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Corporate welfare thrives in Florida; Wal-Mart sucks

In Florida, a state that is racing third world countries to the bottom of the wage scale, companies like WalMart, which place bets on the impending demise of their employees (see excerpt below) and are known for driving local businesses into the ground, are rewarded with generous tax breaks and outright subsidies regressively financed by the poor. Speaking of poorly paid janitors, WalMart’s cleaning companies entry level wages start at $2.00 per DAY.

Why do we let our elected representatives continue to get away with cutting social services, education, health care, and other absolutely necessary programs while throwing hundreds of millions of dollars at corporate pigs?

Carnival Corp., Florida's 10th-largest public company with 4,220 South Florida employees and a $136-million state payroll, posted more than $1-billion in profits last year.

It also paid nothing in Florida corporate income tax.
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In fact, 98 percent of the estimated 1.5-million businesses in Florida paid nothing. And many of those that did pay found ways to reduce their tax bills.

At a time when Florida is scraping for every dollar to improve education, build roads and prisons and buy prescription drugs for the poor, Florida's corporate income tax is all but dead.
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** As the corporate tax percentage declines, the state's reliance on the sales tax - which hits the poorest Floridians five times harder than the richest - is growing.

** By one state estimate, legal exemptions, credits, deductions and loopholes cost Florida $1.2-billion a year - more than the corporate tax generates.

In a state with a $53.5-billion budget, $1.2-billion would be enough to hire 28,000 teachers or build 3,500 classrooms or bring teachers' salaries in line with the national average.

It would be enough to build 30,000 prison beds or 425 miles of two-lane roads. Or enough to provide prescription drug coverage for 50,000 seniors for more than a decade.

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"There's a good side to it," said Jim Zingale, executive director of the Department of Revenue. "We appear to have a strong business climate today that we didn't have in past recessions."

State officials also stressed that many of the zero-paying businesses are small. And even if businesses don't pay a corporate tax, they usually pay property, unemployment, sales and use taxes as well as annual filing fees. They employ tens of thousands of Floridians who also pay sales and property taxes.
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Bush administration officials also argue that the low-tax culture is a key reason Florida continues to create jobs.
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"Dead janitor insurance'

Corporate shelters designed to avoid federal taxes also cost Florida revenue.
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Take Florida's third largest public company, Winn-Dixie Stores Inc. From 1993 through 1997, the Jacksonville-based supermarket chain used a tax shelter later deemed a "sham" by U.S. courts.

It took out life insurance - payable to the company - on more than 36,000 employees. The premiums, like any employee benefit, were considered a tax-deductible business expense.

Until Congress cracked down in 1996, dozens of businesses adopted a similar tactic: They bought insurance policies and collected when low-level employees died. The cash payments were also tax free.
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Another firm that took out life insurance on its rank-and-file workers is Wal-Mart Stores Inc., the world's largest retailer. It employs 76,400 Floridians and operates 192 stores and four distribution centers in the state.

"We saw COLI as a possible way to reduce our corporate income taxes which, in turn, could help us defray the rising cost of providing health care benefits to our people," Wal-Mart spokesman Tom Williams said in an e-mail. "As it turned out, the program did not work out well for us."

First, families of some Wal-Mart employees sued, saying the company purchased the policies without their knowledge and cashed in after their loved ones died. They want some of the proceeds.

Then, in a lawsuit filed in Delaware, Wal-Mart attorneys said the retail giant had settled with the IRS in August 2002 for a "substantial unanticipated tax liability ... under threat of litigation."

"It's especially bad when your employer has an interest in your early demise," said Scott Clearman, an attorney for the workers.
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America's No. 1 store is also among the nation's largest taxpayers, paying $57-million in Florida property, unemployment and income tax last year. It declined to say how much of that was state corporate income tax.

But considering its $244.5-billion in sales and $12.7-billion in pretax income, Wal-Mart still pays a relatively small amount of income taxes to states.

Tax credits

Like many large corporations, Wal-Mart also takes advantage of state tax credits. Florida offers them to firms that create jobs in enterprise zones, which are rural or urban areas targeted for economic revitalization.

Businesses can also get credits if they do research, provide child care or contribute to charity. And while some states are cutting back on the use of credits, contending that the giveaways hurt other taxpayers, Florida keeps approving more.

