When do economic development incentives become corporate welfare? I don't know, but I hope someone on the Richardson City Council is at least asking the question. It's prompted by two recent news stories, one in Plano, the other in Richardson.
After the jump, how much do we have to pay to attract business?
The first story is an old one now. It's how the city of Plano and the state of Texas attracted Toyota to relocate its US headquarters from California. According to the Gov. Rick Perry's office, the state is giving Toyota $40 million dollars to relocate about 4,000 jobs to Plano. That's $10,000 per job. Perry's incentives are controversial. "Even Attorney General Greg Abbott, the Republican candidate to replace Perry, has said he wants government to get out of the business of 'picking winners and losers'", according to the Dallas Business Journal.
The second story is a new one. The City of Richardson just might be getting more deeply into that business of "picking winners and losers." According to The Dallas Morning News, Richardson is considering whether "to devote a half penny of its property tax rate for economic development incentives." That's estimated to give the city about $500,000 a year to encourage redevelopment. If the Toyota math holds, that's about 50 jobs a year. If the Toyota math isn't applicable, I wish someone at city hall would provide me with the correct math.
"Over time, we could in fact develop a significant war chest," Richardson Mayor Laura Maczka was quoted as saying by The Dallas Morning News. Yes, indeed. Just how big a "war chest" is needed and exactly what return is Maczka expecting from it? If the city backs up this plan with details showing an attractive return on investment, I might be convinced to go along. But without that accountability, that "war chest" could become a slush fund and those economic incentives little more than corporate welfare.