Cries of corporate welfare - FOX13 News, WHBQ FOX 13

Cries of corporate welfare

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Some Memphis City council members are pointing to a particular line in the mayor's budget.

Mayor A C Wharton wants to give $3.5 million International Paper for improvements to its main campus, for what he calls an investment in public infrastructure and safety features.

But some say it's not the government's job to offer handouts to private businesses.

Councilman Lee Harris told FOX13 News the #3.5 million was sprung on council Tuesday and he was completely surprised and discouraged. The councilman flat doesn't like the idea and says government should be about essential services which benefit the public, like parks and neighborhoods.

"It's discouraging not the way government should be done," Harris said. when we do these kind of things should really scrutinize it."

Councilman Harris points out that Memphis taxpayers are facing at least a 28-cent tax increase, but Mayor Wharton says the public, not just International Paper, will benefit from the improvements. Those include an intersection, traffic signals and a pedestrian overpass.

Mayor Wharton said IP plans to continue to invest and the improvements are necessary due to the traffic patterns. He added that the Fortune 500 company stands behind the plan, but did express one regret.

"It has been in the package that was presented to The EDGE Board, which is public information," Mayor Wharton said. "All of the commitments that have been made. No it's not a backroom deal. Regret it to the degree council members did not find out about that. I will take responsibility, regret that."

In February Memphis city and Shelby County leaders approved to give a 15-year tax break incentive package worth $59 million to International Paper.

International Paper $59M tax break approved

"Again that has been studied by economists who have much more expertise and knowledge than I do," Mayor Wharton said. "They assured us this is a reasonable investment that we're making and we stand by that. I wished we did not have to do that but we're in an extremely competitive environment."

"It's a billion-dollar company," Councilman Harris said. "The $3.5 million has little to do with whether they stay in Memphis, smacks of absurdity on it's face. The company is going to make a decision about where it operates and how it conducts business on what's profitable to it. It's not going to base a decision on what the council does. The mayor's office does."

This budget item is not final, they'll review the item again during budget hearings next week. The $3.5 million is a piece of the $46 million capital improvements budget. Mayor Wharton says going forward he pledges to give more information and get a guarantee everybody's seen it.


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