Moving the Peas Around on the Plate?

Saw the article in the ProJo today about TD Bank getting tax breaks from the Economic Development Corporation for creating jobs by opening offices in RI. I was surprised. First reaction was that we have lots of banks and success by TD Bank will only reduce deposits and business at existing competitors. So TD Bank hires and the others lay off.

(Disclosure – I have seen a couple bank booms and busts and the resulting empty buildings at the end of the cycle. And wondered about the market for slightly used bank vaults.)

Then I read in the article that there is a history of giving tax breaks for opening bank retail branches.

Certainly I appreciate the benefits of competition but do we want to give (pretty large) financial incentives for something that is likely “moving the peas around on the plate”?

I guess this caution would apply to many or most cases of “retail” jobs. I could imagine some procedure to have the incentives be based on net new jobs in the state in those cases. But I wouldn’t want to be the person required to compute it and give a convincing explanation that my numbers are right.

I can’t blame TD Bank for asking for the money but I wonder at the wisdom of this. At least one of the new EDC board members, Stanley Weiss, agreed with my thoughts. That didn’t stop them awarding the money, however.