Column for March 8, 2007

Corporate welfare programs are bad policy

Well, it figures. I rarely miss being a spectator at a Town Council meeting in Selma. Each of the few times I have, I miss interesting developments in the town’s government. The last meeting, I missed the agreement to lease the Harrison school property to a charter school and the plan for economic development incentives here in town. I think the charter school plan is an innovative use of otherwise unused property. The proposed economic development zone and incentives, however, I am not so keen about.

I have never been a fan of corporate welfare programs. Here in North Carolina, we have seen our share of them. Dell, Google, FedEx, Honda, and other industries have been lured to the state with multi million dollar incentive packages at taxpayer expense. Here in Johnston County, we have seen our share, as well.

From what I have read in the media, the Selma Town Council and Town Manager seem to be supporting the recent plan for local town to offer tax rebates to encourage business development. First, if we just plain lowered taxes across the board, business would be encouraged. The high tax rates we already pay are a disincentive for development. Government regulation adds to the high costs of doing business, as well. Here in Selma, we already have an increased property tax rate plus sales tax, income tax, FICA, and federal taxes. If that burden was lessened, we would not have such a hard time with getting businesses started and continuing. Present businesses would have more to invest in their companies and ordinary people may be able to start their own businesses.

The current plan is to rebate people who build and improve property along a specific, generally undevelopable stretch of road in Selma, the differential in rate of the property tax paid for five years. I understand the concept and the reasons behind the tax rebates. However, I think that the five year plan is a bit of over kill and akin to the deals that Dell and others have gotten. I realize that after five years, a business will have their normal tax rate and may (not a definite, since businesses come and go) pay full freight then.

The area targeted in Selma is not ripe for development primarily because of what is there. Exit 98 is one of the worst exits for access and egress on the interstate. No business will solve that challenge to development. It is not right off Highway 70, a major throughway like at exit 97. There is a major railroad crossing there, a train station, the town electrical department, and a propane farm. A restaurant or bank would just be "out of the way and out of sorts" from the already settled area and would not really conform to either the surrounding area or usage thereof. That is why I believe that the stretch in question is certainly not ripe for development. It really has less to do with encouraging building there and more to do with the uselessness of the terrain. I believe that the reality is that no incentives would really make that area attractive to development.

The same proposal is going across Johnston County. I am all for encouraging business. However, corporate welfare programs at taxpayer expense, no matter how large or small, are inherently unfair to all other taxpayers. Sure, the local proposals are relatively small. But do we just join the bandwagon of the practice of corporate welfare for development or do we stand on principle? To compare something recent in the news, if Jim Black had just a little bit of corruption while in office rather than a heap big amount, would it have been acceptable or fair? Not to be cliché, but I believe that a little leaven will leaven the whole lump.

Don’t send me hate mail claiming that I don’t understand business and am not for developing our area, or am a regressive. Sure, I can handle that, no problem. But, better than your letters, emails, or phone calls would be your commentary at the public hearing that will be held on the subject. Show up and let your voice be heard where it counts.