Economic Incentive Procurement

48:18
SUMMARY KEYWORDS
incentives, state, jobs, workforce, business, company, negotiate, manufacturing, site, move, grow, people, labor force, offer, construction, economic incentive, employees, alternatives, talking, client
SPEAKERS
Damon Pistulka, Josh Malancuk

Damon Pistulka 00:03
All right, everyone, welcome once again, the faces of business. I’m your host, Damon Pistulka. And I am excited for our guests today because we are going to be talking about economic incentive procurement. And explaining a what that is the people how we do it when it’s important, but we’ve got none other than repeat offender, Josh Malin Chuck, here today from jam tax advocates. Thanks for being here today, Josh.

Josh Malancuk 00:34
Well, thanks for having me, Damon, this is a great opportunity, and always enjoy the experience working with you. Oh,

Damon Pistulka 00:41
man, it’s gonna be fun today. Because as we were talking before we got on, it’s happened to me once when we go and build a greenfield site or something, but these these economic incentives? And in procuring those incentives? Can you just explain what we’re talking about? First of all, so we can clear that up for the listeners, and everybody knows what we’re going to be talking about today?

Josh Malancuk 01:06
Yeah, so the general concept is, many states have developed economic policies to incentivize or induce growth, with employment and with capital investments to help kind of spur their economy. And so normally, there’s, there’s legislation that that kind of authorize certain items that would incentivize a business, you know, such as updating property taxes for a period of time, for, you know, the capital growth that occurs in a jurisdiction or, or maybe incentivizing jobs through income tax credits, or other grant programs, that they kind of helped push the project over the edge in that jurisdiction to, to ultimately go forward. And so really, you know, a lot of the states compete for these projects, because they’re really good things, right. I mean, it’s great to grow the economy, all these states want to grow. And so by offering these incentives, you know, ultimately, they’ll compete between one state to the other, with a winner and a loser for the project. And so in essence, these states are buying jobs, through offering these incentive programs for businesses to grow in various spots, and maybe, in certain cities within a state as well to coincide with economic policies with each state. Yeah, so and so to a business, you know, it can mean a tremendous benefit, to help offset, you know, what can be a pretty large investment for the company, maybe historic levels. And so, you know, if you’re growing your capital, if you can offset that by five to 20%, which is kind of our benchmark average, we’ll get involved with this tournament. Well, you know, you’ve you’ve not only made it a dent in your, in your in there, but you’ve probably set that business up for continued profitability, to establish that as a lower site from a competitive nature, with your other facilities as well. Also, it’s a great tool to help, you know, really, with some genuine support needs to get the labor force up and running. And and to get the capital in place without having to see immediate operating costs, or property taxes or other expenses, while the business is ramping up.

Damon Pistulka 03:55
Yeah. Yeah, that’s, that’s really cool that too. You know, just to think about if you’re doing an expansion with a business, you’re going into a new area, and you’re considering two or three areas, that could make a lot of difference if one could have certain kind of, like you said, property tax income tax, job benefit, you know, a decrease in benefits or to help to create those jobs or train those people, this all those kinds of things can make a big difference, that’s for sure. So, when you’re thinking about this, what are some trigger points like, add this might be a good time to think about maybe, maybe not so much. But what are some guidelines to go well, if you’re going to do maybe this big or this much land or whatever, what are the kinds of things that really set this apart?

