The economic stagnation in rural Georgia has drawn increased attention during this year’s legislative session, and a few measures mostly related to hospitals and health care are still on the table for the General Assembly’s final two days. The most prominent move regarding rural Georgia came from Speaker David Ralston, who launched a two-year initiative to study its problems, talk with its residents and leaders, and propose solutions. But he pointedly said the idea was not for government to “create jobs.”
The wisdom of that stance has been borne out — in the negative — in New York. There, Gov. Andrew Cuomo has plowed some $25 billion (the equivalent of one year’s entire state spending in Georgia) into the upstate region, with paltry results. The Investigative Post, in a project with ProPublica and Columbia University, found all that spending still left upstate New York far behind almost every state in the union:
“Employment upstate has grown by only 2.7 percent during Cuomo’s tenure — compared with 13.1 percent downstate and 11 percent nationally. Four of upstate’s 12 major metropolitan areas have actually lost jobs since Cuomo took office.
“If it were a state, upstate’s job growth would rank fourth-worst in the nation, below, among others, Mississippi.
“What’s more, 88 percent of the net jobs added upstate during the Cuomo years have been in low-wage sectors, led by restaurants and bars, employment data shows.”
That’s a pretty damning result after spending that kind of money, and it shouldn’t only affect Cuomo’s designs on being the Democratic nominee in 2020. It’s a cautionary tale for anyone in Georgia who does get the notion that government spending can fix what ails our rural neighbors. But not just spending; from the report on New York:
“The sheer number of subsidy programs helps explain New York’s largesse.
“There are property and sales tax abatements. Discounted power programs. Cash grants. State budget allocations to build and equip facilities for companies. And a growing number of state tax credits.
“The Tax Reform and Fairness Commission empaneled by Cuomo reported that the number of state tax credit programs had grown from nine in 1994 to 50 in 2013, the year it issued its report.
“Relatively few companies reap most of the benefits from these programs.
“‘A small number of taxpayers account for the vast majority of tax credits claimed,’ the commission reported.
“A report issued about the same time by ALIGN, an economic justice research and advocacy organization, found that only 4 percent of businesses across New York receive subsidies, and that many recipients are large, out-of-state corporations. ALIGN noted, for example, 14 separate subsidy deals for Target stores and warehouses. Walmart was another frequent recipient.”
Some of that might sound more familiar around here. This year, Georgia’s legislators have sought to make many more tax abatements and tax credits available, many of them with the expressed purpose of shoring up rural Georgia. There are instances where tax credits work, but as a general rule it’s better to place a low, simple tax burden across all rather than trying to stimulate economic activity by favoring a select few.
If that’s the direction the people working on Ralston’s initiative look to find answers for rural Georgia, the results probably won’t be any better than they were in the Empire State of the North.