Given Millions to Make Jobs, These Guys Instead Make Hay for Themselves
|December 31, 2013||Posted by Staff under Subsidies & Waste & Public Debt, The Progress Report|
This 2013 excerpt of Clawback (of Good Jobs First), Oct 23, is by Phil Mattera.
Three years ago, newly elected governors in several states decided to outsource economic development functions to “public-private partnerships” (PPPs). Things have gotten demonstrably worse since.
“Enterprise Florida is our state’s most glaring example of cronyism and institutional corruption,” said Dan Krassner, executive director of the nonpartisan government watchdog group Integrity Florida. “The organization engages in pay to play: it sells seats on its board to corporations for $50,000 and then gives away taxpayer-funded subsidies and vendor contracts to them in return.”
The Wisconsin Economic Development Corporation (WEDC) was accused of spending millions of dollars in funds from the U.S. Department of Housing and Urban Development without legal authority, failed to track past-due loans, and hired an executive who owed the state a large amount of back taxes.
JobsOhio received a large transfer of state monies about which the legislature was not informed, intermingled public and private monies, refused to name its private donors, and then won legal exemption from review of its finances by the state auditor.
The Rhode Island Economic Development Corporation is still litigating the biggest economic development scandal in Rhode Island history: its $75 million loan to the now-bankrupt 38 Studios.
Ed. Notes: The well-meaning author and his organization want to keep the public funds with a public agency to make jobs. However, if we want jobs (and the bosses that come with them) — here I confess I’d prefer co-ops, self-employment, startups, a shrunken workweek, and lots of leisure — then why do we tax them? And just as dumb, why do we let prime sites in cities where hundreds could be working lie fallow? Some governments have generated jobs in the past, not by creating a bureaucracy to create jobs but by getting out of the way, by getting their taxes out of the way and getting their subsidies to land speculators out of the way. What these jurisdictions did was shift the property tax off buildings, onto land. When owners erected or improved buildings, they didn’t get taxed, but they did hire people. Owners who had been speculating, keeping prime sites from best use, got busy and developed their locations, so they generated jobs, too. That’s how you do it. It worked in Denmark, New Zealand, and could anywhere. Just takes a little understanding a lot of political chutzpah.