Archive for the ‘Corporate Welfare’ category

Does Burning Money Increase MoCo’s Carbon Footprint?

28 April 2014


Council member Roger Berliner sponsored a set of environmental bills that made it through the council last week.  The worst one — which was passed, of course — requires the county to purchase 100% of its electricity from “clean fuels”.  The current requirement is 30%.

This initiative is all cost, and no benefits.

Based on the county’s fiscal impact statement, the law will increase the county’s energy expenditures in the range of $279,000 – $545,000 per year.  That gets over a million easily, in less than four years.Plaudits to Nancy Floreen, who argued for looking at this from a budgetary standpoint.  None of the other council members thought that was worthwhile.

And what do we get for those millions of dollars? Nothing.   The incremental change from this bill is so infinitesimally tiny that it adds up to nothing. No change in greenhouse gas emissions, no impact on climate change. Zero. Just a meaningless statement and bit of bluster.

So if the environment is not improved, who does benefit from those millions of taxpayer dollars? Well, council members like Berliner and George Leventhal get to crow about their wondrous accomplishment. (Leventhal excelled at playing the pompous windbag on this one.  He called it “the most urgent public policy challenge that we face.”   Really, George? More urgent than homelessness? Crime? Poverty? Educational failures for low-income neighborhoods?)

And certain energy producers, politically favored, get a more than tripling of the subsidy they currently receive. These producers are too expensive to compete, so they work through the political process to extract funds from MoCo taxpayers.

I can understand wanting to reduce emissions from fossil fuels.  I can understand reasonable policy proposals to do that.  But anyone with a lick of sense can also see what is purely symbolic, useless, and wasteful.This is a useless and expensive heap of corporate welfare, that allows the politicians to beat their chests, but accomplishes nothing. Nothing, that is, except take away funds from needs that really are urgent.



Voluntary? I Don’t Think So

9 February 2014


More than half the County Council is sponsoring a bill to create public financing for political campaigns in Montgomery.  The bill would mandate that tax funds go into a new pot of money for candidates to draw from.  Echoing the PR of Councilman Phil Andrews, who is introducing the bill, the Post gushes “Andrews plan is completely voluntary.”   By this, they mean that the pols don’t have to take money from it.  But it’s not voluntary for county taxpayers, who would be forced to pay more money — purely for the benefit of the candidates.

Andrews and the sponsors call it “campaign finance reform.”

I call it “Welfare for Politicians.”


County Taxpayers to Bankroll Risky Businesses

12 March 2013

The Planning, Housing, and Economic Development committee of the County Council approved Bill 3-13 on Monday, allowing the county to funnel taxpayer dollars into private companies.  The bill would allow the county to own as much as 25% of selected businesses.

Private firms can get money from banks or venture capital sources.  Why would they choose taxpayer dollars instead? Either they have been unable to raise money from those private sources, or it’s a cheaper source of capital.

Taxpayers would be dragooned into providing a capital subsidy to private enterprises.  The possible outcomes are limited. Either the public subsidy helps the company succeed over its less politically favored competitors, or the judgment of the banks and venture capital firms is vindicated, and the company fails (taking the taxpayers’ money with it).

Neither one is fair, just, or sustainable.

Windpower Boondoggle

3 March 2013

The fate of Governor O’Malley’s windpower boondoggle is  now in the hands of the Senate, as the House has passed the Maryland Offshore Wind Energy Act.  Although the envisioned project is relatively small, the corporate welfare effects are among the largest that the General Assembly has considered.   [Let’s define corporate welfare effects as the net loss to residents:  Amount of public money that will be fed to the well-connected corporation + other losses to residents.]

The bill creates an “Offshore Wind Business Development Fund”, funneling $17.7 million into the pockets of the project developers over five years.  Furthermore, according to the analysis of the State’s Department of Legislative Services,  both state and local expenditures  are expected to increase “significantly beginning in FY 2017 due to higher electricity prices.”