Josh Malancuk 04:56
Well, so you know, when you are looking at grown little is 10 new jobs and heuristics question that that should trigger at least some research about available incentives. Another trigger point has other sites out of state, and is potentially going to shutter an operation and move those jobs, while the receiving state will actually consider those jobs as new jobs with respect to incentives. And so, you know, it’s important to kind of plan ahead for those types of events. Growing capital, by as much as little as $3 million can also generate some incentives that might be available. But so generally growing your jobs growing your capital, but the most important aspect of this statement is that there’s a planning element that is extremely important, because there’s a concept called a buck for provision with with most states, which means, you know, but for the incentives, you wouldn’t have grown in that that state or that county or that city. And so that is kind of a perceived concept that’s extremely important with respect to negotiating incentives. Because if you go in and you say, Well, I’m going to grow here, what incentive is there for that locale to offer you incentives, it’s kind of a basic concept. So maintaining that is extremely important. But to get more specific, before you ever file, any external disclosure forms, like sales, permits, land acquisition documents, closing on the land, any sort of media announcements about growing into a certain spot, any sort of construction, permitting, any sort of kind of communication with a local economic development planner, as I mentioned, you know, saying, Hey, I’m gonna grow here, what can you do for me, you know, those types of communications will literally squash, your ability to procure incentives in that jurisdiction, unless they have just flat out cash grants that they offer without any sort of inducement concept, which is kind of rare. And they’re usually smallish type incentives. Yeah. But basically, you’ve disqualified that business at that point with any of those events, by probably 95%, of what could be available, maybe 100%. So

Damon Pistulka 07:40
I just want to back up on this, because this is a pretty big point, that, really, they they only want to give the incentives to people that are businesses, organizations that are actually going to need them. So you really need to demonstrate that need by not going out and buying land or buildings or committing to expanding into an area until you’ve talked to people about incentives to allow you to do that. That’s

Josh Malancuk 08:10
right. But then there’s also several more steps that have to be completed before those as well. So it’s not just letting the cat out of the bag. As far as external filings or communications, there’s actually several steps and some of those may require public hearings to demonstrate approval for the incentives that may involve legal agreements that are signed and agreed to upfront prior to any of those construction activities. And certainly you don’t want to start digging dirt and having girder stick up out of the ground when you’re trying to say that, you know, Hey, you gotta give me incentives the build here? Well, I actually had, it’s funny that I mentioned that because my first incentive project, my client failed to tell me that they were under construction before a public hearing to ask for a tax abatement. And sure enough, there were girder sticking up out of the ground. And that one of the council members knew you know, I was kind of young and tooth inexperienced in this area. And they were really respectful they were like Sunday you realize your clients already building the building. So you might want to go talk with them about that. Because you know, there’s there’s a problem here and I didn’t know enough about what that meant and why that was so important. But I found out in a hurry why Oh, yeah. So yeah, that business by by just going ahead with the construction without the formal vote with the council, jeopardize their entire incentive request, and it was a tough learning left lesson for them. But unfortunately, I learned the hard way based upon their their inexperience and their failure to plan properly, to allow ample time for these public hearings to take place?

Damon Pistulka 10:05
Yeah, yeah, that’s something. So then oh, there’s a lot of stuff I want to get to about the different types of incentives and those kinds of things. But you bring up a great point. When Okay, so now just say, we’re going to go into this area, we think it’s probably big enough to start talking, what’s the process that you actually go through, I mean, if this big steps to go, Hey, you should do this first, do this second, do this third kind of thing. Because, you know, some people may be out there, right? Now listen to this going, we’re ready to expand, we’re gonna go into Louisiana or wherever it’s at, and we’re gonna build, we know we’re gonna build, we know where we want to go. And they could be missing on a lot of incentives, if they get down there. And like you said, they open an office get ready to do that construction. And then they think, Oh, wow, now let’s, let’s see if we can get incentives, because we didn’t think about that before. So if you can kind of lay out the steps, I just the big steps would be kind of helpful. So someone listening could go, Hmm, I need to start talking to somebody then.

