IAFF TAX ABATEMENTS & GASB STATEMENT #77
WHO s GASB? Governmental Accounting Standards Board Governmental version of FASB (private sector) Creates Generally Accepted Accounting Principles (also known as GAAP) for government Non-Profit standard setting board
GASB In our world most famous for statements on pensions and OPEB funding that are detrimental to our members. Since compliance can affect governmental credit risks, GASB statements are more enforceable than NFPA and many times have the force of law.
GASB & GAAP COMPLIANCE GASB estimates GAAP usage: ~80% of counties ~71% of school districts ~76% of cities and towns
CORPORATE WELFARE-HOW BAD IS IT? OVER $70 Billion a year Property Tax Abatements TIF-Tax Increment Financing Corporate Income Tax Credits Enterprise Zones Project Infrastructure Personal Income Tax Diversions Training Grants
CORPORATE WELFARE vs PENSION Arizona California Colorado Florida Illinois Louisiana Michigan Missouri Oklahoma Pennsylvania $552M vs. $475M $9.7B vs. $6.8B $593M vs. $180M $3.8 B vs. $906M $2.4B vs. $1.9B $1.8B vs. $348M $1.9B vs. $587M $840M vs. $427M $479M vs. $222M $3.9B vs. $1.4B
Localities Less Transparent than States 2/3rds of big cities & counties fail to disclose Non-disclosers include Charlotte, Cook County (Illinois), Dallas, Harris County (Texas), Los Angeles (city and county), Miami-Dade County, Philadelphia, and San Francisco. Memphis, New York, Austin, Chicago get top transparency grades
Chicago TIF versus Pensions Tax Increment Financing (TIF) now diverts 10% of Chicago property tax revenue! TIF costs exceed pension obligations Debate changes from Mayor 1 Percent s tax hike to TIF redirected for pensions Sponsors: IAFF, AFT, SEIU, AFSCME
Memphis PILOTs vs. Pensions PILOTs consume 14% of Memphis property tax revenue PILOT costs exceed pension obligations Chamber of Commerce forced onto defense by Fire Fighters Issue prominent in 2015 mayoral election Agency becomes hyper-transparent
Paying Taxes to the Boss 16 states allow companies to effectively keep some of employees state personal income taxes 2,700 companies Loss to states: ~$700M/year
Required Disclosures If Disclosing Body Granted Abatement Program name Program purpose Authority to abate Eligibility criteria Abatement mechanism Recapture or Claw back provisions Dollar amount of abatement Amounts received or receivable from other governments associated with abated taxes Other commitments by government
REQUIRED DISCLOSURES By Other Governments Name of Government Tax being abated Dollar amount of abatement Amounts received or receivable from other governments associated with abatement Information omitted due to legal prohibitions
NOTES FOR NOW
GOOD JOBS FIRST RESOURCE FOR LABOR Website with several tools @ www.goodjobsfirst.org Expert technical assistance Training, speaking, testifying Partnerships with coalitions such as NPPC Exec. Director Greg LeRoy ALTS class
First CAFR Releases April 2017 Columbus, OH Fairbanks, AK May 2017 Denver Co New York City, NY June 2017 Anchorage, AK Augusta, GA Charleston, SC Fargo, ND Indianapolis, IN Little Rock, AR Minneapolis, MN New Orleans, LA Omaha, NE Pittsburgh School District, PA St. Louis County, MO Seattle, WA Sioux Falls, SD Wichita, KS July 2017 Milwaukee, WI
MULTIPLE USES Pension Funding Battles Negotiations Campaigns
EARLY CASES MEMPHIS CHICAGO
QUESTIONS?