Valdosta Daily Times

Top News

January 24, 2013

Georgia Described as the "Poach State"

Study: States Waste Billions Luring Jobs from Each Other

WASHINGTON, D.C. — Georgia is one of the states that waste billions of dollars each year on economic development subsidies given to companies for moving existing jobs from one state to another rather than focusing on the creation of truly new positions, according to a study released today by Good Jobs First, a non-profit, non-partisan research center based in Washington, DC. The report, entitled The Job-Creation Shell Game, is available at www.goodjobsfirst.org/shellgame.

"What was long ago dubbed a Second War Between the States is, unfortunately, raging again in many parts of the country, and Georgia is a major participant," said Greg LeRoy, executive director of Good Jobs First and principal author of the report. "The result is a vast waste of taxpayer funds, paying for the geographic reshuffling of existing jobs rather than new business activity. By pretending that these jobs are new, public officials and the recipient companies engage in what amounts to interstate job fraud." Georgia is singled out in the report for its use of the Mega Project Tax Credit and other programs in luring companies such as NCR.

Interstate job piracy is not a fruitful strategy for economic growth, LeRoy noted: "The costs are high and the benefits are low, since a tiny number of companies get huge subsidies for moving what amounts to an insignificant number of jobs." LeRoy added: "The flip side is job blackmail: the availability of relocation subsidies makes it possible for companies that have no intention of moving to extract payoffs from their home states to stay put."

Summarizing studies demonstrating that interstate job relocations have microscopic effects on state economies, the report reviews the history of economic competition among the states and presents eight case studies of those areas of the country where job piracy is currently most pronounced. Highlights include: 

In the Kansas City metro area, companies have been getting eight-figure subsidy packages to move from the Missouri side to Kansas, or vice versa.          

In Texas, the "deal-closing" Texas Enterprise Fund as well as a privately financed marketing group called TexasOne are used to brazenly lure companies from many states, including California.          

New Jersey has doubled down on both job piracy and job blackmail payoffs, continuing to lure firms from New York City-many of them Wall Street firms that were likely to come anyway.

Tennessee embodies all the policy contradictions. Its largest city, Memphis, is frequently the victim of poaching by bordering Mississippi, yet Tennessee created a whole new subsidy program to lure the North American headquarters of Nissan from southern California.

The booming Charlotte region has job growth most states would die for. Yet instead of managing their growth, the 16 counties in North Carolina and South Carolina routinely poach jobs from each other, using both state and local subsidies.       

Rhode Island has long pirated jobs from Massachusetts, but when it gave a very large package to lure video game maker 38 Studios, founded by retired Boston Red Sox star Curt Schilling, the deal soon blew up and criminal prosecutions are now under way.

Huge job blackmail subsidies have left many taxpayers bitter in states such as Illinois and Ohio, and Sears Holding Corp. has continued to shed jobs despite getting a second nine-figure retention deal from Illinois.

To cool these job wars, the report recommends that states demonetize interstate job fraud. That is, the states should stop subsidizing companies for existing jobs that are treated as "new" simply because their location has changed.

The study reveals that the vast majority of states already know how to do this: four-fifths of the states already refuse to pay for intrastate job relocations. For at least one and sometimes most of their major incentive programs, 40 states disallow subsidies for existing jobs that are merely being moved within their own borders.

The report also recommends that states end their business recruitment activities that are explicitly designed to pirate existing jobs from other states. It also suggests a modest role for the federal government: reserving a small portion of its economic development aid for those states that amend their incentive codes to make existing jobs ineligible for subsidies and certify that they no longer engage in raiding.

1
Text Only
Top News
  • blood drive.jpg Give Blood

    Give Blood

    August 1, 2014 1 Photo

  • Man arrested in Valdosta drug raid

    Man arrested in Valdosta drug raid

    August 1, 2014

  • Taiwan Gas Explosions_Stew.jpg Gas explosions in Taiwan

    At least 24 people were killed and 271 others injured when several underground gas explosions ripped through Taiwan’s second-largest city overnight, hurling concrete through the air and blasting long trenches in the streets, authorities said Friday.

    August 1, 2014 1 Photo

  • Immigration Overload_Roge.jpg Immigration courts speed up children’s cases

    Immigration courts are speeding up hearings for the tens of thousands of Central American children caught on the U.S. border after criticism that the backlogged system is letting immigrants stay in the country for years while waiting for their cases to be heard.

    August 1, 2014 1 Photo

  • Extra jurors seated for long Ga. salmonella trial

    After three days of jury selection, a panel with plenty of extra members was seated Thursday to hear the case of three people charged in connection with a deadly salmonella outbreak traced to a southwest Georgia peanut plant five years ago.

    August 1, 2014

  • Liberia West Africa E_Roge.jpg Ebola outbreak tops 700 deaths

    The death toll from the worst recorded Ebola outbreak in history surpassed 700 in West Africa as security forces went house-to-house in Sierra Leone’s capital Thursday looking for patients and others exposed to the disease.

    August 1, 2014 1 Photo

  • Mideast Israel Palest_Roge.jpg U.S., U.N. announce deal on Gaza cease-fire

    Israel and Hamas have agreed to a 72-hour humanitarian cease-fire beginning Friday, during which time there will be negotiations on a more durable truce in the 24-day-old Gaza war, the United States and United Nations announced Thursday.

    August 1, 2014 1 Photo

  • APTOPIX Congress_Stew.jpg Congress oks VA, highway bills, not border measure

    Congress ran full-tilt into election-year gridlock over immigration Thursday and staggered toward a five-week summer break after failing to agree on legislation to cope with the influx of young immigrants flocking illegally to the United States.

    August 1, 2014 1 Photo

  • Wisconsin Unions_Stew.jpg Wisconsin Supreme Court upholds union law

    The fight over Wisconsin Gov. Scott Walker’s signature policy achievement, a law effectively ending collective bargaining for most public employees, ended Thursday with the state Supreme Court declaring it to be constitutional.

    August 1, 2014 1 Photo

  • Today in History

    In 1714, Britain's Queen Anne died at age 49; she was succeeded by George I.

    August 1, 2014

Top News
Poll

Do you agree with the millage rate increases?

Yes. We need to maintain services
No. Services should have been cut.
     View Results