Josh Malancuk 11:11
Yeah, so I would say that the the research and diligence is different. The workplane is different, when you’ve got site alternatives for the project, that would involve possibly a new facility from scratch facility, or a large renovation project that again, you know, could have alternatives between sites. And so when you’re looking at various sites, and you are looking at a build, and you want to look at what the labor force looks like, you know, how much unemployment Do you have that that could actually staff up the jobs at this factory, because the last thing you do want to do is build a factory not have enough labor force and immunity, that just has, you know, a small population, or maybe that population is almost 100% employed. And it’s an aging population that is not likely to produce enough young people to run the factory or, or whatever the project may look like. But the labor force is important to evaluate the costs with the labor force, you know, your your logistics with freight, and how that is looking and in relation to your major customers. And so there’s a lot that goes into studying the area, to first make sure that it makes good business sense to build in a certain spot. But but let’s say for instance, you already have a facility, you’ve you’ve already made the good faith leap that you want to be there, you are already have jobs there, you’re already established, right? And you’re planning to expand, and maybe you’ve got another plant and another state, that this kind of fighting for the same project. Well, you still want to look at the labor force trends. But then you also want to look at, you know, what are the incentive programs in each particular state? And how do the property tax rates, for instance, compare, you know, one versus the other. And so there’s, there’s kind of this decision tree that happens to not only line up the incentives, but also line up the business factors that could, you know, kind of tip the scales with that decision, one site versus the other. So that site selection, diligence, is really key, so that you don’t have a surprise coming down the pike, where you’ve made all this investment. And now you’re literally not finding enough people to demand the lines and work at your factory. So that’s extremely important. But But then, as far as the incentives go, once you’ve kind of gotten a good idea of alternative viable alternatives. You know, what we’ll do is, we’ll kind of go through an incentive negotiation with each of the site economic development, folks, and procure a competitive package of incentives, again, for both locations, and then use that to kind of negotiate one versus the other with maximizing the deal, bringing that competitive pressure with site alternatives. And so in some cases, it’s by statute to prove that you’ve got a competitive site to gain access to incentive. So you know that that alternative type diligence is extremely important, really, to do the best job that you can. And there’s a lot of labor time and meetings and diligence involved with that. Most of the time, our clients don’t have the time to do all of that. And they wouldn’t know the first place to start with looking at alternative sites, and procuring incentives in multiple jurisdictions like we do. So that’s an important concept. But once you kind of line up an initial offering, there are also some steps to actually formalize the agreement in place, which may involve public hearings, kind of some back and forth negotiation agreements, that can be very lengthy, possibly with a lot of legal language. There, there can be steps for the, once the agreements are inked, to go through and actually comply annually, with possibly some complicated surveys that have to be submitted every year, you know, because that’s the thing, once you negotiate the right to an incentive, you still have to comply with your incentive agreement, in terms of proving out that you’re doing your end of the deal with growing your jobs or capital, based upon your initial commitments as a company. And so if you’re not demonstrating that annually, you can either lose the entire incentive altogether, or lose it for that year. So the annual compliance is extremely key. And then also, from time to time, you know, just with any government employee, you come upon situations where there’s maybe an error or interpretation of the agreement that can happen at the state or local level. And so you got to know that you got the benefit that you negotiated. So that certification review, looking over the either the assessor or the economic development agent at the state, and making sure that their computed amounts are accurate. Really important, you can’t assume that you got your money. Because you know, what happens when you assume it? Yeah, you know, you can really be taken advantage of as a company. And so keeping the government accountable in all phases of this is extremely key. Even if they’re the friendliest bunch in the world. Yeah. Like they’re just willing to give you the world and help every every way that they can. When when the agreements are inked. When the annual compliance police come out, usually there’s a different sort of thought process. Yeah. And that’s important to kind of keep in mind. So you don’t have some surprises with lower benefits at the end of the day.

Damon Pistulka 17:47
Yeah. Well, that’s a great point, because it’s something you know, talking with you now, it’s a point that I hadn’t even thought about is that two things, one, it’s an incentive for you to lose. First of all, it’s not just given to you as good you got to be. And the second point is, even if you think you’re doing it, you think you’ve proven you’re doing you’re doing it, that you need to make sure that the person that’s going to say, Yes, you are doing this is really using the right data in their calculations are right or whatever you’re going through there to ensure that they may just be wrong as well, if they turned you down or said it wasn’t really like you said it was in the beginning.

