Now don't get me wrong, I know our local economic development "gurus" will always chase the out of town, multinational giants waving wads of your cash at them and from Using Economic Development Incentives: For Better or for Worse: by Jonathan Q Morgan of the UNC School of Government I'll show you why:
"Some recent large deals in North Carolina illustrate how the immediate thrill of victory in the incentives game must be tempered by questions about the actual net benefit to the state and its communities."
You see, for them it's only about winning the game. They have jobs, nice homes, their children go to good schools and their expense accounts are paid with your tax dollars. They're salesmen. I once worked at a company where the salesmen were found to be selling products at below cost in order to increase sales and their own personal commissions. Worked out real good until a new district manager was brought in to figure out why the outlet leading the company in sales was loosing the most money. Also from the same article:
"As others have aptly noted, incentives are not inherently good or evil, right or wrong, wise or foolish. They are tools that public officials can use more prudently—or less so—depending on the application. Economic development incentives should be consistent with the letter and the spirit of the law to avoid potential legal challenges. Beyond legality, public officials should clearly understand the tradeoffs among fairness, efficiency, effectiveness, and accountability in using incentives to promote job creation and private investment. Current practice in North Carolina incorporates many good reforms in the use of incentives.
Additional ones are possible:
• More enforceable contracts
• Greater transparency and disclosure
• More rigorous cost-benefit analysis
• Better state-local and regional collaboration
• Improved opportunities and support for hiring local residents and the unemployed
• A greater focus on small businesses, existing industry, and job training
Taken together, these enhancements in incentive policy will help jurisdictions strengthen their negotiating position with companies, maximize public benefits, and protect the public investment in incentive deals."
Since 2009, when Mr Morgan's article was written we have come to learn that there are numerous drawbacks to the regional approach to economic development that perhaps Mr Morgan and his piers could not have foreseen. For example: Roch writes:
"I agree, Alex, in an effort to make ourselves look bigger than we are, we've made ourselves invisible."But it doesn't end there. As the largest city in the 10 county region Greensboro is also the largest contributor of tax dollars to the 10 county regional effort-- tax dollars that are being used to place jobs in places other that the most distressed areas of Greensboro and other cities throughout the Triad.
Smart players don't bet against themselves unless they are planning to throw the game. Have Greensboro's economic development "gurus" been working to throw the game? Fact is every city in the Triad has been investing incentives everywhere but their distressed neighborhoods.
Put Regional On The Back Burner: Other than the regional aspects I agree with Mr Morgan's points above and still believe there are some instances when regionalism might be a good tool but as the region's largest player we should be calling the shots if they want to play our game. And our game should be Greensboro first. After all: that was the formula that built the Piedmont Triad in the first place.
Tax The Incentives This may seem in contrast to incentives as we know them but if we were to consider incentive packages as incentive to create new businesses here in Greensboro instead of participating in a never ending, economic war among the states you'd find the idea I'm about to propose simply makes economic sense.
Why not, instead of providing tax incentives to companies to come to Greensboro, we provide incentives to start new businesses in Greensboro and grow the businesses that are already here? Then we tax the incentives those businesses receive so that the money earned from those taxes can be used to provide incentives to more businesses.
This would not only improve the local economy and reduce the burden on taxpayers but it would also help to level the playing field between the businesses we provide incentives to and the businesses who did it alone without incentives. Seems only fair to me when what we're supposed to be talking about is a hand up instead of a hand out.
Metrics And Performance Standards: Also from Mr Morgan's article:
"The strongest argument offered by proponents for the continued and expanded use of incentives is that incentives actually influence business location decisions. Although some evidence supports this claim, skeptics cite numerous studies that show incentives having little to no positive direct effect on investment
decisions."
Isn't that the problem in a nutshell? Up until now Greensboro, like cities everywhere, has offered little or no proof their incentive packages work. In this very series, Incentives In Greensboro, I challenged the City to provide me with proof and they were unable to do so. Any new rules for incentives must include performance standards and a means to determine if incentives work. Otherwise Greensboro will fight these battles forever.
Daycare: How can you expect people on welfare to take on jobs that pay hardly any more than it costs to put their children in daycare? Plus afford transportation? And how do you expect people who ride Greensboro Transit Authority Buses to and from work to get to and from work plus get their kids to and from daycare. Greensboro seriously needs to consider incentives to establish top quality daycare services where people work. Take Purolator, a company I mentioned earlier in this series. It is physically impossible to ride a GTA bus to work on first shift at Purolator and get there on time as their first shift starts too early. My brother works for Purolator and cannot use the GTA bus that stops in front of his house every 30 minutes and keep his job-- what if he still had children at home?
Not only is it a matter of getting people off of welfare and getting them to work, it's also a matter of educating our children-- something the City of Greensboro has washed its hands of since the State forced the merger of city and county school but something for which the City of Greensboro still bears responsibility. You see: we live inside cities and pay city taxes because we expect more than the county can give us.
In Finland, where “Whatever it takes” is the attitude that drives the world's most successful schools:
"It’s almost unheard of for a child to show up hungry or homeless. Finland provides three years of maternity leave and subsidized day care to parents, and preschool for all 5-year-olds, where the emphasis is on play and socializing. In addition, the state subsidizes parents, paying them around 150 euros per month for every child until he or she turns 17. Ninety-seven percent of 6-year-olds attend public preschool, where children begin some academics. Schools provide food, medical care, counseling and taxi service if needed. Student health care is free."
It's the preschool that interests me most. In Finland, kids don't start 1st grade until age 7. Finnish preschool has nationwide standards for quality and education. If Greensboro were to subsidize preschools/daycares located where people work it would give our city an economic advantage decades into the future and attract the very kinds of people to Greensboro we currently fly our economic development "guru" around the world hoping to get while helping the people who are already here.
