One of the biggest problems with corporate welfare programs is attempting to evaluate whether the "incentive" given to a company to do something (expand, create jobs, purchase machinery, etc.) actually is an enticement for the company to do that or whether they are just trying to recoup money for something they were going to do anyway.
Here's one example that makes you think that so-called "incentives" aren't really incentivizing business to actually do something, rather it is just a payoff of taxpayer dollars.
Piedmont Aviation in Forsyth County has asked the county commissioners for $44,000 in "incentives" to consolidate their local operations and create 120 jobs. They are asking the State of NC for a similar $44,000 from the One North Carolina Fund.
So in total, this company would receive $88,000 in taxpayer dollars for adding 120 jobs. Sounds like a good investment right?
According to the company, the jobs created would pay an average wage of $44,805 plus benefits. Assume on the low that benefits cost an additional 20%, and you have total compensation for those jobs at $53,766 each. Multiply that by the 120 jobs and the total cost to the business to add those 120 jobs is roughly $6.5 million — per year.
Add in the fact that company will spend $3.3 million outfitting the new site for the expansion, and the company's total first year outlay is nearing $10 million.
So I'm supposed to believe that the decision on whether this company invests $10 million next year (and an annual expenditure of $5.6 million) hinges on taxpayers giving them a one time infusion of $88,000?
Or is this company going to expand anyway and is just looking to bilk the taxpayer out of a few dollars?
So the “incentive” amounts to about one-half of one percent of the company’s investment over just the next two years.
Good thing they want to expand JDIG and One NC Fund so we can continue to shell out even more money to companies that are expanding anyway.