Josh Malancuk 18:29
That’s exactly right. There’s there’s a lot of fine print elements to this, Damon. And so there’s the surprise factor is pretty high. And you know, I don’t want to start a conspiracy theory. But you know, in some cases, it kind of looks to me like it’s rigged for failure. And that’s where a seasoned navigator like us can can kind of play the movie forward and see where it’s going and take steps to avoid having an issue or a surprise going forward. Or if there’s an issue, you know, we’re capable of going to bat as an advocate for our client to set the record straight, right. Yeah. And so that’s what we’re, you’re on our fees. And then some, by making sure that, you know, the deal got sealed our money, our client actually got the money that we negotiated for them, and everything is working according to plan. And then even more importantly, our client, you know, is having that, that accountability, to get their information together so that we’re meeting the compliance deadlines for those surveys. Because if they miss that, then there can be a real problem with either a single year benefit or maybe the entire benefit all together because of the way that the the incentive agreement was written. And so just just being able to avoid those pitfalls, before someone stumbles is extremely valuable. Bull. Yeah. And that’s kind of how we earn our stripes as incentive consultants. Yeah.

Damon Pistulka 20:07
Wow. So much to think about in this. So what are some of the trends of things changed a lot over the last few years? Or are they really kind of staying the same? Or what are some differences, things that you’re seeing now, if there are some with these incentives? And how people are approaching them? And what types of incentives are being given? Well,

Josh Malancuk 20:30
taking a big step back. So first of all, when you’re negotiating incentives, and you’re researching available incentives, you have to know your client’s business. And you also have to know what incentives could even be usable to them, you know, so for instance, if they’re not subject to corporate level, state income taxes, the certain incentives won’t be of any value as, right. So knowing whether it’s a refundable credit, or if it’s not, and the carry forward activity that would be available for for that deduction is extremely important. So, you know, that’s all part of the initial diligence. But yeah, negotiating usable incentives is a real key area that I failed to mention at the beginning. Yeah. But but as far as the trends go, Really, this all centers around the current state of workforce in the United States, and folks that are maybe staying at home, or have retired too early, it’s created this huge ripple effect with available workers in the United States. And that is really impacting our way of life as Americans. But as a company, that’s so labor reliance, that worker shortage has really been a big challenge to businesses, especially labor intensive businesses, like manufacturers. And so if you don’t have enough people that are willing to apply and work in your factory, you know, what are you going to do? Yeah, and there’s a number of different responses. I mean, employers have gotten creative with allowing work from home, you know, for some of the administrative support, folks, you know, and that’s, that’s a good, good thing, as long as your workers are working at home, and only working for you. Because, yeah, find out they’re working for two employer. Yeah. And so that’s a big deal. Another is, you know, the, there’s such a shortage yet with the unskilled labor tier, that many manufacturers are resorting to automation and replacing those jobs with machines. And so in order to do that, they have to upskill their existing employees to learn how to use the the automation equipment, and maintain it. And so finding maintenance employees for those factory machines can be a real bear. So there’s, there’s kind of a trend and a shortage for for repair technicians. You know, the, the folks that are baby boomers that are retiring, you know, is creating gaps with employees. And so it’s all kind of converging at the absolute wrong time, when we’ve had way too many government entitlements handed out, and folks are making more just staying at home versus coming back to work. And so, you know, there’s, there’s a lot of different factors that create this problem, where you’re going your favorite restaurant, you’re waiting for two hours for your meal to come to you. And it’s it’s just because there’s not enough people to, to work in the jobs, then that one time had plenty of people, you know, and so so so the workforce element is probably barred none the biggest issue that our our AR AR companies in the United States are challenged with and are having to deal with. And so that’s kind of one one trend. The other is, you know, having to deal with in sourcing the factories, in other words, moving factories from foreign countries, United States, because of logistical supply chain. So supply chain is another big issue. That’s, that’s creating a lot of movement and capital growth in the United States. But again, if you don’t have the people that are willing to work, what good is it to grow? And yeah, so So that’s kind of the push and pull that that’s creating. I think opportunities to look at incentives, because, you know, there are retention incentives that can be available to help employers get to the next level with automation, and also kind of move their workforce into that higher paying higher value added type type job situation. And so training in upskilling employees is of paramount importance with every state in the United States. And so there’s, there’s a lot of programs that are out there these days, to help with training, through grants, cash grant matches yours, to know where and how to apply and win as a business. But But then, you know, those programs can literally fund up to 50% of your training budget, year after year. And so that’s just an example of, of an incentive that’s out there, that’s being used to kind of help drive good economic policy, to build skills in in a state workforce, to, you know, improve the economy. And so that those are, those are big trends. And, you know, the workforce shortage trend is also having a profound impact. But But then, you know, many states are kind of seeing this as an opportunity to help, you know, fund those automation efforts, through some kind of retention incentive programs to partially fund some of the automation equipment purchases. And so, yeah, you just have to know the message and how to ask for those and where to look. But those programs are out there. But again, it’s important to, before you actually buy the equipment, before you dig dirt and start the construction progress project. You have to think about these incentives and go through all of the hoops to make sure that you’re free and clear, to build, construct and add jobs under that umbrella of a formal agreement. Well, before the all of those key events happen.

