IN A PERFECT world, we wouldn't have to get into bidding wars with other states - or countries - to see which one can give away the most to lure big companies to bring jobs its way. A nice bonus of living in such a world is that we wouldn't have to wrestle with difficult questions about how big is big enough.But it's not a perfect world, and so sometimes we do have to give significant tax breaks, and even put out money up front for infrastructure costs, in order to essentially buy jobs. That means we have to figure out where to draw that line between the companies that are worthy of incentives and those that are not.
As The State's Roddie Burris recently reported, the House and most of the Senate want to provide some Boeing-style tax breaks to a company that's talking about building a giant outdoor shopping mall that's supposed to pluck traffic off of I-95 in Jasper County. The argument is that a shopping mall would have as transformative an effect on the economy of that poor rural county - and its even poorer neighbor, Hampton County - as Boeing will have on Charleston County, and so it deserves comparable tax give-aways.
It's hard to refute that logic, and to their credit, legislative supporters have put some safeguards on their special tax-give-away package for Okatie Crossings: Developers couldn't get any tax breaks until they spend at least $100 million and create at least 1,000 jobs, and the incentives would go away if total jobs ever dropped back below 500.
Nonetheless, this would continue to take us in a direction we'd be better off not heading in - and away from better routes to prosperity.
We've traditionally had a traditional approach to economic incentives: Manufacturers get tax breaks, retailers do not; the idea was that manufacturers create better paying, more stable jobs. Then we started focusing on growing a "knowledge economy" and said we only wanted incentives to go to brainy businesses, which don't always meet the standard definition of "manufacturers" but often pay even better. At the same time it was doing that, though, the Legislature - over Gov. Mark Sanford's strong, repeated and correct objection - was moving in precisely the opposite direction, offering incentives if specific giant retailers would open up shop in the state. None has bitten so far, but it doesn't take much of a leap to get from trying to lure "extraordinary" retailers they claim would be tourist destinations (Cabela's) to the giant mall. What's next? Tax incentives for a burger joint? A convenience store?
At the least, we need an objective way to differentiate the value of jobs in a Lexington County and the value of jobs in a Marlboro County. We have laws that pretend to do that, allowing more incentives for lower-paying jobs in the poorer counties, but the tiers are subject to political manipulation, making them not particularly helpful.
The better and smarter approach is to make give-aways a less important part of the job recruitment strategy, by making our state, and individual communities, places where businesses want to locate. You do that by providing a well-educated workforce and a good quality of life and basic infrastructure. You do that by providing a stable tax system that is adequate to pay for the services that help create the well-educated workforce and good quality of life and pay for that basic infrastructure. You do it by providing a predictable tax system that treats everyone fairly - not one that works just for those who have the right connections, or are willing to purchase the right connections.
That's a lot harder than figuring out where to draw the line between companies that are big enough to merit what should be truly rare incentive packages and those that aren't, and harder still than just tossing out tax goodies like parade candy. But until we are ready to commit ourselves to that approach, those good-paying, stable jobs are going to continue to be the exception rather than the rule, and we're going to have to continue to buy even the mediocre jobs.