Virginia

Embattled Virginia Gov. Ralph Northam Signs Bill Authorizing $750 Million in Cash Subsidies to Amazon

No one is calling for the governor's resignation over the huge transfer of taxpayer dollars to a private company.

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JAY PAUL/REUTERS/Newscom

Embattled Virginia Gov. Ralph Northam has signed a huge incentive package aimed at online retailer Amazon that could see the company get millions in taxpayer-funded grants.

On Tuesday, the Richmond-Times Dispatch reported that Northam signed Senate Bill 1255, which creates a new "Major Headquarters Workforce Grant Fund" that will make available $550 million in grants to any "qualified e-commerce company" that invests at least $2 billion in an Arlington County, Virginia headquarters, and adds a minimum of 25,000 jobs paying an average of $150,000 a year.

Should this "qualified e-commerce company" add up to 37,580 jobs at its new Arlington headquarters, it could receive an additional $200 million in subsidies, bringing the grand total of taxpayer assistance authorized by the bill to $750 million.

The intended recipient of the bill is obviously Amazon, which announced plans to add 25,000 jobs at a new Arlington headquarters complex in November of last year.

That same month, Northam publicly released a "Memorandum of Understanding" between the Virginia state government and the e-commerce giant, promising the company an identical deal to what the governor signed today. That memorandum also included a promise of $295 million in state infrastructure investments in and around Amazon's new headquarters.

Offering massive subsidies to companies as a way of luring jobs and investment is hardly a practice unique to Virginia, although this specific proposal to award Amazon nearly a $1 billion in cash payments—as opposed to tax credits or abatements—is somewhat unusual.

The $3 billion in government incentives offered to Amazon to set up another 25,000-person headquarters in New York City, for instance, were mostly city and state tax breaks.

A bill ratifying Northam's Memorandum of Understanding with the online retailer flew through the state legislature. The state senate passed the bill in a lopsided 35-to-5 vote. The state's House of Delegates approved the bill with an equally uneven 83-to-16 vote.

No one was more pleased with the signing of the bill today than its sole recipient.

"This is an investment in the growth of Virginia. It will help diversify the economy and serve as a catalyst for drawing in other businesses and sought-after jobs," said Amazon spokesperson Jill Kerr to the Times-Dispatch.

The subsidy bill signed into law by Northam today, while sizable, is far less than some of the other subsidy deals offered by other states and municipalities in their desperate bid to lure Amazon to town.

One of the last acts of Chris Christie's tenure as governor of New Jersey was to sign a bill greenlighting $5 billion in incentives should Amazon set up shop in the Garden State. Maryland Gov. Larry Hogan floated a similarly sized $5 billion incentive package in January 2018.

The fact that Amazon passed on these more generous bids suggests that the subsidies signed by Northam today were not all that necessary.

"At the end of the day, it suggests that even New York City and Virginia and Nashville didn't really need to offer those subsidies, because Amazon is chasing other factors," Michael Farren, a research fellow at the Mercatus Center, a free market think tank housed at George Mason University, told Reason's Eric Boehm back in November 2018.

(Amazon was awarded $102 million in state and local incentives for adding a smaller, 5,000-person headquarters in Nashville, Tennessee.)

Certainly, one would think that a company capable of hiring 25,000 people at an average salary of $150,000 would be the last entity to need taxpayer support. The money Virginia taxpayers will be spending on Amazon either means fewer dollars for genuine public services, or higher taxes for the state's residents.

Northam is receiving a lot of heat right now for a photo in his medical school yearbook showing a person in blackface standing next to a person in a KKK costume. Northam has forcefully denied being in that picture, but has admitted to wearing blackface during a 1984 dance competition.

These revelations have spurred calls for Northam to resign, something the governor has so far resisted.

His signing over of as much as $750 million in taxpayer subsidies to one of the most successful private companies in the world is a reminder of how terrible politicians can be even when going about the normal business of policy-making.

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  1. No one is calling for the governor’s resignation over the huge transfer of taxpayer dollars to a private company

    that’s not “sinful”.

    1. No one is calling for the governor’s resignation over the huge transfer of taxpayer dollars to a private company.

      I’m no one?

      1. You’re some guy

  2. Although I respect his commitment to expanding abortion access, Northam must resign. He cannot recover from this yearbook scandal.

    1. People change. Elizabeth Warren just changed her heritage.

      1. Sorry. Not good enough.

        If Northam had, for instance, driven drunk and killed someone, that’s the type of mistake I could overlook. But wearing blackface in medical school? That’s unforgivable.

        1. Wearing culturally-appropriated Native Aboriginal costume was forgivable?

    2. What about LG Fairfax?
      What about AG Herring?

      Who’s next??

      1. I had no idea who Herring was until today. And I need more time to evaluate the Fairfax allegations and whether they meet the #BelieveWomen standard.

        1. Too late. His forceful response to the allegation proves that he is unfit to serve.

      2. Can Herring chop down the largest tree in the forest?

      3. Didn’t Herring previously admit to having worn blackface in HS? We need to go one more run down the ladder, at least

    3. Yup, he expanded that abortion access right into Govt. sanctioned killing of a live just born baby!…Good job, Ralphy Boy!!

  3. The fact that Amazon passed on these more generous bids suggests that the subsidies signed by Northam today were not all that necessary.

    Right? After they basically committed to move into Crystal City, Northam should have said, “Sonny Boy, My Mammy said you’re gonna Cary Me Back to Virginny whether you get that Darkey Money Musk or not.”

    1. Maybe Amazon would have taken less money if Northam’s wife had let him moonwalf for Bezos like he wanted to.

      1. blackface to look like Mike Jackson implausible.

