Across the Birmingham area cities spend tens of millions of dollars on incentives. Sadly, it is rarely to draw new opportunity or gain new blood. Instead we spill blood, as competition for existing businesses in the region pits city against city.Here we have an example of the intra-metro area job piracy that Good Jobs First covered in its 2011 report on the Cleveland and Cincinnati metro areas, Paid to Sprawl. It would be interesting to see if Birmingham shows the same tendencies as those two regions, where most moves, even from one suburb to another, put facilities further from the city center. My guess is that's exactly what we would find.
It happens all the time.
Birmingham commits millions to steal a hospital from Irondale, and St. Clair sweetens a deal to lure a coffee maker out of Jefferson County. Birmingham outspends the suburbs to take a Walmart, and the escalation continues.
We love the smell of industrial recruitment in the morning. And it gets us frustratingly nowhere.
We beat each other senseless. For a zero-sum game.
Because the city – the cities across the Birmingham area – pay to keep what they already have. Taxpayers lose and the region gains no jobs.
And I should emphasize, as the most recent Good Jobs First study does, that the state of Alabama knows how to put anti-piracy provisions in state subsidy programs. The very first entry on p. 45 of The Job Creation Shell Game shows Alabama's Enterprise Zone Credit program as containing no-raiding language. Since cities are legally the creation of states, it's time for Alabama to clip its cities' wings and force them to stop this completely indefensible intra-state job piracy. The same holds true in many other states.
UPDATE March 7th: Greg Varner writes to tell me that two more Birmingham car dealerships have gotten deals for retention subsidies. Though their names have not yet been announced, the new article has more details on the Serra retention package. In addition to staying put in Birmingham, the dealership will add 35 jobs to its current 210, at a cost of $5.27 million over 7 years, a nominal cost of $150,000 per job. For $150,000/job, you can get auto assembly plant jobs, so this is not very impressive as an expansion subsidy. Again, it is the threat to move that is paying off handsomely.
Cross-posted at Angry Bear.