By Leslee Kulba- By way of analogy, suppose I want to start a girl’s club, just to be politically incorrect. We’ll all pay $20 a month in dues, and that will cover rental of our meeting room, light refreshments, table settings, a door guard to keep boys out, and gratuities for our members assigned on a rotating basis to set up and clean up.
To pay our dues, most of us do chores around the house for an allowance. One girl sells lemonade, and another has a paper route. Another tutors Spanish.
We start out with 20 girls, and since we’re not running a fund balance, when another girl wants to join, she pays $20, too. Our new girl eats as much food as the others, requires the same amount of plasticware, and actually adds a little to the time needed to prepare and clean up. The only fixed cost is that of renting the room, and the savings from adding one person aren’t worth the hassle of nickling-and-diming our friends.
When one of our original girls quits, we are very sad, but because our membership rates are so right-sized, we are not hurting to be out $20 a month. Our services scale easily.
As we add girls, some of the surplus we’ve been building as per-capita rent decreases can go toward buying everybody nicer refreshments or tipping our helpers more. But eventually we reach a membership of 40 and have to divide into two chapters, doubling rental costs. We make the transition smoothly by going back to our original types of refreshments. We are merely running two versions of our original model.
Now, five girls move into the community. They want to join our club. They want to eat our cookies and share our protections and services, but they want to ride free for five years.
If we agree, we wouldn’t have to rent a third room – yet – but we could make things work if we tip our servers a little less or do away with the place settings and eat Cheetos out of the bag, but then it wouldn’t feel like a girl’s club. We could also reject their offer and say we’re a dues-only club or raise dues for paying members to $21 or $22.
The five girls explain that four of them are going to do chores at home, and the fifth will sell lemonade. They haul out some pie charts to show us how their labors, unlike ours which we’ve been doing for years, are going to have multipliers.
Impressed by their magic multipliers, we let them in the club and raise memberships to $22 for the next five years. With the $22 one girl saves by not paying dues, she purchases tastier, healthier ingredients for her lemonade, and sells each cup for 5 cents less than our friend who used to have a corner on the market, forcing her to fold. Without a source of income, she can’t pay her dues and leaves the club.
But we’re still excited, hypnotized by visions of multipliers. So much so, that before it comes time for the girls to start paying their dues, they announce their cousins are coming to town, and they’ll need the five-year discount because four will be doing chores at home, and the fifth tutors Spanish.
This time, in addition to showing us the pie charts, they pull us aside to explain that the chores they’ll be doing free up time for other members of the community to pursue employment. With more income, newly-employed girls can have enough money to join our club or hire still others so they will be more likely to join our club.
We are not impressed. We can’t figure out why our labors are not doing the same. A dues-paying member cannot join us twice, but if they were to quit, would we not hurt as much as we would be helped by somebody else joining?
The cousins feel sorry for us because we’re so confused, so they try one more tack. “You’re not writing us a check,” they say.
Our friend gets undercut in the Spanish-tutoring market and drops out.
And so it was that General Electric received $900,960 from Asheville City Council at their July 24 meeting. In return, GE promises to create 131 new jobs with a median wage of $49,500 and invest $105 million in the economy.
GE will continue to pay taxes as it has been doing, but the city will be paid only half the assessment on any increased valuation attributable to the expansion, for a period of five years. In June, Buncombe County approved $685,000 in incentives for GE. More is coming from the state.
In 2014, GE received $18.5 million from the county, $1.568 million from the city, and $558,700 from the state.