Now Playing: Killing for Love, by Jose Gonzalez. “What’s the point if you hate, die and kill for love. What’s the point with a love that makes you hate and kill for.”
There’s a lot of sound and fury about economic incentives used to recruit business to North Carolina. Hey, I don’t like them, either. Taking at the most basic level, incentives are a bribe. We can all agree on that.
But let’s keep a little reality in the argument. The North Carolina Institute for Constitutional Law, a blowhard group if ever there was one, has publicly crafted a letter to President Obama filled with half-truths – which my mama always called lies – to ask him to help institute a unilateral ban of incentives in all 50 states. Chief among the half-truths (lies) is the notion that states are giving millions in corporate welfare.
Interlude: These Days, by Jackson Browne. “These days I sit on corner stones, And count the time in quarter tones to ten, my friend, Don’t confront me with my failures, I had not forgotten them.”
No. 1, those “gifts” require a big time upfront investment by the company. For example, earlier this year, Oregon-based Reser’s Fine Foods agreed to expand a plant in Halifax County, an area in the state that has been devastated by the textile industry’s move offshore. The expansion will result in 500 jobs in a place that needs them. The company could get $1 million from the state. But here’s the fine print: Reser must spend $15 million up front for the expansion. It must add and maintain the jobs in the next five years, meeting certain pay standards. Until then, it gets nothing. If it doesn’t follow through on its promises, it gets nothing. It’s still a sweet deal, particularly if the company was going to expand here anyway. But neither the institute nor anyone else but Reser management knows the answer to that question. And it isn’t telling.
Secondly, those “gifts,” in many cases, are rebates on taxes for equipment purchased or electricity used. And they’re usually not 100% of those taxes. In other words, the state is still reaping benefits from the expansion/relocation. The money that’s given back is money the state never would have had in the first place. As the great Muddy Waters once sang, “You can’t lose what you never had.”
Incentives still suck, of course. They’re a slap in the face to every business that started here and expanded here by the old-fashioned way – raising or saving its own money. I wouldn’t oppose a unilateral ban, though I suspect the end result would be illegal bribery of another sort to attract projects or the offshoring of more industry. At least we can see what companies are getting this way.
But the institute and its flunkies should be honest about their opposition – there’s a whole lot of “we got ours and to hell with anyone else” in their arguments. And another thing, for all the institute’s concern for taxpayers, who do they think pays to defend against its lawsuits?
Just a thought.
“Things got bad, things got worse, I guess you know the tune, Oh! Lord, stuck in Lodi again.” _ Creedence Clearwater Revival (John Fogerty), Lodi.