Spread & Containment
How patent laws get in the way of the global coronavirus vaccine rollout
A transcript of The Conversation Weekly podcast episode #3.
Share this:
This is a transcript of Episode 3 of The Conversation Weekly podcast: Coronavirus vaccines: what’s getting in the way of the global rollout, published on February 18, 2021. In this week’s episode, we hear about an ongoing battle to relax intellectual property rules around coronavirus vaccines and new research on why China is closing down coal-fired power stations faster in some places than others.
NOTE: Transcripts may contain errors. Please check the corresponding audio before quoting in print.
Gemma: Hello and welcome to The Conversation Weekly.
Dan: Each week we bring you expert analysis on the world’s biggest stories.
Gemma: And groundbreaking new research, explained by the academics behind it.
Dan: Today, we’re talking about coronavirus vaccines – how and where they’re getting manufactured and why there is a fight over the intellectual property rights that regulate them.
Ronald Labonté: Countries have that vaccine manufacturing capacity, but right now they can’t access it.
Gemma: And we’ll hear from an expert on Chinese energy on why the country is shutting down coal-fired power stations – and what this means for the wider region.
Hao Tan: 291 coal power generation units had been decommissioned in China.
Dan: I’m Dan Merino in San Francisco.
Gemma: And I’m Gemma Ware in London and you’re listening to The Conversation Weekly.
Dan: Gemma and I are in the UK and the US. But the story we’re gonna hear today is about how countries with lower incomes are struggling to get vaccines. A key reason for this is that companies in rich nations generally hold the intellectual property rights over the vaccines.
Gemma: OK Dan, before we get into all, can you just run through the different types of vaccine that have already been licensed.
Dan: Sure, so first we have whole virus vaccines. These are when you inject a whole but harmless version of the coronavirus into your body and this generates an immune response. These use either harmless versions of the coronavirus that are still alive, this is called a live attenuated vaccine, or a dead normal version of the coronavirus, this is called an inactivated vaccine. Another kind is called an adenovirus vaccine – these use harmless adenoviruses to deliver a gene from the coronavirus into your body. Your cells then use that gene’s directions to make a piece of the coronavirus. It’s totally harmless, it’s just a little protein, but it triggers a really strong immune response.
Gemma: OK, which vaccines are we talking about here?
Dan: A couple of the Chinese vaccines are using dead version of the coronavirus. And ones using those harmless adenoviruses include the Oxford/Astrazeneca vaccine, the Johnson & Johnson vaccine and also the Sputnik vaccine in Russia.
There’s also mRNA vaccines, like the Moderna and the Pfizer vaccines. When you get one of these, a bit of mRNA – a form of genetic code – is shot into your arm. Like with the adenovirus vaccine, your cells read these genetic instructions to create the same protein from the coronavirus. Again this triggers a really strong immune response, it’s totally harmless.
Gemma: OK, and are there any other technologies being used?
Dan: There are a ton of different things being tried, but the ones I explained just now are the ones that have been approved so far.
Gemma: OK so we’ve got all these different types of vaccine but how are they actually made?
Dan: So I actually spoke with someone who really helped explain how vaccines are manufactured.
Anne Moore: My name is Dr Anne Moore and my research interests are in vaccines.
Dan: Anne is a Senior Lecturer in Biochemistry and Cell Biology at University College Cork in Ireland. She first explained how adenovirus vaccines – like the Oxford/Astrazeneca vaccine – are manufactured.
Anne: So what you do, say for adenovirus, you would take some of your master virus, and you would infect some cells, some very special cells that you understand all of the attributes about those cells. And you grow those up. The virus will infect the cells and produce more virus. And then you’ve enough cells in there where you have this bulking up a virus over the course of a few days, and this will be in anywhere from four litres of cell culture up to higher volumes, maybe 20, 30 litres.
And then you have what we call downstream processing then where you’re purifying the virus vaccine away from all of the other components that you’re not interested in. That can be a very, very difficult process. So even though it only takes a few days to grow a batch of virus. It can take a long time to not just to purify, but also to prove that it is pure and it is sterile and it is what you say it is.
Dan: So what about the genetic material vaccines?
Anne: It’s much more synthetic. You don’t have any cells, so you don’t need any vats to grow anything in. The synthesiser is chemically conjugating one nucleic acid onto the next one in the right sequence.
Dan: That sounds almost more assembly line-like where the other one is much more staged?
Anne: Yeah, I guess we call that continuous versus batch manufacturing. So the kind of move in industry is to go down this more continuous method where it is, as you say, an assembly line.
Dan: How many vaccines can one facility make at a time. And where are we at right now as far as output?
Dan: I suppose thinking about one facility making the vaccine from start to finish is a little bit untrue, because classically in the pharma industry, you would have different facilities doing a different part of the job.
I guess, constraints at the moment is more about actually getting your hands on the materials that you need to make the final product. Everything has many moving parts and that is becoming a constraint in manufacturing now because there is a big demand to make as many vaccines as quickly as possible.
Dan: Is the pace something that you are happy with?
Anne: I think, you know, considering this virus only emerged in November 2019, we are doing incredibly well, if you look back and say we actually even have a vaccine and we have almost half a dozen licensed at this stage is an incredible achievement. It kind of comes down to commerce. We didn’t have any buffer in the system in the sense that there was no spare capacity. And there was a recognition that that was needed because a pandemic would happen, but nobody was actually willing to support it.
Nature abhors a vacuum and pharma abhors an empty facility, you know, nobody’s going to leave something empty just in case pandemic happens.
So I think it is a huge global scramble to rededicate facilities to a coronavirus vaccine to upskill employees, to get more employees in, to actually do the work. And I think there will be an inflection point where these facilities that are now being kitted out will come on stream and will be then pumping out millions more vaccine doses than we’re seeing at the moment.
Gemma: So Dan it sounds like Anne is saying good job so far everyone, but the world could have perhaps prepared a bit better.
Dan: Yeah, absolutely and I guess that’s a major lesson from this pandemic too. But she touched on a hugely important part of the story here: economics. The fact that these vaccines are being produced by large, for-profit, pharmaceutical companies.
Anne: Who made the vast proportion of vaccines for the world.
Dan: Anne told me that there are essentially four major vaccine manufacturers in the world, and for the most part, they have their manufacturing facilities in the US and in Europe. There’s a shift though happening as India is now actually the biggest vaccine manufacturer globally. They’ve actually got a licence to make large batches of the Oxford/Astrazeneca vaccine.
Gemma: So who is getting the coronavirus vaccines that this small number of companies are producing?
Dan: The answer to that also is basically who has the money. A bunch of different countries spent a tonne to pre-order batches of the different vaccines. And this was happening even before these vaccines were approved.
According to the Duke Global Health Innovation Center by early February 2021, the world’s high-income countries had pre-ordered 4.2 billion vaccine doses, compared to a total of 670 million ordered by low-income countries. Many of the world’s wealthiest countries have far more than they need to cover their entire populations.
So to find out what it’s like in a part of the world where COVID vaccinations still feel very far away in the future, I called up a researcher who’s actually working across west Africa to try and solve this problem.
Mosoka: My name is Mosoka P. Fallah, I’m from Liberia.
Dan: Mosoka is a lecturer at the University of Liberia in the School of Public Health, and also a part-time lecturer in Harvard’s School of Public Health. He’s been very involved in the research on Ebola, and consults for the company Merck as an expert on Ebola vaccine licensing. He spoke to me last week from Sierra Leone, and described the situation there.
