Cabarrus Cheap Seats

Golden Gait Trailers will relocate to Kannapolis next year [link to story] . The company is looking to more than double it’s workforce in the next few years and they are going to do it in Kannapolis. 

So, a $4 million-dollar facility will be built, employing about 100 people when it comes to full-speed. The City of Kannapolis and Cabarrus County are so happy about it, they are giving this small, locally-owned business modest tax incentives, but still projecting a net gain of $80,000 in tax revenues (after the incentives). Golden Gait is happy about it. I’m sure about 50 of the few hundred people in the area looking for a job is happy about it.

Who wouldn’t be happy about this? Harold Smith.

His weekly post at www.goharoldsmith.com actually sees a problem with this. See for yourself:

May 30, 2005: Who runs the County; John Day or the Commissioners? Cabarrus County Commissioners gave $28,000 tax incentives to Golden Gate Trailers in their last meetings and at the same time announced recommended 19% property tax increases on their citizens. Something is terribly wrong with that scenario. When Coy Privette requested a guarantee of the 100 jobs promised by Golden Gate Trailers, he was voted down. John Day had already committed to the tax decrease for Golden Gate Trailers according to Bob Carruth. Who is running the county; John Day or the Commissioners. Is it right to give a new comer a tax decrease and at the same time recommend to increase the citizens’ property taxes by 19%? Something to think about! Harold Smith

OK. First, let’s just run the numbers on this. If the only economic impact this company has is its headquarters, both the city and the county make at least $10,000 a year for the first five years in fees, taxes, etc. AFTER the incentives. Right now, they aren’t making anything from Golden Gait. But Golden Gait is looking to ADD about 50 jobs. Let’s be conservative and state that only 25 of those jobs will be filled by Cabarrus County residents, BUT those residents have special skills and have moved to the area. Remaining conservative, about half of them buy houses and pay, on the average, $1,000 a year in property taxes on houses and personal property. That’s $12,000 (I gave up the extra half person for those using a calculator) plus the $10,000 that’s coming from Golden Gait. $22,000 per year that the city and county aren’t getting now that they will be getting in direct tax revenues from Golden Gait and its new staff. The county invested nothing. We haven’t even gotten started about all of the revenue from construction, sales taxes, increased local sales of goods and services, etc.

Obviously, Harold Smith either didn’t do the math or he’s got a problem with incentives for “new comers”. So, did he cry foul with all of the incentives that Pillowtex got? How about Corning? Those incentives aren’t paying off for anyone now. When the Cabarrus Taxpayers’ Association-backed candidates controlled the Board of Commissioners, plenty of businesses got incentives. I looked through Harold Smith’s website and I couldn’t find him complaining once about any of those. Obviously, his latest rant has nothing to do with economics and has everything to do with bullying a political enemy - John Day and the majority of the Commissioners (Juba, Carpenter, and Carruth). City elections come up this year and county elections come up next year. Do you want candidates who have something against outside businesses coming in, building stuff, paying taxes, and creating new jobs? Well, maybe Harold Smith is your man.