Damon Pistulka 27:13
Yeah, so you really need to be talking to the local economic development people understanding this before, you know, you may have done an initial site selection or review, and said, Okay, it looks like we got workforce looks like logistics are going to be okay. But now it’s time for us to really see if this and the incentives, the whole package works for us. It’s just like another wheel in the package, isn’t it? That’s

Josh Malancuk 27:44
true in the planning element can’t be understated. And so I want to a client comes to us and says, Hey, I’m gonna, I’m gonna grow. Here’s kind of what I’m thinking. This is why it’s important to me strategically, you know, the next question I asked, well, you know, when are you thinking about growing? And, you know, because you need to give me at least six to nine months to do my job for you, so that we’re not in such a rush, because of your construction timeline, that we can actually negotiate the incentives and maximize the deal, because of enough time, you know, we might as much as double the economic benefit for the incentive offering, because of that competitive pressure that, you know, we’ve had enough time to build as part of a multi site negotiation and competitive negotiation between the sites. Yeah.

Damon Pistulka 28:45
How many? How many times when you do this, and I’m going to look at three different sides, and you go, wow, the incentives are way different across the board, or do you usually go there, they’re pretty much the same? Or because you’re not knowing this? And what what do you see when you do that?

Josh Malancuk 29:06
Well, some states are more similar to others and others are vastly different. And in some states don’t even offer incentives, you know. So if you say, I’m going to grow in California or Florida, my next comment is don’t bother. Because they’re not gonna get anything there. Right. Yeah. You know, so knowing the state that you’re possibly going to look at expanding in or move to, is really key. You know, so you know that that status is really an important thing to know. Okay, why stick alternatives are?

Damon Pistulka 29:45
Yeah, as well. That just brings up the next question. And you don’t have to do we’re not going to take you to the bank on this. But what are some of the better states that you’ve worked with that really understand the incentives and how to make them work for the companies?

