New Jersey Gov. Chris Christie (R) is shoveling scarce state money at an ugly subsidized shopping mall with an indoor ski slope, and also at a new casino. Josh Barro at Bloomberg explains why this is not a good thing for the government to do.
Meanwhile, from New Mexico, we get this dispatch on state subsidies for favored businesses:
As we’ve seen in recent years with the pullout of Schott Solar (incentives cost NM taxpayers $16 million) and the collapse of Eclipse Aviation which cost us $19 million, “investments” of taxpayer dollars in specific companies is a risky business (for taxpayers at least).
Now, we have Hewlett Packard which set up shop in Rio Rancho a few years ago and received $2.2 million in incentives, but is experiencing significant (albeit undisclosed) layoffs.
Almost every governor does it. During the primaries I knocked both Gov. Mitt Romney for handouts to biotech companies, and Gov. Rick Perry for the Texas Enterprise Fund and the Texas Emerging Technology Fund. Both of these funds allowed Perry to give state money to favored businesses and favored industries. Recently, Minnesota handed $500 million to the Vikings. Glendale Arizona recently decided to hand out $100 million to keep a hockey team. Virginia is paying the Redskins to practice there.
When these deals go right, they’re unfair to other businesses. When they go wrong, they are a huge waste of money.
Conservative-leaning Republican governors occasionally lament these sort of special-treatment handouts, but claim they have to make them, because their neighbors are making them.
First, the tendency of these deals to fail should make them feel better passing on them. (Did you know the subsidized Pfizer plant behind the eminent-domain case Kelo v. New London has shuttered?)
Second, many state constitutions actually ban such gifts.
It seems this would be a way for some GOP governor to make a mark: start working out an interstate pact against special handouts and sweetheart deals.