News & Observer | newsobserver.com | Googled

Published: Feb 09, 2007 12:00 AM
Modified: Feb 09, 2007 03:02 AM

Googled

It turns out the incentives package to recruit Google was more generous than first thought. The secrecy is disturbing

 

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What must Google executives have thought when they reviewed the incentives offered by the state of North Carolina and Caldwell County last year in exchange for the company bringing a data center to Lenoir? That reaction must have been something like an after-Christmas sale when shoppers are standing outside a department store awaiting the opening and one declares, "You know, they're practically giving the stuff away!"

North Carolina and Caldwell County and Lenoir leaders really were giving things away in a panting (and ultimately successful) effort to lure Google, with its projected 210 jobs and $600 million investment. The gifts, mainly in the form of incentives such as tax breaks and also including grants and road preparation and the like, might go as high as $260 million. And the deals were done in secret. The News & Observer reported on the revised (higher) size of the incentives package after new records pertaining to the deal were made public this week.

In fact, as The N&O had previously reported, Google played tough -- demanding secrecy, implying that if the slightest thing went wrong it would withdraw its plans and so forth. Some misguided local officials and legislators actually signed promises of confidentiality. And they were either naive or oblivious to the fact that the only beneficiary of secrecy is the company involved.

In a competitive market, it's perhaps understandable that a corporation -- in particular a large, powerful one that was well aware of how sought-after it was -- would want confidentiality in some areas.

But part of the reasoning behind an insistence on closed doors in any such negotiation, though public funds are involved, is so that a state or locality will offer as much as possible without knowing what the next best offer is. If, for example, North Carolina offered someone $5 million and the best offer besides that was $1 million -- and North Carolina officials found out -- the initial offer might be lowered.

Company officials and state officials defend the process and the incentives that were offered as reasonable in light of what other states do. OK, but if they are indeed reasonable, why not put more of these negotiations on the table for the taxpayers who will foot the bill to see? That ought to be a lesson learned from the Google experience.

Maybe the incentives package isn't bad, and perhaps all that has been forecast in terms of jobs will come to pass over the next 30 years (the period during which some of the company's taxes have been waived). If so, great. But it's unrealistic and improper for public officials, appointed or elected, to engage in these kinds of negotiations without allowing more scrutiny along the way by taxpayers. Other companies may have a dog in the fight, so to speak, as well.

The state needs to lead the way here, setting guidelines that demand more openness at the state level in these deals and that demand the same of local governments. If all the wheeling and dealing is worth it, and government officials as well as company officials insist that it is, then there would be no harm in the state letting the public see just how generous it's being, and why.

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