Theft at the Public Till
Like other states, New York tries to recruit and retain businesses by offering various kinds of bribes. These include targeted tax breaks, dis- counted energy, and even direct investment. Four different agencies put out press releases every few days heralding their giveaways to compa- nies from Spalding Sports to ABC Television. Susan Glass of the Urban Development Corporation claims the state has created or retained some 200,000 jobs. There is, however, no evidence to support this fantastic asser- tion. Governments cannot do better than the marketplace at determining where investment will best generate growth and create jobs. Businesses love it when governments try, because it allows them to make a direct claim on state monies. But it doesn’t really help. As Vincent Tese, Director of Economic Development for New York State, admits, threats to leave have only increased since New York began bribing firms to stay. Cuomo’s economic-development programs are inordinately expensive, consuming 2 percent of the state budget. Infrastructure, meanwhile, has gone begging. Nearly 70 percent of New York’s bridges are currently rated deficient, double the national average. The state spends time and money creating and imple- menting its taxes and regulations, then spends more of both finding ways around them for those who complain the loudest. Instead, we should just cut business taxes across the board. But the notion that the key to a sounder economy is doing less rather than more seems never to have occurred to those who make the decisions. In Minneapolis the owners of the NBA’S Timberwolves built a private stadium for about $100 million well over budget. They consequently lost about $15 million when a local savings and loan failed. But the owners Mary Wolfeson and Harvey Ratner are looking to the public fo get them off the hook. Their pitch: If the state doesn’t buy the Target Center from us we’re moving. Minnesota blinked. The state legislature agreed last month to buy the arena if the team stays in Minneapolis. What we have here is professional sports version of Gresham’s Law. which states that bad money drives out good money. Once the public starts subsidizing these new facili- ties it becomes hard for those without subsidies to compete. A recent study
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