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You are a special assistant to the governor of a southeastern U.S. state in which unemployment (especially in rural areas) is well above that national average. After nearly three years in office and elected on a pledge to attract industry and create jobs, the governor is concerned. Because he respects your moral stance on issues, the governor has come seeking your insights. A European automobile maker has just told the governor that your state is on its short list of potential sites for a new manufacturing facility. The facility is expected to employ about 1,500 people, with plenty of spillover effects on the wider economy. The governor informs you that the European automaker expects significant incentives and concessions. The governor would like to offer some $300 million in tax breaks and subsidies in an effort to bring the new plant to the state. How do you advise the governor? Would the outlay be proper use of taxpayer money? Why or why not? Would you feel comfortable defending your advice if it were to become public?

Explanation / Answer

I advise governor that he is misusing taxpayers money by passing huge incentives and subsidies to manufacturing company. However in view of Interest of public and looking at the unemployment ratio, governor is taking right steps to bring new business and manufacturing plants to create new employment and support economy.

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