With an economic downturn and a government in gridlock, it is so refreshing to see a nation standing together: a nation that believes in the same things and works together to help each other. Oh wait, the last few blog posts there have been discussions on states secede, cutting spending on educational programs, and strict partisan lines. It would appear that during a time of crisis the United States of America turns more into the “Keep-to-your-self States.”
Recently there have been a few “Border Wars” as states compete for big businesses to move to their states and create jobs. It is estimated that local governments across the nation give about $80 billion of taxpayer money in the form of incentives for big business. One of these competitions is happening on the border between Kansas and Missouri. In mid-September, the State of Kansas gave AMC theaters $45 million to move their headquarters across the border from Kansas City, MO. A few weeks after the deal, Kansas was forced to make budget cuts on their public schools.
Around May 2011, Missouri lured the Applebee’s headquarters to jump across the Missouri-Kansas state line with $13 million worth of incentives. Not long after the deal was struck, the state pulled money away from their early childhood development program.
The point is, big business is moving across the street for tax incentives at the cost of the taxpayer. Although these big corporations may create some jobs for the state they move to, it is not worth the competition if more important programs like education and childhood development are sacrificed. Not to mention, the corporations who take the incentives do not actually care about their location, just how much the location is willing to offer them. This means they can get up and leave if a better deal comes around and leave devastation to the state’s economy in the their wake.
In the war between New York and New Jersey, corporations threaten to leave unless the state they are based in pays them more to stay. Since 2002, NYC has given $11 billion worth of incentives to companies in an effort to keep them on the New York side of the river. According to New York’s Economic Development Corps, this money was used wisely to attract companies that created jobs. Ironically, the jobs New York bid so high on were mostly through the financial sector: Goldman Sachs, Chase Bank, etc. I highly doubt taxpayers in New York appreciated winning the “Border War” for companies that took down the American economy.
The “Border Wars” are another example of how corporations have the most power in our governmental system. The only ones who really benefit from these competitions are large corporations. They make their money by pinning communities against each other and pick the highest bidder. In this financial climate, states need to work together to get more funding that will help the people, not compete against each other and grind the people down. Business incentives should not divide us.