More bad judgment on the economic development front
Submitted by James on Thu, 05/27/2010 - 9:35am
North Carolina's economic development professionals appear to have a single-minded operating model. If it moves, chase it. How else to explain government subsidies for businesses that are already up and running. For example, an expansion to an existing plastics plant in Reidsville will add fifty-five jobs, stimulated by a One North Carolina grant of $45,000. That's $800 per job. In addition, economic developers want to give $25+ million in tax breaks to four other companies that might deliver 1500 jobs. Two are data centers, coming no doubt for cheap energy, one is an "energy turbine manufacturer," and the fourth is freakin' paper plant. That's $1600 on average per job.
So what do we get for all this investment? A new generation of energy hogs? New sources of air and water pollution?
I don't object to strategic investments by taxpayers to build a brighter future for North Carolina. But I do object to throwing money at any corporate relocation office that happens to look our way. We don't have money to burn. If we're going to invest in economic growth, and we should, we should choose one or two sectors and go after them like gangbusters. I've argued on many occasions that the lead sector should be green energy. But with proposed incentives for companies like Titan Cement and now a paper company, we're well on our way to becoming the opposite of green. That's just plain stupid.
If we want to be known for something, we should stand for something. As it stands, what we'll be known for is public policy that will pay polluters to come into the state and trash our environment.
i'm going to guess...
...that the reason these incentives made sense to the economic development folks is because they all involve relatively high-paying jobs.
a server center obviously brings in technicians and engineers for its work force, among others, a cement plant brings drivers and helps create other construction jobs, and working at the paper mill is better pay than agricultural work or working at the local walmart.
now none of this is meant to diminsh the points you're making here...but it is intended to offer a bit of potential insight into what is motivating these potentially bad choices.
another point: $800/job is "dollar-store" cheap compared to the job creation sales pitch you get when the local sports team is looking for taxpayer funding for a new stadium. a good example is the new yankee stadium, where $2 billion in taxpayer money was spent to build a stadium that employs about 4000 people, full- and part-time.
"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965
I don't disagree with any of your points
It is Dollar Store cheap ... because that's all we have to spend. So why not spend it on building toward something extraordinary?
Do good. Be nice. Have fun.
in washington state...
...we are guilty of giving way too many specific tax breaks for many of the same illogical purposes, and we're suffering for that type of thinking here as well.
"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965
More tax subsidies for big corporations
There is no excuse for the secret pandering for jobs that in many cases would locate in NC even if the state and local governments didn't give them a dime. What legitimate business is going to make a move or expansion for $45,000. And the fact that the Senate is willing to grant a conservatively estimated $23,000,000 in tax breaks to five big corporations over the next couple of years, while eliminating teaching positions and cutting all sorts of services shows how bad the system is. When Perdue has her announcement of jobs coming to NC because of these incentives, I hope all those people impacted by budget cuts will come out and demonstrate their disgust with the choices being made by our elected officials in both parties.
Dell, anyone?
Was it $350 million to entice Dell to locate in Forsyth County? Where are they now? And what about the Global Transpark? I understand taxpayers have shelled out some $125 million to Spirit Aero to build pieces and parts of the Airbus A350 in the Global Transpark.
I support wholeheartedly government investment in infrastructure to support economic development. I reject wholeheartedly the notion of bribing companies to set up shop or expand in return for the false hope of permanent jobs.
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Not everything that can be counted counts, and not everything that counts can be counted. -- sign on Einstein's office wall.