Corporate Welfare Weekly - January 19, 2010 – Issue 33

 

Recent Announcements…

 

$100,000 in additional incentives has been approved for Innovative Emergency Management (IEM) by commissioners in Durham County on January 11^th. The company has also been granted a $150,000grant from the state’s One North Carolina Fund and could get as much as $9,000,000 in income tax rebates as part of a Job Development Investment Grant.

                ~ Ray Gronberg, Herald Sun, January 11, 2010

 

Incentives are being debated by state, county and town officials to keep ConAgra Foods in Garner. We all remember the June 13, 2009 explosion that killed four workers and injuring dozens more. The company has since shifted some of its Slim Jim operations to other sites and local officials want to make sure the remaining operations stay in Garner. ConAgra expected to see an incentives proposal by January 15, but officials say they will have one by Friday, January 22. The incentives package could climb into the millions of dollars.

                ~ Sarah Nagem, News & Observer, January 16, 2010

 

Quote of the Week…

“I think the point is, we try to be smart about this, we just don’t throw money at companies willy-nilly in hopes that they will locate here.”

~ Pennsylvania Governor Ed Rendell, as quoted by the Charlotte Observer, regarding a recent study by Good Jobs First, which advised Pennsylvania’s legislators against getting involved in the incentives war among the states.

 

Pennsylvania study advises against economic war

 

The Charlotte Observer reported in a January 13 article written by Dan Nephin that a recent study advises against states being involved in incentives war.

 

“The conclusions by Good Jobs First, a Washington-based economic development watchdog group aligned with organized labor, come from examining where Pennsylvania’s high-tech jobs have come from since 1990 and by comparing Pennsylvania with six nearby states.

 

The study, released Wednesday [January 12], advises against getting into an economic war among states, saying the movement of high-tech jobs between states is negligible, the bigger problem is jobs moving overseas.

 

‘Offshoring is  a big issue, but you can’t fix federal tax policy with state taxing,’ said Greg LeRoy, executive director of Good Jobs First and the study’s primary author.

 

The study found minimal difference in tax rates among Pennsylvania and the other six states – Maryland, New Jersey, New York, North Carolina, Ohio and West Virginia – when taking economic development incentives into account. The authors also conclude that most companies that get tax incentives would have chosen that state or locality anyway.”

 

Fidelity could get more incentives…

 

The Triangle Business Journal reported in a January 15 article written by Amanda Jones Hoyle thatFidelity Investments is finalizing its plans to build a second data center in Wake County.

 

“Sources say the Boston-based company is in final negotiations to buy a tract of land in Garner, but it has also considered sites in south Raleigh and south Cary for its second data center in the Triangle. The other is in Research Triangle Park. …

 

The project announcement may have been delayed because the company may still be trying to renegotiate incentives with the North Carolina Department of Commerce, although the company has not yet requested incentives from Garner’s town government. …

 

Fidelity Investments is currently fulfilling obligations required under a 2006 state incentive package that would be worth $69 million if it created 2,000 jobs by 2009. Fidelity has topped that goal and currently employs about 2,400 people in North Carolina, with most of those jobs based in the Triangle.

 

To date, the state has disbursed $2.5 million to Fidelity as part of a separate $54.6 million Job Development Investment Grant awarded as part of its incentive package, says Kathy Neal, spokeswoman for the North Carolina Department of Commerce.”

 

Garmin needeth no enticement!

 

The Triangle Business Journal reported in a January 12 article written by Chris Baysden that

 

“Satellite navigation firm Garmin International Inc. plans to open a new wireless technology center in the Triangle that will employ up to 40 people, the company said Tuesday.

 

The company, which is a unit of Garmin Ltd. (Nasdaq: GRMN), is in the final stages of choosing an office location, said spokesman Ted Gartner. This will be Garmin’s first office in the Old North State.

 

‘We’re excited to be in North Carolina,’ Gartner says. ‘We’re looking for some additions to the Garmin family.’

 

The firm, which neither asked for nor received any incentives, was attracted ot the Triangle because of its deep bench of engineering talent. Local universities produce a lot of that talent, and Gartner says that Garmin also wants to take advantage of the fact that some local experienced engineers are available after having been laid off from other firms due to the economic slump.”

 

Have Virginia lawmakers seen the light?

 

The Richmond Times-Dispatch reported in a January 14 article written by Olympia Meola and Michael Martz that Virginia lawmakers are proposing to eliminate the corporate income tax to make the state more competitive.

 

“Legislators looking to strengthen the state’s competitive edge when vying for new jobs are proposing to scrap the state’s corporate income tax.

 

The idea is being pushed by a small group of businessmen who see it lending a ‘wow factor’ to the state’s marketing pitch, creating jobs and encouraging investment.

 

It would give Virginia ‘economic competitiveness that is unparalleled,’ said [Sen. Ryan T.] McDougle, who quotes estimates that revenue from new jobs should exceed the money lost within two years.”