With the help of Gov. Bush, Wal-Mart qualified for tax refunds of up to $2.88-million for building a grocery distribution center near the northeast Florida town of Macclenny.

In its application for the tax break, Wal-Mart played the Sunshine State against the Peach State: "In the event our application is denied, we would pursue to expand in Georgia. Our capital investment of $40-million and 600 jobs would be welcome in Camden County."

Florida won the bidding. "They (Florida) threw everything at Wal-Mart to make the project happen," a message in a state file says.

Wal-Mart said it already has received $540,000 for the Macclenny project and expects the rest over the next four years.

In 2001, Bush's office also agreed to a deal worth $539,000 after Wal-Mart opened a store in Florida City.

Although Florida is more than willing to sanction corporate handouts, state officials are less willing to discuss how they are used. Neither Florida nor Wal-Mart would say if it is getting the breaks on its corporate taxes, sales taxes or both.

Wal-Mart said it has created more than 1,200 jobs in exchange for all the credits, but it stressed that it doesn't rely on government subsidies. In the past three years, Wal-Mart said, it has added 15,000 people to its Florida payroll.

And. pray tell, how may of those jobs were janitors making $2 per day?

More on WalMart

Finally, some feel that Wal-Mart threatens our way of life:

Wal-Mart is powerful; Wal-Mart is the American worker's nightmare:

Low wages: Nearly half of Wal-Mart's workers earn less than the federal annual poverty income for a family of three - $15,300 per year.

Few benefits: 700,000 of the workers get no health care from Wal-Mart. The rest who do pay for it.

Little retirement: No retirement plan is provided for 35 percent of the workers. The other 65 percent are in the Wal-Mart profit sharing and 401(k) plans. And most of the investment is in Wal-Mart stock - shades of Enron.

Low wages, little health care and retirement - what else could be wrong? Thousands of workers are suing Wal-Mart because some managers force people to work unpaid overtime. Thousands more are suing for gender discrimination. Women comprise 70 percent of Wal-Mart's workers and many are suing over promotion and pay inequality.

WalMart vs. Women

Troxler on Schiavo

From the SP Times:

Tuesday's banana republic mayhem was a spectacularly bad way to make new law. It was immature and intemperate. It was inconstant. It was law made up on the spot by a flock of clucking chickens jerking their heads in unison at loud noises and bright flashes of light.

The emergency act passed by the Legislature is not even a "law," in the sense of being a rule for all of society to live by. It was more of a whim, a dispensation - an exercise of raw power that lives for exactly 15 days and applies to exactly one case. No citizen of Florida before or after enjoys the same protection.

The Legislature simply waved a magic wand and claimed to grant Gov. Jeb Bush a power that he cannot possess. The governor is not king, you know, no matter how much they want him to be. Both he and the Legislature may exercise only the powers granted to them by the state Constitution.

Scripps deal another swampy mess?

Let me get this straight: Florida has no money for education, transportation, medical care for its citizens, or anything else, but Jeb is actually selling us on a deal which will guarantee 540 jobs in Florida, but not necessarily to be given to Floridians, for an average government subsidy of just $925,925 per job.($500 Million, 540 jobs...)

People who work full time in this state for minimum wage cannot put food on their own table, if they’re lucky enough to own a table and have a place to put it, and we are going to give the world’s richest research institute $500,000,000.00 to come and hang out for a few years?

All emphasis within quoted material is mine.

The beginning:

Gov. Jeb Bush boarded a plane July17 and headed to California with an audacious idea.

Behind closed doors, Bush told one of the world's largest private research companies that he was prepared to make a deal.

Open a facility in Florida, he said, and taxpayers will build you a brand new lab and spend millions of dollars on high tech equipment.

We'll even pay your employees' salaries for eight years, he said. The cost to taxpayers: at least $400-million.

The Scripps Research Institute hadn't seriously considered expanding, until they heard the offer. They quickly agreed.
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But the Scripps deal stands out. The governor's economic development office could not cite another time Florida offered to pay the salaries for a company to move to the state.

Bush said the company's presence in Florida will ripple through the state's economy.

Scripps chose Palm Beach County for its new facility, and projected hiring 31 people the first year. The number would grow to 545 employees within seven years and 2,800 within 15.

The state projects another 3,700 jobs also would be created, such as research materials suppliers and waiters at local restaurants.

