Economic development or merely re-arranging the deck chairs on the Titanic?



Politicians LOVE to talk about — and pat themselves on the back about — job creation and economic development.  Though, most rational people know the only sources for job creation are private businesses.

Instead of carrying out responsible economic development policy — like cutting back government and rolling back taxes — bureaucrats and politicians are using more and more targeted tax incentives and payments to lure business from one jurisdiction to another.  Are you really growing the economy by doing that, or are you merely encouraging governments at all levels to focus on poaching from their neighbors’ tax base? 

At the state level, MetLife is getting more than $100 million in state and local incentives to move some jobs to Cary and Charlotte.  We’ve been told that roughly 40 percent of the proposed MetLife jobs will be people moved in from out of state.  

Will state government cut back their spending to compensate for this giveaway?  Gosh, no.  The rest of us will be expected to help make up for the unexpected shortfall.  Politicians get to crow about “job creation,” while we get  even more money sucked from our wallets.

Last year, we had Republicans in Raleigh beating Bev Perdue over the head for offering incentives to a tire company considering relocating a plant in North Carolina or South Carolina.  Derisive cries of ‘corporate welfare’ went up across the countryside.   The NCGOP even added a plank about corporate welfare to its 2012 party platform.  Now that the NCGOP owns state government, corporate welfare appears to be JUST FINE.

Locally, we’ve learned that Southern Pines is giving First Bank $15,000 per year for TEN YEARS for moving their corporate headquarters 40 miles down the road from Troy.  Moore County is also offering up incentives.   The move is a smart one for First Bank. Troy and Montgomery County are dying a slow death economically.  A good chunk of First Bank’s business is in cash-rich Moore County.  But most of the employees working in the headquarters will likely be just transfers from the corporate offices currently in Troy.  First Bank is also one of the most cash-rich banks in the state.  Does it really need the money?  Was the money really all that important to their decision to move?

Pinehurst tried a game similar to this by trying to lure an existing microbrewery from Aberdeen — about five miles down the road — to relocate in the Pinehurst resort’s dilapidated, bombed-out former steam plant in the heart of Old Town Pinehurst.   Village government secured about a half million in grants to facilitate the building renovation.  A handful of mostly hourly jobs were going to be moved a few miles down the road.  How much of a boost to the local economy was going to be provided here to justify investing $500,000 in tax dollars?  It ended up being a moot point.  The deal fell through.  The village still has all that money earmarked for renovating that building.

Instead of working so hard to shanghai jobs from a nearby jurisdiction and handing out freebies at the expense of residents and businesses who are already invested in your community, why not implement reforms to make starting-up a business or relocating a business to your community a no-brainer?  Simplify the planning and zoning process so that people seeking to grow their businesses are not harrassed to the ends of the Earth.  (Are you listening, Pinehurst?)  If you’re going to offer tax incentives, why not open them up to ANYBODY — even people seeking to start up businesses?  Why not adjust downward the first year’s taxes for a new startup?  Why not roll back regulations so that you have a more conducive environment to start up a business?  Why not work with and encourage utility providers — with their monopolies — to set up business incubators for new entrepreneurial ventures?

We’ve got one of the roughest economic situations in the United States.  Rearranging the deck chairs on this sinking ship — moving jobs around from one troubled community or county to another — is merely temporary window dressing and far from a realistic, long term solution.

11 thoughts on “Economic development or merely re-arranging the deck chairs on the Titanic?

  1. …Now that the NCGOP owns state government, corporate welfare appears to be JUST FINE…..

    There is no opposition party to protect the public from this. It’s the Oligarchs and Political Ruling Class (PRC) vs the public.

    The “were against higher taxes and bigger goverment” is only brought out as window dressing during election season to sucker the public in exchange for votes and money. They fall for it everytime.

    Pat McCrory and Thom Tillis members of the Mecklenburg Mafia from Charlotte have a special statement they would like to share with the people of NC:

    “Thanks Suckers!”

  2. Whatever happened with Spirit Aero at the Global Transpark. I recall that the Golden Leaf Foundation chipped in the first $100 million. The other incentives, I believe, raised the total available to somewhere near a quarter of a billion. Don’t hear too much about the GTP anymore. I know the General Assembly still gives them a yearly stipend to keep the doors open.

      1. You do realize Gov Martin has been long gone and many, many years of Democrats have been in control. The Dems have had many years to correct Martin’s mistake, don’t you think? Why continue to fund it? Why have the Escheats Fund “loan” the GTP $25 million? Why have the Golden Leaf Foundation write them a check for $100 million. And I do believe Easley’s budget writer, Danny Gerlach, had gone over to run the Golden Leaf at the time the check was written. But I am sure it was just a coincidence. Gov. Martin may have made the appointment of Danny prior to leaving office and the Golden Leaf being formed. Must have been ESP.

        1. The Republican Governor Martin initiated the Global Transpork boondoggle, it’s been a money pit ever since. Now that the laughable “conservative revolution” (The CRIN0 Conservative Revolution in Name Only)is underway in Raleigh, what page of the current Republican Governor McCrory’s budget proposal lays out the defunding of the Global Transpork? Will the House and Senate propose the defunding and shutdown of this Republican initiated money pit?

          Looks like they have the votes to shut it down or is this really just a CRINO Conservative Revolution in Name Only as suspected.

  3. Beaufort County, NC (population 49,000) has made itself the poster child for waste disguised as economic development.

    Since 2001, the local Economic Development Commission has created two Industrial parks.  Both are abject failures. One has, after six years cost $2.4 million and remains an empty field with no tenants and no jobs. Over the last ten years the second industrial park has been so discredited as a commercial effort that it is now the location of choice for nothing more than the new county jail.

    Over the Economic Development Commission’s twelve year life, it has squandered well over $15 million in local government cash and state government grants along with additional funding from Golden Leaf.

    Syncophantic  politicians, unqualified economic developers, self congratulating, incompetent civic leaders have done regular and recurring damage to taxpayers and honest businesses.

  4. There are just so many boondoggles associated with corporate welfare known as ”economic development”. It is shameful when politicians abuse public funds for these bribes. All involved should be proseucted for corruption.

    What we really need is federal law to prevent corrupt state politicians across the country from trying to out bribe each other and corrupt corporations from playing them all off against each other. Perhaps a federal tax of 110% of the amount of such bribes. We need a conservative in Congress to introduce it. Or just adopt a special criminal law to clarify that this conduct is criminal.

  5. At first the Dems said that Bev should get credit for the MetLife deal. Then they said that McCrory should be blamed.

    So is it a credit situation or a debit situation? Are we to be glad the jobs are coming or should we be sad?

    1. We should be glad that jobs are coming, but that is overwhelmed by sadness of the shameless bribes with taxpayer money to get them.

  6. Well, here in Moore County, we wait until the company has bought the building, then we agree to give them thousands of dollars in tax incentives. Smart huh? We don’t even get the jobs. They bring their people with them.

  7. In Moore County we will stall the Veteran’s Memorial Project “disguised as trying too save money “when(Vet’s) are trying to keep the quality of landscape and scenic view along with adequate parking for a amphitheatre for the Family’s visiting the Killed in Action,shot-up,crippled, and others who served their Country in time of WAR,and then give tax payer money for a bank to move that is already………..WHAT?

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