The town of Cary is at it again.  According to The News & Observer, the town is considering an incentive grant of just over $200,000 to Kellogg’s for a $19.5 million expansion of it’s facility there.  There are several problems with this deal.

  1. The $200,000 incentive is equal to about 1% of the cost of the $19.5 million expansion.  Does anyone really believe that Kellogg’s can come up with the other 99%, but needs that final 1% from taxpayers to make the project worth their while?  Cary doesn’t need to spend this money.
  2. This expansion doesn’t come with any additional jobs.  It will increase capacity, but not employment.  Is $200,000 for no jobs really a good deal for taxpayers?
  3. The argument from proponents of the incentive payment is that this investment will increase the tax base, but that’s impossible to know.  Maybe it will, but if that $200,000 is left with taxpayers to use for the things they value most, they may contribut to all sorts of other activities – like buying from local businesses or starting their own small businesses – that will increase the tax base, while also creating jobs.  They might even  increase the tax base more than the Kellogg’s plant would.  Does the Cary Town Council really think it’s wise and all-knowing enough to determine that expansion of a Kellogg’s plant is the best possible use of that $200,000?

Better to leave these things to the market.