In the latest edition of Corporate Welfare Weekly, the analysts at the N.C. Institute for Constitutional Law focus on the $150,00 the Durham City Council wants to extend to a smart-phone manufacturer in order to entice the company to Durham. Note, however, what a company executive says is a driver for a possible move to Durham. (emphasis is mine)
On Monday, Durham City Council members locked in their half of an incentives package they believe could persuade Taiwanese smartphone manufacturer HTC Corp. to open a new R&D office in Durham’s American Tobacco complex.
The city’s offer of $150,000 in economic incentives won unanimous approval from the council and more corporate welfare is just over the horizon. Recruiters are waiting on the N.C. Department of Commerce to match Durham’s offer with money from the One North Carolina Fund.
But according to HTC’s chief strategy officer, Ron Louks, targeted incentives are not what attract the smartphone maker to Durham, but rather the area’s brain capital. Seems the incentives are just a nice extra cash bonus!
Louks told council members, “Part of HTC deciding to, looking into coming to North Carolina, was … the fact that when Sony Ericsson and Ericsson and other companies left, there was just way too much good talent in this area.”
Louks also said HTC would work very closely with Duke University, UNC Chapel Hill, NCSU, NCCU, and Shaw University.
In this brief interview, JLF’s Joe Coletti says too many government officials treat targeted tax incentive deals like a guaranteed lottery jackpot. Coletti wants to see local officials use an evaluation tool for economic incentives — a tool that calculates costs versus benefits and factors in the opportunity cost of forgoing the next best use for the funds and the likelihood the investment would have happened without an incentive.