Mosoka: I can speak from west Africa because at least I’ve travelled, in recent times, Libiera, Sierra Leone, I was in Burkina Faso and then I transited through Togo. Basically, what I do know for now is that there’s nothing substantial towards vaccine.
Dan: He said a few countries in the region, including the small island of Cape Verde have been able to start to procuring some doses of the vaccine. But these are the exception.
Read more: COVID-19 vaccines: how and when will lower-income countries get access?
Mosoka: There’s attempt by the regional body, like African Union to access the vaccine. There is minimum effort, at least I know one, from a cell phone company to procure very little vaccine but it’s just a drop in the ocean. So basically Africa right now does not have any substantive way to acquire the vaccines.
Dan: Mosoka explains the reasons for this are almost entirely economic.
Mosoka: Fundamentally it’s the economic costs of acquiring the vaccine. You know, As someone really involved with the outbreak, I think the African countries tried to protect themselves preemptively, but it came at an alarming cost.
Dan: The cost of the vaccines is simply prohibitive for many of these countries.
Mosoka: Most of them are heavily indebted and there are no sense that they will have any debt relief. So basically this means, from an economic point of view, they cannot afford at the current market price.
Dan: There is an ongoing multinational effort to secure vaccines for countries that can’t afford them. I’m talking of course about the Covax initiative, led by the World Health Organization. The initiative wants to get 2 billion vaccine doses out to these countries in 2021.
But it’s at an incredibly slow pace. Mosoka explained that many west African nations covered by the alliance are only expecting to have 3% of their populations vaccinated by mid-2021. To put that that into perspective, as of February 14, 3.9% of the entire US population had gotten both doses of a coronavirus vaccine, 11% had already had one dose.
Anne Moore explained that manufacturing a vaccine is difficult and there have been a ton of delays already. This begs an obvious question: why aren’t more countries manufacturing vaccines that have already been approved, like the Moderna or Astrazeneca vaccines, for example. To understand why this is happening, we have to broach an ugly international issue. This is intellectual property rights around pharmaceuticals. To help me understand that, I called up Ronald Labonté.
Ronald: I’m a professor and have a distinguished research chair at the University of Ottawa in the School of Epidemiology and Public Health.
Dan: Ronald told me that the world has a lot of untapped vaccine manufacturing capacity.
Ronald: The annual global vaccine manufacturing capacity is estimated at somewhere between six and a half and eight and a half billion doses per year. But UNICEF probably using a larger database of potential manufacturers, estimates that in 2021, the volume of that output could be as much as 20 billion.
Meanwhile, the 2021 production run of the top three vaccines at the moment, right, the Pfizer vaccine, the Moderna, the AstraZeneca, the total manufacturing capacity that these three companies have is only 3.2 billion.
Dan: Sort of running in parallel to Covax is something called the COVID Technology Access Pool or CTAP, it’s led by the World Health Organization. This is something of a information sharing club to help scale up the global production of vaccines.
Ronald: And that pool was designed to have manufacturers make their patents, their medical know-how available to all other manufacturers. Since its launch, not a single COVID-19 patent-holding company has joined CTAP. A lot of countries have that vaccine manufacturing capacity, but right now they can’t access it. And interestingly half of this vaccine manufacturing potential is actually in developing countries: Argentina, Bangladesh, China, India, Brazil, Egypt, Cuba, Indonesia, Iran, Mexico, Taiwan, Thailand, South Africa.
Dan: The intellectual property system for drugs is governed by the World Trade Organization. Specifically, it’s regulated by an agreement called TRIPS, which stands for the Trade-Related Aspects of Intellectual Property Rights agreement.
Ronald: And this agreement obliges all WTO member states to offer 20 years of monopoly protection on new patented products. There is a group of 35 least developed WTO member states that are still exempt from these obligations, but all the other countries that are members of the World Trade Organization have to play by these rules.
If the patent holder has a patent that applies to that particular country, that country cannot just automatically reverse engineer, try to develop a generic equivalent. It has to offer or provide or guarantee, a period of monopoly protection, during which time the company is basically able to set whatever price or whatever conditions it wants to set in access to its product. It’s the only agreement in the World Trade Organization that is not liberalising, it is protecting.
Dan: The pandemic has now put this TRIPS agreement seemingly at odds with an international effort to ramp up vaccine production. This is due to be discussed on March 1 and 2 at the World Trade Organization’s General Council. A number of countries are bringing up a request – first tabled in October 2020 – for a temporary waiver of the TRIPS agreement when it comes to COVID-19.
Ronald: India and South Africa, and a bunch of other countries, have formally signed on with a petition to create this waiver and over a hundred developing country member states of the World Trade Organization also support it.
So what they’re arguing is that, is that in the absence of a waiver, there are too many, uh, legal obligations, too many impediments, too many cumbersome rules around the flexibilities of the TRIPS agreement that would allow, other vaccine manufacturers to very quickly scale up and produce more of the vaccines that are effective.
It would be enforced until the World Health Organization declared the global pandemic was over. In other words, that global herd immunity had been reached.
Dan: Waivers have issued for other WTO stuff, like things for bananas, for example. But there’s only been one waiver for TRIPS, relating to the licensing rules around exporting generic medicines.
Ronald: So it is possible, by consensus, if all the countries agree, then yes, we have the TRIPS waiver. Or if I believe it’s three quarters of the member states agree if they come and they hold a vote on that.
Dan: This path to expanding global manufacturing capacity for coronavirus vaccines – and presumably ending the pandemic faster – is being blocked by a few powerful countries.
Read more: Dummy's guide to how trade rules affect access to COVID-19 vaccines
Ronald: Australia, Brazil, Canada, the EU, Japan, Norway, Switzerland, the UK and the US oppose it, or if they don’t oppose it they’re saying, well, we really can’t support it at this time because there’s no real evidence that it’s needed.
Now, the argument being made by this small handful of opposing countries, all of them, high-income countries, pretty much. Most of them already having inked a number of their own bilateral vaccine, advanced purchase agreements, so there they’ve taken care of themselves. Their argument is that existing TRIPS flexibilities for compulsory licenses or parallel importing is sufficient. And they also argue that patent holding companies well, they can issue voluntary licenses to other manufacturers to produce their products at negotiated prices, and indeed, many have done so with a number of other vaccine manufacturers.
Dan: But again, price limits how many places can actually afford to make a deal with the patent holders. And that’s where these flexibilities built into TRIPS come into play. They could theoretically allow countries to make their own vaccines without having to deal with the pharmaceutical companies at all. But Ronald says getting these flexibilities approved is next to impossible – it’s only happened once before – and it would take forever to be done on a wide enough scale as the flexibilities need to be approved on a case-by-case basis.
Ronald: What it really comes down to is that they don’t want to touch the intellectual property rights regime of the TRIPS agreement, which is so profitable to the patent-holding pharmaceutical industry.
Intellectual property it’s seen as one of the engines of the new kind of post-industrial economic growth. So we want our patent-holding companies to become profitable, to become rich because if they’re rich, then supposedly our countries become rich. So there’s a kind of a mercantilism going on here.
Dan: To Ronald, it’s frustrating to see pharmaceutical companies posting big profits from coronavirus vaccines.
Ronald: The only reason the vaccines got done so quickly, wasn’t because of the wonderful inventiveness and the use of intellectual property rights that the vaccine manufacturers, were able to put in place. It was because of massive, massive amount, billions and billions of dollars, in public support. And billions and billions of dollars more in advanced purchase agreements by governments that, that kind of gave the assurance of making a tonne of money at some point in time and recovering all of those costs. It wasn’t because we had an intellectual property regime system.