Sounds like a real win-win proposition, doesn’t it?  Only if you are one of the lucky developers poised to rake in both state subsidies and higher rates from the ratepayers, and then get further subsidies from taxpayers to cover the overruns.  For those corporations, it’s a guaranteed gain. For the ratepayers and taxpayers of Maryland, it’s a guaranteed loss.

Welfare for Westfield and Costco

25 May 2011

A huge portion of federal government expenditures (close to half) consists of robbing Peter to pay Paul.  It is not nearly as large a part of the MoCo budget, but it’s still significant.

The County Council and the County Exec are now scuffling over how much tax money to give away to politically favored private companies.  Leggett wants to give away $4 million to the Westfield corporation, which in turn would be used to bring Costco to Wheaton Plaza.  Westfield is in tight with the county, having previously been fed $6 million to build a garage at Wheaton Plaza.

The money comes from the Economic Development Fund Loan and Grant Program, which has given out about $25 million to well-connected businesses in the county such as Marriott and others.   In difficult financial times, Ike is proposing to increase this corporate welfare spending by 447% in FY 2012.  The budget target for the Economic Development Fund is $4.92 million;  in the current year, spending is budgeted at $1.53 million.

The County Council voted this week to go with Leggett’s proposal to give the four million to Westfield.  The floodgates are officially open.

Buy American clause for Montgomery

24 March 2009

Councilman Marc Elrich is circulating a draft “Buy American” requirement for MoCO expenditures under the federal stimulus package.   The specifics are not public, but the analogous requirements suggested for the federal law indicated that “all of the iron, steel, and manufactured goods” used in the project must have been produced in the U.S.

In other words, if any part of the materials used in roadbuilding, construction projects, or other stimulus spending came from Canada or overseas, the project would have to be put on hold until an American supplier was found.  Likely at higher cost (else what would be the point of using the supplies to begin with?).  So the end result of such a resolution would be to delay spending and increase the costs.

On the other hand, considering how politically connected vendors tend to be rewarded with these funds, and considering the damage to the economy from increasing the federal debt and paying for useless white elephant projects, maybe delaying the spending — indefinitely — might not be such a bad idea.  I think another rider should be considered:  All stimulus spending has to include some amount of goods or services from Jupiter.

Subsidizing the Horsey Set

6 March 2009

The state has already spent nearly $700,000 to build the Woodstock Equestrian Center near Beallsville.

Now the county is planning to add more funds.  This coming Tuesday (March 10), the County Council will seek approval to add funding for the project.  The County Planning Board has requested a special appropriation of an additional $750,000 to pay for an outdoor riding ring, terraced seating, a storage area for jumps and maintenance equipment. A “special appropriation” means they can appropriate this with reduced oversight and procedure.  Why?  Because, as the funding request notes, “The County Council declares that this action is necessary to act without delay in the public interest.”

Whenever you hear someone citing “the public interest”, it’s time to reach for your wallet. What’s the “public interest” here? The county cites “recreational opportunities”.  Recreation — for whom?  We’re not talking about playground basketball here.  Riding horses is an expensive hobby, undertaken by folks with a lot of disposable income.   Those who benefit from the center should be paying for it – not the taxpayers. But this is a typical MoCo ploy;  taking money from taxpayers to subsidize the leisure of the rich. I note that some of the funding will come from a state “Community Parks and Playgrounds Grant.”  Somehow, I don’t think the intent of that grant was to provide a playground for wealthy horse owners.

The county justifies the expenditure thus: “A fully developed equestrian center expands the economic impact of the equestrian industry in both the State and County. The equestrian industry contributes in both direct and indirect ways to a majority of Montgomery County’s agricultural income.”   As many have noted, including this blog, we already subsidize the equestrian industry with millions of state dollars annually.  That’s wrong, and more money shouldn’t be taken from taxpayers to subsidize the industry, no matter how much political pull they have.