Amazon’s choice to split its second headquarters between New York City and a Washington, D.C., suburb has drawn outrage from nearby residents, activists, and congressional leaders, who have decried the financial incentives offered to the corporation and the lack of attention paid to needs of the local communities.
These decisions may be shocking to New York and D.C. residents. But for Detroiters, this is nothing new.
In Michigan’s 13th District, which I will have the privilege of representing in Congress come January, we have an unfortunate history of political leaders bowing down to the demands of corporations with little community input and even less benefit to impacted communities. We even had our own $4 billion bid for Amazon led by Dan Gilbert, a billionaire businessman Detroiters have no way of holding accountable.
The rate at which leaders roll over and beg corporations to set up shop in their communities, giving away hundreds of millions of dollars while neglecting the need for resources to support city services, is alarming. Just four years after Detroit’s bankruptcy, we have already had two billionaires and one mega corporation get in the corporate welfare line asking for millions of dollars in public money for their private developments (this is in addition to the Amazon bid).
And they got it. Meanwhile, public schools are closing in these same communities, and low-income Detroiters are having their water turned off when they can’t afford the bills.
No matter how much the private sector crows that corporate tax breaks will lead to more jobs or robust economic activity, such benefits rarely materialize. In 2013, the Ilitch family, owners of Little Caesars Pizza, the Detroit Red Wings, and the Detroit Tigers, unveiled a plan for a new arena for the Red Wings. The proposal came with an ask of $262 million in public funding—a figure that has since jumped to $324 million. The family promised that taxpayers’ investment would be rewarded with a sprawling district of new restaurants, housing, and other businesses, along with thousands of jobs.
Now that the Ilitches received the funding, however, all mention of the new developments has been wiped from the District Detroit website. In its place: advertisements for a series of Ilitch-owned parking lots available for sports and other events.
The corporate giveaways didn’t stop there. Earlier this year, Gilbert got approval for $618 million in public money for his private downtown developments. A few months later, Ford spent $90 million to acquire the Michigan Central Station, a massive train hub left unused by its previous owner, billionaire Matty Moroun. With the purchase, Ford requested nearly $240 million in tax incentives for the rehabilitation of the building and surrounding area. The company is on the path to getting them—with more than $100 million coming from the city of Detroit, which is fresh out of bankruptcy.
Ford did come to the table to negotiate a community benefits agreement with the host neighborhood. But the community’s initial request for benefits totaling $39 million was negotiated down to $10 million by the company.
Across the country, Americans have been told that big, corporate-owned, taxpayer-supported projects like the ones put forth by Amazon, Gilbert, the Ilitches, and Ford are what will grow our economy. Well, guess what? When we shift our public dollars away from our schools and city services and into company developments, it increases the root causes of poverty: unemployment, underemployment, lack of community resources, and lack of quality public education. One in eight Americans now lives in poverty, creating a class of citizens who are being left behind.
A 2018 Harvard Business School study showed that corporate tax cuts increase income inequality and push more Americans into poverty. If developers want our public dollars, the exchange must come with real accountability and a higher standard of responsibility.
This is why more and more working class communities are creating community benefits movements that require corporations who want public handouts to enter into legally binding agreements with teeth, requiring sustainable resources for host communities. From capitalizing housing trust funds, which allow low-income people to obtain grants to fix up and stay in their homes, to creating job training programs in schools, these are the kinds of economic stimuli that will give families the opportunity to thrive.
We must do our job in Congress, as well, to ensure that our communities back home are protected. When we are asked to bail out corporations and banks, or pass tax bills that shift billions in public dollars out of government, we must ask ourselves, who were we truly sent here to advocate for?
Rashida Tlaib is the representative-elect for Michigan’s 13th Congressional District.