The truth is, nobody knows the real bottom line. Estimates are based on financial projections over the next 20 to 25 years. The incentives include such things as breaks on state sales tax for some FedEx purchases, exemptions from Guilford County property taxes for the hub and for FedEx's jet fleet, and government credits to lower the company's corporate income taxes. The estimates are not cast in stone because they depend on tax rates and other variables two decades out, said Martyn Johnson, an economic developer who helped assemble state government's part of the package. In addition to the unknown final cost of the hub, other variables include how much it costs FedEx to operate the hub over 20 to 25 years and how many tax-exempt jets it assigns to the hub.
Critics believe it's unfair to use tax money to help multimillion-dollar corporations.
Supporters see incentives as seed money that companies eventually repay to state and local government many times over, through the money they spend and jobs they create. Money isn't given as a lump sum, but parceled out in tax reductions over the years, Johnson said. Each break is intended to lower the receiving company's initial cost to do things that increase its local investment or create jobs. You really do want them to be linked to what the company does. Ted Johnson, PTI's executive director, takes the pragmatic view that like them or not, incentives such as tax-free bond financing are part of today's business climate.