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Tuesday, January 22, 2013

Super projects: When economic development is poaching

Posted by on Tue, Jan 22, 2013 at 10:15 AM

Arkansas still waits for how much money Gov. Mike Beebe wants from taxpayers to land a super project with many new jobs, said to be almost a certainty.

At a minimum, super projects always raise questions about cost and benefit; about whether the state payouts were critical to the corporation or merely lagniappe the companies were happy to slurp. But there's another issue bubbling that will be the subject of discussion this week, which may or may not be relevant to Arkansas's coming news:

Good Jobs First will hold a tele-press conference on January 24 to issue a major study exploring the states' use of eight- and nine-figure economic development subsidy packages to poach jobs from each other, or pay "job blackmail" to prevent jobs from being pirated.

The study will include an especially outrageous aspect of the problem, dubbed "interstate job fraud."

In addition to the primary author of the report, the press conference will feature Bill Hall, Assistant to the Chairman, Hallmark Cards. He and other Kansas City-area business leaders have been outspoken on the issue.

The study will include case studies featuring metro areas Kansas City, Charlotte and Memphis and the states of Georgia, New Jersey, Rhode Island, Tennessee, and Texas. It has additional content regarding California, Connecticut, Illinois, Massachusetts, New Hampshire, New York, Ohio and Pennsylvania. It includes a historical chapter on interstate competition for jobs, data on interstate job relocations, and policy recommendations
.

I'm particularly interested if the coming Arkansas project might be one of those "job blackmail" deals — where a company already in Arkansas holds the state up for money to prevent it from moving jobs elsewhere. Seems like we went down this road once years ago on a forest products company's threat to locate a big mill elsewhere — many miles from the trees it was cutting in Arkansas to feed existing operations.

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