The bill would direct $12 million toward a company that owns a Western North Carolina paper mill, add $14 million in grants to recruit companies and start a new fund that would allow the state Commerce secretary to offer upfront cash grants to companies. The closing fund, controlled solely by the state commerce secretary, is expected to get $20 million to $30 million in the still-developing state budget. Senate lawmakers said it would be a one-time appropriation.
All told, we are looking at potentially $54 million being approved for additional corporate welfare handouts – this in a year when legislators are fighting over how to pay for teacher raises. And that doesn’t count the corporate welfare for the film industry also being debated. The Senate on Thursday approved the bill, and in so doing, sounded an awful lot like the Democrats whom they criticized in years past for doing the exact same thing. In defending his support for the corporate welfare expansion, Senate Majority Leader Harry Brown said “I think we need to be in a position to recruit one of those (large companies) if possible, and this is a way we can give (the secretary) a tool to maybe do that”; and Senate Commerce Committee Chairman Rick Gunn said “This is a huge tool in the tool box.” Sound familiar?
In 2010, Gov. Bev Perdue said this in reference to a corporate welfare bill: “This jobs package, which was strongly supported by legislators in both parties, gives North Carolina more tools in our economic development toolbox.”
Gunn also added: “the next five-year window is when every state is going to see the biggest opportunity for growth. I want to be in the game, and I want to win the game.”
Perdue in 2012, in referring to the use of corporate welfare to recruit businesses, said, “…that is the climate we find ourselves in. It’s hard out there. Everybody wants to win.”
Moreover, current Commerce Department spokesman Graham Wilson offered support for the new corporate welfare program, describing it as “a closing fund that is going to give us some flexibility. When you get to the end of those negotiations you need that flexibility.”
In 2006, Gov. Mike Easley bragged: “We have shifted emphasis to more flexible tools such as the One North Carolina Fund and Job Development Investment Grant.”
And in a somewhat different vein, there was this defense of the expansion of cronyism:
Sen. Jim Davis, a Franklin Republican who represents the area, said the money is needed to ensure the future of the plant and its 1,200 jobs.
“I’m not a big fan of picking winners and losers, but … if the government is going to impose all these regulations on them at least the government can be part of the solution,” he said.
So Sen. Davis says that the problem of government intervention (via regulations) should be solved by more government intervention (corporate welfare). As Ludwig von Mises warned, intervention begets more intervention. The proper way to address the problems caused by government intervention is to eliminate the interventions, not create more.