Ex Post Facto "Incentives"

IBM probably spends more than $35,000 a year on ballpoint pens and paperclips. So does anyone really believe that the city of Boulder landed a new IBM service center, and the 500 jobs that go with it, because of $35,000 in tax "incentives" it will give the company?

The Boulder Daily Camera seems to believe it, judging from its diligence in drawing these causal connections. "IBM gets $35,000 business incentive from Boulder, will add 500 jobs," reads the headline. And Boulder city officials may also choose to believe it, since it would seem to justify this obvious misuse of public money. But does anyone else really, truly, honestly believe that a corporate behemoth like IBM made this decision based on a penny-ante $35,000 handout from the city?

You'd have to be a PhD to believe anything so far-fetched.

The company has been a presence in Boulder for years. It actually has a "campus" there. It made this move based not on a measly $35,000 in tax rebates, but because it makes compelling business sense, unrelated to this payment. The company apparently is shameless enough to take "free" money when "free" money is offered: the widespread bidding for jobs with public funds has created a mercenary culture inside too many board rooms. But no sensible person would in this case connect one event with the other.

I'm not saying "incentives" never matter. In some cases, they may make a difference, at the margins. But other factors still matter more -- like the fact that IBM already has a campus in Boulder. Corporate executives have become very shrewd about collecting "incentives" for choices they would probably have made without them.

If folks in Boulder want to believe that this $35,000 offering played a pivotal part in the decision, and congratulate themselves on their economic development prowess, who's going to pop their big green balloon? Certainly not the top brass at IBM, who are laughing about this all the way to the bank.