Editorial: IP is worth the tax inducements

A lot of Greater Memphians may disagree with this statement, but we'll say it anyway. The decision to give International Paper incentives to remain and grow in Memphis is the right thing to do.

Memphis Mayor A C Wharton and Shelby County Mayor Mark Luttrell were looking at the bigger picture when they went to bat to keep the Fortune 500 company's headquarters here.

After much negotiation between IP officials and local elected leaders, the city-county industrial development board is scheduled to formally review the deal Wednesday. The accord will include 15-year tax breaks on new and existing buildings, but not on corporate aircraft the company also wanted covered.

Some view such deals as corporate welfare. They ask the obvious question: Why does a company that makes billions need tax breaks, especially in a city that is facing revenue problems and has a newly merged city-county school system set to begin operating in August with a $60 million budget gap?

But here is another way to look at the situation. It would be a serious blow to the city's prestige if the company moves. That counts for something. IP is going to retain its 2,300 existing jobs here, with an average annual salary of $164,761. Another 101 jobs will be added with an average salary of $93,225. The company also is a major financial contributor to charitable and civic endeavors, and that too counts for something,

Tax incentives are economic development tools that, when appropriately monitored, benefit the entire community in jobs and economic growth. The incentives proposed to keep IP here are appropriate.