Josh Malancuk 29:58
Well, I really feel like most of the Midwest states really get the concept of economic incentives and also the southeast with the exception of Florida. Yeah, you know, West, Texas is a very business friendly state in general with for incentives. But then there’s other states that just are not, you know, but I really like the Midwest and the Southeast. And the South in general, for for incentives, you know, and so, you know, in a lot of cases, they offer a much easier, more streamlined process for negotiating and applying for the incentives, you know, because if it takes you a year and a half to finally get your incentive, yeah. Well, I mean, you’ve already moved past your construction, inception phase, and it doesn’t, you know, good, you know, so, so having a state, I’ll just pick on Indiana, for instance, Indiana is a great state, they get it from a standpoint of making things streamlined and user friendly to businesses. Yes, the application process, I find, is extremely short, it’s expedited with decisions. And the incentives as a whole are pretty easy to use to a business. So. So I like Indiana in that aspect. What I don’t like about Indiana, is that we tax business equipment, which I think is a competitive disadvantage. And with other states that surround Indiana, like Illinois and Ohio, for instance, that don’t tax business equipment. You know, that’s a disadvantage, just because of the property tax structure. And so, you know, looking at the property tax structure is key to know, kind of what you’re starting with, and what’s going to benefit the company. And whether you’re starting with a a tax type that doesn’t exist between certain states. Yeah,

Damon Pistulka 32:13
yeah. So really understanding your states, before you even think about going there might be a good thing about incentives is just go gay, here’s where we’re kind of thinking. And I’m talking about we’ve looked at the workforce, we’ve looked at anything, you know, maybe if you know, you’re going to need incentives, or nation state, because you’re, you really shouldn’t need them to get them all the way through, but knowing that your state’s going to be harder, or may have some better ones that fit you is important before you even approach the state.

Josh Malancuk 32:47
Absolutely. And then, you know, as far as site selection, I mean, knowing what you know, the utility rates are and how those here, you know, whether there’s available land to even construct the project, because, you know, if you’re ready to go, you need shovel ready land, now, you better know that you’ve got land that has utility hookups, that Yeah. Right. And if you don’t, and you got to wait a year for a big transformative be constructed by the utility company, yeah, it’s gonna be a big drawback. So those are things you look at as part of your site diligence, and, and knowing kind of what’s happening with with energy, you know, namely, you know, do you have brownouts, you know, that you’re gonna have to deal with, you know, you have a good dependable energy system. And that state, you know, is extremely important, especially to a manufacturer that is so energy dependent.

Damon Pistulka 33:41
Oh, it’s huge, huge. You can reach millions of dollars of equipment with those kind of situations. Yeah, absolutely. And, yeah, that don’t get fixed easy to. So you’re out of commission for a long time. That’s right. Yeah. Yeah, good stuff. Well, when you’re where have have so going back up a little bit, workforce, workforce in manufacturing, we hear it all the time we, you know, that it is, you couldn’t you couldn’t hire the people. Someone said this. And I don’t even know it’s true. With all the openings in manufacturing, you couldn’t hire the people because there’s not enough unemployed people don’t know if that’s true. But how many times are you’re seeing this now looking at the multiple sites and go into a workforce just not even going to it’s going to discount us from two thirds of the sites we’re looking at or 25% or how many times the workforce just me that’s gonna stop us from even getting started.

