Two weeks ago we covered a story that may have made some taxpayers angry. The Pickens County government agreed to back a bond for a private-sector company. If the company defaults, the county will ultimately be responsible for payment and the bank could force the county to levy up to one mil more in taxes.
But this company, Restaurant Interiors, Inc., was experiencing a rapid growth spurt and needed to relocate quickly from their 6,000 square foot warehouse to something larger that would allow them to add employees and equipment. After partnering with the Pickens County Development Authority, which owns a 77,000 square foot building behind Jasper Middle School, a deal was hammered out in which Restaurant Interiors would lease the building from the Development Authority. If the business defaults the Development Authority will take over payments until they can find a new tenant. Only if the Development Authority ran out of money, which they have enough of to cover payments for 20 months, and then could not find a new tenant would the county be held liable for the payments.
Everyone involved in the deal said the risk of backing this private company was very low, but the potential for economic development was high and worth putting one mil of taxes on the line.
Because they were able to relocate, Restaurant Interiors added over 50 new positions, with over 90 percent of their new employees being previously unemployed and from Pickens County. The company is looking to expand even more by the end of the year, hoping to add another 30 positions. Those employees, who again mostly live in the county, will spend money here and further impact economic development in a positive way.
But remember one of presidential candidate Mitt Romney’s mantras during the campaign (even President Obama when pushed)? “Government doesn’t create jobs,” Romney said. This is obviously wrong, and claiming that the government has no role in job creation is a partisan argument that ignores facts.
The fact is that the Restaurant Interiors deal is one prime example of how the government can help fuel private sector job growth, and like it or not the government also provides necessary services by employing people that the private sector doesn’t. These services range from public school employees, emergency personnel, roads employees, state parks employees, soldiers, etc., to the tune of 22 million jobs that are paid by taxpayers on federal, state and local levels.
Granted, the backing of Restaurant Interiors is not the same creature as jobs the government, i.e. the taxpayer, fund. Restaurant Interiors pays its own employees and pays its own bills, but the owner said without backing from the county she would not have been able to expand at a crucial point for her business, and those 50 people who are now employed would still be without work.
The point is that government is indirectly creating jobs in this situation, just as it indirectly creates jobs in the private sector by purchasing goods from the private sector, or by employing people who go out and spend money in the private sector, which helps create jobs, too. Of course, the focus of our leaders should be primarily on encouraging the free market, which employs over 90 percent of the working population, but go ask those 50 local people who are now employed through Restaurant Interiors if they are happy the local government got involved? We’d bet they would tell you yes.
Again, we are not arguing that the government should be the primary guiding force for economic development, but rather that those who claim government has no role in job creation should belly up and admit that it does directly create, or indirectly encourage, jobs that are of value.