Economic incentives are again in the spotlight after Google was promised as much as $260 million in tax breaks and other perks to create 210 jobs.

A top lawmaker, Senate leader Marc Basnight, will begin a review this week of recruiting deals and incentive policies to ensure that the state gets more than it gives. Officials with the N.C. Commerce Department and Caldwell County, where Google will invest up to $600 million in a data center, say the project passes the test.

But figuring out just how much a deal like Google costs and how much it will benefit the community and the state is difficult.

A Commerce analysis, completed before officials awarded a $4.8 million grant to Google, shows a net benefit to North Carolina of $37.15 million over 12 years.

That report, based on the department's standard economic model, doesn't consider all potential revenue or the value of state and local tax breaks.

Officials in Caldwell County and Lenoir, the city where Google is building, have promised to cut most of the company's tax bill for 30 years, a move that one public estimate shows could lead the community to forgo $165 million.

Legislators also passed a measure last year exempting Google from sales tax on the electricity and equipment it purchases in North Carolina. Sen. David Hoyle, a Gaston Democrat and one of the sponsors of the state bill, said last week that he did not know the full scope of the local incentives at the time.

The length of those local tax breaks, and thus their potential value, have drawn scrutiny from those who study recruiting.

"For it to be 30 years is surprising, especially for something in the technology field," said Terry Clower, associate director of an economic research center at the University of North Texas.

"What was a data center 30 years ago?" he asked. "What's the chance that entity will be anything or even exist in 30 years?"

Nowhere in public records released by the state is a concise accounting for all the concessions and advantages related to Google or an explanation of the duration of the local tax breaks.

Quality of assumptions

Documents generated by Lenoir and Caldwell leaders -- who doubled the length of the tax breaks early last year -- are expected to be made public later this month. Even with all information, calculating the costs and benefits is a tricky exercise.

To make the assessments, officials make assumptions about a number of factors, including the jobs a company will create and how many others will be generated by suppliers, vendors, retailers and other employers as a result of the company's presence.

The Commerce review of Google, for instance, assumes that 1,682 jobs will be created in the state this year because the company is locating in Caldwell County. That includes those Google hires and those hired by construction and other companies doing work because of Google.

Commerce has no way of knowing how many jobs will actually be created. Its computer software produces estimates based on several inputs.

Plug in different assumptions or switch to a different model and the results can vary widely.

The Dell disagreements

When North Carolina worked to recruit a Dell computer plant to Forsyth County in 2004, for instance, the state's jobs estimates were about double those of Virginia, which also competed for the plant.

Virginia officials estimated that Dell, its suppliers and others would bring about 4,113 new jobs. North Carolina estimated 8,086.

That also was much higher than an estimate produced in the Winston-Salem region. A UNC-Greensboro professor estimated the total jobs, if the plant came to Guilford County, to be between 4,911 to 6,320.

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