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| From the April 2015 edition of Carolina Journal, a monthly journal of news analysis and opinion from the John Locke Foundation |
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New GOP Incentive Plan to Feature Welfare Wednesdays (a CJ parody) By J.M Canes Economics Correspondent RALEIGH — A group of Republican legislators is planning to expand the discretionary business incentive powers of the governor's office, calling the program Welfare Wednesdays, Carolina Journal. has learned.
Professors at N.C. State University — most of them not economists — have developed models with a multiplier effect showing that every project supported by incentives more than pays for itself, placing taxpayers at no risk of default. Sometime next year the supporters of the new WW program will ask voters to approve a $1 billion bond to fund the program, CJ has learned. The architects of the plan will defend it publicly by claiming that all incentives programs pay for themselves by creating jobs through a multiplier effect, according to the draft document. Gov. Pat McCrory said after taking office in 2013 that the General Assembly should supplant the Commerce Department's public efforts to recruit businesses and expand jobs with a nonprofit known as the Economic Development Partnership of North Carolina. He urged the General Assembly to set up the arrangement because he said the state's economic development team needed to be more "nimble" and needed more tools to compete with other Southern states. Now, the governor says the new nonprofit lacks the necessary tools and is not nearly as nimble as he expected it would be. CJ also has learned that McCrory and Commerce Secretary John Skvarla have contacted representatives of actor Tim Allen — who played TV's Tim "The Tool Man" Taylor in the "Home Improvement" sitcom — about working with the state to promote the new incentives plan. "No other state has done anything like Welfare Wednesdays," said the governor. "I have said that our job-recruiting organization needed to be more nimble, that I needed more tools. Well, this will be the ultimate tool belt for me, and with Tim 'The Tool Man' Allen as a spokesman, I will have the best tool in the nation in the war for job announcements," he said. One legislator who is opposed to the program and who requested anonymity shared the information — which is a proprietary document and not subject to public records requests — because the legislator says it takes the incentives concept too far. "Corporate welfare critics have characterized these programs as a system where government bureaucrats pick winners and losers," the lawmaker said. "It's clear from this plan that they think every idea will be a winner, and that is simply impossible. I think taxpayers will be left holding the tool belt, so to speak," the lawmaker said. The Welfare Wednesday plan would funnel all business incentive programs through a one agency, the soon-to-be-announced Division of Corporate Welfare, a source confided to CJ. The office would be open only one day a week, Wednesdays, to accept grant applications from any company that plans to move to or expand in North Carolina. Under the plan, any type of legal business activity could qualify for and receive an award. The office also would accept grant applications from film production companies, developers who want to restore old buildings, and entrepreneurs with unusual business ideas that have not received start-up capital through conventional sources. A grant committee appointed and chaired by the governor would review applications and make awards. "Since we know that properly configured incentive deals always pay for themselves, the staff must make public the equation it used to make the award decision," the draft document states. Allen's representatives did not respond to requests for comment. CJ "Parting Shot" is a monthly parody by Carolina Journal spoofed to look like a genuine news story. It appears on page 28 of the print version of CJ. |
