A beacon of hope has emerged locally in Smith and Nephew (S&N). S&N, the area’s largest manufacturer is investing millions and adding jobs without a tax incentive. Its big news in the practice of corporate community leadership away from the valueless FedEx/Memphis Tomorrow complex that has helped author an excessive corporate/real estate tax incentive policy environment on the back of a community in need.
But unfortunately, S&N’s leadership is not being trumpeted. In Mayor’s Strickland’s Facebook post on the story in the Daily Memphian, he did not mention S&N’s capital investment and new jobs without a PILOT. This is huge corporate leadership news. But since the Memphis culture is addicted to excessive tax incentives, trumpeting such a positive disruption may be off putting to the corporate culture.
In the Daily Memphian article, Kenneth Bly of S&N said, “We want to be a good neighbor. That includes showing up and setting a standard that maybe others follow. I don’t know that we were doing that. It’s about inspiring and retaining talent.” Memphis needs a new standard in corporate community leadership because there are no standards with the valueless FedEx/Memphis Tomorrow complex.
Somehow S&N conducted a cost/benefit analysis and concluded that its better to go without incentives in the heavily incentive burdened Memphis and Shelby County. Its not hard to get there. S&N is already operating in one of the lowest cost centers in the country and their problem is not lower costs but a need for a career ready workforce. As a “good neighbor” S&N must know that workforce development efforts have been seriously compromised by deficient corporate community leadership and excessive tax incentives.
S&N provides a needed beacon of hope with a new form of corporate community leadership. This is vital because the local insiders of the FedEx/Memphis Tomorrow complex just don’t have the value set to change the trajectory of the community as they have culturally invested the community in decline.
Lacking Legislative Oversight and Analysis
Legislative oversight does not occur in Memphis while surrendering to the bully hacks of the FedEx/Memphis Tomorrow complex. There is no vitality on the matter of excessive incentives as legislators seem robotically controlled by the bully hacks. This is a feature of a rigged system in lost growth vitality on matters of importance. And if that is not enough, Memphians are in the dark, while as part of a rigged system, the press and public institutions like the University of Memphis do not inform the public of the excesses of the corporate socialists.
In the current environment, this blog has proposed a practical non idealistic PILOT reform solution. The PILOT reform model would maintain EDGE’s current investment and term minimums while abating a net 50% for new capital investment provided current job levels are maintained and abating 1% on total wages paid for new jobs. The proposed solution would have reduced historic job tax incentives by some $200M+ from 2011-18.
As for implementation it is a net 50% abatement being proposed. In this way, local companies that currently reside in Memphis would likely get less than 50% abatements and relocating companies, undertaking extensive relocation costs might get more than 50% abatements.
Unfortunately, the bully hack corporate socialists have convinced the public that because of high tax rates and their own botching of the workforce development system that massive corporate/real estate incentives are in order. This is not true as Memphis has one of the lowest business costs operations centers in the country. The fact is that Memphis has high property tax rates but not high property taxes due to low property values while at the same time providing a low cost business operating environment.
Based on the table below, if the proposed solution were idealistic and not practical, it would move to reduce abatements by some $400M and not $200M bringing them in line with $2.5K per job in Nashville and Indianapolis. To that extent, the below macroeconomic analysis is simple as it shows a massive data dislocation and Memphis abatement excesses. Nashville and Indianapolis are paying approximately $2.5K per new employed job and Memphis $14.5K !
Applying the proposed practical PILOT reform solution to historical abatements, Memphis, with $300M in total abatements down from $500M, would still have paid well in excess of the $2.5K in Nashville and Indianapolis and paid $8.7K per new employed job.
See below table for current Memphis abatement excesses which accomodates a simple analytical platform for local legislators:
Conclusion
Memphis has a sick elitist corporate community leadership culture where its Tuff n Cool Man to feed on a community in need. So sick that true corporate leadership as exhibited by Smith and Nephew is for the most part squelched as it threatens the decline by design culture of the corporate socialist FedEx/Memphis Tomorrow bully hacks.
As exhibited for the last 20 years, the elitist FedEx/Memphis Tomorrow culture does not have it within them to change the trajectory of the City. Its so sad as everyone bought in and believed only to be robbed of progress and to have their community left behind in a global economy as the bully hacks fed on a community in need at a $500M cost to taxpayers from slow growth and excessive incentives. With the bully hacks, its Tuff n Cool Man, Tuff n Cool to feed on a community in need.
There is good news. There are local business leaders who do not believe in the use of incentives at all or at the very least reject excessive incentives. But they are scared to speak up as they feel threatened by the sick corporate socialist culture of the bully hacks. Hopefully, these voices will find ways to speak up with Smith and Nephew. Because without them, Memphis is left to more decline with the bully hacks of the FedEx/Memphis Tomorrow complex.
Please let me know if you need references by emailing me at jkent@pathtrek.net