Dan: Ronald has been advocating hard for the TRIPS waiver – including writing a few articles for The Conversation. But he admits, if the waiver passes through the WTO, the outcome are also unknown.
Ronald: Now it may mean that, or it may be that, that if the waiver were approved, that it would take a while for all of its actions to sort of begin to play out. And, it may not make the huge difference that a lot of people think it could make. But we don’t know that.
We’re in a global pandemic emergency. The longer we wait, the worse it’s going to become, the more variants we might get. And the countries that are going to take the longest in actually being able to vaccinate their population to some sort of a kind of the national herd immunity are going to be the low-income countries.
Dan: When I asked Mosoka Fallah about what changes to IP and intellectual property rights might mean, he immediately pointed to the example of antiretroviral drugs and HIV/Aids. As soon as the IP was opened up, the price went down.
Mosoka: Once, multiple countries like Brazil and South Africa manufactured HIV, drugs, antiretroviral, we saw that the prices went down and countries could access it.
Fundamentally, in an ideal situation, if they release the IP to countries that have the capacity to manufacture, the pipeline going to increase. There’s going to be more vaccines, the prices are going to be reduced.
Dan: This won’t happen easily.
Mosoka: But the catch of this is that, if we allow of them to to give their IP, and there is an another outbreak tomorrow would they have incentive to do research? So the key trigger to think about is, how do we find means to meet these countries halfway, give them some funding for the R&D?
Dan: Mosoka is particularly incensed by the vaccine nationalism surrounding COVID, because it is so different from what he saw during the Ebola crisis. Today, there a shared pool of Ebola vaccines, ready and waiting to stop any outbreak no matter where it happens.
Mosoka: So that within 24 hours, where there is an Ebola outbreak, you can make a request that the vaccine can go to that country, irrespective of their ability to pay. So that’s a very good arrangement.
Dan: Towards the end of our conversation, Mosoka relayed to me a teaching, from his close friend and collaborator, the late Swedish epidemiologist, Hans Rosling.
Mosoka: And one morning, he said to me: “Mosoka, keep this in your mind. Everything you do in Liberia you are protecting Washington DC and London. If you don’t do a good job in Liberia, London and DC are vulnerable.”
Dan: The is as true for COVID as it is for Ebola.
Mosoka is part of a group of scientists working on a joint letter advocating for more equitable access to COVID vaccines. There are two main actions they plan to push for. First, more funding for the Covax alliance. This would help the group buy more vaccines for countries that can’t afford them. Second, that intellectual property rights be relaxed or waived.
Finally, Mosoka argues that richer countries, should simply give vaccines to poorer places. This isn’t even an ethical argument, it’s actually just the safest thing to do for everyone on earth.
Mosoka: And so at some point in time, if you vaccinated, say, 50% or 60% of the rich population, then you begin to do to share with others because even from a protective point of view, from a selfish point of view, if you don’t protect us, you are at risk because there is mutation happening. And so we are trying to propose potential alternatives. We’re not saying give 100%, can you give 10%? But for your own survival, try to share some of that vaccine.
Gemma: He makes a compelling argument doesn’t he?
Dan: He really does, not only from the ethics, but just the broader public health argument. Like, if your neighbours’ house is burning down, not only should you save them because, I don’t know, maybe it’s the nice thing and the right thing to do, but also because it’s gonna burn your house down too.
If you’re interested in reading more about vaccine manufacturing, vaccine nationalism and the intellectual property rights around vaccines, you can read stories by Ronald Labonté, Mosoka Fallah and Anne Moore on The Conversation. The links to their stories, and plenty of other further reading by experts, are in the show notes.
Gemma: Right, so for our next story we’re going to hear about an important shift that’s happening in China. So Dan, what do you think when I say the words “coal and China”.
Dan: Well, I imagine China’s burning a lot of it. And because its coal, it’s just spewing tonnes of pollution out into the atmosphere. Am I far off the mark there, Gemma?
Gemma: No, you are right. In fact, China is still the world’s biggest producer and consumer of coal, by a large margin. But there’s a change underway, and China is closing down some of its coal power stations.
Dan: Well that’s gotta be good. Is it for environomental reasons, or what’s going on?
Gemma: You’d think so but actually the reasons aren’t just about the environment, and they’re a lot more complex than that. So to find out more, I spoke to a researcher who has just published a study on what’s happening.
Hao Tan: My name is Hao Tan and I’m a researcher with Newcastle Business School within the University of Newcastle in Australia. My research is focused on energy transitions, especially that in China and its global implications.
Gemma: So Hao could you set the scene for us? How much coal does China use every year?
Hao: China is the largest coal user in the world. In 2019, China consumed about 53% of the coal produced in the world. In 2020, this share could even go higher because the country’s economy has had rapid recovery from the pandemic since early 2020, where all the major economies are still struggling with restriction to economic activities.
Gemma: Ok. So biggest consumer of coal, and I think the biggest producer of coal as well?
Hao: Exactly. China is also the largest coal producer in the world, yes, you’re right. So it’s not surprising that the majority of the coal used in China is from domestic sources. In 2019, about 90% of the coal used in China was domestically reproduced and the rest was imported from overseas.
Gemma: Why? What is this coal being used for?
Hao: About half of the coal is for power generation. So right now China has about half of the coal power stations in the world.
Gemma: But it’s also used for industry?
Hao: Yeah, for steel making, for heating, a range of purposes.
Gemma: When it does use coal from outside of the country, where does that coal come from?
Hao: Indonesia, Australia, Mongolia and Russia. So coal from those four countries account for over 90% of the coal imports of China.
Gemma: And in terms of domestic coal, is it coming from all over the country or are there particular parts of China, which are the biggest coal producers?
Hao: The majority of the coal produced in China actually is from western China. Eastern China used to produce a coal, but they are no longer producing coal anymore.
Gemma: So you’ve set out to picture here where China is the world’s biggest producer and consumer of coal, but it’s got plans to change that, hasn’t it? It’s trying to shift away.
Hao: Yes, so China, as we know, has recently announced its commitment to zero emissions by 2060. I think to achieve this goal, it has to radically reduce the coal use in the country.
Gemma: Let’s turn now to talking about your research. Could you explain what the most recent research you’ve done on coal power stations has been in China?
Hao: This is a part of an ongoing project funded by the Australian Research Council. In this project, my colleagues from UNSW and Macquarie University and myself, look into the energy transitions in east Asian countries and particularly the role governments play in those transitions. And in this research project we look into not only the rise of renewable energy industries, but also the dynamics of traditional energy industries, such as coal.
Gemma: And what did you find? How many coal power stations have been closed?
Hao: So between 2010 and 2019, a total of 291 coal-power generation units had been decommissioned in China, accounting for 37 gigawatts of capacity. For context, currently there’s 50 gigawatts of power generation capacity in operation in Australia.
Gemma: And what share of the overall coal power generation was that?
Hao: Right now it’s still a small share in terms of the total coal power generation capacity in China. China currently has over 1,000 gigawatts of coal power generation capacity.
Gemma: So it’s a small amount, but it’s happening at a faster rate than it used to?
Hao: Yes, yes. And, more interestingly, we found that in more economically advanced regions, the closures have been more substantial and more rapid. For example, take Guangdong province, a relatively developed region June in China.
Gemma: That’s in the east?
