Ideas to Improve Pennsylvania’s Fiscal and Economic Health

:: Fat Facts of the Week ::

Taxpayer-funded handouts to major corporations are just one reason why state government spending is so obese. Consider just four examples of corporate welfare:

:: PNC Bank received a $33.75 million handout from the state.

:: Cabela’s hunted down $5.5 Million in grants along with $32 million in tax breaks.

:: Bass Pro Shops snagged $15.5 million in grants.

:: Comcast received a package deal of $42.75 million.

PNC Bank—which posted a $2.6 billion profit in 2006—was essentially able to underwrite its $20 million in bonuses through a $33.75 million handout from state taxpayers. This pinstripe welfare was in the name of “economic development” to help revitalize a portion of the downtown corridor in the atrophying City of Pittsburgh. PNC Bank plans to build a $170 million 23-story facility, which will house office and retail space, a luxury hotel, condominiums, and a parking garage—over $50 million of which will be paid by taxpayers. Allegheny County and the Pittsburgh Public Schools also contributed $18 million to PNC’s bottom line through tax increment financing.

Cabela’s—for being the world’s foremost outfitter—sure knows how to hunt down taxpayer money. In 2005, Governor Edward G. Rendell announced the investment of $5.5 million to support the expansion of Cabela’s in Hamburg, PA. Due to anticipated annual state sales taxes, officials also approved more than $32 million in tax breaks and other incentives for Cabela’s. Unfortunately, this increasing trend is not new: In 2002 the state gave Cabela’s $12 million in assistance.

Bass Pro Shops has also snagged a fair share of taxpayer money at the state Capitol. In July 2005, Bass Pro Shops received a formal commitment from the Commonwealth of Pennsylvania for $15.5 million. Cabela’s and Bass Pro Shops alike have been quite successful in fishing for taxpayers’ money…and Harrisburg has been more than willing to help reel it in.

Comcast likes to help Governor Ed Rendell moonlight as a sports commentator in his spare time. But during the weekday, he also likes to provide a little help for his Philly friends. David L. Cohen, who is the current executive vice president of Comcast, was Rendell’s chief of staff when he served as Mayor of Philadelphia. That may not be the reason Rendell gave the company $30 million to relocate the company’s office just a few blocks away, but it is another example of corporate welfare being delivered to a company that posted revenues of $25 billion in 2006. The state gave $30 million for development to Liberty Property Trust, which is a real estate investment trust company. It also gave Comcast a $4 million opportunity grant, $6.75 million in job creation tax credits, and $2 million in job training assistance, for a total package of $42.75 million.

:: Diet Tip of the Week ::

If you haven’t seen Lady in the Water, you really ought to. Not that it was a great movie—it was panned by critics, has a “Rotten” rating at, and floundered at the box office last summer—but you have already paid for it, through your taxes. While the movie’s earnings were significantly less than previous M. Night Shyamlan’s films, a $6.2 million grant from the Film Grant program helped Rebellion Pictures’ bottom line.

Taxpayers provided $10 million for Film Grants out of the Department of Community and Economic Development in FY 2006-07, and Governor Rendell has proposed increasing funding to $20 million in his FY 2007-08 budget. With the film industry already swimming in movie-goers’ cash, Pennsylvanians should be outraged that their hard-earned money is funding fairytales.

:: Toward a Healthy State ::

“Corporate Welfare” has not led to better fiscal and economic health in Pennsylvania, as evidenced by recent economic statistics. In fact, states that spend the most in “economic development” are among the worst in economic performance. The 10 states with the highest economic development budgets, per capita, ranked below the national average in job, income, and population growth.

In contrast, the 10 states which spent the least on “economic development” had job, income, and population growth which outpaced the rest of the nation. In other words, corporate welfare does not promote fiscal and economic growth.In the 2006-07 fiscal year, Pennsylvania taxpayers funded more than $567 million in corporate welfare from the state’s General Fund budget alone. Instead of handouts to politically connected companies, $567 million could have been used to lower the Corporate Net Income tax by 25% ( from its current 9.9% to 7.4%), which would give Pennsylvania a far more attractive business climate.

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: :, a project of the Commonwealth Foundation (, is an educational campaign to restore Pennsylvania’s fiscal and economic health through a three-step program of spending restraint, taxpayer control, and tax reduction. For “The Pennsylvania Diet Plan: Three Steps to Fiscal and Economic Health,” go to