The sketchiness of “economic development”

February 13, 2018

By Josh Moon
Alabama Political Reporter

Let’s be honest, governing well is hard.

So hard, in fact, that sometime in the past, most Alabama politicians quit trying. And so, our people found an easier way to make taxpayers at least believe that they’re doing some good.

Economic development.

Essentially, the idea is this: We pay companies to locate here through a complex series of straight cash, training programs, land gifts, tax abatements and tax deferments. These companies accept these ludicrous gifts and in exchange dole out … jobs to people so the company can continue (hopefully) turning a profit.

It’s a bit one-sided.

The process of economic development, as you might know, is often filled with ethical sketchiness. There’s just so much money, so many people eager to make deals and offer “incentives” that it’s hard for most politicians not to reach a hand in the cookie jar from time to time.

After all, if you’re helping to deliver a few thousand jobs does it really kill anyone if you make a buck or two? Or if your cousin gets the excavation contraction? Or if your in-laws’ land gets purchased? Or if your brother’s tractor company supplied the equipment for the project?

Over the years, our lawmakers have been slowly forced to make most of that illegal. They’ve also made it illegal for a public official to accept a thing of value from a business in exchange for using their position to lobby for that business.

But that could be about to change.

If HB317 passes, as written, it would allow an exception to that law — if such lobbying is done in the name of “economic development,” well, it wouldn’t be considered lobbying.

Van Davis, the former special AG who convicted former House Speaker Mike Hubbard, called the bill disastrous in an interview with al.com. And he said it would make legal two crimes for which Hubbard was found guilty.

But don’t sweat it. It’s all in the name of economic development. And that always works out just fine for the people of this state.

Remember that time we gave more than a billion dollars in incentives to ThyssenKrupp? How’d that go?

Well, we didn’t really know it at the time, but it stunk. And the reason we didn’t know it at the time is because we’ve so revered “economic development” in this state that we’ve carved out special laws — laws that allow the government that works for us to keep very important details in these multi-million-dollar incentives packages secret.

But that’s not the worst of it.

The lying is.

A few weeks back, a lot of people in suits and pantsuits stood on a stage in Montgomery and proclaimed that Toyota-Mazda’s decision to build a plant in north Alabama was a great day. And maybe it will prove to be.

But here’s what’s already been proven: When Alabama’s elected officials proclaimed that the plant was lured here for $370 million in incentives and said it would employ 4,000 people earning an average salary of $50,000, none of that was technically true.

Two days later, when news of local incentives broke, the total incentive package price went up to over $700 million.

Two weeks later, the costs were estimated at over $800 million.

Last week, the Decatur Daily finally got its hands on a heavily-redacted copy of the actual incentives agreement. Total cost now: More than $871 million.

The Commerce Department also hid certain information when it turned over the documents, as it is bound to do by law under Alabama’s Open Records Act.

Among the items redacted: the salary information for employees, the dates of when construction will begin and end, when Toyota-Mazda will invest its $1.4 billion (which was $200 million less than reported at the press conference) and when production will actually start.

But don’t fret, it was quite clear when Alabama taxpayers’ $20 million in straight cash was due.

But maybe fret a little since the company isn’t bound to employ any specific minimum percentage of Alabama residents.

So, let’s tally this all up, shall we?

At the end of the day, Alabama is forking over $871 million in some form — even if it’s just from lost taxes — to get a plant that may or may not employ 4,000 people at an average salary that might be $50,000, or it might not be anywhere close to that, and we have no idea when this plant will start construction or production. In exchange, two companies that, combined, earned more than $60 billion in PROFITS last year alone will get a free building on free land and pay almost zilch in taxes.

And for this astonishing work, our public officials now want to be able to legally take money under the table.

That is economic development.

 

The sketchiness of “economic development”

by Josh Moon Read Time: 4 min
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