Sunday, July 31, 2011
Why does Facebook need tax subsidies?
In Central Oregon, Crook County government leaders were excited to see Facebook expand its data center near Prineville without having to pay about $2.8 million annually in taxes. And that's before the second data center is constructed.
In exchange, the good people of Prineville are thrilled to get new mats for the wrestling team, $1,500 for Friends of the Flag and $5,000 for the chamber of commerce. In all, Facebook, one of the richest companies in America, is scheduled to donate less than $100,000 to various county entities this year.
Granted, Facebook did pay about $12 million in development fees. And, it will have 52 full-time employees, recruited from outside the region, which will have no effect on a county with the highest unemployment rate in the state.
But, let's not kid ourselves. Most of those 52 won't live in Prineville or Crook County because the local school district is one of the poorest around. The school district can't even afford to pay for extracurricular activities, like sports.
The mayor gushed to the Bend Bulletin about Facebook: "They have been a good neighbor. They have increased business at grocery stores, filling stations, restaurants and motels."
It always good to see any business uptick during these times, but gas stations are are not the backbone of a stable community.
And, it looks like Crook County will attract more companies willing to cash in on taxpayer subsidies leaving area residents, who have a median income of more than $12,000 below the state average, to pick up the difference.
Facebook chose Crook County because of taxpayer subsidies, cheap land and relatively cheap energy costs. Nothing more and nothing less.
Facebook doesn't care about Prineville and will have no trouble leaving when its tax breaks end in 15 years.
The question taxpayers should ask Crook County government is this: Why does a company that will likely pick up $100 billion in a single day next year need to be sudsidized by one of the poorest areas in Oregon?