In quest to create jobs, some states get creative
MIKE BAKER,Associated Press
OLYMPIA, Wash. (AP) – In the quest to create jobs, some states are getting creative: Nevada may hold contests to encourage entrepreneurs. Ohio is giving control of its liquor profits to a group of business leaders. And Washington and Alabama are “selling” income they don’t even have yet.
More than four years after the start of the Great Recession, state lawmakers have few options left to stimulate economic activity. With little room for new spending or tax cuts, several have turned to more imaginative, sometimes quirky, proposals to encourage job growth.
“Jobs, jobs, jobs,” is how New York Gov. Andrew Cuomo summed up his agenda. His $15 billion “New York Works” plan is a version of traditional jobs programs, but with a twist he calls “entrepreneurial government.”
Instead of handing out government money, the Democrat plans to extract matching commitments from private companies to rebuild 2,000 miles of highways and countless bridges and tunnels. Difficult fiscal times required a new approach, he said.
He proposes creating a “Rebuild NY Bank” to use state and federal money as equity to create a pool for investments in jobs programs or infrastructure projects.
Those projects will entice businesses with a new form of contract called “design-build” in which the company can control the whole process and reduce typical estimates by months and millions of dollars, Cuomo said.
The strategy is “based on fiscal discipline, real reform and the exciting area of entrepreneurial government to lead us to a new New York,” Cuomo said.
The lack of cash comes after three years of deficits totaling more than $20 billion.
Cuomo also divided the state into 10 regions to encourage companies and local governments to compete for $1 billion in state tax breaks, capital funding and other aid.
Under his plan, begun last year, every region must propose a viable project, such as a medical technology park or highway connector needed by a high-tech company. The project that would create the most jobs or other economic activity would win larger shares of grants that had previously been vulnerable to political wheeling and dealing.
“We can take this state to a role it’s never been before … to a level it’s never achieved before,” Cuomo told mayors last week.
The governor also proposes to swap land for a global casino developer to build the nation’s largest convention center in the New York City borough of Queens, while pushing for a state constitutional amendment to allow private-sector casinos beyond Indian land.
To fund infrastructure projects in Washington state, lawmakers are trying to raise money by selling off future income from the state lottery and other, more obscure sources of revenue. The state has largely maxed out its bond capacity, and there’s no momentum for new taxes.
“How many moves have we got left? asked state Democratic state Rep. Hans Dunshee. “This seemed like a move that we can make.”
Alabama Gov. Robert Bentley is proposing a similar bonds program backed by future federal grants.
Jobs packages are nothing new, but they’ve become more common in the last few years as lawmakers try to pull their state economies out of the aftermath of the recession.
Some states with more secure budgets – including those with surpluses – have largely returned to traditional job-creating strategies: States with Republican leadership promote tax breaks while Democrats tend to seek stimulus spending for construction.
But the task is more challenging in places such as Nevada, where the unemployment rate still lingers above 12 percent and budgets have been tight.
A plan released by Republican Gov. Brian Sandoval adopts tactics more common to the corporate world: It seeks to cultivate the state’s brand and creates a small pool of money for loans and grants.
Steve Hill, director of the governor’s Office of Economic Development, said the goal is to highlight industries already entrenched in the state while trying to match private entrepreneurs with private investors who may want to pursue new lines of business.
The plan includes a $150,000 fund for three contests – one each in Las Vegas, Reno and a rural area – that will help entrepreneurs bring their business plans to fruition.
Hill said the ideas were relatively inexpensive but still offered a payoff in economic growth.
“In the short-run, if we had the money Texas had, it would probably help boost the effort a bit,” Hill said. “But that’s just not the situation where we’re in.”
Ohio’s Republican governor announced an agreement last month to funnel profits from state-owned liquor stores to a nonprofit board of business leaders. The money, part of a 25-year deal worth $1.4 billion, is supposed to give the board tools to attract new businesses and expand existing ones.
New York isn’t the only state looking to tap gambling for money. Republicans in Washington state and Massachusetts are trying to exploit its ability to quickly generate both jobs and revenue.
Massachusetts Sen. Richard Ross, a Republican who helped broker a deal that authorized up to three new resort casinos, said he saw gambling as a rare jobs solution that political leaders could agree on.
At this point, he said, “we kind of felt like it’s the only one we have.”
Gormley reported from Albany, N.Y.