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GOP Math: Alabama Gives Chinese Company $190 Million to Build $100 Million Plant

No doubt Decatur, Alabama, tubing manufacturer, Wolverine, is thrilled that the state is funding a competitor.  Not just any competitor: Chinese-owned "Golden Dragon Copper" has opened in Wilcox County and is getting a pretty sweet deal

  • Capital income credits worth up to $160 million over 20 years
  • $20 million in state economic development discretionary incentives
  • $8.5 million in property tax abatements
  • $5.1 million in sales and use tax abatements
  • $5.7 million for an industrial road and bridge to support the plant
  • $1.8 million in worker training services
  • Site purchase, prep and water and sewer improvements worth about $1 million.

The plant itself is worth $100 million, so the state is giving the manufacturer twice that to move here and provide jobs for 300 people with wages that average $15/hour.

Now, let's do some math on that one:

$193 million for 300 jobs equals about $643k per job.

The company says it will employ more than 300 people at that point. The current work force stands at about 150; the full ramp up is estimated to take 18 months.

However, local and state business recruiters say they expect employment to eventually climb to as many as 500 jobs, and company officials -- without pinpointing numbers -- said there would be future growth.

Let's see... we started with 150 jobs, which makes that state's contribution over a million dollars a job.  That number will fall when the full workforce of 300 is employed — in 18 months — and then maybe... maybe... there will be 500 jobs. That total will bring the cost per job down to $386,000 per job.

Governor Bentley and others say this is a great thing, and indeed, Wilcox County and surrounding areas is very poor and underdeveloped. 

Supporters also point to the ancillary jobs that will come from the opening: more people spending money at local stores, eating in restaurants, visiting the doctor, etc. Oddly though, they ignore "the multipler effect" when it comes to Medicaid expansion.

Expanding Medicaid in Alabama would cost a lot less and create a lot more jobs in the state.  At the same time we're handing millions in taxpayer money over to a Chinese company — and ignoring a competitor who's been in operation in Alabama since 1912 — we refuse the economic benefits of Medicaid expansion

Expanding Medicaid would have brought the state $2.1 billion in federal money and created a minimum of 30,000 new jobs.  And it would create a healthier, more productive workforce.  But we can't implement such a commonsense, affordable jobs program in Alabama, can we?

Because... Obama.

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