FedEx Tax-Break Deal Wins Final Approval From Board in Collierville, Tenn.
The vote was 4-2 for the deal expected to run through 2038. Voting yes were Mayor Stan Joyner and Aldermen Maureen Fraser, John L. Stamps and John Worley. Aldermen Tom Allen and Billy Patton voted no.
The global shipping giant's high-paying jobs have shaped the town's economy and culture, and its presence serves as a selling point as the town tries to recruit more businesses. The vote also illustrates that in such tax-break matters, companies frequently hold most of the power because governments fear that if they don't provide the financial support the company wants, another community will.
Discussion on FedEx tax break has begun at C'ville town hall. Econ devlpmt director John Duncan speaking now pic.twitter.com/yYSKeN6y8c
— Daniel Connolly (@DanielConnolly) January 26, 2016Worley publicly pointed toward the example of General Electric, which this month announced it was moving its headquarters from Fairfield, Connecticut, to Boston.
"We need to keep FedEx and ... if we don't vote this in today, I'd be willing to bet there will be a hundred phone calls calling FedEx, 'Bring your headquarters to us. We'll take care of you.' "
The aldermen voting no said the benefits to FedEx will come at the cost of other taxpayers and that the town should have negotiated harder. "I think everybody should pay their fair share," Allen said.
The town's tax breaks will last 20 years. The vote also covers a 15-year Shelby County tax break, the maximum the county allows.
FedEx opened its World Technology Center complex in 1998. The 20-year tax breaks it received that year will expire around the beginning of 2019. The company has said it's negotiating renewals of leases.
Under the current tax-break deal, FedEx enjoys nearly a 100% write-off of town property taxes. Its current annual payment to the town totals $1,400, Finance Director Mark Krock said. Under the new agreement, the company would have 75% of its town taxes written off, and it would pay significantly more to the town, about $326,000 per year, according to a worksheet distributed earlier this month.
Including town and Shelby County taxes, the company would pay an estimated $25.2 million over the course of the new tax-break deal and save about $75.5 million, the worksheet says.
FedEx wrote in its application for tax breaks that it employs 2,425 professional workers with an average salary of $95,000 and 75 clerical workers with an average salary of $45,000. An additional 400 contractors work at the site at a salary described by the company as "unknown."
Patton asked several pointed questions about the contractors and related issues, including how many FedEx employees had taken a recent buyout offer. Company spokesman Patrick Fitzgerald said in the meeting that he didn't have that information.
Patton, a former FedEx information technology employee who now owns a Collierville computer store, said in the meeting that he believes contractors are paid less than the FedEx employees, about $50,000 or $60,000 a year. He also repeated a criticism he had made in an interview with The Commercial Appeal: that FedEx is training foreign contract workers, then sending them back to continue the job overseas.
"So these are not employees that will seek to buy new homes," he said in the meeting. "These are temporary employees who will take American jobs back to India."
The FedEx employees present at the meeting didn't respond to Patton's accusation about contractors. Last week, Fitzgerald declined to answer questions from The Commercial Appeal about contractors.
Among the people speaking in favor of FedEx was John J. Barrios, chairman of the Collierville Chamber of Commerce board of directors. He said in the meeting the organization's directors unanimously voted last week to support the further tax breaks. "We feel like FedEx is an ideal corporate citizen. It's important to our community and our economy."
