Incentive fund

The Shoals finally appears to be on the threshold of creating an economic development incentive fund, which is being driven by an opportunity to lure a major employer. Without an incentive fund that can be used to pay for worker training and infrastructure, it's certain the company will look elsewhere.

Last week, the chairman of the board of the Shoals Economic Development Authority, which represents Colbert and Lauderdale counties, asked local governments to increase sales taxes by half a cent to establish and sustain an incentive fund. Elected officials appear ready to embrace the concept, but they want some questions answered first, and they are legitimate questions -- questions the public wants answered too.

We agree that our community needs a sustainable economic development incentive fund. Without it, the Shoals will not be competitive with other, larger communities for good jobs. Anyone who keeps up with economic news knows that incentives have become an integral part of attracting job providers. The state has been offering them for years. Without an incentive for job training and other amenities, Mercedes Benz would not have built its plant near Tuscaloosa. The same is true of other automobile manufacturing plants that have built in Alabama in the past seven years.

Whether adding to the sales tax rate is the best method of sustaining the fund remains open to debate, but SEDA Chairman Macke Mauldin said the board looked at other funding mechanisms -- including fees on utility bills and vehicle license plates -- and decided the sales tax was the most reliable and equitable method.

An additional half cent of sales tax would raise more than $6 million annually in the two counties. And compared to the sales tax rates in surrounding communities, that would not create a disadvantage for Shoals merchants. In fact, it would still be lower than in many communities in the region.

If local governments decide to increase the tax, they should take several steps to insure that accountability for the money's use is high. For example, SEDA would be custodian of the fund, but decisions about how the money is spent should be a decision made by the city councils and county commissions. Decisions about spending taxpayer money should be made by those elected to represent the taxpayers.

We also believe the money should be used only to attract new industries and to help existing industries create new jobs. It should never be used to attract retail businesses.

The money should not be used for operational expenses for SEDA. If that happened, then local governments would lose control of the money and SEDA would be less accountable to the public.

Establishing an incentive fund is a major step for the Shoals -- at step that would tell the world we're ready for the 21st century and its new challenges.