As I get ready for today's big "Day of Action" to gather the final signatures necessary to refer House Bill 1230, I think of one of the few folks who flatly refused to sign my petition. One Republican woman heard me say "corporate welfare." She said she doesn't believe in handouts. But then she said this petition drive is just Democrats demonizing corporations. So because Democrats want to do it, she wouldn't sign to repeal the handouts she says she doesn't believe in.
If the Tea Party gets to refute charges of racism by cheering Herman Cain (who disqualifies himelf with his own bigotry), then I get this one:
The drive to refer HB 1230 is not just Democrats demonizing corporations. It is citizens of all stripes who share a belief that government ought not transfer wealth from public coffers to private pockets. My proof of this claim: a little bird tells me that one of our key petitioners today in Mitchell will be notorious arch-conservative Steve Sibson. Mr. Sibson and I disagree on lots of issues, but he would argue that he hates corporate welfare more than I do.
Think of Steve's solidarity with me on this issue as another expression of that great occasional Paul&ndashKucinich alignment where Right and Left find common ground in opposing special interests and advocating Adam Smith's proper roles of government. Glad to have you on board, Steve!
And glad to have the rest of you helping, too! See you at Mochavino here in Madison at 10 a.m.! Let's take that money back from pillaging corporations and invest in our kids!
p.s.: Sibby had a great outburst of blog posts on the Mitchell city manager vote. Sibby is always at his best when he turns away from World Nertz Daily and aims his passion and intellect at real local issues. Give us more, Sibby! Pat Powers is bound and gagged by patronage, Dakota War College has nothing new to say... now's your chance! Restake your claim to pre-eminence at the top of the blogospheric heap! When you get back from petitioning, crank out those posts!
and we should not give corporate handouts because our neighbors are not right? I guess we should continue exporting our kids out of state to work for those corporations that built there because the state incentivised them to move there.
Do some businesses shop for incentives yes but most need the money to cover their up front capital needed to get a loan. What is so great about 1230 is that it gives us the ability to make that decision instead of the old system that gave it to any company who was going to spend a lot much like your beloved Transcanada. If we don't, thats good news for our neighbors. Good grief we reform a program to make it much more efficient and you criticize it more than the old system. This is a really foolish issue for the Democrats to run up the flag pole.
This is a good example of why it pays off to not get to judgemental and keep an open mind to work together in politics. Some one on the 'other side' can completely agree on a particular issue. Not making enemies makes this work better.
In reply to Ryan. And Mr. Sibson may agree with me on this. This is why we should go to Washington and make sure no state of city gives an unlevel playing field to any company which would stop corporate welfare and keep business fair and save tax money and reduce government all at the same time. The most blatant situation is when government pays for stadiums so the richest most talented can play for free while the common person pays taxes to help the most talented.
"Ryan", I'm still with Roger and Steve. This is an excellent issue for Dems to run up the flagpole, because it provides an opportunity to expose the shallowness of the Republican faith in a truly free market as well as their really bad priorities. Please review the links, Ryan, and you'll see that the incentives HB 1230 offers are not demonstrated to be so effective. Where's the benefit in recruiting undercapitalized companies that will pull up stakes and move the moment another state outbids us in the Toyota lottery?
The return on investment is not as clear or direct as investment in education. Compare just the up-front impact. Out of every dollar spent on HB 1230, some portion automatically leaves the state to the coffers of the out-of-state company we are trying to recruit. Spend that same dollar on education, and much more of it, if not all of it, stays right here in South Dakota, paying teachers who buy stuff here, buying supplies and services for the schools from local vendors, and recirculating in the local economy.
As for keeping kids here, again, you might get a more immediate bang for your buck by spending that money on education, helping to fund local entrepreneurship classes in high school that would give kids a chance to start their own businesses, learn more about their own communities and local markets, get involved in local civic projects, and help them feel more like stakeholders in their communities. We can do much more to stengthen our economy and our culture by "growing our own" rather than pyutting our faith in outsiders. What was that Gov. Daugaard said about self-reliance?
And where's the "reform" you tout? How does HB 1230 offer any greater accountability for the spending of this money? You can slap some nice-sounding words on top of the bill, but it won't change the fact that it just perpetuates the redistribution of wealth from the public to a few private players.
we all need ideals to guide our way and thats great. This is more of a political statement as you said this is a chance to expose republicans of their shallowness and the cause is being carried by a political party and not an affected group.