Hao: That’s right. This is one of the 30 provinces in China but, since 2015, coal power capacity retired in this province accounted for over 10% of the total coal power capacity retired in the country. Meanwhile, we see that the new power stations are still being built, particularly in poorer western provinces in China. In fact, since 2015 and 2019, the total coal power capacity of the country increased, by about 18%.
Gemma: Ok, so it’s a complex picture there that you’re painting, isn’t it? That there are power stations closing, but there are others opening. So in the areas where you did see them closing, can you explain a bit about why?
Hao: We found that, while in other countries, climate change is probably the main cause of, closures of coal power plants, a distinctive feature in China is that closure of coal plant stations there largely follow a developmental logic. By developmental logic, we refer to the local government’s ambitions to replace many energy- and pollution-intensive industries with industries based on more value-added activities, such as advanced manufacturing and services.
Gemma: And the land is very valuable, I imagine?
Hao: Yes, especially in those rich regions land has become very expensive. So that becomes a economic incentive for the closures of power plants.
Gemma: And what does that mean for those countries you mentioned at the beginning, who export a lot of coal to China?
Hao: If we’re talking about countries like Australia and Indonesia, an advantage of their coal exports is that they can actually transport the coal to China’s coastal regions with relatively cheaper transportation costs. But with this geographic redistribution of the coal power capacity, I think the prospect of coal exports from these countries to China is a bit gloomy in the future.
Gemma: I think particularly with Australia, there’s real trade tensions with coal at the centre of them?
Hao: Yes, in the middle of 2020, China has imposed an unofficial ban to Australian coal exports to China. And ships of coal have not been able to unload it to Chinese ports. So in December, the coal exports to China, for example, from Australia has completely stopped.
Gemma: How does this shift that you’re seeing in China fit into a wider pattern of energy transition, which, you know, you said at the beginning that you study the wider region?
Hao: So those countries race to develop new carbon energy technologies is not just about climate change. It’s probably more to do with growing internationally competitive industries. This reflects the strong tradition of the development state in those countries, where governments have the resources and motives, to directly support a creation, transformation and growth of new industries.
Gemma: So what you’re saying is that while there’s an overall kind of concern about climate change and a need to shift away from coal, that actually it’s more economic drivers that are the reason behind the closures in eastern China. Is that, is that what you’re saying?
Hao: Yes. You can say that. Yes.
Gemma: And what do you think about this 2060 net zero emissions target? Do you think it’s achievable in the timeframe?
Hao: I think we still need to see more evidence to assess whether this commitment is achievable and whether the Chinese government is serious about that. I think two immediate indications include, first, the coming 14th five-years plan, which is going to be released by the Chinese government very soon. And second, whether the trend of emissions - so as we know, into 2013, actually the emissions in China has declined between 2013 and 2017. But unfortunately in recent years, that emission has picked up again. So we will look very closely whether that trend can be reversed.
Gemma: Well thank you very much Hao, it’s been fascinating talking to you, and I appreciate you explaining your research to us.
Hao: Thank you Gemma.
Gemma: If you want to read more about this, you can find a link to a story that Hao Tan wrote recently with some of his colleagues, in the show notes.
Dan: To finish off this episode we’ve got a few recommendations sent in via voicemail from our colleague Clea Chakraverty, politics and society editor at The Conversation in France.
Clea Chakraverty: Hi everyone. I’m Clea Chakraverty, politics and society editor from the The Conversation France.
This week I would like to discuss a very sensitive topic that is shaking France at the moment. At the beginning of January 2021, lawyer Camille Kouchner published a book called La Familia Grande in which she reveals how her father in law sexually abused her twin brother when they were teenagers. The book triggered a huge outcry as the man she accused is a well-known academic and is close to various elite circles in France.
The book also broke the taboos around incest, child abuse and abusers in a new way. Following its release, thousands of French people came out with stories of incest and abuse with the #Metooincest.
As historian Anne-Claude Ambroise Rendu from Université Versailles St Quentin wrote for The Conversation in French, incest and child abuse are quite common within families, but they are too often silenced.
Recent data published by a team of researchers from INED, also for The Conversation, back her claim: in France one woman out of 10 has faced sexual abuse while growing up, whether from outside her family or within.
This week authorities are discussing a possible revision of the law surrounding sexual abuse of minors. The reckoning for this historic abuse has only just started. Thanks so much for listening.
Gemma: Clea Chakraverty there from The Conversation in France.
Dan: Alrighty, that’s it for this episode of The Conversation Weekly. Thank you to all of the academics we’ve spoken to in this episode.
Gemma: And thanks to The Conversation editors Nicole Hasham, Caroline Southey, Moina Spooner and Clea Chakraverty.
Dan: You can find links to all of the expert analysis we’ve mentioned in this week’s episode in the show notes. Or head to TheConversation.com, where you can sign up to get a free daily email by clicking “Get newsletter” at the top of the homepage. I promise you, it’s actually a good newsletter.
Gemma: This episode is co-produced by Mend Mariwany and me, with sound design by Eloise Stevens. Our theme music is by Neeta Sarl. Final thanks also to Alice Mason, Scott White and Imriel Morgan.
Dan: And one final thing, if you like this podcast, please tell your friends about us and go please give us a review on Apple Podcasts – it really does help!
Gemma: Thanks for listening, until next week.
economic growth
pandemic
coronavirus
covid-19
link
vaccine
adenovirus
vaccine production
genetic
herd immunity
recovery
iran
africa
india
brazil
mexico
japan
canada
europe
uk
france
russia
eu
china
world health organization
Spread & Containment
The Coming Of The Police State In America
The Coming Of The Police State In America
Authored by Jeffrey Tucker via The Epoch Times,
The National Guard and the State Police are now…
Share this:
Authored by Jeffrey Tucker via The Epoch Times,
The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.
Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.
The message has been sent: Only the police can do this job. Whether they do it or not is another matter.
Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.
In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.
The law-abiding will suffer and the criminals will grow more numerous. It will not end well.
When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.
If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.
We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.
My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.
It goes like this:
1) lockdown,
2) loss of moral compass and spreading of loneliness and nihilism,
3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,
5) a rise in uncontrolled immigration/refugees,
6) an epidemic of ill health from substance abuse and otherwise,
7) businesses flee the city
8) cities fall into decay, and that results in
9) more surveillance and police state.
The 10th stage is the sacking of liberty and civilization itself.
It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.
But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.
It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.
Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.
As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.
The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.
Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.
By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.
The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.
Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.
The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.
The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.
But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.
What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.
As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.
The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.
Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.
Spread & Containment
Another beloved brewery files Chapter 11 bankruptcy
The beer industry has been devastated by covid, changing tastes, and maybe fallout from the Bud Light scandal.
Share this:
Before the covid pandemic, craft beer was having a moment. Most cities had multiple breweries and taprooms with some having so many that people put together the brewery version of a pub crawl.
It was a period where beer snobbery ruled the day and it was not uncommon to hear bar patrons discuss the makeup of the beer the beer they were drinking. This boom period always seemed destined for failure, or at least a retraction as many markets seemed to have more craft breweries than they could support.
Related: Fast-food chain closes more stores after Chapter 11 bankruptcy
The pandemic, however, hastened that downfall. Many of these local and regional craft breweries counted on in-person sales to drive their business.
And while many had local and regional distribution, selling through a third party comes with much lower margins. Direct sales drove their business and the pandemic forced many breweries to shut down their taprooms during the period where social distancing rules were in effect.
During those months the breweries still had rent and employees to pay while little money was coming in. That led to a number of popular beermakers including San Francisco's nationally-known Anchor Brewing as well as many regional favorites including Chicago’s Metropolitan Brewing, New Jersey’s Flying Fish, Denver’s Joyride Brewing, Tampa’s Zydeco Brew Werks, and Cleveland’s Terrestrial Brewing filing bankruptcy.
