Friday, October 18, 2002
Georgia won the bidding war for the Chrysler van plant. The short list included Savannah and a location outside Charleston.
The plant's a big one: 3,300 employees, $750 million in investment. Georgia reportedly offered $320 million, or $67,000 per job (according to the state) -- the largest sum the state has ever committed to luring an industry. South Carolina offered a $340 million package.
By my figuring, the incentive package was more like $97,000 for each direct job. It's tough to see how these incentive packages pay for themselves. Georgia says that the average pay for each job will be $44,000. That makes the total payroll about $145 million per year. State taxes in Georgia are about 6.2% of personal income. Even allowing for multiplier effects, it will be well over a decade before Georgia generates a cash on cash return.
Even more worrisome: Georgia is willing to put cash on the table without linking it to job creation.South Carolina wasn't willing to take that step.
My guess is that the people of Georgia would be better off if the funds were invested, with the returns going annually to fund R&D at the public universities in the state. Learn more.
posted by Ed Morrison |
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Georgia wins bidding war