Bush expects other biotech companies to locate to Florida, creating 44,000 high-wage jobs.

The state of Florida is going to pay the salaries of the employees of a private research firm? Can anyone say “corporate welfare?”

Some lawmakers are trying to give the appearance of looking out for the public’s money, but in the end they will bend over and squeal excitedly as Jeb has his way with them.

The deal to lure a major biotechnology center to South Florida with a $310 million tax giveaway is drawing scrutiny from Republican legislators, who say they want more assurances and details before going along with Gov. Jeb Bush.

Under the Bush-brokered deal, taxpayers would pick up the cost of a new building, equipment and employees for a sister facility of the Scripps Research Institute, based in La Jolla, Calif.

In return, the institute is required only to move in.
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Though the governor has been vague about the origins of the deal, the Herald on Wednesday learned that an influential Orlando attorney with ties to Bush first suggested the governor look into wooing Scripps.

Bush first visited the institute in July when he was in California for a fundraiser for that state's Republican party, a visit arranged by C. David Brown II, chairman of the Miami-based law firm Broad and Cassel. Brown, who raised $100,000 for George W. Bush's 2000 presidential campaign, was a member of Jeb Bush's campaign team, visited the governor's daughter, Noelle, while she was in jail on a drug charge and was recently named by Bush to the influential Council of 100, a business group that advises governors.

Aware of Bush's interest in luring a biotech firm, Brown suggested a contact at the Scripps Institute last spring.

Brown became involved with the negotiations when his client, British billionaire Joe Lewis, offered land near Orlando to Scripps before the institute opted for Palm Beach County.

Now, Broad & Cassel is representing the state in its negotiations with Palm Beach County and Scripps. On Wednesday, Brown downplayed his role. He said credit goes to the governor for helping change Florida's destiny.

''It changes us from being a tourism state,'' Brown said. ``It's like Harvard coming to Florida. It will change the way the business and scientific community views Florida.''

Brown is working with Bush's legal team and the governor Wednesday defended the use of outside counsel to seal the deal, noting ``This is a big deal. It's a half a billion dollar transaction and there's a short time frame to get it done.''

Brown's contract was not available Wednesday, but the governor's office said Brown ``offered his services at a discount rate.''

So, Brown first wanted to broker a deal to enrich his landowning buddy. I wonder who owned the company that owned the land that Palm Beach County just purchased to seal this deal?

If Florida gives the Scripps Research Institute $310-million to open a campus in Palm Beach County, should Florida residents get first crack at the job openings there?
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Scripps executives said earlier in the week that the biomedical think tank from San Diego couldn't guarantee jobs for Floridians because its goal was to attract the best scientific talent available anywhere. The state would nevertheless benefit from the blossoming of biomedical businesses, and jobs, that would cluster around the new facility.

A site for the new campus was revealed Thursday, when Scripps chose to build on what is now a 1,920-acre citrus grove in unincorporated Palm Beach County. The site was selected over several other options nearby.

Under the land deal, Palm Beach County will pay Lantana Farm Associates Inc. of Lake Worth $30,000 per acre, or $57.6-million, county administrator Bob Weisman said. Scripps will occupy just 100 acres of the tract. The remainder would be set aside for biotech companies, universities, venture capitalists and others that seek to do business with Scripps and for water-treatment facilities and other infrastructure.

Allen Zech, head of the agricultural section at the Palm Beach County property appraiser's office, said there is no easy way to tell whether the county got a good price for the land. Few tracts of that size, type and location have been sold in recent years.

In other developments Thursday, Rep. Dan Gelber, D-Miami Beach, said he has asked an independent economist to review the Bush administration's claim that a Scripps deal would directly or indirectly create 50,000 new jobs in Palm Beach County by 2019. That estimate, which administration officials describe as conservative, was derived by Tony Villamil and Robert Cruz of the Washington Economics Group of Coral Gables. Villamil is chief of Bush's council of economic advisers and his former director of trade, tourism and economic development.

"Is it conservative, or highly speculative?" Gelber said in an interview. "Euphoria is a wonderful thing, but you never want to base a purchase on it."

Also Thursday, the Miami Herald reported that C. David Brown II, chairman of Orlando's Broad & Cassell law firm, was the person who first suggested last spring that Bush approach Scripps about a deal. The newspaper said the Bush administration has now tapped Broad & Cassell to handle its negotiations with Scripps. A Broad & Cassell spokeswoman said Brown was not immediately available for comment.

