County considers $40 million in corporate welfare for Raytheon
Raytheon– like so many other multi-national corporations– is trying to hold our local government hostage in exchange for corporate welfare. “Give us money, land, and tax breaks and rework your infrastructure to suit us, or we may hire workers elsewhere” is the mantra of corporations and major league sports teams who pit cities against each other to see who will give them the best deal– at the expense of the taxpayers.
And cash-strapped local and state governments trying to “do the right thing” fall for this scam all the time. Currently, our bankrupt state is considering offering million of dollars in tax breaks to unnamed corporations to move here, and now the cash-strapped county and city are considering offering millions to Raytheon and Diamond Ventures.
In Plan aims to assist Raytheon expansion, Arizona Daily Star reports that the county was “stung by Raytheon Missile Systems’ decision to build a new missile facility in Alabama instead of Tucson”, and that this is the reason it is considering going further into debt to help Raytheon expand here. Part of the expansion is $8 million for the purchase of land south of Raytheon– now owned by Diamond Ventures.
I know that the county is considering this in the name of keeping “good jobs” in Tucson, but frankly, this deal is just corporate welfare. According to the Star (quoted below), one of the reasons that Raytheon expanded in Alabama recently instead of here was that there wasn’t enough room physically to expand in Tucson.
Taxpayers need to help facilitate Raytheon’s expansion because one of the reasons Tucson lost out to Huntsville, Ala., for Raytheon’s new missile facility is that Raytheon didn’t have enough room at its south-side site here, [Pima County Administrator Chuck] Huckelberry said.
When it awarded the new facility to Huntsville – which will employ an estimated 300 workers at an annual average wage of $60,000 – in July, Tucson was a finalist. But the company said Tucson was bypassed because of limits to expansion at Raytheon’s current missile plant and a lack of development-ready alternative sites.
Richard A. Mendez, Raytheon’s director of facility management, told the City Council that Raytheon is confined in a box where it is now, which causes problems for the company and limits potential expansion.
If Don Diamond has $8 million worth of land south of the existing Raytheon plant for sale, that sounds like there is room for expansion. This issue is that Raytheon wanted it for free; perhaps you could call it another corporate bailout? Certainly, it is corporate welfare. (Another question is: Where is this land in relation to the TCE-contaminated land near Raytheon, and is it really worth $8 million? From the map on the EPA Superfund website, Diamond’s land is definitely close to the contamination– if not overlapping. What would Diamond do with this land — other than sell it to Raytheon or the Tucson International Airport? No one would want to live between those two noisy and environmentally messy neighbors. And, if Tucson funds the purchase of this land, who owns this wasteland in the middle of no where? The taxpayers or Raytheon?)
I have an alternate proposal for that $40 million. Give most of it– say $30 million– to The University of Arizona to create well-paying, clean, non-violent jobs in research and emerging technologies. The UAFoundation has mounds of data that show small donations that fund pilot research projects help UA scientists gather data to win large research grants. Grant funding and the spin-off businesses that often are created by new research findings provide good-paying jobs, often in emerging industries.
With the remaining $10 million, invest in local small businesses and help them expand. Small businesses created by local residents have an investment in Tucson; they’re not going to Huntsville, Alabama or China. (You’ll note in the Raytheon deal that there is no commitment to stay or expand in Tucson.)
Raytheon and Diamond Ventures should be weened off of the teet of the nanny state. Let them make their own deal without taxpayer funds greasing the wheels. Also, if Raytheon wants the county and city to rework the roads south of town, maybe they’d be willing to pay a bit more in corporate taxes. (I’m sure they’ve got some sort of sweetheart deal now.)
Wry Heat in his column today questioned the plans to rework Pima County’s roads on the south side (at taxpayer expense) to suit Raython and offered alternatives.
I question why Pima County would offer $40 million in corporate welfare to a highly profitable, multi-national corporation whose primary business is fueling violence worldwide. If the county and city want to grow the local economy and create new jobs, invest in research and education at the UA and in local businesses.
Tucson Tea Party– where are you on this? You railed against corporate welfare for the big banks and the auto companies. Where do you stand on using taxpayer funds for corporate welfare for the military-industrial complex? State Senator Frank Antenori, what about you?
[tnipoll]
19 comments on “County considers $40 million in corporate welfare for Raytheon”
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Feel free to turn this opportunity down, I would love for them to move to my home state. I have seen first had what happens when a large corporation of any type packs up and leaves a community when I was in Texas. I know that the Town of Clarksville, TN would welcome them with open arms
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We will have a word with Clarksville and get them to pledge no giveaways to Raytheon. We would do this with any other city as well.
