...If the political leaders are actually offering cash bonus incentives to move in, yes, that is taxpayer dollars, but are they offering cash or are they offering discounts on things? Remember taxes are a percentage based of gross, and the politicians have to balance, if we offer incentives here, when will the company and it's workers begin repaying those incentives?
A lot of states and areas (cities and counties offer incentives, too) make these kind of offers and there is seldom much CASH in the deals offered. That doesn't mean that the programs can't be a losing proposition for some states or areas.
The governments involved offer other incentives that include NOT charging for things government usually charges for a number of years. Typically there is not a lot of money paid TO the firm coming in, but the firm may qualify for
low cost LOANS, won't have to pay for some start-up costs, such as government services (road construction, water and sewer lines, etc); they may also pay no (or reduced) property or income taxes for that same period.
The incentive programs don't always pay off, but when they do, they can pay off in a big way. The failures sometime involve some government outlays, and some embarrassment, but if the deal fails, they don't have to provide services or offer discounts on taxes that they didn't collect anyway.
A firm that brings in a lot of new jobs can generate a lot of tax revenues for the local government and also create a lot of business activity for the area, either by people moving in to take jobs, or by the arrival or expansion of supporting firms (shippers, parts makers, etc.). Even some of the suppliers MIGHT get some incentives, but not always -- but they do get a good business relationship with the business that is the focus of hte incentives. And, of course, these supplier firms hire, too.
BMW, the recipient of one of the bigger incentive offers, has one of the largest auto plants in the world in the Spartanburg area, and that plant now has more than 11,000 employees; it works with 300 suppliers, many with facilities in the area. BMW, last I read, has spent over $10 Billion dollars in building and expanding that plant and campus.)
The CZ plant isn't on the same scale as the BMW plant, but it could be a good economic bump for Arkansas -- particularly since they won't be building the kind of Assault weapons that may, one of these days, be banned.
Mercedes Benz has opened a much smaller plant in SC, and they've just been selected by Amazon to produce 20,000 delivery vans for Amazon's new delivery function. (Amazon is dropping UPS and FedEx and is going to do its own deliveries in some areas.)
FedEx opened a big processing center at a nearby major airport (here in Greensboro, NC), and Honda is building their new Executive Jet there, too -- a jet that seems to be selling very well. HerbalLife also opened up a plant in this area, and they're apparently doing well, too. All of these firms got incentives from the state, county, and sometimes city governments.
With most of these incentive programs, if the company doesn't do what they promised to do to get the incentives (doesn't hire as many people as promised, for example) the firm has to pay back a substantial part of the benefits they've gained. That happened here in Winston-Salem (NC) when Dell created a PC factory in the area and later closed it when the market began to focus on smaller laptop and notebook computers. Caterpillar took over the DELL site a couple of years later to produce some specialized earth-moving equipment; changes in the construction market (worldwide) hit Caterpillar very hard, and it closed down, too. Both firms had to pay back a good bit of the incentives they received. I'm suspect both programs were net losses for the local governments, but they weren't total (or even BIG) losses.