Some of these brands hope to survive, but others, including Anchor Brewing, fell into Chapter 7 liquidation. Now, another domino has fallen as a popular regional brewery has filed for Chapter 11 bankruptcy protection.
Image source: Shutterstock
Covid is not the only reason for brewery bankruptcies
While covid deserves some of the blame for brewery failures, it's not the only reason why so many have filed for bankruptcy protection. Overall beer sales have fallen driven by younger people embracing non-alcoholic cocktails, and the rise in popularity of non-beer alcoholic offerings,
Beer sales have fallen to their lowest levels since 1999 and some industry analysts
"Sales declined by more than 5% in the first nine months of the year, dragged down not only by the backlash and boycotts against Anheuser-Busch-owned Bud Light but the changing habits of younger drinkers," according to data from Beer Marketer’s Insights published by the New York Post.
Bud Light parent Anheuser Busch InBev (BUD) faced massive boycotts after it partnered with transgender social media influencer Dylan Mulvaney. It was a very small partnership but it led to a right-wing backlash spurred on by Kid Rock, who posted a video on social media where he chastised the company before shooting up cases of Bud Light with an automatic weapon.
Another brewery files Chapter 11 bankruptcy
Gizmo Brew Works, which does business under the name Roth Brewing Company LLC, filed for Chapter 11 bankruptcy protection on March 8. In its filing, the company checked the box that indicates that its debts are less than $7.5 million and it chooses to proceed under Subchapter V of Chapter 11.
"Both small business and subchapter V cases are treated differently than a traditional chapter 11 case primarily due to accelerated deadlines and the speed with which the plan is confirmed," USCourts.gov explained.
Roth Brewing/Gizmo Brew Works shared that it has 50-99 creditors and assets $100,000 and $500,000. The filing noted that the company does expect to have funds available for unsecured creditors.
The popular brewery operates three taprooms and sells its beer to go at those locations.
"Join us at Gizmo Brew Works Craft Brewery and Taprooms located in Raleigh, Durham, and Chapel Hill, North Carolina. Find us for entertainment, live music, food trucks, beer specials, and most importantly, great-tasting craft beer by Gizmo Brew Works," the company shared on its website.
The company estimates that it has between $1 and $10 million in liabilities (a broad range as the bankruptcy form does not provide a space to be more specific).
Gizmo Brew Works/Roth Brewing did not share a reorganization or funding plan in its bankruptcy filing. An email request for comment sent through the company's contact page was not immediately returned.
bankruptcy pandemic social distancing
Government
Students lose out as cities and states give billions in property tax breaks to businesses − draining school budgets and especially hurting the poorest students
An estimated 95% of US cities provide economic development tax incentives to woo corporate investors, taking billions away from schools.
Share this:
Built in 1910, James Elementary is a three-story brick school in Kansas City, Missouri’s historic Northeast neighborhood, with a bright blue front door framed by a sand-colored stone arch adorned with a gargoyle. As bustling students and teachers negotiate a maze of gray stairs with worn wooden handrails, Marjorie Mayes, the school’s principal, escorts a visitor across uneven blue tile floors on the ground floor to a classroom with exposed brick walls and pipes. Bubbling paint mars some walls, evidence of the water leaks spreading inside the aging building.
“It’s living history,” said Mayes during a mid-September tour of the building. “Not the kind of living history we want.”
The district would like to tackle the US$400 million in deferred maintenance needed to create a 21st century learning environment at its 35 schools – including James Elementary – but it can’t. It doesn’t have the money.
Property tax redirect
The lack of funds is a direct result of the property tax breaks that Kansas City lavishes on companies and developers that do business there. The program is supposed to bring in new jobs and business but instead has ended up draining civic coffers and starving schools. Between 2017 and 2023, the Kansas City school district lost $237.3 million through tax abatements.
Kansas City is hardly an anomaly. An estimated 95% of U.S. cities provide economic development tax incentives to woo corporate investors. The upshot is that billions have been diverted from large urban school districts and from a growing number of small suburban and rural districts. The impact is seen in districts as diverse as Chicago and Cleveland, Hillsboro, Oregon, and Storey County, Nevada.
The result? A 2021 review of 2,498 financial statements from school districts across 27 states revealed that, in 2019 alone, at least $2.4 billion was diverted to fund tax incentives. Yet that substantial figure still downplays the magnitude of the problem, because three-quarters of the 10,370 districts analyzed did not provide any information on tax abatement agreements.
Tax abatement programs have long been controversial, pitting states and communities against one another in beggar-thy-neighbor contests. Their economic value is also, at best, unclear: Studies show most companies would have made the same location decision without taxpayer subsidies. Meanwhile, schools make up the largest cost item in these communities, meaning they suffer most when companies are granted breaks in property taxes.
A three-month investigation by The Conversation and three scholars with expertise in economic development, tax laws and education policy shows that the cash drain from these programs is not equally shared by schools in the same communities. At the local level, tax abatements and exemptions often come at the cost of critical funding for school districts that disproportionately serve students from low-income households and who are racial minorities.
In Missouri, for example, in 2022 nearly $1,700 per student was redirected from Kansas City public and charter schools, while between $500 and $900 was redirected from wealthier, whiter Northland schools on the north side of the river in Kansas City and in the suburbs beyond. Other studies have found similar demographic trends elsewhere, including New York state, South Carolina and Columbus, Ohio.
The funding gaps produced by abated money often force schools to delay needed maintenance, increase class sizes, lay off teachers and support staff and even close outright. Schools also struggle to update or replace outdated technology, books and other educational resources. And, amid a nationwide teacher shortage, schools under financial pressures sometimes turn to inexperienced teachers who are not fully certified or rely too heavily on recruits from overseas who have been given special visa status.
Lost funding also prevents teachers and staff, who often feed, clothe and otherwise go above and beyond to help students in need, from earning a living wage. All told, tax abatements can end up harming a community’s value, with constant funding shortfalls creating a cycle of decline.
Incentives, payoffs and guarantees
Perversely, some of the largest beneficiaries of tax abatements are the politicians who publicly boast of handing out the breaks despite the harm to poorer communities. Incumbent governors have used the incentives as a means of taking credit for job creation, even when the jobs were coming anyway.
“We know that subsidies don’t work,” said Elizabeth Marcello, a doctoral lecturer at Hunter College who studies governmental planning and policy and the interactions between state and local governments. “But they are good political stories, and I think that’s why politicians love them so much.”
While some voters may celebrate abatements, parents can recognize the disparities between school districts that are created by the tax breaks. Fairleigh Jackson pointed out that her daughter’s East Baton Rouge third grade class lacks access to playground equipment.
The class is attending school in a temporary building while their elementary school undergoes a two-year renovation.
The temporary site has some grass and a cement slab where kids can play, but no playground equipment, Jackson said. And parents needed to set up an Amazon wish list to purchase basic equipment such as balls, jump ropes and chalk for students to use. The district told parents there would be no playground equipment due to a lack of funds, then promised to install equipment, Jackson said, but months later, there is none.
Jackson said it’s hard to complain when other schools in the district don’t even have needed security measures in place. “When I think about playground equipment, I think that’s a necessary piece of child development,” Jackson said. “Do we even advocate for something that should be a daily part of our kids’ experience when kids’ safety isn’t being funded?”
