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AUGUST 31, 2010 | Commentary by ELIZABETH STELLE
Traditional Energy Fuels Pennsylvania's Economy
Pennsylvania has always been a leading provider of America's energy. From timber and coal to the nation's first commercial oil well, and now the Marcellus Shale boom, traditional energy is vital to our state's economy. But these industries, and the prosperity that accompanied them, are now threatened because they have become politically
JULY 13, 2010 | Commentary by NATHAN BENEFIELD
The Real Problem with the Specter Library
As part of the state budget deal, Gov. Rendell secured $600 million in new borrowing for pork-barrel projects, including $10 million for the "Arlen Specter Library" at Philadelphia University and another $10 million for the "John P. Murtha Center for Public Policy." These monuments to politicians have sparked outrage, but represen
JUNE 29, 2010 | Policy Points by COMMONWEALTH FOUNDATION
Pennsylvania Budget Facts 2010: Corporate Taxes
The Commonwealth has the second highest state corporate income tax (behind Iowa, which has more generous deductions and exemptions). When compounding state and federal corporate taxes, Pennsylvania's corporate income tax rate is higher than that of every other country.
Recent Blog Posts
AUGUST 19, 2010
Rendell's Pinocchio Moment on WAMs
During yesterday's press conference, Roxbury News reported Gov. Rendell saying, "Opportunity Grants are not WAMS." Really?
Forget the numerous failures of Opportunity Grant recipients, like the $750,000 awarded to Siemens Energy for a never-constructed fuel cell manufacturing plant.
Forget that the 2007 Auditor General's report examined $215 million in grants expected to create 300,000 jobs, but found only 170,000 were created -- less than 60% of the goal.
And forget that the audit also revealed a poor track record of assessing and collecting fines -- $49 million in fees for failure to meet requirements were waived.
Because the real purpose of the Opportunity Grant program is press release economics. Governor Rendell may prefer "discretionary grants" or "corporate welfare" to "WAMs," but they're all examples of elected officials using other people's money to take credit for "creating jobs," even if they never materialize.
Denying that the Opportunity Grants are WAMs won't change the more important fact -- they are a waste of taxpayer dollars.
posted by ELIZABETH STELLE | 04:15 PM | 0 comment
AUGUST 13, 2010
Has Corporate Welfare Ever Failed?
A reader asks us if we know of any examples of corporate welfare where it has failed - not just on the Macro level, giving grants to select corporations while taxing others, which has proven to undermine economic growth - but individual companies that took taxpayer money and moved or cut jobs.
Here are but a few examples off the top of my head:
- Under Bob Casey Sr., Pennsylvania gave Sony $40 million to come to PA (Westmoreland County), that lasted about 15 years. They gave them $1 million to stay, that lasted about 1 year. The plant is now in Mexico.
- Lazarus Department Store in Pittsburgh took local funding, before closing down a few years later. In a similar case, Kolovani's and Company in Lebanon took state money to last a few years.
- Amazon.com recently got state funding for a distribution center in Hazleton. They subsequently closed a distribution center in Chambersburg.
- An audit of Pennsylvania's Opportunity Grant Program found numerous cases of companies receiving grants and loans, yet going out of business. These include $900,000 to AcceLight and $250,000 to Laclede Steel.
- Harley Davidson got $4 million in 2000 to stay in PA "forever." The company again threatened to leave in 2009, and got $15 million in taxpayer money to only cut half its workforce.
- Finally, the Pittsburgh Penguins threatened to leave, got millions for a new arena, and afterwards owner Mario Lemieux noted there was 0% chance they would have left.
Despite this abysmal record, Pennsylvania lawmakers keep doing it.
posted by NATHAN BENEFIELD | 01:16 PM | 0 comment
JULY 27, 2010
Tax For Soccer
It's not soccer players or fans that will be taxed to pay for the Major League Soccer stadium in Chester, but the visitors who patronize bed and breakfasts or hotels in the county.
Delaware county officials in 2008 put local taxpayers on the hook for nearly $30 million (on top of the $47 million Gov. Rendell pledged) to finance the Major League Soccer stadium.
A year after the Delaware County Council then-Vice Chairman promised residents the soccer stadium would be "entirely covered by restricted gaming funds," the council has announced a hotel-occupancy tax increase to pay for it. Needless to say, local hotel owners aren't happy their customers are required to contribute to the stadium.
The simple fact is that government-supported stadiums are a great deal for sports teams but not for taxpayers. While lawmakers promise the stadiums will foster economic growth, countless studies show otherwise. If legislators really want to stimulate the economy they should reduce the tax and regulatory burdens on job creators and not waste taxpayer dollars to help millionaires build and keep sports stadiums.
posted by KATRINA CURRIE | 03:00 PM | 0 comment
