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IBM’s two facilities in Dutchess County have received gigantic, long-term public assistance. Their facility in East Fishkill received bonds and grants covering a 30 year period, and the tax breaks on their Route 9 project were recently extended until 2028, making this a 35-year corporate subsidy.
In a recently-annouced deal, the Dutchess County IDA is not requiring any commitment from IBM to retain or create jobs, possibly because the corporation has failed to meet its job retention and creation goals for the last 20 years. It fell far short of its goals at Route 9, cutting 3,515 jobs, and fell far short of its promise to create 700 jobs in East Fishkill.
Unfortunately, due to poor reporting and lack of transparency, it’s difficult to tell just how poorly this corporate subsidy project has performed to-date. IBM is notoriously secretive about its job cuts—it currently reports 0 employees at its East Fishkill location instead of the actual number. It’s also difficult to calculate the total value of the tax breaks that IBM has cashed in on over the years. In the meantime, the development agencies seem resigned to giving the 9th most profitable corporation something for nothing, as local residents watch their full-time jobs outsourced or replaced by temp and contract jobs and their own property taxes rise.
IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. In 2012, Fortune ranked IBM the #9 most profitable business, with $15.85 billion in profits. A major employer in the Hudson Valley, IBM directly accounts for approximately 17% of the total wages in Dutchess county, and vendors, contractors and temps whose jobs stem from IBM add many more jobs. IBM payroll jobs have been in decline for several years, locally and in the U.S. even as the corporation’s overseas workforce has grown enormously in places such as India and China, and their reliance on temps and contract workers at home continues to grow.
Industrial Development Agencies: Summary of Data, Office of the New York State Comptroller, at http://www.osc.state.ny.us/localgov/datanstat/findata/index_choice.htm
Fortune 500 Annual Ranking of America’s Largest Corporations, 2012: Most Profitable, CNN Money, at http://money.cnn.com/magazines/fortune/fortune500/2012/performers/companies/profits/
Dutchess Sites Still Vital to IBM, Experts Say, by Craig Wolf, Poughkeepsie Journal, June 19, 2011, at http://www.poughkeepsiejournal.com/article/20110619/BUSINESS01/108160013/Dutchess-sites-still-vital-IBM-experts-say?nclick_check=1
Annual Report on Jobs Created and Retained on ESD Grant and Loan Programs and Status Report of UDC Loan Portfolio: December 14, 2011, Empire State Development, at http://esd.ny.gov/CorporateInformation/Data/12142011_BoardMaterials/11_Item112011EmploymentReport_121411.pdf
Dutchess County IDA Board of Directors Meeting Minutes: May 19, 2011, Dutchess County Industrial Development Agency, at http://www.dutchesscountyida.org/dcida_proto/documents/DCIDAMinutes5.19.11.pdf
IBM to Get Tax Break as East Fishkill Approves Payment Deal: '98 PILOT Gets a Renewal, by Craig Wolf, Poughkeepsie Journal, July 27, 2012, at http://www.poughkeepsiejournal.com/article/20120727/NEWS/307270043/ibm-pilot-east-fishkill
Foreigners Drive IBM Gains in State: Firm, which has millions in state contracts, has brought hires to Albany, by Larry Rulison, The Times-Union, July 19, 2012, at http://www.timesunion.com/business/article/Foreigners-drive-IBM-gains-in-state-3721458.php
Dutchess County Tax Rate “Rounded Rate M” 2008- 2012, Author’s calculation based on tables available at http://www.co.dutchess.ny.us/CountyGov/Departments/RealPropertyTax/12485.htm; See also http://taxblog.billrubin.info/2012/01/dutchess-county-2012-tax-rate-is.html
IBM Slices 800 Hudson Valley Jobs, Sources Say, by Christine Young, Times-Herald Record, January 28, 2009, at http://www.recordonline.com/apps/pbcs.dll/article?AID=/20090128/BIZ/901280340
In I.B.M. Deal, State Offers a Loan to Create 700 Jobs, by Dennis Hevesi, New York Times, January 30, 1994, at http://www.nytimes.com/1994/01/30/nyregion/in-ibm-deal-state-offers-a-loan-to-create-700-jobs.html
IBM Layoffs Exceed 800, Workers Say: IBM cut employees in its outsourcing and server manufacturing units, among others, by Paul McDougall, Information Week, February 28, 2012, at
Mid Hudson News: Union Workers present IBM with raspberry “Hall of Shame” medal
August 16, 2012. Union workers held a rally outside the Dutchess County Office Building Wednesday afternoon, criticizing IBM for taking public tax incentives while they say Big Blue created no new jobs. The event culminated with a mock “Hall of Shame” award presented to the corporation, formerly one of the largest local employers. Continue reading