Meanwhile, the challenges facing administrators 500-odd miles away at Atlanta Public Schools are nothing if not formidable: The district is dealing with chronic absenteeism among half of its Black students, many students are experiencing homelessness, and it’s facing a teacher shortage.
At the same time, Atlanta is showering corporations with tax breaks. The city has two bodies that dole them out: the Development Authority of Fulton County, or DAFC, and Invest Atlanta, the city’s economic development agency. The deals handed out by the two agencies have drained $103.8 million from schools from fiscal 2017 to 2022, according to Atlanta school system financial statements.
What exactly Atlanta and other cities and states are accomplishing with tax abatement programs is hard to discern. Fewer than a quarter of companies that receive breaks in the U.S. needed an incentive to invest, according to a 2018 study by the Upjohn Institute for Employment Research, a nonprofit research organization.
This means that at least 75% of companies received tax abatements when they’re not needed – with communities paying a heavy price for economic development that sometimes provides little benefit.
In Kansas City, for example, there’s no guarantee that the businesses that do set up shop after receiving a tax abatement will remain there long term. That’s significant considering the historic border war between the Missouri and Kansas sides of Kansas City – a competition to be the most generous to the businesses, said Jason Roberts, president of the Kansas City Federation of Teachers and School-Related Personnel. Kansas City, Missouri, has a 1% income tax on people who work in the city, so it competes for as many workers as possible to secure that earnings tax, Roberts said.
Under city and state tax abatement programs, companies that used to be in Kansas City have since relocated. The AMC Theaters headquarters, for example, moved from the city’s downtown to Leawood, Kansas, about a decade ago, garnering some $40 million in Promoting Employment Across Kansas tax incentives.
Roberts said that when one side’s financial largesse runs out, companies often move across the state line – until both states decided in 2019 that enough was enough and declared a cease-fire.
But tax breaks for other businesses continue. “Our mission is to grow the economy of Kansas City, and application of tools such as tax exemptions are vital to achieving that mission, said Jon Stephens, president and CEO of Port KC, the Kansas City Port Authority. The incentives speed development, and providing them "has resulted in growth choosing KC versus other markets,” he added.
In Atlanta, those tax breaks are not going to projects in neighborhoods that need help attracting development. They have largely been handed out to projects that are in high demand areas of the city, said Julian Bene, who served on Invest Atlanta’s board from 2010 to 2018. In 2019, for instance, the Fulton County development authority approved a 10-year, $16 million tax abatement for a 410-foot-tall, 27,000-square-foot tower in Atlanta’s vibrant Midtown business district. The project included hotel space, retail space and office space that is now occupied by Google and Invesco.
In 2021, a developer in Atlanta pulled its request for an $8 million tax break to expand its new massive, mixed-use Ponce City Market development in the trendy Beltline neighborhood with an office tower and apartment building. Because of community pushback, the developer knew it likely did not have enough votes from the commission for approval, Bene said. After a second try for $5 million in lower taxes was also rejected, the developer went ahead and built the project anyway.
Invest Atlanta has also turned down projects in the past, Bene said. Oftentimes, after getting rejected, the developer goes back to the landowner and asks for a better price to buy the property to make their numbers work, because it was overvalued at the start.
Trouble in Philadelphia
On Thursday, Oct. 26, 2023, an environmental team was preparing Southwark School in Philadelphia for the winter cold. While checking an attic fan, members of the team saw loose dust on top of flooring that contained asbestos. The dust that certainly was blowing into the floors below could contain the cancer-causing agent. Within a day, Southwark was closed – the seventh Philadelphia school temporarily shuttered since the previous academic year because of possible asbestos contamination.
A 2019 inspection of the John L Kinsey school in Philadelphia found asbestos in plaster walls, floor tiles, radiator insulation and electrical panels. Asbestos is a major problem for Philadelphia’s public schools. The district needs $430 million to clean up the asbestos, lead, and other environmental hazards that place the health of students, teachers and staff at risk. And that is on top of an additional $2.4 billion to fix failing and damaged buildings.
Yet the money is not available. Matthew Stem, a former district official, testified in a 2023 lawsuit about financing of Pennsylvania schools that the environmental health risks cannot be addressed until an emergency like at Southwark because “existing funding sources are not sufficient to remediate those types of issues.”
Meanwhile, the city keeps doling out abatements, draining money that could have gone toward making Philadelphia schools safer. In the fiscal year ending June 2022, such tax breaks cost the school district $118 million – more than 25% of the total amount needed to remove the asbestos and other health dangers. These abatements take 31 years to break even, according to the city’s own scenario impact analyses.
Huge subsets of the community – primarily Black, Brown, poor or a combination – are being “drastically impacted” by the exemptions and funding shortfalls for the school district, said Kendra Brooks, a Philadelphia City Council member. Schools and students are affected by mold, asbestos and lead, and crumbling infrastructure, as well as teacher and staffing shortages – including support staff, social workers and psychologists.
More than half the district’s schools that lacked adequate air conditioning – 87 schools – had to go to half days during the first week of the 2023 school year because of extreme heat. Poor heating systems also leave the schools cold in the winter. And some schools are overcrowded, resulting in large class sizes, she said.
Teachers and researchers agree that a lack of adequate funding undermines educational opportunities and outcomes. That’s especially true for children living in poverty. A 2016 study found that a 10% increase in per-pupil spending each year for all 12 years of public schooling results in nearly one-third of a year of more education, 7.7% higher wages and a 3.2% reduction in annual incidence of adult poverty. The study estimated that a 21.7% increase could eliminate the high school graduation gap faced by children from low-income families.
More money for schools leads to more education resources for students and their teachers. The same researchers found that spending increases were associated with reductions in student-to-teacher ratios, increases in teacher salaries and longer school years. Other studies yielded similar results: School funding matters, especially for children already suffering the harms of poverty.
While tax abatements themselves are generally linked to rising property values, the benefits are not evenly distributed. In fact, any expansion of the tax base due to new property construction tends to be outside of the county granting the tax abatement. For families in school districts with the lost tax revenues, their neighbors’ good fortune likely comes as little solace. Meanwhile, a poorly funded education system is less likely to yield a skilled and competitive workforce, creating longer-term economic costs that make the region less attractive for businesses and residents.
“There’s a head-on collision here between private gain and the future quality of America’s workforce,” said Greg LeRoy, executive director at Good Jobs First, a Washington, D.C., advocacy group that’s critical of tax abatement and tracks the use of economic development subsidies.
As funding dwindles and educational quality declines, additional families with means often opt for alternative educational avenues such as private schooling, home-schooling or moving to a different school district, further weakening the public school system.
Throughout the U.S., parents with the power to do so demand special arrangements, such as selective schools or high-track enclaves that hire experienced, fully prepared teachers. If demands aren’t met, they leave the district’s public schools for private schools or for the suburbs. Some parents even organize to splinter their more advantaged, and generally whiter, neighborhoods away from the larger urban school districts.
Those parental demands – known among scholars as “opportunity hoarding” – may seem unreasonable from the outside, but scarcity breeds very real fears about educational harms inflicted on one’s own children. Regardless of who’s to blame, the children who bear the heaviest burden of the nation’s concentrated poverty and racialized poverty again lose out.
Rethinking in Philadelphia and Riverhead
Americans also ask public schools to accomplish Herculean tasks that go far beyond the education basics, as many parents discovered at the onset of the pandemic when schools closed and their support for families largely disappeared.
A school serving students who endure housing and food insecurity must dedicate resources toward children’s basic needs and trauma. But districts serving more low-income students spend less per student on average, and almost half the states have regressive funding structures.
