Last Monday's Wall Street Journal had an interesting article in the Regional Economic Roundup (A Special Report): Take the Money and Don't Run; States continue to lure businesses with promises of tax breaks and grants; But now the deals come with a catch: You don't get the cash until we get the jobs. by Conor Dougherty. WSJ. (Eastern edition). June 11, 2007. pg. R.1
Here's the abstract:
Now governments are making sure that their incentive plans come with a catch. Many are using "clawback" provisions that let governments recover their money if companies leave town or go belly-up. In other cases, governments don't pay companies until they actually create jobs. One city is even proposing a "no poaching" agreement to get more leverage over businesses, where neighboring cities promise to limit the use of incentives to lure companies from each other.
"It's a 'united we stand' kind of approach," says Charles Bichara, director of economic development for Middleburg Heights.
"No one can predict or guarantee economic conditions, which will ultimately determine the long-term viability of any business venture," says Jay Biggins, executive managing director at Biggins Lacy Shapiro & Co., which represents companies in negotiating incentive packages. If a project doesn't meet expectations, and a clawback becomes necessary, Mr. Biggins says, "that's the system working."
To get the full-text article, you can go to a database that contains the WSJ, such as ABI/Inform Global. That includes the New York State Library, if you have a P card. If you don't have access, let me know , and I'll see what I can do.
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The WSJ's video about Naugatuck, CT's plan to use a new transit system to "breathe life into the city's economy." (3:11, after a 0:15 commercial.)
Here's the abstract:
Now governments are making sure that their incentive plans come with a catch. Many are using "clawback" provisions that let governments recover their money if companies leave town or go belly-up. In other cases, governments don't pay companies until they actually create jobs. One city is even proposing a "no poaching" agreement to get more leverage over businesses, where neighboring cities promise to limit the use of incentives to lure companies from each other.
"It's a 'united we stand' kind of approach," says Charles Bichara, director of economic development for Middleburg Heights.
"No one can predict or guarantee economic conditions, which will ultimately determine the long-term viability of any business venture," says Jay Biggins, executive managing director at Biggins Lacy Shapiro & Co., which represents companies in negotiating incentive packages. If a project doesn't meet expectations, and a clawback becomes necessary, Mr. Biggins says, "that's the system working."
To get the full-text article, you can go to a database that contains the WSJ, such as ABI/Inform Global. That includes the New York State Library, if you have a P card. If you don't have access, let me know , and I'll see what I can do.
***
The WSJ's video about Naugatuck, CT's plan to use a new transit system to "breathe life into the city's economy." (3:11, after a 0:15 commercial.)
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