The Daily Item, Sunbury, PA

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February 13, 2013

Make a real impact with KIZ funds

The Greater Susquehanna Keystone Innovation Zone creates jobs, it says so right on the first page of its website. Look a little closer, though, and you also see that the KIZ, "fosters local job growth."

There is a big difference between the two and that is a big problem. To create is, by definition, to bring something into existence. To foster is "to promote the growth or development of."

In these difficult economic times, creating jobs is vital. Foster job growth all you want, until someone gets a paycheck no one really cares about how much fostering you do.

Last year the Department of Community and Economic Development handed out nearly $13 million in tax credits to 179 KIZ businesses to help create jobs. One problem: there is no requirement to actually create a job, to physically bring on a new employee, with the money. Instead of creating jobs, however, KIZs now have the "flexibility to decide how best to accelerate the growth of their companies," thanks to the tax relief a spokeswoman said.

That part is somewhat understandable. To hire, a business needs to grow first. What is the sense in hiring a new employee if the money or work simply isn't there yet? It's one of the curses of the tax credit, where the government will offer a business a $4,500 tax credit for hiring a new employee without ever saying where the money to actually pay the salary comes from.

But when you are getting millions of free dollars from the government, it should come with job creation requirement. Create a formula where the amount of tax forgiveness relates directly to the number of new employees collecting a paycheck.

If each of the 179 companies created just one job with its portion of the $13 million it saved in tax forgiveness, those jobs would pay better than $72,000 per gig. Pay $36,000 each and you are talking about 360 jobs.

The unemployment rate in United States has been above 7.3 percent for 50 months and at least 7.8 for the last four years. Unfortunately those numbers aren't just numbers, they represent real people and real struggle.

In today's world of trillion-dollar deficits and billion-dollar budgets, $13 million is really a drop in the bucket. If used correctly, the money could have a real impact.

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