Tuesday, May 11, 2004
Here is an increasingly common story. A local school district resists the pressure from economic developers to offer tax breaks. The school officials are right on this one.
Local economic developers, citing a survey of firms, indicated that incentives ranked as the most important factor in location decisions. Before jomping on these "facts", economic developers should pause.
There is very little economic evidence that incentives matter much. But let's assume that they do work. Does it make sense to add to the costs of a local school system (by adding families through successful recruitment) at the same time that you are reducing the tax base?
Let's assume that you add a plant with 250 employees, and that translates into 200 families, or about 400 school age kids. If the expenditures per pupil are, say, $6,000 per year, your recruitment effort adds $2.4 million in added operating cost to the school system. (Capital costs -- the investment in new school buildings -- is another factor, but I'll exclude that.)
The strategy is simply not sustainable, especially in a global economy where brainpower matters.
Read about what's going on in Columbia, MO. Go.
posted by Ed Morrison |
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Columbia schools resist incentives
