This is a head-scratcher. Mecklenburg County’s economic incentives program tries to make sure the county does not lose money in the long-run when it gives out business subsidies. Of course, the best thing would be just not to be in the subsidy business, but if you are going to the play that game, winding up in the black seems a common-sense goal.
Not according to the Charlotte Chamber of Commerce. The Charlotte Business Journal reports the Chamber is conducting a full-court press to change the county’s way of handling incentives. The goal is nothing less than removing any meaningful cost-benefit analysis from official deliberations on incentives. Then, with facts out of the way, it’ll be down to smoozing and behind-the-scenes deal-making. Guess who might carry the day in that environment.
The Chamber’s problem with the current county approach is that the county actually tries to compute the cost of services it must provide to the workers that incentives draw to the county. In other words, it is the same cost-of-services problem that backers of big, subsidized “economic incentive” dreams usually leave out. The CBJ on what Mecklenburg County General Manager Bobbie Shields does:
Shields says the county uses a fiscal-impact analysis that eyes the cost and benefit of a company relocation before it awards any incentives.
The review assumes each new job that’s created would bring in a new resident, and that increases the demands for education, public works, public safety, libraries and other government services.
Shields says a company must offer annual salaries of $60,000 or greater, otherwise the population growth is considered a drain on county resources.
A recent incentive request for warehouse equipment maker Mias Inc. failed Shields’ analysis.
Now its chief financial officer, Christian Börstler, says the company is re-evaluating its investment plans and is thinking about other states.
And this has the Chamber in a tizzy. Chamber senior vice president of public policy Natalie English actually wants the county — and the city, which rubber-stamped the Mias deal in May — to chase lower-wage jobs with subsidies under the theory that most any job is worth adding to the local employment matrix.
In other words, not only does the Chamber have no problem with taxing some residents in order to give tax breaks to corporations, it wants to build-in the virtual certitude of future tax hikes in order to afford what are clearly money-losing incentive deals for local government.
With friends of business and industry like these, who needs enemies?