Uh, the property appraiser says he really can’t tell if that land was acquired at a fair price, cause, uh, you know, it’s really hard to appraise the value of something. It seems that this type of confusion is contagious:

...the demand for a quick decision left other commissioners less enthusiastic. Because Scripps kept its plans under wraps until 10 days ago, Commissioner Addie Greene feels she's being rushed without being given enough information. She was the only commissioner to vote against the proposal.

"I'm still lost as to why this is such a grand opportunity for Palm Beach County because I have not been informed," Greene said.

Lack of information also bothered environmentalist Cynthia Plockelmann.

"I think there's a lack of sunshine. I am appalled some commissioners were informed (and) others not. I don't think there's nearly enough detail as to expenses," Plockelmann said.

Commission chairwoman Karen Marcus (pictured, right) agreed they didn't have enough specifics, but still voted to spend the money.

"It causes you to pause with this kind of money we're investing, but if we didn't take steps today, we'd never know," Marcus said. (ed.note: Marcus is obviously confused, but at least she’s curious! $210 million is a small price to pay if the other option is not knowing!)
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Scripps has promised to create 540 jobs over seven years and said it will be a magnet to biotechnical companies who will want to be near the research facility.
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The deal is still contingent upon Gov. Jeb Bush's commitment to add $310 million to buy Scripps new equipment. That could come out of a special session of the Legislature as early as next week, putting the project on the fast track toward moving into a temporary facility by midsummer.

State leaders expect Scripps, the country's leading nonprofit biomedical research institute, will help create 6,000 new jobs, in addition to the 540 jobs it promised Palm Beach County. The institute, based in the San Diego suburb of La Jolla, is known for groundbreaking work in leukemia, ovarian cancer, Lou Gehrig's disease, Alzheimer's disease and AIDS. It has become internationally recognized for research into immunology, biology, chemistry, neuroscience, autoimmune and cardiovascular diseases and synthetic vaccine development.

Scripps, established in 1924 through a gift from philanthropist Ellen Browning Scripps, employs 2,900 people in La Jolla and is the largest institute funded by the National Institutes of Health. It is the home of three Nobel laureates.

Smells like Disney...

But Disney, at least, had bought its own land on which it would spend fortunes of its own money. Scripps brings to the feast no dowry other than a good reputation. For the first time, the public is expected to provide not only the land, not only the buildings, but also salaries sufficient for seven years. There is no precedent for that.

There is no guarantee that Scripps will stay even seven years, let alone longer. The governor's hastily drafted legislation provides for a share of Scripps' net - not gross - income, but only begining in 2011, after it has drawn down the state's advance.
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Granted, the deal could be good, very good, for Florida. But this raises the question of why Bush is not equally eager to invest equivalently in improving Florida's educational system, especially its colleges and universities.

Every survey of business leaders points to education as more important than any other factor, including taxes, in attracting and keeping industry. If I were a legislator, I'd tell the governor to bring now, not later, his plans for a stable funding source for higher education, and put them on the table right beside the Scripps deal.

Good idea, but that’s not very likely to happen. The train rolls on:

Gov. Jeb Bush on Monday made his case to Florida lawmakers for spending $310-million to lure the world's largest private research center to Florida, but skeptical senators weren't in a buying mood.

In an unusual joint session of the Legislature, Bush said he supports measures to ensure that the money is well-spent, but warned lawmakers not to micromanage a venture that could push Florida to the forefront of biomedical research.

"This is a once-in-a-lifetime opportunity to build an economic engine with the power to drive this state forward," Bush told lawmakers. Florida can create prosperity for future generations, Bush said, "or we can forfeit our dream to those bold enough to build it."
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If any lawmakers oppose the idea of spending public money on a private company, they weren't evident. Instead, the focus was on accountability.

But the public was left largely in the dark as the session began. A House bill did not surface, and Bush expanded the five-day session's agenda to include an exemption from public records laws for "certain information" on the Scripps deal.
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During the joint session with Bush, Democrats asked the toughest questions.

Sen. Debbie Wasserman Schultz, D-Weston, said it was "fairly unprecedented" for an out-of-state business not to put up its own money. Bush rejected that.

