In the perfect world of economic development, there would be no smokestack-chasing.

Friday, March 23, 2001

In the perfect world of economic development, there would be no smokestack-chasing.

City and state governments couldn’t offer incentives to businesses and industries to move. Taxes would be paid; not forgiven. The playing field would be level.

Art Rolnick does not dream of this perfect world. He promotes it. Rolnick wants Congress to end the economic wars between the states.

He even preaches it to economic development organizations, who are forced to give preferential treatment to businesses and industries to lure them to new locales.

For instance, the Development Corp. of Austin.

Rolnick is senior vice president and director of research for the Federal Reserve Bank of Minneapolis. He was the guest speaker at Thursday night’s annual meeting of the DCA held at the Holiday Inn of Austin.

He said his concern that an unequal playing field would help some, but not all, surfaced in 1991 when Minnesota bailed out Northwest Airlines with $1 billion.

"I couldn’t understand why government should have to do that," he said.

The potential loss of 17,000 jobs if Northwest Airlines would have left Minnesota didn’t complete assuage Rolnick and his contention that Congress is guilty of allowing cities and states to lure companies and jobs took hold of him.

Rolnick has examined the issue at economic summits and he believes Congress has the authority to end the bidding wars, which he said are counterproductive both to the government entities that offer them and taxpayers who pay for them.

In addition, Rolnick said, the bidding wars are not just a regional or even national issue, but they extend to countries.

"In the long term, Congress is going to have to deal with these issues both nationally and internationally," Rolnick said.

Craig Johnson, chairman of the DCA board of directors, welcomed special guest Rolnick and DCA members and guests to Thursday night’s annual meeting.

In his remarks to the DCA audience, Johnson said the DCA must look at ways of "enhancing our industrial properties." Johnson also said the city needs a new industrial park and his recommendation for its location is the Austin Business Develop-ment Park (formerly the Cook farm site) owned by the city.