Our View: County subsidies: immoral

 

Our View: County subsidies: immoral

 

Date: February 23, 2012
by: Observer Staff

 
 

 

Maybe a a good roundhouse to their proboscises might knock some sense into them and awaken them.

We’re speaking of the Sarasota County Commission members. Over the past two years, they have confiscated $10 million of your money (called tax dollars), and, in exchange for promises by business owners to create new jobs, the commissioners have passed your money into the hands of those business owners.

They’re almost out of that money now and want to replenish it with another $6 million of your money.
These five commissioners, along with their “economic development” experts — none of whom, by the way, has achieved any venture capitalist or business status of remarkable merit — have decided which companies among many have the best ideas, plans, products and services to be worthy of your money.

In some places they call this process “government picking winners and losers.” And always (i.e. Solyndra), the taxpayers are the losers.

There is no moral or economic justification whatsoever for government to take your wealth (by force of a gun, mind you, aka taxation) and transfer it to a privately owned enterprise that competes in the free marketplace.
People such as Commissioners Christine Robinson and Nora Patterson and Mark Huey, president of the Economic Development Corp. of Sarasota County, see this as “economic development” — providing subsidies under the guise of “public policy” to improve the local economy. The idea, of course, is to hand out capital to companies so the businesses can expand and hire more people — obtaining an (alleged) advantage over their competitors. This in turn is expected to create a spillover effect that will result in the creation of more new local jobs.

The economic development experts say this process is executed under rigorous examinations and follow-up to make sure taxpayers are receiving the proper “return on investment.”

But as we have seen in Sarasota County, it’s a “learning” process. The expected ROI is often mythical. Our version of Solyndra was Sanborn Studios, one of the county’s more notorious economic development flubs. The county gave Sanborn $650,000 with the expectation that Sanborn would create 117 movie-production jobs in three years.

Sanborn outfitted a 20,000-square-foot studio in Lakewood Ranch, but has since abandoned it, laid off several employees and doesn’t exactly appear to be on its way to becoming the next MGM. When it applied for another $500,000 in taxpayer money, the county’s economic development officials had enough sense to turn it down.

There were other losers — Sunovia Energy Technologies, for one ($50,000). And the jobs created from 28 “grants” to various companies have totaled 1,039 compared to 2,323 promised (44%). It’s still early in some cases. Companies received their money in just the past few months.

Truth be told, taxpayers should be outraged by this stuff. Consider this one:

Commissioner Robinson is all excited about the $400,000 the county promised recently to an out-of-state medicall billing company that employs 148 people and “is expected” to hire another 215 more over the next two years, according to the Sarasota Herald-Tribune. The company was deciding between Sarasota and Hillsborough County.

Now let’s say you own a medical billing company in Sarasota County, you’ve been operating here for more than a decade, you’ve paid property, tangible and intangible and corporate income taxes all that time and you haven’t taken one dime from the government.

How can Robinson, Patterson and Huey possibly justify a handout to the out-of-state company?

There’s more:

With the typical arrogance of government do-gooders, Robinson & Co. are presuming they are smarter than all of us on how best to spend or invest the $16 million they are confiscating from you, the taxpayer.

In effect, they are saying: “If we let you control your own money, you are not as smart as we are creating new business ventures that will generate as many jobs as we will or the kind of jobs we want when we take your money and invest in, say, Sanborn Studios.”

They can see the companies that come to them for a welfare check. But they cannot see the unknown entrepreneur, maybe even the next Steve Jobs, who is denied capital because of the taxation that occurs.

This may sound far-fetched. But it reminds us of the often told story by the late, great economist Milton Friedman. After Mercedes Benz won a $350 million subsidy to build an auto plant in Tuscaloosa, Ala., from the Alabama Legislature, Friedman was asked whether this was a wise investment. Think of all the new jobs being created, he was told.

Responded Friedman: “Think of all of the jobs not being created by the Alabama people who had to give Mercedes that $350 million. Ask the widow on the fixed income in little Chicasaw, Ala., on the Gulf Coast if she cares about the Mercedes jobs in Tuscaloosa.”

One more time: Stop the corporate welfare. It’s wrong. It’s immoral. Focus instead on reducing the burdens of taxation and regulation. Create a climate where it’s a joy and easy for all to do business.

+ St. Armands BID works
The nature of news is to focus on the unusual and extraordinary. And as we all have learned in this modern media era, that usually means the bizarre begets the biggest headlines, or the badder the news the bigger the story.

But a lot of media outlets, including ours, have gotten the message: Celebrate the good.

Here is one of those good-news stories: the St. Armands Business Improvement District.

This is the special taxing district that St. Armands landowners created, via the Sarasota City Commission, to impose an extra tax on themselves to fund physical improvements around St. Armands Circle.

It’s not a sexy story — full of dramatic heroism and feats. But it’s a story of Aesop’s famous race, “The Tortoise and the Hare” — slow and steady wins the race.

You may have seen last week in the Longboat Observer the long list of the BID’s accomplishments over the past 10 years, the most noticeable, of course, being the most recent — the four lushly re-landscaped medians. It was also behind the installation of new street lights and 122 outdoor Bose speakers, new and repaired sidewalks, brick-paved crosswalks and the funding of a long-range master plan for the Circle.

All of this may not seem like much, but if you think back 10, 12, 15 years ago, slowly and steadily a ragged-around-the-edges St. Armands Circle has been showing continued improvements.

The BID was a smart idea, and its three board members — Marty Rappaport, clearly its champion, Michael Valentino and Gavin Meshad — should be recognized for their positive contributions. We know merchants feel they are ultimately responsible for providing the property-tax dollars to the BID via the merchants’ rental payments. But another way to view that is this: The landowners could eliminate their taxing district and divert that BID money to other uses than the Circle. With the BID, dollars are forced to flow back into the Circle. Everyone benefits — landowners, merchants, the city and surrounding property values.

Clearly, it would behoove the landowners to extend the BID another 10 years. That is especially so because the work of the BID is not finished. There are two more crucial projects that need to be accomplished:

• A parking garage, with public restrooms;

• And, an extension of the new landscaping to create dramatic entrances to the Circle from Sarasota and Longboat Key.

Knowing how the city of Sarasota operates, no one can expect instant miracles. But if the St. Armands Business Improvement District, St. Armands merchants and St. Armands residents continue in the vein they have over the past 10 years, to be sure, slow and steady will win the race.

+ A bum victory
Irony: A Sarasota city commissioner told us last week the city has received complaints about loitering vagrants from residents near School Avenue and the old industrial area near Payne Park.

This, you may recall, is the area where Sarasota businessman Ron Burks had proposed his mixed-use development, Payne Park Village. As noted in the Sarasota Observer last week, however, Burks has put his 9.5-acre site up for sale, apparently calling it quits.

The irony here should be obvious. Former Sarasota Mayor Kelly Kirschner and his friends in neighborhood associations fought vigorously (that’s being polite)to try to force Burks to reduce the size and scope of his project, complaining that it would ruin the character of the adjoining neighborhood.
But instead of new housing, offices and retail stores, Kirschner won. He got bums.

 

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Currently 1 Response

  • 1.
  • You're right. Subsidies for businesses make no sense. I would however subsidize the removal of commissioners promoting business subsidies.
  •  
  • Milan Adrian
    Thu 23rd Feb 2012
    at 3:26pm
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