ECONOMIC DEVELOPMENT ACCORDING TO AMAZON

PERSPECTIVE FROM THE 19TH HOLE: This is the title I chose for my personal blog, which is meant to give me an outlet for one of my favorite crafts – writing – plus use an image from my favorite sport, golf. Out of college, my first job was as a reporter for the Daily Astorian in Astoria, Oregon, and I went on from there to practice writing in all of my professional positions, including as a Congressional press secretary in Washington, D.C., an Oregon state government manager in Salem and Portland, press secretary for Oregon’s last Republican governor (Vic Atiyeh), and a private sector lobbyist. This blog also allows me to link another favorite pastime – politics and the art of developing public policy – to what I write.

Recent stories about corporate behemoth Amazon and its search for a second headquarters location beyond Seattle got me to thinking about the “economic development” business.

I was heavily involved in that enterprise for the State of Oregon in the late 1980s when I served as deputy director of the Economic Development Department, now called “Business Oregon.”

Of course, we never had as a big a quarry as Amazon, with its pledge to invest about $5 billion, and to create about 50,000 new jobs in a second headquarters, jobs that would pay in the range of $100,000 each.

In Oregon, we had far smaller targets.

Should a government be involved in business recruitment? It’s an often-controversial subject.

Some believe the private sector should fend for itself without any support from government, except, perhaps, in the permit-issuing business – at least considering whether to issue one, not whether to help a business wade through the quagmire of many permitting processes.

Others believe government has an important role to play in enticing businesses to consider locating in a state, county or a city, or, in the case of existing business, encouraging expansion in the same areas.

For us in the Oregon Economic Development Department, encouraging economic development was an important government function.

We felt it was entirely appropriate to be involved in business recruitment, as long as we also emphasized helping existing businesses remain in Oregon and cope with often-intense government regulations.

The matter of government providing incentives – including tax incentives to spur location or expansion — is even more controversial.

I remember a time in Oregon when economic development officials –it was after I left the department and became a lobbyist – went to the Legislature to gain approval for a list of incentives that would, among other things, have the potential to entice Intel to expand in Oregon.

Consider what happened.

Intel took advantage of the incentives and, as a result, is now one of the largest employers in the state. Its huge investments here also ripple out to suppliers and other economic resources in and around Washington County.

Without the incentives, Intel would have gone elsewhere.

Plus, one fact often lost as critics raise their voices about economic development is the incredible benefit of the income taxes all of the employees pay – income taxes that help to finance needed services, including K-12 schools, higher education, and public safety.

In my day, when we were recruiting businesses to Oregon and aiding existing companies with expansion prospects, one of the major questions revolved around the character and quality of school systems.

Not taxes.

Of course, we helped companies analyze taxes, but it was usually more important for company executives and employees to understand schools, including perceptions of their quality – schools that would be attended by the children of employees.

Back for a moment to Amazon.

Critics of decisions by East Coast cities – New York and Northern Virginia — to attract Amazon say some officials involved in development proposals expanded non-disclosure agreements beyond what a company even requested.

Companies seeking tax breaks and other incentives often require local officials to sign non-disclosure agreements as part of economic-development deals to protect confidential, proprietary information. The secrecy is intended to avoid alerting employees, competitors and would-be land speculators of potential development, as well as to protect private company information.

If you think about it only for a moment, protecting confidential company information makes eminent sense.

One of the risks now is that legislators who know nothing about economic development other than their opposition to it will press requirements to avoid incentives.

Too bad for those jurisdictions taken out of the game.

Cities, counties and states will lose if they don’t play in the game. And they will not be able to count on the new jobs and the taxes those job-holders pay.

To economic development opponents, I say, “Look at the jobs and the taxes that flow from those jobs.” That will provide a more complete picture of the worth of the supporting economic development.

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