Economic development funding is used by both parties in most, if not all, states around the country. Many governors feel like they must use these tools to make their states competitive.
It goes without saying that when the government gets involved with paying businesses to locate in a state or community, it runs the risk that the plan will go south. Picking winners and losers is an inherently risky business. Hopefully, the state officials making the funding decisions have analyzed the risk in a way that provides maximum protection to taxpayers.
The recent revelation that the McAuliffe administration failed to vet a Chinese company who received $1.4 million to locate in Appomattox is especially concerning. It turns out that the decision to cut a taxpayer-funded check to the company was based off a review of the company’s website. Only after the deal seemed to be going south did the Commonwealth ask for financial statements from the company, and later demanded our money back.
Making Virginia a competitive economic environment should be our priority. Questions remain as to whether using a taxpayer-backed slush fund is the best way to do it.
1. Are the standards by which these deals are made in a transparent and objective fashion, or is there too much subjective influence by the people making the decisions? Governors of both parties have made these deals and done the photo ops with the oversized checks, but taxpayers deserve to know their money is going to a legitimate business.
2. Is what we are doing now really working? When the last set of economic numbers were released, Virginia’s economy had flatlined. Economic growth was 0.0%, and Virginia is slipping with every independent group who ranks these things.
3. Why should Virginia’s policy be to favor a new business over one who has been here providing jobs, paying taxes and supporting the community? Making sure existing companies are thriving and staying here should be higher on Richmond’s priority list than it seems to be.
4. So, would it be a better approach to tackle tax and regulatory burdens on all businesses, new and existing, to make Virginia’s economic environment the most competitive in the country? Governor McAuliffe could surely spend a little less time stumping for Hillary Clinton and more time sitting down with Republicans in the legislature to tackle the fundamental tax and regulatory structure businesses face. Arlington surely would benefit as we face of high office vacancy rates. Other communities across the Commonwealth most certainly would as well.