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 The Best Jobs Money Can Buy
by Tom Campbell
August 10, 2006
You hardly read the news today without an announcement that a new plant is expanding or relocating to our state. The creation of new jobs is certainly welcome news to those who have been displaced and seek work, but there is another side to these stories.
Hidden deep, or sometimes never mentioned in these stories, is how many dollars the state or local units of government gave in tax breaks to land the deal. With few exceptions all these companies receive tax incentives to create these jobs. You could say that we, the taxpayers, are buying these jobs for others in our state to enjoy.
Problems arise when these new or expanded plants create unintended consequences. New jobs generally spur growth; growth that results in greater demands for schools, roads, water and sewerage, and other infrastructure. We often limit the amount we have to spend on these badly needed public improvements because we gave away tax revenues that could have helped pay for them.
The result can be a bigger hangover than a January credit card bill. The town of Holly Springs is an excellent example. To lure the giant Novartis vaccine plant the town agreed to give up million in incentives. Town leaders were so eager to land the plant they salivated over the deal, knowing all the while they were about million over-extended. The thrill of victory was more important than economic reality and accountability to citizens. Now town officials want financial help in fulfilling the promises they made. Holly Springs is likely not alone in making unrealistic promises.
Is anyone keeping totals of what the taxpayers have agreed to underwrite in all these economic incentive deals? This is badly needed information so that the public can learn just how much has been promised, in what forms, and over what time periods.
We know millions of dollars in tax breaks have been offered to corporations by state and local governments, and we suspect no one knows just what the grand total might be. Judging by the increased number of new or expanded job announcements, we can only believe that total is growing exponentially.
If our governments are indeed acting responsibly we can rejoice in the new jobs, but if that is not the case the public has a right to know what obligations, both present and future, are being made. Giving up future tax revenues can be considered almost the same as incurring public debt.
This is a stewardship and accountability issue. Let’s do the math and figure out just how these giveaways are affecting the future of our state
It is time to call a moratorium on more corporate incentives until we get an accounting. Then our leaders should set a ceiling on how much we reasonably want to allow before going forward. Like consumers swept up in the Christmas spirit our citizens may not be able to afford all the jobs we are buying.
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