The retention PILOT program is one way Memphis competes against itself in the work of economic development. Two of the greatest enablers of the retention PILOT program are the bogus EDGE accounting platform that justify excessive abatements using greatly exaggerated projected tax revenues and the cross border threats of North Mississippi and Eastern Arkansas.
As other communities are investing in community betterment to compete in a global economy, the bully hacks have led a disinvestment campaign that transfers wealth from a community in need to corporations that serve global audiences. Its anti-business and anti-community while undermining the societal foundation on which commerce thrives.
The most notable tactic used for retention PILOT justification is the cross border threat of Northern Mississippi. Anyone knows that if a company relocates to Northern Mississippi, the entire local tax base does not depart with the company as EDGE has assumed for 8 years in their bogus projection modeling. The tax loss is far less than the loss would be if a company relocates hundreds of miles away.
Modeling the Cross Border Threat
At the first of the year, thru collaboratively competitive analysis, the Beacon Center and this blog arrived at a $100M taxpayer loss in analyzing the retention PILOT program in general while using different modeling methodologies. If the same 20 PILOTs used in the analysis before assume North Mississippi competition, the taxpayer losses double. This is primarily because indirect jobs will be impacted very little and local sales and property tax revenues would not be anywhere close to being entirely eliminated with many employees choosing to remain living in Memphis.
In this case, using modeling, if we generously assume a 50% company retention rate with the benefit of a PILOT for new jobs only which avoids burdensome relocation costs, 10% negative impact on indirect jobs, 40% impact to sales and residential taxes and 10% for hotel/motel taxes, direct taxpayer losses climb from $100M to $238M with EDGE revenue overstatements at over $730M. And the cross border threat for sure eliminates the need for economic multipliers while this being only a partial analysis of 20 of 90 PILOTs.
While no one knows the real impact, everyone knows that when a company relocates to Northern Mississippi the entire tax base is not anywhere close to being entirely lost as EDGE projection accounting assumes.
With this in mind, the following spreadsheet was developed to provide a quantitative context to the discussion around the cross border threat while accommodating variable modeling for public use. See spreadsheet here and please advise if you have questions, see potential mistakes or have suggestions for improving the modeling by emailing me at firstname.lastname@example.org