Unmentioned in the recent Good Jobs First report on job piracy, it turns out that both relocation subsidies and retention subsidies are commonplace in Alabama. Greg Varner (@varnergreg) directs me to this report on how a Birmingham auto dealership, Serra Automotive, is demanding a multimillion incentive deal to keep it from relocating to another municipality in the metro area. As Birmingham News columnist John Archibald tells the story:
Across the Birmingham area cities spend tens of millions of dollars on incentives. Sadly, it is rarely to draw new opportunity or gain new blood. Instead we spill blood, as competition for existing businesses in the region pits city against city.
It happens all the time.
Birmingham commits millions to steal a hospital from Irondale, and St. Clair sweetens a deal to lure a coffee maker out of Jefferson County. Birmingham outspends the suburbs to take a Walmart, and the escalation continues.
We love the smell of industrial recruitment in the morning. And it gets us frustratingly nowhere.
We beat each other senseless. For a zero-sum game.
Because the city – the cities across the Birmingham area – pay to keep what they already have. Taxpayers lose and the region gains no jobs.
Here we have an example of the intra-metro area job piracy that Good Jobs First covered in its 2011 report on the Cleveland and Cincinnati metro areas, Paid to Sprawl. It would be interesting to see if Birmingham shows the same tendencies as those two regions, where most moves, even from one suburb to another, put facilities further from the city center. My guess is that’s exactly what we would find.
And I should emphasize, as the most recent Good Jobs First study does, that the state of Alabama knows how to put anti-piracy provisions in state subsidy programs. The very first entry on p. 45 of The Job Creation Shell Game shows Alabama’s Enterprise Zone Credit program as containing no-raiding language. Since cities are legally the creation of states, it’s time for Alabama to clip its cities’ wings and force them to stop this completely indefensible intra-state job piracy. The same holds true in many other states.
Cross-posted from Middle Class Political Economist.