Georgia and many other states collectively “waste” billions of dollars to lure companies and existing jobs from their neighbors rather than investing in job growth created within their borders, according to an advocacy group report released Thursday.
Good Jobs First said Georgia is among states that engage in “interstate job piracy” and “geographic reshuffling of existing jobs.” Hefty incentives, the non-partisan group said, strain already fragile state budgets.
Georgia’s top economic development official, Chris Cummiskey, termed the report “off the mark.” He chafed at the labeling of Georgia as the “Poach State,” a riff on the Peach State moniker.
“We’re not a state that poaches,” said Cummiskey, commissioner of the state Department of Economic Development. State incentives have created thousands of new jobs from both companies that pick Georgia for growth and in-state companies that look to expand, he said.
“We’re a state that answers the door when (companies) come to call,” Cummiskey said.
The number of major corporate expansions and relocations is down since the late 2000s, making competition for new jobs fiercer, the report said.
The report cited Georgia’s 2009 recruitment of NCR. The state lured not only the ATM maker’s headquarters, but also manufacturing, training and research centers that imported or created more than 2,000 direct jobs. The price tag: $109 million in state and local incentives.
Recent jobs announcements from heavy equipment maker Caterpillar (1,400 direct jobs), biomedical giant Baxter International (1,500 direct jobs) and a General Motors innovation center (about 1,000 direct jobs) involved more than $130 million in state and local incentives.
Poaching makes states vulnerable to what the report authors called “job blackmail,” which they say happens when companies obtain incentives to expand in their home states when they had no intention of leaving.
Good Jobs First, an economic development research group that is often critical of corporate incentives and subsidies, recommends states not incent relocated jobs or label existing jobs as new ones, and that they treat companies that move jobs or create new jobs in a state the same as growing in-state employers.
Cummiskey said Georgia treats in-state and out-of-state prospects the same.
Gov. Nathan Deal’s budget writers recently proposed cutting about $185 million this fiscal year and next from war chests the state uses to close deals. Incentive war chest funding has varied greatly over the years, but the latest move is a reduction of nearly 75 percent.
Cummiskey said the state still has plenty of funds available and will restock in future budgets.
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