"It is a not-for-profit. It is not there to make money. It's there to make discoveries," Bush said.

Bush also said Floridians should not receive preferential treatment in jobs or programs at Scripps Florida. "It should be completely open," Bush said.

Swamp sale so sweet

You know, when this thing was announced, during the Governor’s race, it seemed awful fishy, and now things are really starting to stink...

The investigative arm of the U.S. Department of the Interior has begun an inquiry into the Bush administration's $120 million buyout of oil rights in the western Everglades.

The deal was intended to thwart a massive oil-drilling plan by the Collier family of southwest Florida, which held the mineral rights at Big Cypress National Preserve, Florida Panther National Wildlife Refuge and Ten Thousand Islands National Wildlife Refuge. When the buyout was announced last year at a White House news conference, environmentalists gave the administration a rare round of applause in a crucial state for the 2004 election.

But now the Interior Department's Inspector General's Office has begun reviewing the transaction. The Inspector General's Office would not comment. But Hugh Vickery, spokesman for the Interior Department, said the inquiry focused on how the administration arrived at the $120 million price.

"We can confirm that the inspector general has told the department that it is initiating an inquiry into the valuation process used for the Collier deal," he said. "We're confident that the process used in reaching the valuation of those resources was good."

Bad timing

The buyout still has not closed, and the inquiry comes at the worst time for its prospects. The administration had requested a $40 million installment in next year's budget, but neither the House nor the Senate put the money in their spending bills. While the Florida delegation had planned to fight for the money, the inspector general's review could make it difficult for them to press their case.

"If there were some sort of inquiry going on, I would think that people would want to see how that comes out before they appropriate funds," said Jill Greenberg, spokeswoman for U.S. Sen. Bob Graham, D-Florida.

And now that the federal investigatoin has held up the money, the Colliers are attempting to extort as much as they can:

A federal investigation that has stalled an Everglades buyout has a rich Florida pioneer family thinking about reviving plans for exploratory oil and gas drilling on some of the nation's most sensitive land.

The Bush administration's $120 million purchase of mineral rights on 390,396 acres of federally owned land in the historic Everglades was intended to halt drilling planned by the Collier family, for whom Collier County is named.

The Bush administration asked for a $40 million down payment, but House and Senate appropriations committees are not expected to put the money into the current spending bill while the Interior Department's inspector general conducts an investigation.

Bob Duncan, general manager of Collier Resources Co., said the family would ''look at its options'' if no money is forthcoming.

''We firmly believe there's additional oil to be found. We have our permits in with the National Park Service, so clearly that's one of the alternatives,'' he said.

Mary Munson, regional director of the National Parks Conservation Association, said the Colliers should be patient with the process.

''The Colliers know the fiscal climate,'' she said. ``The threat to drill if they do not get this huge payout borders on extortion.''

Summing things up:

A year ago, New Times probed the Bush administration's planned $120 million buyout of mineral rights in the Big Cypress National Preserve from the wealthy Collier family, whose operation is based on Florida's west coast ("Big Cypress Buyout," September 12, 2002). The deal, announced in May 2002 on the White House lawn by the president and little brother Jebbie, was also to include to-be-determined tax breaks that could have amounted to hundreds of millions of dollars.

Though New Times revealed that the feds ignored staff estimates that the mineral rights were worth only $5 million to $20 million, there was little response.

So why did the inspector general of the Department of Interior just recently decide to probe the deal, as the Sun-Sentinel disclosed last week? The IG won't say a word about the inquiry, but a DOI insider has a pretty good idea of what sparked it. "There's blood in the water," the source says of the growing criticism of the White House. "It's near election time, and the sharks are circling. A lot of people are worried about what this administration is doing."

If it chooses, the IG's office can easily verify that the inflated valuation is a waste of taxpayer money. The question the IG investigators should be asking, however, is this: Did DOI higher-ups use that federal agency to aid Florida Gov. Jeb Bush in his reelection bid against challengers Bill McBride and Janet Reno?

Coming as it did during the thick of the campaign, the proposal certainly raised eyebrows. "The timing with the Bush administration -- that energy-happy, let's-drill-everywhere administration -- was certainly very suspect," says Robin Rorapaugh, who at the time was McBride's campaign manager. "The Bush White House and Interior Department are not an environmentally friendly organization. The deal was counter to what that administration is usually doing. [The announcement] was there to help his brother."