Facing dwindling resources for schools, several cities have begun to rethink their tax exemption programs.
The Philadelphia City Council recently passed a scale-back on a 10-year property tax abatement by decreasing the percentage of the subsidy over that time. But even with that change, millions will be lost to tax exemptions that could instead be invested in cash-depleted schools. “We could make major changes in our schools’ infrastructure, curriculum, staffing, staffing ratios, support staff, social workers, school psychologists – take your pick,” Brooks said.
Other cities looking to reform tax abatement programs are taking a different approach. In Riverhead, New York, on Long Island, developers or project owners can be granted exemptions on their property tax and allowed instead to shell out a far smaller “payment in lieu of taxes,” or PILOT. When the abatement ends, most commonly after 10 years, the businesses then will pay full property taxes.
At least, that’s the idea, but the system is far from perfect. Beneficiaries of the PILOT program have failed to pay on time, leaving the school board struggling to fill a budget hole. Also, the payments are not equal to the amount they would receive for property taxes, with millions of dollars in potential revenue over a decade being cut to as little as a few hundred thousand. On the back end, if a business that’s subsidized with tax breaks fails after 10 years, the projected benefits never emerge.
And when the time came to start paying taxes, developers have returned to the city’s Industrial Development Agency with hat in hand, asking for more tax breaks. A local for-profit aquarium, for example, was granted a 10-year PILOT program break by Riverhead in 1999; it has received so many extensions that it is not scheduled to start paying full taxes until 2031 – 22 years after originally planned.
Kansas City border politics
Like many cities, Kansas City has a long history of segregation, white flight and racial redlining, said Kathleen Pointer, senior policy strategist for Kansas City Public Schools.
Troost Avenue, where the Kansas City Public Schools administrative office is located, serves as the city’s historic racial dividing line, with wealthier white families living in the west and more economically disadvantaged people of color in the east. Most of the district’s schools are located east of Troost, not west.
Students on the west side “pretty much automatically funnel into the college preparatory middle school and high schools,” said The Federation of Teachers’ Roberts. Those schools are considered signature schools that are selective and are better taken care of than the typical neighborhood schools, he added.
The school district’s tax levy was set by voters in 1969 at 3.75%. But successive attempts over the next few decades to increase the levy at the ballot box failed. During a decadeslong desegregation lawsuit that was eventually resolved through a settlement agreement in the 1990s, a court raised the district’s levy rate to 4.96% without voter approval. The levy has remained at the same 4.96% rate since.
Meanwhile, Kansas City is still distributing 20-year tax abatements to companies and developers for projects. The district calculated that about 92% of the money that was abated within the school district’s boundaries was for projects within the whiter west side of the city, Pointer said.
“Unfortunately, we can’t pick or choose where developers build,” said Meredith Hoenes, director of communications for Port KC. “We aren’t planning and zoning. Developers typically have plans in place when they knock on our door.”
In Kansas City, several agencies administer tax incentives, allowing developers to shop around to different bodies to receive one. Pointer said he believes the Port Authority is popular because they don’t do a third-party financial analysis to prove that the developers need the amount that they say they do.
With 20-year abatements, a child will start pre-K and graduate high school before seeing the benefits of a property being fully on the tax rolls, Pointer said. Developers, meanwhile, routinely threaten to build somewhere else if they don’t get the incentive, she said.
In 2020, BlueScope Construction, a company that had received tax incentives for nearly 20 years and was about to roll off its abatement, asked for another 13 years and threatened to move to another state if it didn’t get it. At the time, the U.S. was grappling with a racial reckoning following the murder of George Floyd, who was killed by a Minneapolis police officer.
“That was a moment for Kansas City Public Schools where we really drew a line in the sand and talked about incentives as an equity issue,” Pointer said.
After the district raised the issue – tying the incentives to systemic racism – the City Council rejected BlueScope’s bid and, three years later, it’s still in Kansas City, fully on the tax rolls, she said. BlueScope did not return multiple requests for comment.
Recently, a multifamily housing project was approved for a 20-year tax abatement by the Port Authority of Kansas City at Country Club Plaza, an outdoor shopping center in an affluent part of the city. The housing project included no affordable units. “This project was approved without any independent financial analysis proving that it needed that subsidy,” Pointer said.
All told, the Kansas City Public Schools district faces several shortfalls beyond the $400 million in deferred maintenance, Superintendent Jennifer Collier said. There are staffing shortages at all positions: teachers, paraprofessionals and support staff. As in much of the U.S., the cost of housing is surging. New developments that are being built do not include affordable housing, or when they do, the units are still out of reach for teachers.
That’s making it harder for a district that already loses about 1 in 5 of its teachers each year to keep or recruit new ones, who earn an average of only $46,150 their first year on the job, Collier said.
East Baton Rouge and the industrial corridor
It’s impossible to miss the tanks, towers, pipes and industrial structures that incongruously line Baton Rouge’s Scenic Highway landscape. They’re part of Exxon Mobil Corp.’s campus, home of the oil giant’s refinery in addition to chemical and plastics plants.
Sitting along the Mississippi River, the campus has been a staple of Louisiana’s capital for over 100 years. It’s where 6,000 employees and contractors who collectively earn over $400 million annually produce 522,000 barrels of crude oil per day when at full capacity, as well as the annual production and manufacture of 3 billion pounds of high-density polyethylene and polypropylene and 6.6 billion pounds of petrochemical products. The company posted a record-breaking $55.7 billion in profits in 2022 and $36 billion in 2023.
Across the street are empty fields and roads leading into neighborhoods that have been designated by the U.S. Department of Agriculture as a low-income food desert. A mile drive down the street to Route 67 is a Dollar General, fast-food restaurants, and tiny, rundown food stores. A Hi Nabor Supermarket is 4 miles away.
East Baton Rouge Parish’s McKinley High School, a 12-minute drive from the refinery, serves a student body that is about 80% Black and 85% poor. The school, which boasts famous alums such as rapper Kevin Gates, former NBA player Tyrus Thomas and Presidential Medal of Freedom recipient Gardner C. Taylor, holds a special place in the community, but it has been beset by violence and tragedy lately. Its football team quarterback, who was killed days before graduation in 2017, was among at least four of McKinley’s students who have been shot or murdered over the past six years.
The experience is starkly different at some of the district’s more advantaged schools, including its magnet programs open to high-performing students.
Baton Rouge is a tale of two cities, with some of the worst outcomes in the state for education, income and mortality, and some of the best outcomes. “It was only separated by sometimes a few blocks,” said Edgar Cage, the lead organizer for the advocacy group Together Baton Rouge. Cage, who grew up in the city when it was segregated by Jim Crow laws, said the root cause of that disparity was racism.
“Underserved kids don’t have a path forward” in East Baton Rouge public schools, Cage said.
A 2019 report from the Urban League of Louisiana found that economically disadvantaged African American and Hispanic students are not provided equitable access to high-quality education opportunities. That has contributed to those students underperforming on standardized state assessments, such as the LEAP exam, being unprepared to advance to higher grades and being excluded from high-quality curricula and instruction, as well as the highest-performing schools and magnet schools.
“Baton Rouge is home to some of the highest performing schools in the state,” according to the report. “Yet the highest performing schools and schools that have selective admissions policies often exclude disadvantaged students and African American and Hispanic students.”
Dawn Collins, who served on the district’s school board from 2016 to 2022, said that with more funding, the district could provide more targeted interventions for students who were struggling academically or additional support to staff so they can better assist students with greater needs.
