The Daily State-Times of Baton Rouge bannered the news in 1909: “Five Million Dollar Company to Build Two Million Dollar Plant Here.”
The front page hangs in The Advocate’s Baton Rouge office today. Deservedly, given the economic consequences of what is now ExxonMobil, as well as other energy and chemical companies in the state.
The headline about the creation of Standard Oil of Louisiana comes to mind whenever Gov. John Bel Edwards launches into his riff about “the largest economic development project in our state’s history.”
Right, not Standard Oil and its successors, but something that Edwards can claim some credit for, DXC Technologies.
The company is expected to create 2,000 jobs on Poydras Street in downtown New Orleans, and the governor noted that it was considered the second-largest job relocation project in the nation last year.
While DXC is only one of the projects that the governor talks about, saying 43 major industrial facilities or businesses located in Louisiana last year, it is also a much-desired tech company, not the petrochemical industry that may be considered old hat, perhaps, in the 109 years since the State-Times scoop on Standard Oil.
Edwards rarely misses the opportunity to note his own commitment to more funding for colleges and universities. There are obvious implications for economic progress and the potentially negative consequences of failing to invest tax money into colleges and universities.
He said DXC officials told him that had the tax increases and other tough measures taken in 2016 not stabilized higher education budgets, the company would not have opted for New Orleans.
And Edwards is also proud to say, given how many tax breaks and incentives have proved to be boondoggles, about half the incentives for the DXC location are paid to higher education in the state, for training for future employees. “No one is going to invest in Louisiana if we are not committed to education and training for their employees,” the governor told the Rotary Club of Baton Rouge.
Further, the state is doing well after only stabilizing funding from the disastrous cuts of former Gov. Bobby Jindal’s years in office, Edwards mentioned — suggesting more good things will happen if the state invests long-term in colleges and universities.
It is a reasonable argument, given that the state is again in a budget crisis threatening higher education funding, among other investments important to Louisiana’s economic and social progress. When the governor says colleges and universities are “critical going forward,” he is unquestionably correct.
His line of argument is hardly nonpolitical, in the sense that he was at the time of his Rotary speech locked in a battle with the GOP-led House leadership about tax bills for state government. Failing to replace the expiring temporary taxes of 2016 is, in economic terms, not an option: Higher education and health care are the most likely to be cut, at “Draconian” levels, if new taxes are not adopted, the governor said.
Perhaps the governor’s hyperbole about his successes, hardly unusual in a politician, also says something about economic development more generally: As important as political leadership is, the business rationale for a new project is most important.
For Standard Oil, it was the Mississippi River, where its successors are located today.
For DXC, untethered to proximity to rivers or harbors, the intellectual infrastructure of a new business location is important. That is unlikely to be dramatically changed in the four or eight years given a governor or mayor in office, but they certainly affect it.
Email Lanny Keller at email@example.com.