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LOCAL COMMENTARY: Business tax incentives: Spread the wealth

With Atlanta in the running for the new Amazon “HQ2” there is a lot of talk about the pitch being offered to the company to lure them to Georgia. The discussions on the topic have the value of all the incentives well above $1 billion. The discussions are also heavy with the topics of infrastructure upgrades, especially transit, which will be needed if Amazon indeed has Georgia on their mind.

At the same time, another discussion is brewing about the state of rural Georgia. The House Rural Development Council has been researching ways to push back against the population exodus from the rural parts of the state. This could also attract a pricy package of incentives to attract jobs and opportunity, especially in South Georgia.

This is a lot of money. This “b-word” is coming up way too often. Cobb County dropped nearly a billion to relocate the Braves. Mercedes-Benz Stadium cost well over $1 billion. A new discussion of a trucks-only highway between Atlanta and Macon could amount to an estimated $1.8 billion spent on a 40-mile road. When does the spending start to become troubling with the state controlled by a “fiscally conservative” party? How does the state wisely budget the money and still create an environment for business to flourish?

First of all, consider a few basics. Georgia has a tax credit package for the film industry. The state has issued over $200 million in bonds to fund its portion of the Savannah Harbor expansion. We’ve established business-friendly approaches to regulation and taxation. These are examples of broadly-distributed benefits. While the film industry program is specific to that one industry, it benefits anyone in that industry who operates in the state. The harbor expansion helps every Georgia company importing or exporting goods. In these instances, no one company benefits over its direct competitors.

Next, consider a few of the more targeted programs. The HQ2 pitch and the electric vehicle tax credit are somewhat more divisive. Take the KIA plant in West Point. 6,000 Georgia jobs would be competing for market share against companies selling EVs and benefitting from a tax credit. Workers in the distribution center in Carroll County would be competing against the recipient of over $1 billion in tax credits and other incentives. Georgia businesses will be paying taxes which will in turn be used to help their competitors. How can this be considered fair?

Now let’s go to rural Georgia. The hot topics are education, broadband internet connectivity, and healthcare, specifically hospitals. While a package geared toward rural development would be more rural-specific and neglect urban areas of the state, there’s not much of an argument to be made that Atlanta is struggling to develop.

Focusing more on rural development would allow the state to use broader-based packages to benefit a larger area of the state. The Amazon deal would be beneficial to Atlanta and some, very little if we are honest, of the benefits would eventually trickle down to rural Georgia. Building a healthy economy in the rest of the state could have all the positive outcomes of the Amazon deal but without the strain on infrastructure and resources in Atlanta. Stimulated industry, including Georgia’s largest industry, agriculture, would benefit from, as well as be a benefit to, the expanded Savannah Harbor. Improved local economies in South Georgia would put less strain on the state treasury. Increased wages and opportunity would be a boost for the state treasury. The number of Georgians living in poverty would drop, and larger swaths of the state would be attractive to business. Georgia would have more than just Atlanta to offer the world.

The rural broadband expansion is essential. With greater access, schools can use resources that could increase educational opportunities to rural students. Healthcare providers could include telemedicine in their treatment arsenal. Companies could hire telecommuters who prefer to live outside the metro environment. Local small businesses could compete on a more level playing field. This one development could be a game changer for the state. But there has to be an incentive. Companies aren’t going to invest because there might be a customer base one day. They will invest if there is an incentive to do so. But if Georgia runs out of incentives after stadiums and Amazon and electric cars, where does that leave rural Georgia?

That leaves us with a choice of priorities. We can keep incentivizing Atlanta while ironically wondering what to do about traffic, water, parking, crime, transit and affordable housing, or we can look at other options. We can decentralize our economy as a state. We can offer a fair way for our local businesses to compete, a healthy way for our state to grow, and some sustainable answers to the problems currently plaguing South Georgians.

Roman Sam Burnham is the curator, founder and editor-in-chief of the Blog website, the goal of which is to celebrate and preserve Southern history, culture and agrarian ideals.