SAY NO TO OUTDOORS RETAIL SUBSIDIES

The Patriot-News
Corporate welfare faces test in court
Sunday, October 02, 2005

In the mid-1990s, some people feared welfare reform would leave mil lions of people in wretched conditions and cause unemployment to soar. Eventually, changes occurred under Bill Clinton.
I always like to point to that fact whenever the topic of welfare reform comes up. Reform made sense on many levels, and it should not have been a partisan debate.
Clinton eventually signed the Republican-led initiative, and history has proven the reform worked. Unemployment, even with the recession we have weathered since, did not spike and has remained relatively low. People who could work were forced to find jobs, and many people did.
That story helps prove a basic management maxim: Do the right thing for the right reasons and you don't have to worry about the rest, no matter what the outcome. You can always take solace in having done the right thing.
And so it should be with corporate welfare. In this instance, however, the leadership is in the hands of the U.S. Supreme Court and not our elected politicians.
As we reported last week, the nation's highest court might settle whether it is a fool's game for governments to chase industries with lucrative incentives. The specific case involves a $281 million tax credit that Ohio gave DaimlerChrysler to build a Jeep plant.
This high-stakes game often pits states against each other as they bid for a factory and its jobs. There is no winner. Not really. But the losers are taxpayers in states that encourage such payoffs. In Pennsylvania, governors and leaders -- Democrats and Republicans alike -- like to play.
One of the oddest payouts in recent years was the millions given to help build a Cabela's outdoors store near Hamburg. Now, I am all for Cabela's. But if I were a competitor, I wouldn't have been happy. As a taxpayer, I wasn't pleased the money supported retail jobs.
Doomsayers would suggest that incentives are needed or companies will leave. The reality is that a business will do what is best for its future and bottom line, so any money given to it is a gamble. The government simply shouldn't be in the business of gambling with taxpayer money.
So far, no state has been willing to stand on principle and end the payments. That has allowed generations of companies to become dependent on the cash. Isn't that what we were trying to stop with welfare reform -- whole generations getting used to handouts that would keep them from learning how to fend for themselves?
It will be interesting to see whether the Supreme Court makes a distinction between cash payments and other incentives. A government trying to redevelop blight might be wise to offer incentives to lure business and industry. There is a difference between that, where the company is taking an equal risk, and cutting a big check. It also makes little sense for the state to train workers -- taxpayers already have paid by investing in public education.
No matter what, though, I hope the Supreme Court gives politicians a way out. By offering clear direction on what is constitutional and what isn't, corporate welfare as we know it just might end.
TOM BARSTOW: 255-8464 or tbarstow@patriot-news.com