By Staff
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A hefty price to pay.
That's how some will likely describe the $234 million incentive plan used to lure Hyundai to Alabama.
But the reality is progress – and yes, jobs – come with a price.
In the competitive world of economic development, corporations and businesses are in the enviable position of being courted and wooed by suitors from around the world. And, those suitors are offering more than just flowers and a box of chocolates.
Tax breaks; reduced utility rates; infrastructure improvements; even free land are all part of the package offered to potential industries.
And, if Alabama is serious about competing, it must offer the same.
Of course, that's just what our state's leaders did, compiling an intricate package of incentives that includes an $82 million break on corporate income taxes; sizeable state and community pledges for everything from roadwork to job training programs; and $18 million in support from private companies.
As the details begin to be made public and we learn just what the different communities contributed, and what our state officials promised, it is important to remember that these incentives are an investment in the future of our state. They are our contribution – a good faith promise, if you will – that Alabama, its communities and its companies believe that Hyundai's first American manufacturing plant will bring yield much more than $234 million in return.
Some officials were quick to boil the package down to a simple formula: $117,317 for each of the 2,000 projected jobs at the Hyundai plant.
We think it's much more complex than that. The spinoff industries – from suppliers to marketers – are likely to produce thousands of additional jobs. Some officials estimate as many as 6,000. With each of those jobs comes payroll, consumer spending and investment and economic growth.
And, with Hyundai's investment in our state comes additional international recognition, a growing prominence in the world of auto making and, perhaps, a new interest from other manufacturers.
While it may seem a hefty price to pay right now, what we ultimately stand to gain as a state and as a people may make this package look like a bargain.