Google-NASA Partnership Backlash

Morgalyn writes "Apparently having more jobs moving into the area isn't enough for Santa Clara County. They want some revenue from Google, and are peeved that they are avoiding paying property taxes by building on government land. According to a representative of the county, 'If public land is being used for private purposes, the tenants should be paying local property taxes... We have $30 million in unfunded retirement liabilities. We need the money.' They aren't getting the land for free according to NASA: 'Google will not save any money by building on our property. They have to pay full ground rent based on fair market value and all the municipal-like services we provide like police, fire and garbage.'"

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Cry me a river

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Greg Perry, a member of the Mountain View City Council, echoed that sentiment. "If public land is being used for private purposes, the tenants should be paying local property taxes," he said. "We have $30 million in unfunded retirement liabilities. We need the money."

Over the last few years the real estate prices in Mountain View have skyrocketed almost solely because of Google and their cash rich employees (like $2m USD for a nice three bedroom house that would cost ~$400k in a typical "farm belt" community of the US). As prices rises, surrounding values rise and real estate tax revenue rises (to a certain point). Mountain View is now enjoying a major cash influx but yet they want more like most other government entities.

The conflict echos of many past economic conflicts: Company A (the City of Mountain View) is well seasoned, controls the market and has become fat, lazy and leech-like from the lack of competition. While they do many good things they are unwilling to fix the major flaws that are bleeding them dry like, for example, a vastly overstaffed police department unwilling to cut a single position. Company B (Google) is the new upstart, flexible and lean, that is creating wealth for themselves and those that support them. The City of Mountain View has seen quite a few local businesses created to support Google and Google employees that generate millions of dollars each year in tax revenue.

It's a bit like the City of Cambridge, MA vs. MIT and that other school. While they do pay into the local coffers what would be a somewhat appropriate tax for their real estate the City still wants more. But what would Cambridge be like without them? How many local businesses with their high paying research jobs would be there without the talent these schools recruit? While these schools generate less direct tax revenue from their properties then their commercial counterparts they do generate, IMO, much more overall indirect tax revenue. Will MIT every move off of Mass. Ave. because of high taxes: doubtful. Google, on the other hand, could easily leave Mountain View for greener, and cheaper, pastures.

Like it or not "free market" forces can not be denied. If Mountain View becomes too rich for Google they will move elsewhere like so many other businesses and Mountain View will be left as a rotting shell like so many other US cities that have lost their major private employer. Be it to another city, state or county they will move. It's happened millions of times in the US since the early 1970's.

Here's my suggestion for Google employees: take one weekend and everything you buy locally buy with $2 bills. For those outside the US the $2 bill, while rarely used, is legal tender. $2 bills stand out and the massive influx of them will get noticed. Each $2 bill used that weekend is an advertisement for Google's economic force in the community. Those $2 bills will spread to many, many people that think they have no connection to Google. I suspect the media would latch on to the story too.

Google brings in a ton of money to Mountain View and IMO their positive economic impact needs to be taken into consideration when judging what their fair tax responsibility should be. City officials in Mountain View need to take a moment to imagine their city without Google and where they'd be.