County commissioners wrong on incentives
Even after years of watching politicians, I’m still sometimes amazed at their audacity, or mendacity, I should say.
The Novo Nordisk deal cut by Chairman Tony Braswell and his cohorts on the Johnston County Board of Commissioners was astonishingly bad. Please, somebody, find out if this man plays poker, because I want to sit in.
First, let’s look at the deal as presented. According to the Fayetteville Observer and Associated Press, the incentive package likely will cost Johnston County taxpayers $130 million in incentives, grants and lost revenue and could very well approach $150-160 million if Novo’s investment in fact reaches its projected $1.8 billion.
Never miss a local story.
But let’s say it only costs Johnston County what Chairman Braswell has freely admitted to – forgoing $95 million in real estate and personal property taxes, $2.2 million in cash to reimburse Novo for the land purchase (not to buy the land and lease to Novo, mind you, but an outright gift) and $3.5 million for any environmental mitigation that might be required. Forgetting for the moment state incentives, that comes to $100.7 million courtesy of Johnston County taxpayers, or more to the point, $145,730 per job, about five times the median income of our residents. Again, the real cost could be much higher.
This is a bad deal if everything works out as predicted, much less if Novo can’t comply. The market can be a fickle place indeed, and although Novo had a good 2015, there are always surprises.
But let’s suppose Novo continues to do well; it already has a facility in Johnston County that currently employs 700 people. What’s to say the company wouldn’t have expanded anyway? Plus, when exactly did Tony Braswell become an expert on the insulin-delivery market? Who’s to say some other company won’t come out with a new insulin inhaler and Novo’s stock takes a nosedive? You might recall Dell Computer, which likewise got millions in incentives from Forsyth County and eventually closed shop, which meant money down the drain and no jobs.
The best economic incentives to attract business are low taxes, smart regulation and reasonable energy costs. Johnston County’s competition for these jobs was Massachusetts, not a place that comes to mind when I think of the aforementioned criteria. So again, we would have likely gotten many of these jobs anyway without blowing $150 million, which Johnston County taxpayers will have to make up in higher taxes, which would encourage other jobs producers not to come to Johnston County.
That’s the problem in a nutshell: politicians picking winners and losers and writing checks that taxpayers will have to cover based. Tony Braswell’s descendants will be dead and buried before this deal pays off, and the sad part is he probably knows it.
Plus one more thing. I might mention to Mr. Braswell that we might not need a second bond referendum for parks and recreation if Novo Nordisk were paying its fair share. Just a thought.
Note: The writer, like County Commissioner Tony Braswell, is a candidate for N.C. House District 28.