THE PEOPLE HAVE PROHIBITED IT
THE GOVERNMENT DID IT ANYWAY
WITH THE ECONOMIC DEVELOPMENT CORPORATION (EDC)
We the people, by the clear terms of our NY Constitution, have prohibited the State
from giving the public’s money to private corporations.
Our State government doesn’t like to be restrained by the people. No government
does. They like to spend money and wield power.
So, in June of 1998, the State agreed to give IBM $6 million to offset IBM’s cost
of rehabilitating the second and third floor of a building at the 300 site of its
headquarters in Westchester County. IBM’s net profit in 1997 was $6.5 billion.
Also, in July, 1998, the State agreed to give $13 million in cash and $7 million in tax
breaks to Ruppert Murdock’s organization ($12 billion in sales in 1997) to offset the
cost of modernizing its printing plant in New York City. The State money will be passed
through the State’s Economic Development Corporation.
The following is a copy of the Statement Bob Schulz read into the record at EDC's
hearing on the IBM grant:
STATEMENT
BY ROBERT L. SCHULZ
PRESENTED AT
THE N.Y.S. URBAN DEVELOPMENT CORPORATION’S
PUBLIC HEARING ON ITS IBM CREDIT CORPORATION PROJECT
North Castle Town Hall
June 9, 1998
This is a copy of the New York Constitution (holding up a copy). It is all that stands
between the people and governmental tyranny and despotism. By its terms the people, as
sovereign, have created the government. By its terms, the people have distributed some of
their power to the branches: power sufficient to govern but insufficient to oppress.
I read from the first sentence of the original New York Constitution: "Article I.
People the only source of authority. This convention, in the name and by the authority of
the good people of this State, DOTH ORDAIN, DETERMINE AND DECLARE that no authority shall,
on any pretense whatever, be exercised over the people or members of this state, but such
as shall be derived from and granted by them."
By the terms of the New York Constitution the people restrict and prohibit as well as
enable the three branches of government. For instance, under Articles VII and VIII, we
prohibit the gifting or lending of the credit or money of the State or any of its
political subdivisions, to or in aid of private corporations or associations or private
undertakings.
Naturally, people wielding governmental power do not like to be restrained by the
people, especially when it comes to the disbursement of the people’s money -- funds
and favors. They know, for instance, that if they are free to give the people’s money
to private corporations those corporations and their executives will be appreciative -- to
the point of contributing money to the campaign funds of the governmental leaders and
their political parties.
This is a copy of the State’s Project Plan -- the subject of this hearing. By this
proposal, the Governor is doing what the people have directed the State not to do. By this
Project Plan the UDC intends to gift $6 million to IBM to subsidize an ordinary operating
cost of that well-healed private corporation -- the refurbishing and rehabilitation of
some of its office space to prepare it for occupancy by one of its subsidiaries.
It is to be noted that the $6 million grant would be merely the latest gift of public
funds to IBM -- the latest example of the taking, by force, of the fruits of the labor of
ordinary, non-aligned citizen-taxpayers of the State for the benefit of one of the
largest, most profitable corporations in America -- reverse Robin Hood.
In 1992 IBM announced that it was thinking of relocating IBM’s corporate
headquarters building to Connecticut because it was obsolete and couldn’t be
rehabilitated, and because New York taxes were too high.
For that the State reduced the assessment on IBM’s headquarters building by 37%.
Whereupon IBM said it would keep its headquarters in New York.
However, in 1995, the State and IBM announced another deal. IBM would build a new
corporate headquarters building next to its current headquarters building and would pay
$75 million in cash to construct it, but the building would be "owned" by the
State and leased to IBM. IBM’s "rent" would be in lieu of property taxes
and would be a fraction of the tax rate. As part of the deal, IBM would sell or lease its
old headquarters building to another commercial company, implying that the old building
would then pay property taxes based on the standard assessments.
In 1996, IBM transferred to the State its 24 acre recreation parcel with stipulations
as to how it would be used, improved, maintained and shared by IBM employees, retirees,
and Town of North Castle residents. However, as part of the deal, the Town of North Castle
then transferred the development rights on the 24 acres to IBM to be used by IBM on its
remaining acreage.
Then in 1997, IBM announced that it would not be selling or leasing its old
headquarters building to another corporation but would, instead, relocate its subsidiary,
the IBM Credit Corporation, to the building from its location 10 miles away in White
Plains.
Now, in 1998, the State has announced its intention to give $6 million to IBM to
subsidize part of the cost of refurbishing the old headquarters building. Again, however,
the State will "own" the building and lease it to IBM. The rent payments will be
in lieu of property taxes and will be a fraction of the full tax rate.
Mr. Gerstner -- you must accept responsibility for this bad deal for the people.
Instead of standing with the people to reverse the downward spiral toward public debt,
governmental dependency and societal decay in N.Y.S. as a good businessman should, you
have chosen to aid and abet the race to the bottom.
You would have the people share in IBM’s costs but not in their profits. Do the
principles of liberty and freedom from wrongful governance and of free enterprise,
capitalism, independence and self-reliance have any root in you at all?
I am now going to sit across the table from Governor Pataki and say: Governor Pataki,
you, too, must accept responsibility for this bad deal for the people. No corporate
shield, like UDC, can hide you from this responsibility. You are selling the soul of our
State for a plate of beans. You have allowed corporate welfare to run rampant everywhere
in New York State. You have become Hood Robin, the reverse Robin Hood, taking from the
middle class and working poor and giving to the wealthy. Government is obviously for sale
now in New York State.
Governor Pataki, you have decided to force the ordinary, non-aligned citizen-taxpayers
of the State to share in IBM’s costs but not in their profits. Worse than this you
are attempting to acquire power from the people by seizing it.
We cannot let you do this. Governmental tyranny and despotism are a receipt for
rejection. At the least, you invite a lawsuit that will go on until the people’s
rights are fulfilled. If that does not happen I shudder to think of the result should the
people take to the streets. |