Archives

Despite its many flaws, the recently enacted biennial state budget took an important step forward in ensuring the performance and effectiveness of the state’s economic development efforts. Tucked into the spending plan is a provision that expands and strengthens job creation performance monitoring for those businesses that receive state-funded incentives for location or expansion, requirements that represent an important step on the longer road to more accountable—and effective— economic development incentive policies. Read More

google logoThe News & Observer reported today about the secret dealing Google had with the NC Legislature that ultimately got them tax breaks worth $89 million over 30 years.

Google tried to silence lawmakers and pushed — at times with a heavy hand — to influence legislation designed to bring the company to Caldwell County.

Lawmakers last year approved a measure eliminating sales tax on electricity and equipment used by Internet computer centers.

As work proceeded on the bill to remove much of its tax burden, Google threatened to end negotiations because legislative staff didn't write exactly what it wanted.

It bothers me that companies and legislators are striking deals in secret when we’re supposed to have a system of open government.  Adding to the insult was a report by CBS that

Google Inc.'s fourth-quarter profit nearly tripled amid another burst of breathtaking growth that enabled the online search leader to sprint past analyst expectations…

The Mountain View-based company said Wednesday it earned $1.03 billion, or $3.29 per cents per share, during the final three months of 2006.

Google obviously isn’t hurting for money so why can’t they pay their fair share of taxes? And why can’t our legislators stop making these questionable deals in secret?

google lunchThere’s no such thing as a free lunch.” That was my high school biology teacher’s favorite expression. He used it every time he wanted to remind us about the trade-offs in nature. Nothing is gained without something else being lost. Even when the trade-offs aren’t immediately apparent, they still exist. It’s true in nature and it’s true in public policy.

The adage popped into my mind when I heard that the Google, enticed by $100 million in state and county government concessions, decided to locate its new facility in Lenoir, North Carolina. In addition to a Jobs Development Investment Grant from the state, Google receives 30-years of tax reprieves from the city, county and state governments.

The executives at Google must think that they’ve received a free lunch, but I wonder if they’ve stopped to consider the trade-offs. By not paying taxes for 30 years, Google wins but deprives the state and county of revenues that are needed to support the community infrastructure. Two generations of Lenoir’s school children will graduate without having so much as one textbook paid for by Google. It’s simply not fair; not to the community, not to other small businesses, not to the taxpayers.

Businesses, especially industry leaders like Google, Dell and Dole Foods, need to support communities with more than jobs; they need to pay their fair share of taxes to help support the community infrastructure.

It’s up to North Carolina’s government leaders to create a business incentive program that is fair to all stakeholders. Until this happens, communities, small businesses and taxpayers will be asking, “Where’s our free lunch?”