One positive outcome of the recession, as the states struggle to find revenue to spend, is that state subsidies to businesses are facing increased scrutiny.
This week the New York Times reported that states are looking at reducing or ending programs that hand out taxpayer money to television and movie producers. In Pennsylvania, some last-minute handouts from outgoing governor Ed Rendell are under fire, including a $10 million state grant to rehabilitate a former Sony plant for new tenants. According to the Commonwealth Foundation’s Nate Benefield, this is the fourth time Pennsylvania taxpayers have subsidized the site:
Read the rest of this post →Sony moved out in 2007, despite getting more than $40 million in corporate welfare under Gov. Robert P. Casey to come to Pennsylvania, then another $1 million grant under Rendell to stay in the state—a mere two years before shutting down its plant.
Before Sony, the site was occupied by Volkswagen, which got $70 million in state aid in the 1970s under Gov. Milton Shapp. This was touted as a great success — until Volkswagen moved out in 1987, after 10 years of operation.
Pennsylvania is merely renting jobs with this “economic development” spending, burdening other businesses with higher taxes. Hopefully, Gov. Tom Corbett can learn from the failed policies of the past and work on improving the state’s economic climate rather than trying to pick winners.