Public policy decisions are not neutral. Rather, they are loaded with bias, assumptions, and tradeoffs. This statement seems obvious; yet, in my public and environmental policy courses, I am often confronted with students who are eager to find the “right” answer when it comes to regulation, law, and economic development decisions.
The announcement of the new Rivian electric vehicle assembly plant in Rutledge, GA is no exception. As with any public policy decision, Governor Brian Kemp’s announcement that the new plant would be located in the small, rural, farming community of Rutledge has been met with mixed reactions.
Let’s look at the landscape of this decision. Rivian is a publicly-traded, start-up electric vehicle maker with a. stock market capitalization of approximately $100 billion, rivaling the likes of Ford and GM. This is no small operation. They have one plant at present, located in Illinois, and a contract with Amazon to produce electric vans for the company’s delivery service. By all accounts, this is a burgeoning player in the EV market. So, why would they be attracted to Georgia?
While the Atlanta Journal & Constitution reported that the details of the deal struck with Rivian are still unknown, they uncovered some clues as to what might have been at play. For instance, the City of Fort Worth, TX was a contender for the Rivian project and they approved a $440 million tax incentive package. Meanwhile, in 2018 when the state of GA acquired the SK Battery America plant, “state and local officials offered the South Korean company about $300 million in tax breaks, grants, free land and worker training” according to the AJC. The state investment via incentives in this project is likely to be staggering. In addition to tax incentives, Governor Kemp noted that the state offers an advanced manufacturing workforce, advanced transportation networks, and a state-provided workforce training center as enticements.
That’s a lot of investment on the state’s part. What are the gains and who gets what? First and foremost are jobs. The plant is expected to employ around 7500 to 10,000 workers making it the largest single economic development project in the state’s history. Along with these jobs will be a major influx of people and tax revenue to the Morgan county area.
Politically, this is a major feather in Governor Kemp’s hat as he heads into a contested primary season against former Senator David Purdue as well. Democrats like that this is green industry, and Republicans like the jobs creation.
Environmentally, a number of stakeholders have noted that Rivian is not only a green industry, but their business practices are underscored by a commitment to sustainability. Regardless, trading off farmland for an assembly plant simply has a disproportionate environmental impact. Watershed runoff, soil, light, noise, and traffic pollution will have an impact locally, never mind the additional strain on local infrastructure.
Socially, this is going to fundamentally change the Rutledge community. Presently, they have two-lane streets, plenty of golf carts and tractors on the road, and no traffic lights. With 10,000 more people in the area, this will be a big shift. And while Rivian will benefit from tax breaks, the farmers in the area may face increased land prices and taxes which could ultimately price them out of the area. Displacement is major concern for families who have lived and farmed in the area for generations.
Will this new mega-site create jobs, put the state of Georgia on the green industrialization map, possibly displace generations-old farms, and fundamentally change the small town of Rutledge forever? Yes and yes. So, is this a good economic development choice, or possibly a detrimental one? Yes. This is the way economic development operates. It is not neutral. It is not inherently all bad or all good. The only thing we can confidently say, is that it will spur huge change.
Dr. Heather Farley is Chair of the Department of Criminal Justice, Public Policy & Management and a professor of Public Management in the School of Business and Public Management at College of Coastal Georgia. She is an associate of the College’s Reg Murphy Center for Economic and Policy Studies.
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