Washington’s Political Dysfunction Unlikely to Disrupt 2019 Corporate Site Location Projects

Politics, like business, can be ugly.  The current leadership in Washington in both the White House and the Congress is anything but pretty.  However, Trump Administration actions to address the national trade imbalance, reduce federal regulation of business and implement the federal tax reform legislation is having an overall positive impact on the economy.  Trump’s trade war against China is sending a signal to global corporations that they should be considering the United States for economic development investments.  The billion dollar Foxconn deal in Wisconsin is an illustration that pushing from a President with industry can impact global company’s corporate site location decisions. 

For the most part, 2019 will be a year where little to nothing gets done on major issues in Washington that requires an act of Congress.  The largest potential casualty on the lack of federal action in 2019 is failure to move on the nation’s crumbling infrastructure.  A lack of federal consensus for how to fund and where the money will come from has the potential to negatively impact economic growth and corporate site location projects across the nation as growing and struggling states alike are searching for road, highway, bridge, water and sewer and other infrastructure funding.

However, other than trade, taxes and labor regulation, most public policy that impacts corporate site location projects happens at the local and state government level.  From workforce to infrastructure to utility service to taxes, local and state government decisions have a more direct impact than anything the federal government can do for a project.  In reality, economic development happens at the regional level.  The federal government, for the most part, does not have the flexibility or the budget to impact that decision in a particular area.  

2019 will remain a year when Governors, Mayors and County Commissioners along with local business leadership get corporate site location deals done. America’s 34 Republican and 16 

Democratic governors bear the responsibility to address the quality of their workforce, infrastructure and tax code that impacts whether their own companies will grow in their state or move elsewhere.  Local government leaders win or lose economic development battles based upon their ability to create and implement a predictable land use entitlement program, provide infrastructure and address tax issues.

However, local and state government leaders are perfectly capable of shooting themselves in the foot related to economic development and corporate site location.  Look at Florida.  Part of the economic success of Florida is related to its early creation of a private sector economic development model through an organization known as Enterprise Florida. Unfortunately for Florida, attacks on Enterprise Florida started flowing from conservative Republican state legislators.  Governor Rick Scott, now a U.S. Senator, was forced to defend Enterprise Florida and the portion of its budget that comes from the state government and the whole fight created uncertainty in Florida’s economic development community.

2019 will be year of federal government dysfunction but where Governors, Mayors and Commissioners continue to do the important work impacting corporate site location projects.