(Lack of) incentives?
For anyone who is sufficiently recovered from their turkey-induced coma and isn't nursing injuries from the outlet malls wars, here's a little political food for fodder this Sunday morning:
RALEIGH - From Polo Ralph Lauren's 1998 expansion in High Point to CitiCards' opening on Interstate 40 in 2004 to any number of RF Micro Devices projects, Guilford County and the Triad are home to some of the highest-profile economic development deals in the state.If you give Bob Orr a few minutes, the Republican candidate for governor will try to convince you that deals such as the one that helped bring FedEx and Skybus to the airport and a Dell computer assembly plant to Forsyth County hurt the economy and long-term job prospects.
"That very well may be the issue that separates me," Orr said in one of his near-weekly sessions with reporters and all-comers over breakfast at a downtown Raleigh restaurant.
Although it has become his signature issue, political scientists and strategists say it will be difficult for Orr or anyone to translate the incentives issue into viable campaign fodder.
Exhibit A, some say, is Gov. Mike Easley, a popular two-term Democrat who has made frequent and enthusiastic appearances at incentive announcements such as one recently for Skybus in Greensboro.
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Orr's argument is tough to make. I don't entirely disagree with him, but incentives are unpopular mostly in the abstract.
An example: I was on a Charlotte radio show last year to talk about the Google incentives package in Caldwell County. Also on the show were city and county officials from Caldwell. I'd like to say I won the debate, but I certainly didn't convince the folks from Caldwell. They claimed that projected tax revenues exceeded the cost of the incentives, and I granted them that. But the problem with incentives is NOT that they cost more than they're worth, because no city or county would ever knowingly enter into a losing proposition (it can happen, but it's not the biggest issue). The problem with incentives is that they force cities and counties to pay something for that which they used to get (mostly) for free.
When cities and counties paid nearly nothing, they had less control over whether the new facility or plant would locate with them. Society was better off because the side-payments and bribes that we now call fiscal incentives were not being paid out, and ultimately, society doesn't care whether a given plant is located in City A or the equivalent City B. Consequently, society as a whole is worse off now. And yet, the unfortunate fact is that the incentives game allows cities and counties to exert a degree of control over the siting process. And incentives can improve things for an individual community even while worsening things for society as a whole.
But that's a fine distinction, isn't it? Sure enough, the Caldwell officials on that radio show effectively dismissed me as an ivory-tower know-nothing because, in their minds, I'd admitted that they'd made a "good deal." I think they were wrong about that, but it would have taken more time than I had to convince them. And that's why this is tough issue for Orr.
Posted on November 25, 2007 3:39 PM