues increase by $1 million.
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Old 03-05-2015, 10:44 AM
 
9,994 posts, read 6,989,380 times
Reputation: 3068
Quote:
Originally Posted by Cameron H View Post
No? Seriously, man? I'll try one more time:

* The Home Depot is borrowing $200 million from a bank.
* They have agreed to spend that $200 million in Cobb County, if
* Cobb County provides tax abatements amounting to $3 million.
* Cobb County has agreed to do this, because tax revenues on the $200 million in spending are approximately $4 million, and $4 million > $3 million.

If Cobb's economic development agency makes the agreement, THD spends $200 million in Cobb County and Cobb County net tax revenues increase by $1 million.
Ah. So since I paid $1k more in income taxes this year due to my raise I should get $900 back? The government is still netting $100 more.
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