  4. It’s a logical fallacy to think that because Amazon turned down larger offers, no offer was necessary.

    Whether this is a good deal is a separate question.

  5. Its the birth of Amazon nation.

    1. Governor Afterbirth of a Nation

      1. +100

  6. “Northam has forcefully denied being in that picture, but has admitted to wearing blackface during a 1984 dance competition.”

    No. At first he admitted it was him and then the next day he decided that it totally wasn’t him.

    At this point it doesn’t matter if it was him or not. His forceful reaction to the allegation shows that he lacks the temperament to be governor. That’s how this game works, right?

    1. That guy in the central picture on a yearbook page with my name across the top of the page? Wasn’t me.

    2. “I wasn’t in blackface, I was wearing a white medical coat and a cap to match. The cap was a bit bigger than I thought it would be.”

      1. And I used to wear a coonskin cap at VMI. That is why they called me Coonman.

        1. That, at least, seems somewhat plausible. I’ve known more than one country boy who hunted a variety of varmints.

        2. skunk make mighty fine caps, too. That big black tail with the pure white racing stripe smack dab in the middle of it are something to see hanging down someone’s upper back.

  7. I see a gotcha — “adds a minimum of 25,000 jobs paying an average of $150,000 a year” — I doubt Amazon HQ in Seattle averages any where near $150K.

    1. Each >$1M executive offsets a lot of MW schubs.

      When will they hit 25k jobs?
      Does the $150k include taxes, insurance, etc.?
      What is the penalty if they fall short?
      How will part timers be counted?
      What percentage will be executives?

      The mind boggles …

    2. Maybe all those Virginia Amazon jobs are going to be lobbyists. Just think you’re a Congressman who needs some extra pocket money or a rent seeker needing to kneecap a competitor. Amazon provides the middle man to deliver the bribe goods. Probably in less than 20 minutes.

      1. Think you are on to something. Also, Crystal City is right next to the Pentagon, which has lots of logistics expertise for Amazon to tap into. I seriously doubt there will be anything near 25,000 jobs, but hey it sounded like a good enough reason for Ralphy boy to hand over $750 million to a part of the state that really doesn’t need a penny of it. Oh, and he has now hired an African American PR firm to help get him out of the blackface fiasco. I didn’t think it would be possible for a governor to suck more than Tim Kaine or Terry McAulliffe but you win Ralphy…

  8. Virginia AG Mark Herring admits wearing blackface at 1980 college party

    Is Virginia about to get Republican Gov. Kirk Cox?

    This is crazy! All three top Virginia Executive Branch Democrats are embroiled in scandal. This might lead to Kirk Cox, the Republican who is the head of the Virginia House of Delegates, being Governor or temporary Governor.

    1. So now people will be chanting “We want Cox! We want Cox!”

      1. I hope it is a crowd of wimmin wearing white.

      2. Not that there’s anything wrong with that…

    2. Not gonna happen-Northam is planning to ride this out and hope that it will blow over-he’s even hired a PR firm to help, or that the progs who are pissed with him over this will refocus their outrage on the evil orange one. If anyone gets thrown under the bus, it will be Fairfax, Herring’s “crime” doesn’t seem so bad in contrast.

  9. Virginia Gov. Ralph Northam Signs Bill Authorizing $750 Million in Cash Subsidies to Amazon

    Can I have some of that $750 million, or am I too late?

    1. sidle up to Mackenzie.

  10. Governor Coonman bringing home the bacon.

    1. How about the fried chicken & watermelon?

  11. Where are the anti-corporate welfare dems on this?

    1. Actually a lot of democrats in Virginia seem pretty pissed about this.

  12. Amazon get more then enough from their continual fleecing of their independant sellers, and rake them in several ways. They repeatedly violate pricing agreements with manufacturers, selling WAY under binding contractual pricing. They NEVER get enough from the buyer to pay anywhere near actual cost for shipping, and there’ s nothing for dunnage, packaging, etc. They also pressure USPS for shipping costs far lower than anyone else can get so that means the rest of us must subsidise the post office.

    And Jeffie has the unmitigated gall to hold out his hand for an YUUUUUUUGGGEEeeeee subsidy? If THAT guy needs financial help, WHY is he still in business?

    Amd some politiians are calling for higher income taxes on the wealthy but think this is OKAY? Yeah, where’s the Uranium One Memorial Kickback, again?

  13. Sounds like the old shell game. Two racists, one rapist, guess which shell holds the rapist.

  14. I can’t understand how there hasn’t been an equal protection challenge to taxes that are not uniform. And by uniform I of course mean applicable to everyone, not applicable to everyone in theory. A tax deal that only applies to a single company is no different than a bill of attainder.

    And if this can be done with companies, what’s the limiting principle that would prevent it from being done with individuals? What’s to stop a governor, who happens to have a terrible NBA team in state, from crafting a hyper-specific income tax law that grants Lebron a 0% rate plus kickbacks?

    1. I think you stumbled upon the original meaning of “general welfare”.

  15. So bad judgement does not dissipate with age.

  16. A small town I lived in in CT lured Fortune 500 company headquarters back in the 60s and found out that the extra services & infrastructure were far more costly than the economic benefits of more traffic congestion. People who run cities/states giving away tax $ for companies are idiots. Bezos made Amazon, not some politician who wants to piggyback.

    1. Amazon may be the shit now, but things can change quickly in the business. Everyone was excited when GE moved its corporate HQ to Boston a few years ago, and now the company is in debt and laying off thousands of employees. Sam could happen to Amazon, in fact, they might decide sooner than anyone would think that they don’t need both new HQs, so Virginia taxpayers will be caught holding the bag.

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