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Common Sense about Incentives/Industrial Grants

 
With current unemployment rates and the need for jobs, I would like to comment on one aspect of economic development--incentives. Using incentives to create jobs is controversial and often misunderstood. Most every elected official I know will say they would prefer not to have to deal with incentives, and I am one of them. But the reality is that we are competing for jobs and economic development with other cities and states. With unemployment at a record high, the stakes are greater than ever. Our neighboring states are willing to provide extreme amounts of money and land to lure jobs. Is this a fair or good system? I would emphatically answer no. On the other hand, it is today’s reality. Let’s look at a few recent examples of incentive grants in Concord. The following table shows the investments made by the business in their facilities, their annual payrolls, and the number of jobs created. It is clear that incentives are bringing millions of dollars and thousands of jobs into our local economy.

 
There is at least one elected official in a neighboring governing body who believes that incentives have no impact on bringing jobs to Concord and Cabarrus County, and uses the Embassy Suites Hotel and Concord Convention Center as an example. He states that the project was built with no incentives. That is simply untrue. The fact is that it was built after the City donated the land on which the hotel is constructed and leased the parcel for the Convention Center and parking. Had the City not made this small investment combined with a federal Economic Development Administration grant for infrastructure, hundreds of jobs and income for our local economy would not be here. We have been paid back our incentive investment many times over. I believe it is a case where it is accurate to say, “but for the incentive, this would not have been built.” The facility has been open and successful for three years now, but business recruitment efforts remain as crucial as ever.
 
Incentives are an investment, a tool to create jobs, and the investment helps keep taxes low for everyone. I would point out that our tax rate of forty-two cents per one hundred dollars of valuation is much lower than some of our neighboring cities who have not been as fortunate in recruiting efforts. A few simple facts will help you understand why incentives are a low-risk tool when carefully applied:
-       An incentive is typically a partial rebate of the business’ taxes for a short period of time.
-       This tax revenue did not exist before the business came.
-       The City rebates a set percentage of paid taxes and keeps the rest.
-       The rebate is given if and only if 1) taxes are paid in full and 2) the recipient meets performance requirements, otherwise the business would get no rebate.
-       There is always a net gain in taxes but most importantly jobs.
 
It is fair to ask—how do these incentives affect the community? Jobs are added to the economy, and the benefit spreads to other businesses in the community who provide goods and services to those employees. For example, an unemployed person gets a job with Celgard and is able to buy a house after living with family. The sale of that home alone benefits the sellers, the real estate agent, the furniture store, the appliance store, and so on…not to mention all the other businesses the family is able to support with their income. After the rebate period is over, the community still has the jobs along with the full impact of the tax revenues to support public services. It is a win-win for everyone.
 
As you can see from the above table, Concord has used incentives to increase investment but most importantly to provide much-needed jobs. In the case of Celgard, it was a team effort from Congressman Kissell, Senators Burr and Hagan, the NC Department of Commerce, Cabarrus County Economic Development Commission, Cabarrus County Board of Commissioners, and Concord City Council. To date we have not lost one dime but have gained jobs and tax base. To compete for jobs we will need to continue to be aggressive. We owe this to our citizens.
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