Crossing the Lines: Site, Urban, Environmental, and Transportation Planning
Wednesday, June 10, 2015
What does $777.3 million buy you?
According to the Business Journal, American Water is getting a $164 million tax break to move to Camden. This is on top of this short list of other companies who have been bribed into moving into Camden:
Here are a few other companies that have moved to Camden as part of a 2013 state law that increased incentives for employers who moved to Camden: • Volunteers of America Delaware Valley(VOADV) was approved for $6.3 millionto consolidate administrative offices into one facility in Camden rather than a location in Bensalem, Pa. • Subaru of America netted $118 million in tax breaks to move its U.S. headquarters from Cherry Hill to Camden. • Cooper Health System received $40 million to move about 350 administrative jobs now located in Cherry Hill and Mount Laurel back to its main campus in Camden. • The Philadelphia 76ers obtained $82 million in tax breaks to build a practice facility and corporate headquarters. • Holtec International received $260 million in tax breaks to build a manufacturing facility. • Lockheed Martin was provided with $107 million in assistance to relocate employees from Moorestown to Camden.
All told, this is about $777.3 million, more than three-quarters of a billion dollars to get companies to locate in Camden. While Camden is a challenged market in all sorts of ways, and it is likely significant public subsidy is needed to jump start it, this isn't how to do it. This is just sheer economic poaching -- shuffling jobs around without actually creating new jobs. What impact to the region's economy is there if VOADV is in Bensalem instead of Camden? The Sixers in Philadelphia instead of Camden? Lockheed Martin in Morrestown instead of Camden? The article says:
If American Water leaves its Voorhees, N.J. headquarters for Pennsylvania, then New Jersey will lose about 600 jobs on top of hundreds of potential new jobs that would go into constructing American Water's new campus.
If American Water was to move their corporate HQ to Pennsylvania, would they move it to Moon Township? Of course not: that would involve uprooting ensconced executives. It would stay in the Philadelphia area (winding up, most likely, in Bensalem). The economic impact of this strategy is nil. There is no net change in regional economic productivity. There are no new jobs, no new work. All this does is marginally change commuting patterns. And while it's nice that the new Camden jobs would be close to PATCO, is this marginal access improvement really worth $777.3 million in public money? Instead of subsidizing existing jobs, wouldn't that $777.3 million be better spent elsewhere? If the goal really were to make more jobs instead of simply bribing companies to go where you want them to, wouldn't a far more effective program be a small business incubator in Camden?