GE’s tax avoidance: “Imagination at Work”

The General Electric saga took another turn with reports on emails that circulated among city and state officials showing a fevered effort to lure the company, a push that involved significantly increasing the city tax break and state incentives offered to the global multinational in exchange for siting its headquarters in Boston.

Emails obtained through public records requests by WCVB-TV and the Globe show that city officials wound up more than doubling the property tax break offer to GE — from $8 million to $12 million to the final amount of $25 million over 20 years.

Daniel Koh, Mayor Marty Walsh’s chief of staff, tells the Globe the tax deal got sweetened when it became clear GE wanted a much larger footprint for its headquarters. He said it was also driven by competitive pressure to win out over New York City, Providence, and other cities vying to land the firm.

“We didn’t want them to walk away,” Koh said. “We wanted to make sure we closed the deal.”

State officials also roughly doubled the size of the incentive package they offered, the emails show, finally landing on a figure of $120 million.

The city’s assessor, Ron Rakow, seemed stunned by what Boston officials were prepared to offer GE. Before the final $25 million figure was agreed to, the city was considering increasing the abatement offer to $20 million. “Its [sic] the number I’m choking on,” Rakow wrote in an email to John Barros, Walsh’s chief economic development aide, the Globe reports.

The story of how Boston landed GE has never quite added up. Company officials insist that incentives were not the driving factor behind their decision, saying they were drawn by a wish to be in the heart of the region’s rich innovation economy. City and state officials nonetheless are defending the public dollars as worthwhile — and necessary — outlays that will be more than repaid by GE’s economic impact over time. It’s almost as if the incentive package represented more of an expression of just how much GE was wanted, even if was an expression with a public price-tag.

GE’s apparent indifference to tax issues was also on display earlier this week, when the company’s CEO, Jeff Immelt, said at an event in Boston that the possibility of a new Massachusetts tax on personal income of more than $1 million didn’t weigh in the company’s decision.

“Really, I think, believe it or not, most days what we think about is how we can sell more jet engines and gas turbines and we let the rest of the chips fall where they may,” said Immelt.

Immelt almost makes it sound like GE is just an oversized platoon of geeky engineers, too focused on building the “industrial internet” to get all caught up in tax matters.

That picture leaves out the company’s reputation as one of the most aggressive corporate tax avoiders. According to a 2011 New York Times investigation, the company combines “fierce lobbying for tax breaks” with a “giant tax department”  that is “often referred to as the world’s best tax law firm.”

“Indeed,” says the Times story, “the company’s slogan ‘Imagination at Work’ fits this department well.”

–MICHAEL JONAS

 

BEACON HILL

Here is an in-depth CommonWealth backgrounder as the Senate gears up for a big charter school debate today with the threat of a divisive November ballot question looming if Beacon Hill can’t settle the matter. (CommonWealth)

The compromise solar net metering bill is on a fast track through the Legislature and likely to be signed by the governor. With the exception of the Sierra Club and Associated Industries of Massachusetts, most advocacy groups are backing the legislation.(CommonWealth) Rep. Brian Dempsey of Haverhill, a top House leader who helped craft the compromise bill, slams AIM, saying the business group misread the political landscape after 100 House members urged the conference committee to resist efforts to lower net metering rates. (State House News) Don’t forget Dempsey misread the political landscape in November when he helped ram a bill more to AIM’s liking through the House.

The Supreme Judicial Court holds that a retired Peabody policeman can keep his pension despite a criminal conviction for a job-related offense. (Boston Globe)

House Speaker Robert DeLeo and Dempsey bring their no-new-taxes message to the Merrimack Valley Chamber of Commerce in Haverhill. (Eagle-Tribune)

Debate is heating up on Beacon Hill over legislation to rein in the cost of pharmaceuticals. (Boston Globe)

MUNICIPAL MATTERS

Boston City Councilors vote to double the length of their terms from two to four years. (WBUR)

Boston Marathon officials say 5,000 police officers will be on hand at the big race and urge the public to leave backpacks and drones at home. (WBUR)

Fall River Mayor Jasiel Correia says if sanitation workers don’t accept his contract proposal by an unspecified “drop dead” date, he will privatize trash collection in the city. (Herald News)

Telegram & Gazette columnist Dianne Williamson savages Paul Moosey in a funny sort of way for failing to plow the streets of Worcester.

