By FITSNews || As the taxpayer-funded incentives tab for Chicago-based aircraft manufacturer Boeing continues climbing far beyond original legislative estimates, the debate over whether this economic development deal was a good one for taxpayers is raging hotter than ever.
A recent analysis by the Charleston Post and Courier – which had been praising the deal in fawning terms – recently found that the value of the total incentive package could top $900 million. That’s more than twice what Gov. Mark Sanford and state lawmakers said the deal would cost – and it’s also well above the $750 million Boeing is investing in the construction of its 787 Dreamliner assembly facility in North Charleston.
Worse still are reports that Sen. Hugh Leatherman – who is widely credited for finalizing the Boeing deal – remains oblivious as to exactly how much of your money he spent to land the aircraft manufacturer.
“I’m not sure I’ve ever seen a number that’s been compiled,” Leatherman told the Post and Courier last month.
For more information on all of that, click here (and props to Post and Courier reporters David Slade and Katy Stech for their excellent work).
Now, onto the real question: Are we going to get our money’s worth out of this deal or not?
Obviously, we supported the initial Boeing incentives plan (you know, back when it was half what it is today), although the day after Boeing made its big announcement, we published a story urging state leaders to keep their eyes on the ball as it relates to job creation in South Carolina.
It’s nice to land one big manufacturing project every fifteen years, but that’s not enough. South Carolina needs to focus on small businesses – which are responsible for creating 95% of jobs in this state.
That means enacting long-overdue reforms to our tax code, legal and regulatory climate.
Anyway, we’ve reported – with confidence – that the 3,800 direct jobs Boeing is bringing to South Carolina will be accompanied by thousands of additional spin-off jobs. But how many?
Welcome to the heart of this debate – because the answer to that question will tell us whether this winds up being a good investment for South Carolina taxpayers or not.
Supporters of the massive incentives deal say that Boeing is going to provide the state with an unprecedented “multiplier effect,” perhaps bringing as many as 35,000 -40,000 jobs to the state (on top of the 3,800 direct jobs). The logic is that Boeing jobs will be high-paying positions, which means more disposable income that will be spent in South Carolina.
Supporters of the deal also point out that Boeing’s network of suppliers will “dwarf” that of BMW’s in the upstate.
Higher incomes + more suppliers = more spin-off jobs.
In fact Boeing jobs already rank very favorably in terms of the number of spin-off jobs they create. But is such a high multiplier of spin-off jobs reasonable to assume?
Most of the “multiplier” estimates we heard in the days leading up to the deal’s announcement were much lower, with total employment (including the 3,800 direct positions) ranging between 15,000 – 19,000 jobs.
So who’s right?
And who’s wrong?
Does it really matter?
After all … you’ll be picking up the tab regardless …