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Last updated: Tue. Feb. 09, 2010 - 09:11 am EDT Bookmark and Share Subscribe RSS   E-mail

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Government nips bad idea in the bud. It's a miracle!
County dropping housing bonuses for new GM workers.
of The News-Sentinel

When's the last time government - at any level - stopped a program before it even started after realizing that what sounded good in theory might in fact turn into an expensive, unsustainable boondoggle?

Insert joke of your choice here.

But seriously, folks, that very thing was expected to happen today with Allen County Councilman Darren Vogt's announcement that his plan to entice new General Motors workers with a housing bonus of $1,000 has been dropped because research indicated its expense would far exceed its benefits.

“It just came down to cost. The payback wouldn't be for 10 or 15 years, and it just didn't appear the idea would work,” so the “Own It Allen” program went from an unexpected announcement, to a promising idea, to an unworkable bureaucracy in less than a month.

“But at least we didn't spend any of the public's money on it,” Vogt said.

With a third shift at the county's GM truck plant creating the need for 700 new workers, most of them now living out of state, Vogt's intent was sound. If those employees buy homes in Allen County, county governments will receive their local income taxes and property taxes, and local businesses will benefit as well. Nor are the stakes insignificant. The plant generates about $1.2 million in annual local income taxes, but just $620,000 stays here because 1,234 of the plant's 2,484-member work force live outside Allen County.

Many of them commute from homes near other GM plants from which they had been laid off: 185 in Delaware County, for example, and another 155 in Madison County. But many also live in adjoining counties that made a strong pitch to attract GM workers when the plant opened 25 years ago, including 153 in Whitley, 273 in Huntington and 97 in Wells.

But if those housing patterns indicate an opportunity and challenge for Allen County as new workers begin to arrive, they also reveal the not-so-obvious flaw in Vogt's proposal.

“If you look at what's happened in the past, we're going to get so many of those new workers anyway,” said county Deputy Director of Economic Development Mark Royse, who helped analyze the viability of Vogt's plan.

In other words, if 400 of those 700 new workers people are going to move to Allen County even if local officials do nothing, couldn't that $400,000 in housing bonuses have been spent more effectively on something else?

Yes, said Vogt, noting that his incentive might have attracted another 100 employees. Spending $500,000 to get 100 residents just didn't make sense, he concluded. So “Own It Allen” has died before it was even born. The county fund from which the grants were to have been taken, meanwhile, contains about $760,000 - not much of a cushion, considering workers at other companies receiving county tax breaks also would have qualified for the grants.

And even if the housing incentive had made financial sense, it might have been a nightmare to administer, Royse added. GM would have had to certify the residence of its employees, and the county would have had to oversee compliance, much as it currently does to make sure companies keep their promise to crate jobs and invest in buildings and equipment in exchange for tax breaks.

What if the bonus-receiving worker moved out of the county after a year? Would he get to keep that money? Would the incoming worker taking his job qualify? For that matter, if GM workers got housing help, why shouldn't any worker who's thinking of moving into - or out of - Allen County?

Happily, the demise of “Own It Allen” does not mean nothing is being done. Many of the incoming workers own homes in Michigan, for example, where the housing market is so depressed they cannot sell their property at a reasonable price. For that reason, Royse and Vogt said, local officials are trying to connect workers with apartment owners. That's a good beginning, but it must not be the end.

In fact, the money that won't be spent on “Own It Allen” may help plant the seed that could bring even more jobs and people to town. Economic development officials have long acknowledged the need for government to help provide large sites ready for industrial development, and the fund Vogt had hoped to tap could help speed the development of “shovel ready” sites.

Politicians are usually judged by the things they do. Sometimes, however, they should be judged by what they refrain from doing. This may be one of those times. Too bad there aren't more of them.


This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel.
E-mail Kevin Leininger at kleininger@news-sentinel.com, or call him at 461-8355.
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