The AFL-CIO Center for Strategic Research has released a new report that questions whether Milwaukee-based Palermo Villa Inc. has lived up to its commitments to create family-supporting jobs after receiving $26 million in government subsidies.
The report is titled, “Too Much Pork in the Pepperoni Pizza?: Tax Credits For Palermo’s Highlight Need For More Transparency, Accountability at the Wisconsin Economic Development Corporation.”
The report the company has received from city, state, and federal subsidies for economic development and job creation.
In return for substantial public assistance, the Milwaukee-based frozen pizza manufacturer made specific commitments about job creation and economic development, the report said.
“Due to a lack of transparency in the administration of the Wisconsin Economic Development Corp., we cannot know whether Palermo’s has kept its promises,” the report stated.
The report called for the WEDC to improve public disclosure about the company’s accountability.
The report said a disclosure document obtained during the research for the report was “heavily redacted” by the WEDC.
“The public has a right to know whether companies benefiting from public dollars are meeting their economic development obligations. Annual reports should be comprehensive and responses to public records requests should not be so zealously redacted as to render it impossible to evaluate a particular subsidy or tax credit,” the report stated.
“Palermo’s appears to employ fewer people today than it did before it qualified for almost half a million dollars in job creation tax credits with a promise to create 56 full time, permanent positions,” said Julie Farb Blain of the AFL-CIO’s Center for Strategic Research.
“I worked at Palermo’s for over 5 years and only earned $7.50 the hour,” said Flora Anaya of the Palermo Workers Union. “That is not a living wage. I couldn’t support my children and sick parents with so little.”
“Good public policy requires that the details of incentive packages be disclosed, and the effectiveness of incentives be measured. Public policy makers must be held accountable for their decisions based on evidence,” said Cheryl Maranto, chair of the Department of Management at Marquette University.
In response to the report, Chris Dresselhuys, director of marketing for Palermo’s, issued the following statement:
“We respectfully disagree with the comments and the rhetorical attacks made at today’s news conference. Palermo’s is an excellent company with a diverse workforce and an overall solid history of treating its employees very well. The real result of this attack is that it hurts Milwaukee and the very workers some presume to support. We also believe that an accurate review of the facts will show that we have fully and completely complied with the terms of our agreement with the state. Any claim to the contrary is not based on reality, and it’s regrettable that some can simply manipulate statistics to create a new chapter in revisionist history.
“Rather than launching a rhetorical attack based on misinformation, we encourage those who are delaying a worker vote to get out of the way and let the workers decide whether or not they want to have union representation.
“It also should be noted that last week, on Friday, October 12, the Wisconsin Economic Development Corporation released documents indicating that Palermo’s had fulfilled its job creation commitment one year ahead of schedule. Palermo’s has met and exceeded the commitments it made with WEDC and other governmental agencies as it relates to job creation every year since we located our manufacturing facility in the Menomonee Valley.
“Since moving to the Menomonee Valley in 2006 – a move sparked by our desire to remain accessible to our employees who live in the City – we have created 208 good paying new jobs for local residents. We have paid more than $130 million in wages and benefits, and we offer all full-time employees an excellent benefits package that includes health, vision and dental insurance; paid time off; a company-sponsored retirement plan; tuition assistance; and more.
“Palermo’s is also a committed corporate citizen. We invested more than $60 million to build, equip and expand our Menomonee Valley facility and provide our employees with a modern work environment. We have also paid more than $2 million in property taxes since our facility opened. We are strong supporters of Hunger Task Force, Feeding America, the City of Milwaukee’s ‘Earn and Learn’ program and numerous Milwaukee nonprofit groups.
“Milwaukee has been our family-owned company’s home for more than a half-century, and we have always worked hard to do the right thing. Everyone is entitled to his or her opinion, but not their own facts. The fact of the matter is that Palermo’s is a good employer and a positive community contributor, and we have complied with all terms of our state agreement.”