Josh Malancuk 34:46
is a huge part of the decision. You know, that I think that the workforce is really creating somewhat of a economic blight to this country. entry. And I think if we, we solve that issue with sound leadership and concepts at the state and federal level, we’ll, we’ll have a lot more economic prosperity than even we’ve seen over the past few years, right. And so the problem is long term, it’s going to really bite us. Because what happens, you know, in many cases, is that the companies when they run out of workforce, and there’s not enough dependable workforce in a particular area, they’ll just pick up shop and move to either a spot that does in the United States, or just out of the country altogether. And so, you know, so, so having companies move out of the country is a big risk, especially for manufacturers that are so labor dependence, you know, that’s why you hear about jobs going to Mexico and other foreign countries like China, because we just don’t have enough people that are willing to work in this country, to man, all of these job openings. And there’s a number of reasons for that, but I think it really starts with, what are we doing with, with high schoolers, to, you know, kind of shepherd them into better paying positions, you know, in manufacturing and seeing that as a viable career path, or offering, you know, you know, kind of vocational programs to help move people through, so that they’re, you know, they’re working for the first time, versus hanging out at Starbucks as a barista for a few years, right out of high school. I mean, you know, those, those programs really can be powerful and beneficial for companies that, you know, want to put some some intellectual capital, you know, in the folks that have zero experience, and then kind of bring them up through the system. Yeah, so I’ve seen situations where some of my manufacturing clients, I’ll pick on a H fac group that they’ll actually offer on site training, with the H back, you know, production simulator, and, you know, the folks that pass muster, there will actually get jobs on the line. And the same is true with with rip, you know, H back repair, I’ve seen that, you know, with vets, they’ll they’ll offer a vocational education path for free. And then the folks that qualify will actually get the first job offers, you know, and so that’s, that’s kind of bringing people up through the system, through the vocation, through internships, internships are a really powerful way to build experience, you know, with with the inexperienced, kind of next young employee, and yeah, we actually use that program. And, you know, Indiana actually offers some wonderful sponsorship through what’s called the urn program, where the state will actually fund half of the internship through cash match. Employers like us that that will see fits to bring in interns in and show him the ropes and build some skills. Yeah. Those are just examples of where, you know, the the worker skill building programs are working well. But well, we still got a lot a lot of growth to do. Yeah, short the gap and there’s way too many people retiring with all of those skills intact. And so it’s going to be a big challenge to replace the aging workforce with with the next generation young employees. Yeah,

Damon Pistulka 38:51
and we’ve we’ve talked a lot of people and you know, Kurt Anderson, I and on our Monday and Friday shows manufacturing ecommerce. I mean, we talked to a lot of people and, you know, getting the young people aware that manufacturing is even an option. And I think a lot of that comes from the an older generation or their parents that may have been in manufacturing may have had a solid career in manufacturing, but for some reason, don’t want their children to live the same life that they did, even though when they look if they look back at it, manufacturing is not a bad career move at all because of the the both the horizontal movement and the upward mobility that you have within these companies once you get some experience right out of high school. And that’s just a huge thing. And I love what you’re talking about with the vocational schools because we all talk about four year colleges, you hear that all the time bla bla bla bla bla, but that’s not for everybody. And in some of these, some of these kids can go learn automation, learn electronics of some sort, learn how to run a CNC mill or weld or whatever the right thing is for them, and then turn and go into those manufacturing companies. And these are wages that they will not see working at the retail center at the mall at anything else, I don’t care how long you work there, you know, that they just won’t see. And they will see the kind of the other thing that I see in this and I’m a, if you’re a retail person, that’s awesome, do your thing. But retail hours are not that great compared to a manufacturing position usually. And there’s there’s just a lot of things. And I think that this is great to hear about the vocational the internships, you know, you look at some of the countries in in Europe, Germany and other ones that have have a long history of internships and, and developing these skills early and people. We have to solve the workforce problem some somehow. And I don’t think we can automate fast enough. And it’s not cutting out jobs, I just don’t think we can automate fast enough to cover the retirement. So that’s it’s really for us the only way to get enough people to do what we need to do.

