Tuesday, April 02, 2002

DEVELOPMENT? After throwing a bunch of money at yet another automaker, the State of Alabama has been named the site of Hyundai Motor Company's only United States plant. The incentives given by states in the past decade (mainly in the South) has been staggering, but effective. Since 1993, Alabama has attracted Mercedes, Honda, and Ford to build assembly or component plants in the state. Mississippi, after giving nearly $1 billion in incentives (and interpreting eminent domain to mean public benefit rather than public good) became home to a Nissan factory. These packages to lure manufacturers go beyond just having the president of the Chamber of Commerce take someone out for lunch, and instead involve waiving property taxes for decades, and providing major infrastructure improvements. While attracting new industries is important, such tactics seem ill-conceived, especially considering that Mississippi and Alabama are both experiencing major budget shortfalls. While I'm sure you aren't interested in it here, Alabama's woes come from an outdated Constitution conceived during the height of Jim Crow, and a tax structure that favors a non-existent planter class. Alabama has only itself to blame, since it started the whole trend of offering large incentives, when it was courting Mercedes in the early 1990s.

No comments:

Related Posts with Thumbnails