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Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

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Re: Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

#91
post #28

> Google is promising to bring 50 full-time positions to the area. The company also projects that it will create 2,300 jobs during the 18–24 month construction window. Is this a joke? > State Sen. Andrew Mathews (R–Milaca) and state Rep. Shane Mekeland (R–Clear Lake) recently introduced a bill to provide an additional $20.1 million in state bonds to give the Becker Business Park—where the data center would be built—a…

==And it is a zero-sum game where another town loses the possibility for you to gain it. It is hardly a justifiable situation.== This is the most critical piece. What would legislation to address this at the national level even look like?

> What would legislation to address this at the national level even look like?

Any tax breaks offered to and accepted by a corporation reduce federal dollars provided to the state where the tax breaks were provided. Let the state deal with the accounting internally if you want to penalize locals directly for their actions.

This doesn't outlaw the tax breaks, but it does force states to feel the pain of doing it by making it net out. No different than when the federal government requires states to raise the drinking age to 21 by withholding highway funds.

If we can cap SALT deductions, this isn't much of a stretch beyond that.

Re: Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

#92
post #77
post #60

Earlier quoted context omitted.

No no no no. I'm not speaking game theoretically here, because there are a good many more factors that go into determining a "win" than the financials. Now from a money perspective, they won't get money from Google if Google DOES NOT move in, and they won't get too much money from Google if Google DOES move in. This is because the expenses on the infrastructure improvements to support a 600 million dollar data center…

I'm sorry, I'm lost. What are the expenses Becker (and the county) will incur if Google sites here? All we've identified so far is a 20MM bond for a waste pipe extension from the site, which doesn't appear to be part of Google's demand. Wisconsin coughed up (IIRC) over a billion dollars in direct infrastructure spending to support Foxconn. Nothing like that appears to be happening here; it looks like here we're just…

Why should taxpayers have to take the risk for Google if the opportunity and reason for Google to be there is already there? If it's already win-win for everyone, why even have the tax abatement?

Google being the extremely profitable company it is, shouldn't need to create liabilities for a market it's trying to promise jobs too.

a lot changes in 20 years and if its anything like the telco industry it will mean they will rely on these incentives for everything they do in the future because people seem willing to give it to them.

Re: Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

#93

From the linked MPR article ( https://www.mprnews.org/story/2019/02/25/wind-energy-tax-bre... ) > A Google data center often attracts other major technology-based companies to invest in the same area, Bertram said. I'm confused why this would be. What economic benefit would proximity to a Google data center bring, besides lower latency to some of Google's services? I can't imagine 15ms lower latency to a Google servi…

It could be something like impressions of the overall quality of infrastructure. Is Google going to put a data center where Internet speeds look like 90's dialup?

[deleted]

Re: Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

#94
post #68

Earlier quoted context omitted.

> Those justifications you lay out are real, but if you pay google for them in the form of a tax break it all balances out. It doesn't create value from nothing. Only under the assumption that $15M is the exact maximum amount that the city would pay for the listed benefits (i.e. the exact break even number). Probably it is worth more than that to the city (or else they probably wouldn't do the deal), so the reality i…

>Google is promising to bring 50 full-time positions to the area. The company also projects that it will create 2,300 jobs during the 18–24 month construction window—a far shorter period than the 20 years of tax relief they're requesting. After construction wraps, with 18 remaining years of tax abatement, there will be a $270,000 tax shortfall for every full-time position created. I read that paragraph from the artic…

I'm sorry, I can't comment on the specifics of the deal. I'm only trying to point out that the exact total amount of surplus is not necessarily equal to the amount of tax abatement Google is requesting (it could be more or less).

Re: Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

#95
post #28

> Google is promising to bring 50 full-time positions to the area. The company also projects that it will create 2,300 jobs during the 18–24 month construction window. Is this a joke? > State Sen. Andrew Mathews (R–Milaca) and state Rep. Shane Mekeland (R–Clear Lake) recently introduced a bill to provide an additional $20.1 million in state bonds to give the Becker Business Park—where the data center would be built—a…

>So, invest 1 million in politicians

i think you seriously overestimate how much it costs to purchase a state senator.

Re: Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

#96

Earlier quoted context omitted.

Every data center I visit is always established in an economically depressed area by design. No one wants their data center costs to be increased because of massive commercial growth outside the scope of needing internet and power. The bulk of data center jobs are for 50 trade skill type people but all of the brogrammers and developers will be in major cities working remotely since no one these days gets or needs acc…

There's no need to disparage software devs as brogrammers, especially in this context.

Not sure why you felt the need to be offended.

Re: Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

#97
post #36

Earlier quoted context omitted.

The only way seems to be to either to completely outlaw these negotiations, or create a standard rate (i.e. if the project will bring 100 jobs, the cities have the option but not the obligation to offer $10m in various forms of tax breaks— or maybe capped at $10m). The trouble is that, at a higher level, this unwillingness to play ball may just result in the companies fleeing to other countries rather than other stat…

You can't outlaw them without modifying the US Constitution due to the 10th Amendment as it concerns states rights. Individual states could outlaw it, but they would just be putting themselves at a disadvantage relative to other states that did not.

Interstate commerce?

Re: Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

#98
post #40

Earlier quoted context omitted.

@kartan, there is a lot of valid reasons to give an incentive such as a tax break to a large company, I will list a few: 1. Brand name corporation in your community, leading to new businesses propping up 2. Increase land-value in the area, leading to higher city taxes 3. Income, corporate and other taxes associated with the company's project & continuous operation 4. Long-term certainty. Most companies wont build a d…

1. There are already dozens of datacenters in Minnesota. They aren't prompting other businesses to pop up because they are self-contained and self-serving. Furthermore there is no "brand recognition" they are giant unmarked warehouses that could be a datacenter or could just be another nameless storage facility. 2. Why would a datacenter increase land value? This isn't a corporate headquarters, it's a datacenter. 3.…

>There won't be 2,000 jobs to build a datacenter, that's wildly exaggerated

There could be, they probably didn't pull that number completely out of nowhere. But there certainly won't be 2000 jobs for the duration of the construction. or 2000 new jobs.

I'm guessing it just creative counting, like if a crew of four people comes out to plant a couple trees by the front door, works for 4 hours total, and has no other involvement in the project, that's 4 jobs.

Re: Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

#99

From the linked MPR article ( https://www.mprnews.org/story/2019/02/25/wind-energy-tax-bre... ) > A Google data center often attracts other major technology-based companies to invest in the same area, Bertram said. I'm confused why this would be. What economic benefit would proximity to a Google data center bring, besides lower latency to some of Google's services? I can't imagine 15ms lower latency to a Google servi…

[deleted]

Re: Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

#100

From the linked MPR article ( https://www.mprnews.org/story/2019/02/25/wind-energy-tax-bre... ) > A Google data center often attracts other major technology-based companies to invest in the same area, Bertram said. I'm confused why this would be. What economic benefit would proximity to a Google data center bring, besides lower latency to some of Google's services? I can't imagine 15ms lower latency to a Google servi…

Peering agreements are a thing
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