Google-NASA Partnership Backlash

Morgalyn writes "Apparently having more jobs moving into the area isn't enough for Santa Clara County. They want some revenue from Google, and are peeved that they are avoiding paying property taxes by building on government land. According to a representative of the county, 'If public land is being used for private purposes, the tenants should be paying local property taxes... We have $30 million in unfunded retirement liabilities. We need the money.' They aren't getting the land for free according to NASA: 'Google will not save any money by building on our property. They have to pay full ground rent based on fair market value and all the municipal-like services we provide like police, fire and garbage.'"

Public demand beats

[eebra82]

So what if the public demand is of bigger interest? In my opinion, Google brings stuff to people, stuff making your life just a bit easier. And free. NASA should endulge this.

Benefit and loss?

[plnrtrvlr]

OK, so Google isn't locating it new venture on public property, and the article seems to indicate that it wont be using any public services It is unclear (by the article) who will be providing actual sewage services, though it does state that Google will have to construct them. Has anyone in the county bothered to do a benefit and loss comparison with what remains? How many new employees will be purchasing fuel, lunches, snack food, stopping for groceries on their way home, paying sales taxes as they do? How many people will relocate to the area and build new homes, paying property taxes and school taxes? How many new jobs will be created in the service economy of the area to support these people working and moving to the area? Here in upstate NY it would be afairly safe bet that most any town/county would welcome an arrangement where a large company movs to the area, doesn't consume services and so doesn't pay for them, but adds significantly to the local tax base in terms of jobs and consumption. Think about it, If it is such a terrible deal for the area, then why would they even want the Ames research facility there inthe first place? Why would any town, county or state want any government installation located within their borders? Most places with a military base near them shudder at the thought of a base closing, and it's because such bases contribute greatly to the local economy without adding to the service load. Furthermore, most places meter such services as water with a built in assumption of "what goes in must come out" and bills the water and sewer together based upon that assumption. Somebody needs to get their facts together as to what new jobs will be created and do a side by side benefit and loss comparison before they start screaming about the lack of tax revenue. One million square feet of development could easily employ enough new people to more than make up for the property tax loss.

Re:Google Searching For Tax Break? (news article)

[Zenki]

I guess it depends on who really benefits.

I think in most cases, property taxes are collected by the local municipality, and it's really their primary form of income.

Sales tax is usually state-wide. So all that added commercial activity in the area is going to California, not the local municipal governments.

Paying NASA is just paying NASA.

The city is now going to have to deal with issues such as increased traffic, upgrading public utilities, etc., and they're not going to get the money to handle it. I'm not surprised that they are ticked off at this.

Google is winning big, and at the expense of the local people.

Politicians are the same everywhere

[Morgaine]

They want power, by having people and companies dependent on local infrastructure.

And they want money through taxes, which equates to power for them to implement whatever *they* want. The near-zero regard that politicians have for the wishes of the people who elected them is almost universal.

I hope Google tell them to take a running jump.

The issue of Google not contributing to the building of extra transport infrastructure for 4000 jobs is easily handled, and it's not just specific to Google. All large corporations should be expected to make good use of teleworking and office hot-desking wherever it is desired by the workforce and feasible in the business, as it certainly is in IT. In a networked age, a company's whole IT staff driving in at 9am and home at 5pm is just plain nuts.

I think the city SHOULD get the taxes

[jmulvey]

The federal government, much less NASA, doesn't get local tax exemptions so that they can rent the land to corporations. And just because NASA is charging them "full price" rent, doesn't mean they will when some other corporation that makes the "right" campaign contributions will have to pay "full price".

This arrangement is not fair to the other corporations in the city, and it's not what federal tax exemptions were designed for.

Question on the article...

[tkrotchko]

If google is *renting* the building, how would they be liable for any special taxes related to coming to the county?

I get that by moving to a federal building on federal land they don't get money from the federal government for property tax.

But think of the alternative. Google rents some space from "Joe's Management Company". There still is no additional revenue from taxes. I'm not a tax expert, and I can't even spell "CPA", but this article seems to have a flawed premises.

