Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, June 15, 1995 TAG: 9506150037
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
DATELINE: LENGTH: Medium
In addition, before incentives are granted, state officials have begun regularly asking if the proposed new jobs would require job cuts at that company's locations elsewhere in the state. If that's the case, it could hurt a company's application for state assistance, said Brenda Harmon, a senior economist with the state Department of Economic Development.
Harmon made the remarks Wednesday at a department seminar on business incentives for Western Virginia economic development officials and business leaders. Nearly 200 people attended the half-day event at the Roanoke Airport Marriott.
Incentives paid out by Virginia and other states are coming under scrutiny by skeptics at think tanks, trade groups, universities and even in economic development circles. The widely used practice of governments paying for highway access to building sites, installation of utilities and training of workers has been questioned by those who wonder if public funds are wasted and are really necessary for industrial expansions to occur.
Government officials have countered that companies effectively repay the incentives they receive through taxes within a few years after they begin operations. The firms, proponents of incentives, say they decide where to add jobs and invest in plants and equipment based partly on what incentives are available, and that regions that can't offer incentives lose out.
Toward that end, companies receiving state incentives were required in April for the first time to disclose how much they will pay their new employees.
In a report published earlier this month by the Roanoke Times & World-News, Virginia Secretary of Commerce and Trade Robert Skunda conceded the state needs to track more closely what is spent in incentives and what companies provide in return. Virginia lacks an official policy on incentives, but officials expect to have one in place by next January.
In her speech, Harmon reminded the audience that the state retains the right to demand the repayment of incentive grants - which are given directly to localities on behalf of companies - if the companies don't furnish promised jobs and investment. So far, no funds from the grants, such those from the Governor's Opportunity Fund, have been recalled.
"These are the accountability [steps] that everyone's been asking for," Harmon said.
by CNB