Sunday, February 13, 2011

No Guarantees?

Gov. John Kasich's plan to cut out collective bargaining, outlaw public employee unions, and provide tax breaks for the wealthy, might not provide the bonanza of jobs that he is selling.  According to an article in the Seattle Times, pitching businesses lower taxes and tax breaks does not automatically bring jobs.

SeattleTimes:

....there's a catch to the anti-tax, pro-business rhetoric: Businesses consider a range of factors when deciding where to locate, including the quality of schools, roads and programs that rely on a certain level of public spending and regulation. And evidence suggests there is little correlation between a state's tax rate and its overall economic health.


"Concerns about taxes are overstated," said Matt Murray, a professor of economics at the University of Tennessee who studies state finance. "Labor costs, K-12 education and infrastructure availability are all part of a good business climate. And you can't have those without some degree of taxation."

...The quality of a state's labor market is another significant factor for businesses as they choose where to locate, in some cases mitigating the level of taxes they will have to pay....

What business wants to move to a state where potential employees are poorly educated, inadequately trained, schools have had massive cuts, and cities/counties are cutting police and fire services?