From the Statesman:
It’s worth repeating that incentives that spend taxpayers’ dollars to attract companies to Austin are not always warranted or justified and should be granted or denied on a case-by-case basis. And whenever incentives are granted, there must be rigorous follow-up to ensure that the companies receiving public dollars are living up to their end of the bargain. That aside, both deals make sense for Austin, one council member said.
“In these difficult economic times, we must continue to recruit high-paying jobs to Austin that ultimately increase our tax base and put our people to work,” said Council Member Sheryl Cole.
With an unemployment rate at 6.9 percent and declining sales tax revenue, we believe the council is right to focus on bringing jobs to town. More jobs also means more spending on consumer goods and services.
If we are going to start granting incentives for relocation, there should be a strategy, standards, and an accountability mechanism. Otherwise, we leave the amount of subsidy per job and the details of the agreements up to the whims at the moment. The absence of a policy will potentially sow distrust and confusion between the policymakers and the citizenry because of the lack of uniformity in awards and enforcement of deals.
Moreover, an actual strategy is needed that explains why existing firms in Austin that are facing the pressure to cut back but are muddling through don’t deserve to be subsidized. I can sort of see it for Hanger since its medical and we want to build up that, I guess. But LegalZoom? We have tons of consumer-oriented software companies. I empathize with the Council’s desire to create jobs. Perhaps the Council has a well-developed strategy for what and how relocation will be subsidized that I have not detected. But these deals strike of opportunistic companies being empowered by unemployment, not of policy that will set a strong foundation for sustained job growth in Austin.