Incentives should be tied to performance

First Posted: 9/16/2009

For the second time within the past month, Mount Airy commissioners will be holding a public hearing on offering financial incentives to prospective firms looking to locate in the city.
And for the second time, citizens are being asked to comment on the incentives without knowing what the firms are.
We find the practice of asking citizens to do this, without any knowledge of what companies are asking for the incentives, distasteful, although we understand it is a necessary evil.
Firms want to make their own announcements about coming to a community, and local leaders, as good partners with the company, are obligated to respect their wishes in this matter. This is one of those times when the residents of Mount Airy have to trust the people they elected to serve them, hoping those public servants make the right decision.
The incentives, according to city documents, total somewhere between $77,000 and $135,000, but could result in landing as many as 251 jobs to the area.
Its hard to make specific statements about such proposals, but in general that seems like a fair trade-off, giving up that amount of tax revenue over a five-year period while providing that many new jobs.
We would encourage the city and area economic development officials, however, to put some conditions on these incentives. If a firm is promising 221 jobs but wants $58,000 in tax rebates over five years, the city ought to put some qualifications on that.
The company should commit to being up and running within a certain period of time, to have, say, a quarter of that workforce onboard by an agreed upon date, half of that number working by a later date, and be fully up to speed by a still later date. If the firm misses those dates, then it should forfeit a percentage of the financial incentive package.
With such an arrangement, the city can still offer a competitive financial package to a company looking to come to Mount Airy, yet protect itself should the company open up but not perform to the expectations which garnered those incentives.

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