Economic Development Funding – A Legacy of Waste

Earlier this month the State House passed a bill establishing the Industry Partnerships Program. Yet another Department of Community and Economic Development (DCED) program will be instituted, and as all the other programs will aim to create jobs.

A report by Triad Strategies, titled, ‘Changing of the Guard: Economic Development in PA’, documents how the state has been using taxpayer money for economic development activities even before the 1980s. However, the 1980s in many ways solidified a greater role for the state in fostering everything from a failing steel and manufacturing industry to infrastructure development to technology-based economic development to direct subsidies and grants to woo favored companies into the state.

In 1983 the Governor Thornburgh and the General Assembly created Ben Franklin Technology Partners, which today accounts for 16 percent of the DCED’s budget. In the 1990s Governor Casey started the Governor’s Response Team, which is now known as the Governor’s Action Team. Its sole purpose is to provide incentive packages to companies that the Governor deems appropriate. Governor Ridge’s administration, then, created the DCED by merging the Departments of Commerce and Community Affairs. This marked the beginning of a thoroughly entrenched government sponsored economic development projects, the most prolific being the Opportunity Grant Program.

Governor Rendell only reinforced Pennsylvania’s devotion to economic development projects, making Pennsylvania the second highest spender in the nation on economic development projects. The Rendell administration authorized the prevalence of some of the most egregious programs such as the Film Tax Credits.

Pennsylvania’s attempt to attract and foster businesses has only turned into a massive corporate welfare scheme, where companies are financed by tax dollars will little return for the taxpayer.