Good Public Policy, Not Bad Politics

THE REVERE JOURNAL, WEDNESDAY, AUGUST 3, 2011, PAGE 5

By Dan Rizzo

In light of my opponents misguided views regarding NECCO, as well as in response to his continued negative and personal attack ads taken in both the Revere Journal and Revere Advocate, I feel compelled to shed some light on this very important issue which I believe has a dramatic impact on each and every one of us living in Revere.

First off, for the record, let me state that As Mayor, I will always support policies and economic development initiatives that are good for Revere. Such is the case with regards to NECCO.

Currently, NECCO pays a combined total of over $1.3 Million dollars in property taxes and water and sewer fees. These revenues fund our police, fire and public schools. It is these types of companies and it is these types of policies that should be encouraged for the future of our city- not election time politics.

Now, let’s talk about the facts of this agreement. In 2003, Revere and NECCO joined into a contract that granted NECCO a TIF (Tax Increment Financing) arrangement. Let me explain the basic fundamentals on why we grant TIF’s and what the advantages are to the city.

I think everyone would agree, we are living in a “global” economy. Manufacturers have left Massachusetts and the United States in droves to reduce their cost of goods and operations. Because of the smaller number of companies choosing to stay invested in America and in our case, Massachusetts, we are competing with other cities and towns for these companies business. The way we compete is to offer these types of agreements. Now, I suppose we could have passed up the chance to win over NECCO to Revere, however, where would we make up the $1.3 Million dollars that their paying this year alone? They use very little in the way of services; we don’t educate any children out of NECCO; we don’t pick up any trash or recycling at NECCO; and we very rarely have to respond with respect to police, fire, or public works. They are an asset to this community.

What we gave NECCO was tax savings only on the annual growth or assessed value. This is not “corporate welfare”- this was a pre-negotiated agreement we approved to bring a major taxpayer into Revere! This agreement is for 20 years and goes down each year to where in the year 2013, it is down to a minuscule 1% credit! Now, in fairness, there were conditions that NECCO had to meet in order to maintain this TIF agreement. NECCO was required to renovate and upgrade the building, and they were required to create job opportunities for residents of Revere. There was just one little problem......

As I said at Monday night’s meeting, you don’t really have to have an advanced degree in economics to understand that we are living in what most people believe is the single longest standing recession in over 70 years. Every business across this country is struggling. NECCO is not immune from the American economic conditions as some would lead you to believe. Inspite of some really difficult years, NECCO managed to only suffer a net loss of three (3) jobs!!! If revenues go down, how can companies bring on personnel? It’s unrealistic.

As for renovating the building, NECCO did live up to their end of the agreement by adding millions upon millions of dollars in plant and equipment. Currently they are operating at only a 20% capacity with plenty of room for growth using their state of the art machinery to produce candy both for private label and on a subcontracting basis once this country starts moving into a real recovery.

The company was expected to transfer nearly 500 jobs to their new site in Revere, which they did. These employees assumedly shop at some of our locally owned stores and eat at some of locally owned restaurants. NECCO agreed to give Revere and the surrounding communities’ preference on job opportunities, which they have. Thirty families in Revere are sustained by virtue of their employment at NECCO.

This past Monday night, the partnership between NECCO and the city of Revere was regrettably tarnished, but not destroyed. Thankfully, using basic budgetary understanding, the City Council, in a 10-1 vote, agreed to honor the agreement and continue with the TIF program.

Giving NECCO a TIF is not a bailout, far from it. It is a tool that is used to draw large taxpayers to our community that provide jobs and generates significant commercial tax revenues; our only hope to offset rising residential taxes.

One last footnote; you may have heard or read the rhetoric about why other businesses or individual homeowners are not given tax breaks. The answer is simple. There are not many small businesses (and I am one) or individual taxpayers that come close to paying what NECCO is paying- over $1.3 Million in taxes and fees. We will always compete and try to entice businesses of this caliber to come into our community, obviously in areas that are appropriate. It’s safe to say that we are not going to compete for the development of single family homes- it just isn’t realistic.

Revere is faced with high property taxes, expected budget cuts, an increasing need for a stronger police presence, and an ever increasing student population in our schools due to the city’s population growth.

These problems are difficult and will take strong leadership to manage, but these problems are not insurmountable. Economic development through programs like this one with NECCO is the kinds of things we need to encourage, not attack. Without the money we receive from NECCO and companies like NECCO, more services will have to be cut.

It is simply irresponsible to use NECCO and their TIF agreement as a negative political campaign tactic. Any legitimate candidate for Mayor should be talking about how we can use our designation as an Economic Target Area as an effective strategy for growth like our neighbors in Chelsea under the terrific leadership of Chelsea’s City Manager, Jay Ash. This is where real proven leadership comes into play. You will always know where I stand- there’s no debate on this- I stand with the taxpayers of this community.