Monday, January 21, 2008
State Works to Assist Companies with More Development Dollars
We’ve dissected economic development deals for many years and can break the process down rather quickly. It goes like this: appear with a cardboard check and a lot of fanfare, remain conspicuously absent when the time to measure results arrives, and argue that without these investments companies would choose to locate in places other than Pennsylvania. Repeat year after year.
That’s why when two checks were cut in Pittsburgh last week that it would not be surprising to see the same. That was the fanfare part with two companies—TechAssist and CardWorks—getting a combined $907,200 to create 152 new jobs and retain 245 existing jobs. After examining “[the state’s] commitment to stimulate economic development” and making “it possible for companies to compete in the global marketplace”, the state sees its investment as justified completely.
But note that based on the new jobs expected to be created and the amount of the outlay we are talking about spending $6,000 per new job. Looking at each project separately shows that the CardWorks project edges the TechAssist project in egregiousness with the cost per new job for the former at $8,357 to $4,575 for the latter.
And those totals are based on whether the new jobs even come to pass, which we might never know. There probably won’t be any news story splash if we find out in three years that the job totals have not been met. And that is just too bad, especially in light of the recent audit of the Opportunity Grant program by the Auditor General’s office.
That’s why when two checks were cut in Pittsburgh last week that it would not be surprising to see the same. That was the fanfare part with two companies—TechAssist and CardWorks—getting a combined $907,200 to create 152 new jobs and retain 245 existing jobs. After examining “[the state’s] commitment to stimulate economic development” and making “it possible for companies to compete in the global marketplace”, the state sees its investment as justified completely.
But note that based on the new jobs expected to be created and the amount of the outlay we are talking about spending $6,000 per new job. Looking at each project separately shows that the CardWorks project edges the TechAssist project in egregiousness with the cost per new job for the former at $8,357 to $4,575 for the latter.
And those totals are based on whether the new jobs even come to pass, which we might never know. There probably won’t be any news story splash if we find out in three years that the job totals have not been met. And that is just too bad, especially in light of the recent audit of the Opportunity Grant program by the Auditor General’s office.
