Economic Development 101
Why on God’s green earth would a community provide economic development incentives to a company already located in the community?
Doesn’t the community then have to provide incentives to all similar companies? If we don’t incentivize all companies equally, isn’t that picking winners and losers? Corporate welfare! Sad!
Ergo, we should not provide any incentives to anyone.
Actually, incentivizing job creation is how most communities grow and develop economically. Our community has not used these tools to the same extent as our peer communities, which may explain why we lag the rest of the state and much of the nation economically.
A little background: Most states, including Colorado, offer economic development incentives in the form of tax credits and cash payments, often matched locally by pledges of buildings and land for relocating or expanding companies. This was the recipe for once-sleepy communities like Boise, Idaho; Bend, Oregon; Ogden, Utah and Asheville, North Carolina.
But the jobs these companies are creating are not just any jobs. They must be “primary jobs.”
(As an aside, state law requires that no incentives get paid out until the company creates and retains for a year the positions it was incented to create.)
The essential component of a primary job is that it involves production of a product or service that is exported out of the community in exchange for money imported into the community.
A classic example of a primary employer is our own Reynolds Polymer, which manufactures incredible acrylic products like huge aquariums and exports them around the world.
The jobs at Reynolds are like any other local jobs in that the money paid to its employees gets spent at local grocery stores, car dealers, shoe stores, home builders, hospitals and restaurants.
But the extraordinary nature of jobs at companies like Reynolds is that they result in the import of outside dollars. When the size of the local economic pie grows, more money gets spent at local grocery stores, car dealers, restaurants, etc.
In turn, the folks at the car dealers, grocery stores and restaurants spend more, which leads to a faster turn of the economic cycle, resulting in more wealth, more hiring, more prosperity and more tax monies.
If we grow the economic pie, everyone gets a bigger slice. It simply makes us all – including local governments and schools – wealthier.
This is why we find so misdirected the voices pushing back on the long-overdue local deployment of economic development incentives, including a package to retain zip line manufacturer Bonsai Design.
Incentives like the ones offered to Bonsai and the ones paid in the past to Reynolds Polymer and local chairlift manufacturer Leitner-Poma pay a return on their investment within years. Over time – decades in the case of Reynolds and Leitner-Poma – those incentives return the community’s investment hundreds-fold. It’s painful to imagine this community without local gems like Reynolds and Leitner-Poma.
We applaud the City of Grand Junction’s quick and decisive maneuvering to allow all of us to enjoy the economic benefits of Bonsai building its bright future here.
It sends the message to similar companies in all industries that the lights are coming back on in Grand Junction. We are in the game now. No longer will we stand on the sideline when aggressive communities like Ogden, Utah attempt to intercept our up and coming stars.