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The “Gift clause” AZ constitution art. 9, § 7 states: “Neither the state, nor any county, city, town, municipality, or other subdivision of the state shall ever give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation, or become a subscriber to, or a shareholder in, any company or corporation, or become a joint owner with any person, company, or corporation, except as to such ownerships as may accrue to the state by operation or provision of law or as authorized by law solely for investment of the monies in the various funds of the state.”
I take that to include hotels, sports stadiums, and the like.
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Thanks for the statute quotation. I agree with you, but I guess there is some sort of loophole that allows governmental entities to, in fact, give gifts to corporations, hotels, sports stadiums?
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Mr. DuHamel, I am pleased to read your recitation of the law here. I think there is clear evidence this law has been violated on numerous occasion by numerous municipalities over the last several decades, at least. We need to elect County Attorneys who are willing to examine such malfeasance as this. The very proposal of such as this Raytheon land deal is flying in the face of this law and shows how little regard it has by governing bodies of late.
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Excellent article! City leaders can get sucked into this kind of deal without seeming to realize that there very well may be no rewards what so ever for the corporate welfare. I won’t work for Raytheon for moral reasons. I’m with you investing in the UofA
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I really surprised at the silence from local Tea Partiers on the Raytheon give-away. They actively bashed Obama and the Democrats for the stimulus package and the bailouts of the banks (which George Bush did) and the auto industry. The difference is that the banks and the auto giants are paying or have paid the bailout money back– with interest. The $40 million for Raytheon is just a gift.
Come on, Tea Partiers, I know you’re out there. Where is the outrage regarding this misuse of taxpayer funds? When we can’t pay for police, fire, schools, roads– why should we give $40 million (in borrowed money) to a profitable corporate giant?
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What about “fraser”? He’s a tea party type, isn’t he? I wonder why he hasn’t weighed in on this.
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The sad thing is that no matter how progressive and peaceful we are in Tucson, without Raytheon we would need drastic change (which some of us might welcome). Those billions of dollars trickle down on to us as they have money to get “cultured” and go to restaurants, pubs, concerts, art galleries, etc.
Tucson’s economy is a war-based one, that is for sure.
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It should not be that surprising, Pam. You are the only one talking about it. Chances are, they never saw the article and I highly doubt they read your blog. If you want them to comment on something, why don’t you send them an email and ask them rather than blowing your hot air into cyberspace?
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Big difference between Federal TAX dollars and State TAX dollars. The States are supposed to decide tax collection and distribution not the Federal government. The Feds. have only ONE job, and that is protect the country as a whole from attack. That’s it. And that is the only purpose for the Feds. to collect Taxes from citizens. The TEA Party is a growing organization Opposed to Federal expansion and interference where is does not belong. You need to read.
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The Feds. have only ONE job, and that is protect the country as a whole from attack.
This is what is called a belief, Sharon. A belief is different than a fact, which is what you presented your belief as. And please don’t ask me to read your pocket version of the US constitution.
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Wow, I like the trackback from The Writer. This is an excellent article, Pamela. It is so well and concisely written making so many good points. In the course of its publication, we have a citing of the law which prohibits this very thing. We all need to go to the next County Supes meeting and the next Mayor and Council meeting and tell them what we think of this crap.
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Once a ‘fan’ of Tucson/PIMA County, I now look at the economic and culture devastation ocurring there and the rationale for ‘outing’ Raytheon (Plan A) without a ‘Plan B’ (Uof A option) or anything else on the table…like last year’s failed Tucson Downtown revitalization plan as an example of Progress, for example, among many things stagnating, I am looking around for my money and my retirement to re-locate. Next summer, for a change, take a drive ‘NORTH’, look at the vitality of a ‘successful’ research and innovation University Community (remember Tucson IS one of those) such as Madison, WI and UW. Life is NOT all about the weather! It is about Progessive values, quality of life, HIGH QUALITY education, a favorite retirement destination, SUPERB health care ‘choices’ and delivery and a very fair return on investment (yes, taxes.) Folk there LIVE their values. I am not alone…we have a decades HIGH properties for sale in our ‘Foothills’ neighborhood…demographics aside…due to 40, 50 and 60 somethings being sorely disappointed about locating there or planning to locate there in a few years. ‘The Tucson Dream’ is becomng a myth.
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Maybe a book of punctuation rules should have been on your Christmas list?
But, seriously, Tucson exists in a fragile, water-scarce environment. If we want long-term sustainable growth, we need to cast off high-polluting employers (like Raytheon) and high-water-use and high-polluting employers (like the mines). What is left? Building upon our research university and its spin-offs and building upon our vibrant art/music scene.
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This issue is not a TEA Party issue in the least. It is only a State issue.
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