Film incentives are back in the news. New Jersey Governor Chris Christie has pulled the plug on a $420,000 credit for Jersey Shore, a popular but controversial “reality show” that follows the lives of several raucous young adults living in New Jersey. The governor reasons that New Jersey’s taxpayers shouldn’t be forced to support a show that “perpetuate[s] misconceptions about the State and its citizens.” That’s a polite way of saying Jersey Shore makes New Jerseyites look like a bunch of self-indulgent, barely literate nitwits.
Tag: Economic Incentives
It’s easy to criticize the federal government’s attempt to boost economic growth by promoting “green” technology. The idea has a certain superficial charm, and it goes something like this: Since we all know that environment-friendly and energy-efficient technologies are the Next Big Thing, why shouldn’t the federal government “invest” billions of public dollars in the green energy industry? That will (a) create jobs in the short term and (b) put the U.S. economy ahead of the curve in the long term.
Government-driven economic development is a secretive process in which politicians give away tax exemptions, subsidies, and other taxpayer-funded incentives to private companies. Politicians “invest” tax dollars without disclosing any meaningful analysis or information on the company, without providing an estimated return-on-investment, and with no public input.
After the headlines, after the press releases and fanfare, where do all these investments go? Some of them go south and take millions of tax dollars with them.
One of the final pieces of legislation that may pass the General Assembly this year is an omnibus economic development bill that provides an array of targeted credits and subsidies aimed at stimulating South Carolina’s ailing economy. Recipients of the credits range from alternative energy producers to start-ups to waste-grease biodiesel producers. In effect, new and unproven industries are getting the nod over established, independent businesses left to pick up the tab.
A few months ago it seemed as if the idea of handing out retail tax incentives was all but dead. But, be warned, the last week of session is the time when bad ideas and long-forgotten bills (H 4478, for instance) come back to life. Thus, on June 2, the House passed S 1054, “The Local Option Extraordinary Commercial Facilities Fee Act,” on third reading. It is unclear whether the Senate will concur with the bill, setting the stage for a conference committee.
It goes without saying our political leaders should treat public tax dollars with the same care and consideration they would their own finances. This maxim has never been more necessary when we consider the state’s recent experiment with government-driven economic development. As illustrated by the Boeing incentives package, there is little transparency regarding the financial details of these agreements, as well as the process by which lawmakers approve such incentives.