How does Virginia rate?
The commonwealth is not as generous as some states (Texas hands out cash like it owned a printing press), but we’re hardly slouches. According to the Times, Virginia gives companies $1.29 billion per year — $161 per capita, or eight cents out of every dollar in the state budget.
Looking down the list of welfare recipients, one sees some of the world’s largest companies: Microsoft, Rolls Royce, Northrop Grumman, Alpha Natural Resources. Even Steven Spielberg’s DreamWorks made the list as an LLC. That’s a neat trick.
The argument from economic development officials and from politicians is that such financial favors are an essential part of doing business with businesses these days. Without a nominal grant, a tax break, a loan guarantee or all three, companies will take their capital investment, jobs and the tax revenue they will generate over time to other states and localities eager to make a deal.
A Joint Legislative Audit and Review Commission report on Virginia’s incentive grant system notes that these monies “appear to have a positive but small impact on the site selection decisions of businesses.” So the grants may be a deciding factor in some cases. Or they may have been no factor at all. Not exactly a resounding endorsement.
[Continue reading Norman Leahy’s post at Bearing Drift.]
Norman Leahy blogs at Bearing Drift. The Local Blog Network is a group of bloggers from around the D.C. region who have agreed to make regular contributions to All Opinions Are Local.