Even the governor hinted as much at the time. "Whenever there is a convergence of good politics and good public policy, I don't think we should be ashamed about it," he declared at the White House.

The Collier family has been a major landowner in South Florida since 1921, when Barron Gift Collier bought 1.25 million acres of swampland. His heirs sold almost 700,000 acres of Everglades property to the federal government during the '70s and '80s, much of which now makes up the Big Cypress. The Colliers retained the mineral rights, however.

The family has tried to wring as much as it can from its holdings, including an attempt to trade them for surplus military bases in California and Florida in 1996. At that time, the DOI's Minerals Management Service in New Orleans determined that the rights were worth $230 million to $430 million. The deal died, though, says the DOI source, because the appraisal was so far-fetched that it couldn't pass the "red-face test." In 1999, the Colliers tried to swap the mineral rights for property at the Homestead Air Force Base, but by then, DOI staff had determined they were worth $5 million to $20 million.
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Early this year, Sen. Bob Graham reacted angrily when the Bush administration tried to slip a $40 million down payment for the Colliers into a 2003 appropriations bill without congressional scrutiny. It was subsequently withdrawn.

Jeb plan: impregnate Schiavo, get court order to save fetus?

Jeb Bush is looking for ways to interfere with a patient’s stated wish to die. Terry Schiavo is finally getting her wish. She has been in a coma for years, and lawyers have been getting rich during the protracted court fights between her husband, who wants to honor her wish not to be artificially kept alive, and her parents, who want to hire a nurse to work Terry’s jaws and force food down her throat:

After Lazzara's ruling, Michael Schiavo smiled and hugged one of his attorneys, Deborah Bushnell, as members of the Schindler family left court through a back door. Michael Schiavo declined to talk with reporters.

Another of Mr. Schiavo's attorneys, George Felos, told reporters, "I think this is a big step, a very big step."

The Schindlers had filed the federal lawsuit against Michael Schiavo last month alleging a conspiracy between him and Greer to end Mrs. Schiavo's life.

The Schindlers contend their daughter can survive the removal of the feeding tube if she undergoes therapy that they argue would allow her to regain the ability to take in food and water orally.

Felos said that's impossible, and Greer had earlier ruled against allowing such therapy.

"An injunction that says don't remove the tube until she can eat on her own is like saying don't remove the tube until she can walk around the block," Felos said. "It's never going to happen."

Mrs. Schiavo, 39, has been in a persistent vegetative state for 13 years after her heart stopped from what her doctors believe was a potassium imbalance.

Friday's hearing was viewed with great optimism by some of the Schindlers' supporters, especially after Gov. Jeb Bush filed a friend of the court brief opposing the removal of the feeding tube.

Jeb, or OFFaL (Our Feckless FloridA Leader), just can’t keep his government from groping people’s bodies. He’s searching high and low right now for a way to extend the family’s suffering to cynically soothe some sorry slobs salivating over the slim chance of setting a precedent that might someday be used to further erode a woman’s right to an abortion.

Terri Schiavo's weary parents kept vigil by their oldest child Thursday as they awaited word from the governor on a strategy to save her.

Activists pressuring Gov. Jeb Bush to intervene submitted to the governor's office several legal opinions from lawyers telling Bush he has the constitutional right to force doctors to resume feeding Mrs. Schiavo.

Late in the day, Bush told reporters that his lawyers were still working on a solution. But he admitted they have found nothing.
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Legal experts, meanwhile, expressed doubt that Bush has any option to force doctors to reinsert the feeding tube removed from Mrs. Schiavo's stomach at 2 p.m. on Wednesday.

"In a nutshell, it really isn't the governor's official business," said University of Florida law professor Joseph W. Little. "There is absolutely nothing in the state constitution that gives him authority in this matter or a duty to do anything about it."

Professor Mike Allen, who teaches constitutional law at the Stetson University College of Law in Gulfport, said a separation of powers prevents the governor's intervention.

"Maybe my view is a bit jaded," Allen said. "But I suspect a good portion of this is a public relations effort by the governor."

A little Jeb history:
BlogWood: Norwood's Fair and Balanced Nattering: Jeb does his part to strip women of rights
BlogWood: Norwood's Fair and Balanced Nattering: MJ Melone Gets it