Don't count me among those wringing their hands over the exit of Verizon from the local landscape.
The company may or may not have been serious about building a $4 billion data center and bringing 200 good-paying jobs to the wide-open spaces of Somerset. It was hard to tell, given the swiftness with which it vamoosed and the game of footsie it played with us and a competing community. Unbelievably, the price in tax breaks, cheap power and every perk save lifetime dry cleaning for company executives was a hefty $3.1 million per job.
Upon getting the news last week, State Sen. George Maziarz -- who has pocketed a small fortune in campaign contributions from Verizon -- sounded as if someone was shoving bamboo shoots under his fingernails. Tom Kucharski of BNE, our regional business marketing honcho, lamented the loss of what on his scorecard would undoubtedly have been marked as a Big Win.
I know we are desperate for incoming business and for any foothold in the new economy. But paying $3.1 mil per job to entice a company here reeks not just of desperation, but of insanity. It is the civic equivalent of rolling over and begging. Companies make location decisions for a lot of reasons, ranging from work force to transportation network to proximity to markets to culture to quality of schools. If being here works for a company, it will come without a massive taxpayer outlay.
If we're this desperate, then put the $614 million in Verizon goodies on the table and solicit bids from every company in America. Whichever one offers the best deal, take it. And I'd bet that it would bring more than 200 jobs.
Or we could regain our senses and use the money to fertilize the richest job-growing soil: small businesses. The way we throw massive amounts of money at mammoth corporations (read: Verizon, Yahoo, Bass Pro, GEICO), you would think that these giants were primary job generators. In truth, half of the nation's job growth comes from small companies, says the U.S. Department of Labor.
Susan McCartney runs the small-business development center at Buffalo State College.
"Long-term, we are better off [promoting] small business and entrepreneurial activity," said McCartney, who was not commenting specifically on the Verizon deal. "It has greater sustainability and creates more jobs."
And, unlike with giant corporations, small-business profits stay here, instead of getting shipped to a distant corporate headquarters.
A huge piece of the Verizon subsidy was $96 million in cheap power. The problem is that the data center would have sucked down massive amounts of electricity in return for relatively few jobs. Which would have left us with precious little cheap power to dangle to dozens of smaller companies that might bring thousands of jobs, not a couple of hundred.
Beyond that, data centers do not bring the small-business offshoots of, say, a GM engine plant. And I'm hugely skeptical of the argument that one big fish attracts another. Seven years after the heavy-subsidy GEICO deal, we still are waiting for the promised coattails.
It's no surprise that economic-development types lash out when a deal such as this falls apart. They get a piece of the action. Whichever county or town IDA does a taxpayer-subsidy deal collects a fee. It's the oxygen that keeps these IDAs alive -- that pays for salaries, for staff, for rent. For IDA officials, economic development is as much about self-interest as it is about the communal good.
There are better, cheaper ways to create jobs. Our politicians and economic-development officials need to think more about that, and less about throwing pots of gold at rainbows.