Clawing back from past mistakes

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State and local governments across the country are trying to get back economic incentives from companies that have not met their promises. Other governments are opting out of deals. North Carolina is still on the hook for incentives to Dell even though the computer maker closed its Forsyth County plant, but Gov. Perdue has made a spectacle in recent weeks of paying for jobs. The state is also giving incentives to companies that compete with established local businesses.

According to the Wall Street Journal front page story on incentives, Wyoming's state treasurer has a healthy skepticism of how much the state can do if private financing doesn't make sense and the city of Albuquerque, New Mexico, pulled out of a deal to attract a new company.

Wyoming has adopted legislation permitting the state next year to buy as much as $600 million, up from $100 million, of industrial-development bonds, which are securities that local governments issue to help businesses borrow for capital projects.

The sponsor of the bill, State Sen. Marty Martin, says he was responding to situations where businesses wanted to do projects in Wyoming but had trouble getting loans. “The large banks, they are just not putting out money to work with businesses,” says Mr. Martin, a Democrat.

The legislation, however, requires that bond purchases be approved by the state treasurer, and that official opposes the new policy. “I take the position that if a bank will not loan money to a business, in very rare circumstances should the state of Wyoming do that,” says Treasurer Joseph Meyer, a Republican.

He has a dim view, in general, of giving businesses incentives to come in. “They take our money, stay for a couple of years, and then move to another state,” Mr. Meyer says.

Joseph Coletti / Senior Fellow

Joe Coletti is a senior fellow at the John Locke Foundation focused on fiscal policy issues. He previously headed the North Carolina Government Efficiency and Reform initiativ...

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