Attack of the giant perk monster

by Jim Longworth

The incentives war was bad enough when greedy outsiders like Dell were extorting money to locate here in North Carolina. But now we’ve created a perk monster which is starting to attack us from within our own borders.

RF Micro Devices, maker of cell phone components, is Guilford County’s fifth largest taxpayer and employs nearly 2,000 people. Over the years, RF has sought and received numerous incentives from the county, and now they are going to the well again. The high-tech company is planning to build a $103 million facility that, logically, would sit near or alongside RF’s existing 700,000 square-foot plant in Guilford. But guess what? While the city of Greensboro agreed to kick in $1.3 million in incentives, Guilford decided to “just say no” to the perk-addicted company.

That left RF short of its incentives goal, and a bidding war ensued among and between Triad localities. Suddenly Greensboro, High Point and Winston-Salem are all trying to lure RF’s projected plant and the 300 jobs that come with it.

According to The Winston-Salem Journal, if the Twin City wins, it would pay grants to RF over several years based on a percentage of the property tax revenue generated by the company.

But High Point won’t be denied. The Furniture City can offer RF much lower utility rates because it owns a share of a nuclear reactor in South Carolina.

And then there’s Greensboro, where Mayor Keith Holiday is trying to keep RF in the neighborhood without violating the gentleman’s agreement he has with Winston-Salem Mayor Allen Joines not to engage in open warfare for the same local industry.

But by denying RF’s request, the usually volatile Guilford commissioners are acting like the most rational governing body in the region.

Don’t get me wrong. RF Micro Devices is a tremendous asset to the Triad, and a jewel in our economic development crown. But industry incentives are wrong at any level in any amount, and I don’t care who wants them.

Let’s don’t forget what really happened with Dell. Three years ago, Gov. Mike Easley and local officials in Forsyth and Winston pushed through a package worth $338 million. Why? Because Dell told them they needed to top Virginia’s bid which was kept secret. Last year, records were released showing that Virginia’s bid was only $38 million. That’s right. We the taxpayers got swindled by Dell, which conned us out of $300 million dollars more than we needed to pay. And to add insult to injury, the Dell deal doesn’t even protect employees. Under the agreement, Dell can lay off up to 40 percent of its workforce without losing so much as a penny in perks.

To his credit, Joines has made it clear that all of the localities bidding for RF are entitled to know what everyone else is bidding. That’s a step in the right direction, but it fails to address the real problem, which is that incentives are a bad deal at any price.

Hopefully we can end this madness and stop offering perks altogether, but until then, I have a stop-gap proposal. Every city and county should appoint an incentives committee comprised only of individuals who have lost their jobs due to a plant closing. The committee would evaluate every request for industry incentives, then make a recommendation to their local governing body as to whether taxpayers should cough up what amounts to corporate welfare.

Somehow I don’t think committee members will be so free with perks when they themselves are barely making ends meet because they were screwed by big companies that also received taxpayer support.

At any rate, it will then be up to city councils and county commissions to either accept or reject the committee’s recommendations. But what politician is going to dismiss the work of a high-profile citizen group – especially when tax dollars are at stake? The precedent for this system of checks and balances is already in place. That’s why we have, for example, citizen-run planning commissions to advise municipal leaders on such matters as zoning and development. It’s time to let taxpayers finally have a say in whether tax dollars are used to subsidize for-profit industries. Once they do, my guess is that incentives as we know them, will become extinct.

Until then, my advice to RF Micro is to stay in Guilford and build the plant with your own money. You don’t need corporate welfare to succeed, and we taxpayers don’t need to keep subsidizing your success. The Triad needs to work together, and bidding wars run counter to cooperation and trust. It’s time for RF Micro to be left to their own devices.

Jim Longworth is the host of “Triad Today,” which can be seen Friday mornings at 6:30 a.m. on ABC 45 (cable channel 7), and Sunday nights at 10 p.m. on WMYV 48 (cable channel 15).