I also want to stress that 1230 is designed to help our local businesses just as much as a new one from out of state. its also absurd to suggest a business will invest millions in buildings, equipment, not to mention taxes knowing that a few years later they will get pennies back on the dollar when they go to sell their real property all in the name of collecting some incentives.
I would argue that having the best educated kids doesnt do you much good if they dont have good jobs to stay in sd for. Of course we need an educated workforce for businesses to hire but given the exodus of our bright young people, the defict is quality jobs not quality kids.
The reform in 1230 is the ability to tell transcanada no because 1230 is about jobs and economic impact not what a project costs. In pretty much every case the incentive wouldnt cover their tax liability so if this incentive means more businesses pay more taxes resulting in more money for education and healthcare i would argue youre shooting yourselves in the foot. The democrat party i know gets that because they stood up in the 2010 session and said we need corporate welfare for windfarms to come to sd because other states will lure them there without he passage of HB 1060.
Im curious to know who will fund the campaign since the party is broke and education wont and healthcare wont?
As far as republicans views on government i would say if your not here to help then get out of the way.
"absurd to suggest..." but they do exactly that in their home state to come here for incentives, don't they?
And I still haven't seen the line that guarantees TransCanada doesn't get incentives. Where's the written standard for determining necessary aid? Where's the guarantee that the current administration or future administrations won't simply stamp "Necessary" on any incentive request from businesses it likes? HB 1230 still says, "Trust me." If I were governor, just itching to give handouts to my hippie-entrepreneur friends, would you trust me with this bill?
Corey,
Not all but most businesses arent looking to pull up stakes and certainly not just because of some incentives. Primarily these deals are expansions or they have other business or personal reasons that geography isnt a big consideration. If they move they have probably have already depreciated the buildings and equipment.
The large project refund program was created to help Big Stone and it was worded to make sure that particular project would get caught in the net. The problem with that was it caught others in the net that didnt need an incentive, enter 1230. This was a way to allocate dollars in a much more controlled and efficient manner. Remember that they get back a portion of the taxes they paid so I dont think handouts and welfare is appropriate.
I would say its tough to limit 1230 to a defined set of rules because sometimes a small but important business may change an industry or its a big deal to a small town but not Sioux Falls. Yes Corey if you win majority vote for Governor I would say you have won the trust of the majority of our citizens but use it poorly and we wont reelect you or the legislature will change the law. The only way we can use these dollars wisely is to let our economic development officials examine on a case by case basis which companies actually need the incentives relative to what will do our economy the most good.
Don't let the perfect get in the way of the good.
"trust of the majority"—I guess I'd better start campaigning! But if elected in 2014 (ha ha ha!), and if HB 1230 has not been repealed, I would not take that as a sign that voters think I or any one person should be allowed to exercise such unchecked (or weakly checked) power for four years. I'd rather have codified, institutional, and publicized safeguards so we know how these economic development officials are divvying up the public pie.
Handouts remains appropriate: it's money that, from any normal source, would be public money. We're handing it out to outfits that normally wouldn't get it, to players in the market who have been chosen over others who will not get it. The grants will be redistribution of public wealth to favored private pockets.
But if it's good for one outfit, why not pour it on for everybody? Why not just follow my neighbor Gerry Lange's suggestion and get rid of the contractors' excise tax completely? Then we just leave the money in the pockets of every new/expanding business, without the Governor or economic development officials picking favorites?
Because they would still have to pay state and city tax. ask gerry about the corporate income tax he wants to replace it with :)
But wait: HB 1230 is offering incentives just from the contractors' excise tax, right? HB 1230 grant recipients still pay state and city sales tax, right? So wouldn't my total contractors' excise tax repeal incentivize even more economic development than HB 1230? If my plan works like yours, I generate more business and more sales tax revenue to offset contractors' excise tax loss. If that offset isn't complete, then sure, let's implement Gerry's corporate income tax. Lange-onomics says those corporations won't pay that tax unless they're making money! The business can come here, spend the first couple years just trying to break even, and not pay corporate income tax until losses turn to gains, right?
See: Gerry's an economic-development genius!