Ignorance rules this earth

[m0llusk]

This comment is completely ignorant of the realities of what is going on. The Moffet complex recently had most federal functions taken away which is why the land is being used now for other purposes. Google grew in the valley and would almost certainly put most of its expansion in the valley, so there is none of this luring business with tax incentives junk that usually goes on. Businesses themselves have been campaining for bigger freeways and more light rail such as recently installed in this location, so instead of making up junk about grasping local governments it would make more sense to try and deal with the reality of business and government working together to understand community needs and pay for them together. The idea behind the revitalization of Moffet was to bring in valued institutions that the public can get value from such as the new Carnegie Mellon campus which is a center for learning and research, not tax-free profits. This comment is based on a thorough misunderstanding of local history, politics, services, and commercial activity in this area.

Cry me a river

[hotspotbloc]

Greg Perry, a member of the Mountain View City Council, echoed that sentiment. "If public land is being used for private purposes, the tenants should be paying local property taxes," he said. "We have $30 million in unfunded retirement liabilities. We need the money."

Over the last few years the real estate prices in Mountain View have skyrocketed almost solely because of Google and their cash rich employees (like $2m USD for a nice three bedroom house that would cost ~$400k in a typical "farm belt" community of the US). As prices rises, surrounding values rise and real estate tax revenue rises (to a certain point). Mountain View is now enjoying a major cash influx but yet they want more like most other government entities.

The conflict echos of many past economic conflicts: Company A (the City of Mountain View) is well seasoned, controls the market and has become fat, lazy and leech-like from the lack of competition. While they do many good things they are unwilling to fix the major flaws that are bleeding them dry like, for example, a vastly overstaffed police department unwilling to cut a single position. Company B (Google) is the new upstart, flexible and lean, that is creating wealth for themselves and those that support them. The City of Mountain View has seen quite a few local businesses created to support Google and Google employees that generate millions of dollars each year in tax revenue.

It's a bit like the City of Cambridge, MA vs. MIT and that other school. While they do pay into the local coffers what would be a somewhat appropriate tax for their real estate the City still wants more. But what would Cambridge be like without them? How many local businesses with their high paying research jobs would be there without the talent these schools recruit? While these schools generate less direct tax revenue from their properties then their commercial counterparts they do generate, IMO, much more overall indirect tax revenue. Will MIT every move off of Mass. Ave. because of high taxes: doubtful. Google, on the other hand, could easily leave Mountain View for greener, and cheaper, pastures.

Like it or not "free market" forces can not be denied. If Mountain View becomes too rich for Google they will move elsewhere like so many other businesses and Mountain View will be left as a rotting shell like so many other US cities that have lost their major private employer. Be it to another city, state or county they will move. It's happened millions of times in the US since the early 1970's.

Here's my suggestion for Google employees: take one weekend and everything you buy locally buy with $2 bills. For those outside the US the $2 bill, while rarely used, is legal tender. $2 bills stand out and the massive influx of them will get noticed. Each $2 bill used that weekend is an advertisement for Google's economic force in the community. Those $2 bills will spread to many, many people that think they have no connection to Google. I suspect the media would latch on to the story too.

Google brings in a ton of money to Mountain View and IMO their positive economic impact needs to be taken into consideration when judging what their fair tax responsibility should be. City officials in Mountain View need to take a moment to imagine their city without Google and where they'd be.

RTFA People

[bilsaysthis]

Forget about Greg Perry's underfunded pension whining, that's a red herring. Though as someone who's lived in Mountain View for eight years I would say that our city council has done a pretty good, though far from perfect, job in the face of a terrible economy the last four years.

A big problem I have with this deal is that Google is not just building office space on federal land but also housing (up to 2,000 units) and retail space. Guess what? There won't be any taxes paid on the homes and stores either. Most Google employees are younger, many in the age range when having kids is common, and those children will be going to local schools even though this deal will avoid paying into the school district to fund the increased enrollment.

For those of you who said that hey, it's not like Google was paying local taxes now, I guess you forgot where the company's main office complex currently sits. That would be Mountain View and so, yes, they do pay local taxes because of it and that money would evaporate with this deal.

Even given these negatives I do believe that Google and NASA should make the deal; the underfunded pension liabilities are indeed irrelevant. However, if the company executives want to live up to "Do No Evil" then they should alter the terms to account for the cost the development will incur. Otherwise this will be just one more in the recent skein showing Google's corporate morality is now second banana to a misguided self-interest.