But for decades, Louisiana’s Industrial Ad Valorem Tax Exemption Program, or ITEP, allowed for 100% property tax exemptions for industrial manufacturing facilities, said Erin Hansen, the statewide policy analyst at Together Louisiana, a network of 250 religious and civic organizations across the state that advocates for grassroots issues, including tax fairness.
The ITEP program was created in the 1930s through a state constitutional amendment, allowing companies to bypass a public vote and get approval for the exemption through the governor-appointed Board of Commerce and Industry, Hansen said. For over 80 years, that board approved nearly all applications that it received, she said.
Since 2000, Louisiana has granted a total of $35 billion in corporate property tax breaks for 12,590 projects.
Louisiana’s executive order
A few efforts to reform the program over the years have largely failed. But in 2016, Gov. John Bel Edwards signed an executive order that slightly but importantly tweaked the system. On top of the state board vote, the order gave local taxing bodies – such as school boards, sheriffs and parish or city councils – the ability to vote on their own individual portions of the tax exemptions. And in 2019 the East Baton Rouge Parish School Board exercised its power to vote down an abatement.
Throughout the U.S., school boards’ power over the tax abatements that affect their budgets vary, and in some states, including Georgia, Kansas, Nevada, New Jersey and South Carolina, school boards lack any formal ability to vote or comment on tax abatement deals that affect them.
Edwards’ executive order also capped the maximum exemption at 80% and tightened the rules so routine capital investments and maintenance were no longer eligible, Hansen said. A requirement concerning job creation was also put in place.
Concerned residents and activists, led by Together Louisiana and sister group Together Baton Rouge, rallied around the new rules and pushed back against the billion-dollar corporation taking more tax money from the schools. In 2019, the campaign worked: the school board rejected a $2.9 million property tax break bid by Exxon Mobil.
After the decision, Exxon Mobil reportedly described the city as “unpredictable.”
However, members of the business community have continued to lobby for the tax breaks, and they have pushed back against further rejections. In fact, according to Hansen, loopholes were created during the rulemaking process around the governor’s executive order that allowed companies to weaken its effectiveness.
In total, 223 Exxon Mobil projects worth nearly $580 million in tax abatements have been granted in the state of Louisiana under the ITEP program since 2000.
“ITEP is needed to compete with other states – and, in ExxonMobil’s case, other countries,” according to Exxon Mobil spokesperson Lauren Kight.
She pointed out that Exxon Mobil is the largest property taxpayer for the EBR school system, paying more than $46 million in property taxes in EBR parish in 2022 and another $34 million in sales taxes.
A new ITEP contract won’t decrease this existing tax revenue, Kight added. “Losing out on future projects absolutely will.”
The East Baton Rouge Parish School Board has continued to approve Exxon Mobil abatements, passing $46.9 million between 2020 and 2022. Between 2017 and 2023, the school district has lost $96.3 million.
Taxes are highest when industrial buildings are first built. Industrial property comes onto the tax rolls at 40% to 50% of its original value in Louisiana after the initial 10-year exemption, according to the Ascension Economic Development Corp.
Exxon Mobil received its latest tax exemption, $8.6 million over 10 years – an 80% break – in October 2023 for $250 million to install facilities at the Baton Rouge complex that purify isopropyl alcohol for microchip production and that create a new advanced recycling facility, allowing the company to address plastic waste. The project created zero new jobs.
The school board approved it by a 7-2 vote after a long and occasionally contentious board meeting.
“Does it make sense for Louisiana and other economically disadvantaged states to kind of compete with each other by providing tax incentives to mega corporations like Exxon Mobil?” said EBR School Board Vice President Patrick Martin, who voted for the abatement. “Probably, in a macro sense, it does not make a lot of sense. But it is the program that we have.”
Obviously, Exxon Mobil benefits, he said. “The company gets a benefit in reducing the property taxes that they would otherwise pay on their industrial activity that adds value to that property.” But the community benefits from the 20% of the property taxes that are not exempted, he said.
“I believe if we don’t pass it, over time the investments will not come and our district as a whole will have less money,” he added.
Meanwhile, the district’s budgetary woes are coming to a head. Bus drivers staged a sickout at the start of the school year, refusing to pick up students – in protest of low pay and not having buses equipped with air conditioning amid a heat wave. The district was forced to release students early, leaving kids stranded without a ride to school, before it acquiesced and provided the drivers and other staff one-time stipends and purchased new buses with air conditioning.
The district also agreed to reestablish transfer points as a temporary response to the shortages. But that transfer-point plan has historically resulted in students riding on the bus for hours and occasionally missing breakfast when the bus arrives late, according to Angela Reams-Brown, president of the East Baton Rouge Federation of Teachers. The district plans to purchase or lease over 160 buses and solve its bus driver shortage next year, but the plan could lead to a budget crisis.
A teacher shortage looms as well, because the district is paying teachers below the regional average. At the school board meeting, Laverne Simoneaux, an ELL specialist at East Baton Rouge’s Woodlawn Elementary, said she was informed that her job was not guaranteed next year since she’s being paid through federal COVID-19 relief funds. By receiving tax exemptions, Exxon Mobil was taking money from her salary to deepen their pockets, she said.
A young student in the district told the school board that the money could provide better internet access or be used to hire someone to pick up the glass and barbed wire in the playground. But at least they have a playground – Hayden Crockett, a seventh grader at Sherwood Middle Academic Magnet School, noted that his sister’s elementary school lacked one.
“If it wasn’t in the budget to fund playground equipment, how can it also be in the budget to give one of the most powerful corporations in the world a tax break?” Crockett said. “The math just ain’t mathing.”
Christine Wen worked for the nonprofit organization Good Jobs First from June 2019 to May 2022 where she helped collect tax abatement data.
Nathan Jensen has received funding from the John and Laura Arnold Foundation, the Smith Richardson Foundation, the Ewing Marion Kauffman Foundation and the Washington Center for Equitable Growth. He is a Senior Fellow at the Niskanen Center.
Danielle McLean and Kevin Welner do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.
subsidies pandemic covid-19 governor mortality oil
Walmart launches clever answer to Target’s new membership program
EyePoint poaches medical chief from Apellis; Sandoz CFO, longtime BioNTech exec to retire
The Coming Of The Police State In America
When Military Rule Supplants Democracy
Catastrophic Risk: Investing and Business Implications
The Digest #187
Dropping Like a Stone: ON RRP Take‑up in the Second Half of 2023
Where Is R‑Star and the End of the Refi Boom: The Top 5 Posts of 2023
Redefining Poverty: Towards a Transpartisan Approach
Students lose out as cities and states give billions in property tax breaks to businesses − draining school budgets and especially hurting the poorest students
-
Uncategorized2 weeks agoAll Of The Elements Are In Place For An Economic Crisis Of Staggering Proportions
-
Uncategorized1 month agoCathie Wood sells a major tech stock (again)
-
Uncategorized3 weeks agoCalifornia Counties Could Be Forced To Pay $300 Million To Cover COVID-Era Program
-
Uncategorized2 weeks agoApparel Retailer Express Moving Toward Bankruptcy
-
Uncategorized3 weeks agoIndustrial Production Decreased 0.1% in January
-
International2 days ago
Walmart launches clever answer to Target’s new membership program
-
Uncategorized3 weeks agoRFK Jr: The Wuhan Cover-Up & The Rise Of The Biowarfare-Industrial Complex
-
International2 days ago
EyePoint poaches medical chief from Apellis; Sandoz CFO, longtime BioNTech exec to retire