Josh Malancuk 41:07
That’s right. And you may ask, Well, gosh, we we started with incentives, when we went to this workforce type phenomenon, what will they kind of tie this together? You know, while you’re doing what you need to do as an employer, to grow and upskill your workforce, and respond with investing in capital to help deal with some of the worker issues, you know, there’s incentives that can be available. Yeah, this plan ahead and take those steps to qualify each of those initiatives for the myriad of state or local programs. Yeah. So what it ends up doing is helping you with that extra level of support, to take on those activities that can really impact your business from a strategy perspective. And instead of overpaying the government with a lot of property taxes on that new capital, or a lot of state income taxes on, on the withholdings for for your your employees, and the like, you know, part of that could come back to you to help fund that growth, and make your dollar move a lot farther while you’re growing. And, you know, let’s be frank about this. You know, your competitors doing this if they’re smart, right? Yeah. So why don’t you do it to say, Come up with your competitor, you know, and so, it’s just makes good business sense, to think about economic incentives, and to plan ahead, so that you can actually secure usable incentives that make sense for the company with the greatest possible benefit. And then now you’re able to fund your training programs, you’re able to find that automation that literally keeps that plant running, and keeps it competitive with your plant in Malaysia. And now you’re able to, you know, add the extra person in your accounting department that you otherwise wouldn’t be able to, to help make sure that your financial transparency is there for your stakeholders. And, you know, all of this kind of ends up mounting up to be a really big deal for companies. And it’s not uncommon for us to negotiate eight digit type incentives. You know, and so, you know, you get into a project where you can negotiate a 12 to $15 million incentive program for our business. And that can be the net operating income for a decent sized company, you know, on an annual basis. So, these incentives can be worth a lot. But you just have to allow for the time and the process to play out the right way. Yeah, to make sure that you’re getting every opportunity and making full opportunity to sell your project and secure those incentives.

Damon Pistulka 44:12
Yeah. Wow. This is this is great. Learning more about this with you, Josh. It’s it’s just, I think a lot of companies don’t. Well, I know they don’t look at the way you’re looking at and have the experience that and bringing the experience to it, and really, the timing and the process to be able to do it. The best way possible, look at our alternatives for expansion, and then consider what the local the local governments can help us do, or the state or federal government there and in some cases, can help us to really make it the best investment for all of us possible. So that’s right. Thanks for stopping by today. and explaining about this economic incentive procurement and some of the things that you’re seeing. And I just want to say that listeners, if you got in this late go back to the beginning and listen to this, because this is, as Josh has said, these are some of these things are eight figure incentive packages, if you’re gonna go in with a with a large expansion or something else in a new area, and then just the importance of site diligence, and really understanding where is the best site, including incentives, including workforce, including logistics, and some of the other things that you mentioned there? So, wow, thanks for sharing with us today, Josh. Well, thanks,

Josh Malancuk 45:41
Damon. And if I would just leave one carrot, a nugget of gold to the listener today. I would just say, Don’t go it alone, you know, so, you know, if you as the company are going in and negotiating for the company, for these incentives, you’ve already lost, because the site, you know, economic development director, you know, they’ll know that you’re going to, you’re going to expand, and so you’ve lost your bargaining power, you know, bring in someone that can be your experience navigator, who can negotiate with an anomaly. And, you know, through a nondisclosure type forum, to where, you know, you as the business aren’t even mentioned with the initial discussion. And so, you know, the seeds season navigator, bringing in someone that can kind of steer through the process and knows the state knows the incentive structure knows how to negotiate the usable incentives and knows your business, and kind of what’s important to the business. Yeah, those are real key elements. But, you know, it’s important to know, you know, that there are folks out there like us that, you know, will earn their fee 10 times over, through what they’re able to bring back in terms of benefits. And so don’t go at it alone, because your pocketbook will thank you in the end, trust me.

Damon Pistulka 47:10
Yeah. Yeah. Awesome. Awesome. Well, Josh, thanks for being here today. If people want to get a hold of you, what’s the best way to get a hold of you, Josh?

Josh Malancuk 47:20
Yeah, so the best way to get a hold of me would be first email Joshua at JM tax advocates. If you forget that www.jm tax advocates.com has a Contact Us Part of the website. And then my direct dial number is 317-674-8390. And I’m at extension 100. And feel free to leave me a message. I’ll give you a call right back. All

Damon Pistulka 47:45
right. All right. Well, thanks, everyone for being here today. Thanks for all those listeners we have and and thanks again, Josh for explaining to some of the different considerations with economic incentive procurement site selection site diligence and workforce. Wow. Thank you.

Josh Malancuk 48:05
Thanks, Damon. We’re here to help. All

Damon Pistulka 48:07
right, well, hang out with me just for a second. Josh, we’re going to shut down. Thanks, everyone for listening. We will be back again next week.