Back at the beginning of my journalism career in the late 1980s, I wrote for the Employment and Training Reporter, a newsletter that covered federal job training programs. Under that broad umbrella fell welfare reform, education and economic development.
My favorite thing to write about was economic development, because back then, the country was recovering from the Reagan recession and states were throwing around money like drunken sailors to lure new companies to bring in jobs and taxes. Two of the biggest battles I got to watch was the fight for German luxury automaker BMW’s first U.S. plant (it went to South Carolina) and two United Airlines maintenance bases (Oakland and Indianapolis won, but eventually lost as both plants were closed). Looking at a more recent example, we recently learned that bankrupt aircraft manufacturer Hawker Beechcraft turned down $500 million in incentives from Louisiana to leave Wichita, Kan., reports the Wichita Business Journal.
States, counties and cities worked hand in hand to offer everything from tax breaks to infrastructure changes to subsidies to bring in companies and jobs. Some states were so desperate they made deals they knew they could never see a return on their investment.
So it was with great interest that I read this story in the Denver Post — Frontier Airlines wants tax incentives to bring jobs to Colorado — with great interest. The airline was created in 1994 by executives of the original Frontier, which was bought by Texas Air in 1986 and folded into Continental Airlines. The idea was to fill the gap left when Continental Airlines decided to shut down its Denver hub.
The carrier filed for Chapter 11 bankruptcy protection in April 2008, and was bought by Indianapolis-based Republic Airways Holdings in August 2009. After that purchase, the company moved some of Frontier’s operations to Indianapolis.
Now Frontier executives are asking the city and state to come up with incentives in order for them to stay put. The company wants to bring back approximately 430 call center, mechanical, dispatcher and headquarters jobs to the state. In exchange, it wants breaks on state and local taxes on jet fuel, parts and software, according to the Post, adding that they wanted “appropriate” incentives to bring in the jobs.