And it probably wouldn't cost nearly as much as a FedEx, American Express or Proctor and Gamble incentive package has already
Food Stamp Fraud: It's time the City of Greensboro quit hiding behind Food Stamp Fraud. All over Greensboro, in Greensboro's most distressed neighborhoods, convince stores owned by politically connected individuals are trading wine, beer and tobacco for food stamps. This is destroying our neighborhoods and causing economic decline everywhere it goes on. It's time Greensboro realized there are economic consequences to these kinds of crimes.
I'm going to tell you about a man named Calvin Bryant, who many years ago owned a convenience store called the Calvin Bryant Curb Market on the corner of East Wendover and North English St. When I was first married and had a newborn son my paychecks seldom lasted 'til the end of the week. I walked into Calvin's store one night and asked if I could buy some groceries on credit until payday. Calvin said, "Sure, no problem, go get what you need."
I picked up milk, bread, baby formula, a few other things and a six pack of beer and put it on the counter. "Nope," Calvin said, "No beer. If a man can't afford to pay for his beer he can't afford to drink."
I put the beer back in the cooler, paid for my groceries and thanked Calvin. I continued to shop there until he sold the store and I'm still friends with his son, Phil to this day. Stores like Calvin ran were an asset to our community, what we have today is not.
There is no law that says the Greensboro Police Department cannot enforce Federal food stamp laws. Need a food stamp card to use, I'll let GPD borrow mine. There, you have no excuse. The Greensboro City Council should enact ordinances that permanently revoke the businesses licenses of any business found guilty of trading food stamps for beer, wine or cash. And GPD should enforce the law.
Again, enforcing laws like these levels the playing field and helps honest, tax paying businesses to compete, stay in business and contribute to our communities rather than destroy them.
Crime: Recently Ben Holder pointed out that Phongsavanh Market had been raided and meth was allegedly being sold out of the store. Now granted, you cannot close a business for allegedly selling meth, not until it has been proven in court, but as I later pointed out, the Phongsavanh Market, the previous business at that location, Oriental Market and the owner of the property, Shree Gee Llc, are not legal entities in North Carolina and should have never been allowed City of Greensboro privilege licenses, much less the right to remain open and allegedly sell Methamphetamine.
This business could have been closed years ago.
Legitimate businesses with or without incentive programs cannot thrive in an environment where illegal businesses are allowed to operate for years on end. The operators of these businesses haven't paid state or Federal taxes since 2004 and yet every year the City of Greensboro allows them to operate. This must stop. Regulations must be written that require checks and balances before a business license is issued by the City of Greensboro. And the checks are as easy as searching a few websites.
No More Storefront Churches: I don't know if there's ever been a study done and I know this topic won't endeer me to a lot of folks in Greensboro but over the years and throughout my travels I've noticed what appears to be a coloration between storefront churches and economicly distraught neighborhoods. The more storefront churches the worse off the neighborhood.
Now some will argue the churches are simply going where they are needed most and while I can't prove it I don't think so. I think these churches are just going where the rent is cheap. And in doing so they are pushing business out of the very communities these same churches are said to be serving. One way churches push business out is the current North Carolina ABC laws that forbid bars and restaurants that serve alcohol from opening up in close proxemity to churches. Now personally I could care less about the bars but even a lot of church going folk enjoy a class of alcohol with dinner from time to time.
Storefront churches push out businesses simply by taking up the space and they change the character of a shopping center in such a way that may younger small business owners (the ones Greensboro wants to attract most) don't want to locate there.
No, I'm not saying we run off the storefront churches who are already in place-- grandfather clauses prevent that sort of thing anyway-- but zoning changes should be made to stop more from coming in. As an alternative, small churches really are a better fit in residential areas. There are 2 churches in what was once houses within 3 blocks of my house and one more that used to be in a house until they tore it down and built a bigger building. And folks, there are a lot of empty houses in Greensboro. You could have worse neighbors than a church, you know.
Flexibility and Standardization: It really makes no sense that every single decision as to incentives should be left to City Council as this opens up a Pandora's box of opportunities for politically connected elites to game the system. Standardized rules and an annual budget are all that's needed to prevent this sort of gaming the system-- city staff needs only to check that the rules are being met and Council only needs to oversee.
In terms of flexibility, Greensboro's incentive program needs to be geared towards the types of businesses Greensboro needs most at any given time. Sure, a new hotel might provide more jobs, increase the tax base and boost the overall economy but does Greensboro currently need a new hotel or a new manufacturer more? Today I can honestly tell you we need manufacturers more but the day may come when we have to place a priority on hotels so that the people visiting Greensboro's many manufacturers have a place to stay. Any incentive rules passed by City Council need to have a built in means to measure and adjust for what Greensboro most needs at any given time otherwise we are passing out incentives haphazardly strategic formula or not.
Review And Monitor: Not only must we watch to see that each recipient of incentives is doing what he or she is supposed to be doing but we also must be sure the process is doing what it should be doing. As I proved throughout my series, Incentives In Greensboro, no one in Greensboro government or our economic development agencies was ever looking to see if what they were doing was working. (That is, no one with the power to do anything about it.) It shouldn't take a bunch of angry bloggers or a down economy to wake up economic planners to the fact that the system is broken-- they should have known it and fixed it before Billy Jones found out. After all, I'm the one with the falsified high school diploma from Greensboro's James B Dudley High School.
If you haven't the means to review and monitor my suggestions or anyone else's suggestions then what you've got isn't an incentive program, it's another nightmare waiting to happen to another very embarrassed Mayor of Greensboro.