For the first time since Plymouth adopted the Community Preservation Act 14 years ago, Town Meeting members rejected the purchase of a beachfront property. (Patriot Ledger)

The Globe finds it’s not just the mouse-infested Stop & and Shop in Roxbury that has had health code violations.

WASHINGTON/NATIONAL/INTERNATIONAL

Sen. Elizabeth Warren is featured in a comic book. Really. (Masslive)

The window for criminal justice reform is closing in Congress. (Governing)

Marijuana sales save DeBeque, Colorado. (Governing)

ELECTIONS

As CommonWealth did last month, Yvonne Abraham spotlights the two women vying in next Tuesday’s seven-way Democratic primary for the First Suffolk and Middlesex state Senate seat. (Boston Globe)

Could Donald Trump carry Massachusetts? Unlikely, explains MassINC Polling Group president Steve Koczela. (WBUR)

Kimberly Atkins says a complacent Hillary Clinton could be caught napping on the job like Martha Coakley in 2010. The awkward cast shuffle in this analogy has Bernie Sanders playing the role of Scott Brown. (Boston Herald)

BUSINESS/ECONOMY

New federal rules mean brokers must operate in the best interest of their clients. (Boston Globe)

Jim Judge, the chief financial officer at Eversource, is preparing to take over the CEO’s job when Tom May retires next month. (Masslive)

Producers of the Boston Marathon bombing movie Patriot’s Day, whose request to film the search sequence in Watertown was turned down, will use Rockland as a stand-in. (The Enterprise)

A Cains Foods plant in Ayer is going to shut down in 2017, costing 100 people their jobs.. (The Sun)

Minutes from the Federal Reserve’s March meeting show division and inconsistency among members on whether the board should raise interest rates, which it declined to do at the time. (U.S. News & World Report)

The federal Consumer Product Safety Commission has issued a recall of Chinese-made scarves manufactured and sold under the Ivanka Trump brand because of flammability concerns. (New York Times)

EDUCATION

Springfield Central High School now has gender neutral bathrooms for students and staff. (Masslive)

HEALTH/HEALTH CARE

Neighborhood Health Plan is restricting the access of its Medicaid enrollees to specialty care at Boston Children’s Hospital, citing its high rates. Ironically, NHP is owned by Partners HealthCare, whose flagship hospitals are regularly in the crosshairs for their sky-high rates compared with other hospitals. (Boston Globe)

 TRANSPORTATION

The MBTA says it discovered discrepancies between cash receipts and parking counts at the North Quincy station, but officials are being tight-lipped about how much money was lost. (CommonWealth)

ENERGY/ENVIRONMENT

A state board dominated by appointees of Gov. Charlie Baker rebuffs Cape Wind, refusing to issue an extension of a permit the wind farm company needs to build a transmission line to bring power ashore. Baker, of course, is no fan of Cape Wind, calling it a sweetheart deal for its backers during his unsuccessful run for governor in 2010. (CommonWealth)

Only two members of the public show up at a hearing in Lawrence on a proposal from National Grid to raise its distribution rates 7 percent. The attorney general’s office is opposed to the increase. (Eagle-Tribune)

At a Department of Public Utilities hearing in Lynnfield, angry residents battle against Kinder Morgan’s bid to come on their land to do survey work on the company’s proposed natural gas pipeline. (Salem News)

A longtime activist is urging Attorney General Maura Healey to protect the soon-to-be-closed Pilgrim nuclear power plant from a terrorist attack by requiring the facility’s owner Entergy to more quickly place spent fuel rods into dry casks even if the money has to come from the decommissioning fund. (Cape Cod Times)

CRIMINAL JUSTICE/COURTS

Local local enforcement officials are welcoming word from the FBI that it’s willing to help them unlock encrypted smartphones that could play a role in solving crimes. (Boston Herald)

The Westfield mother of a 1-year-old who overdosed on opioids is being charged with reckless endangerment. (Masslive)

Republican congressmen opposed to plans to close Guantanamo Bay say they don’t want terrorists held on the mainland but a New York Times investigation finds hundreds of convicted terrorists already held in American prisons, including at least two in Massachusetts.