Posted tagged ‘Corporate Welfare’

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.

 

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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.

O’Malley and Franchot Agree on Something — Giveaways to Business

25 July 2008

To a politician, a pile of state money, just sitting around, is like a pile of fresh dung to a fly.  Some politicians, notably the notoriously attention-hungry comptroller Pierre V.R. Franchot, are buzzing around the state employees’ pension fund, hungrily eyeing the bounty.  The funds are supposed to be invested, with a goal of maximizing the return for the employees.  Pierre wants to snatch just a little bit of it – that is, about a billion dollars – in a way that will buff his image.

These days, apparently, that’s accomplished by handing over the money to businesses involved in biotech research.  It’s still corporate welfare, but it’s an attractive and progressive-sounding kind of corporate welfare.   Venture capital isn’t easy to find anymore, and many of these businesses are investing in research that may not convince bankers to back them.  So Pierre wants to invest the state employees’ piggy bank in these risky businesses.  The governor is on board with the idea: he’s proposed to squander $1.1 billion from the state’s general funds to buy some of these magic beans.

It’s always a bad idea for governments to pick winners in business, especially when those winners are politically active firms who are big donors to campaigns.  I wonder if AFSCME will complain about this?

Birchmere / Fillmore Update: Dueling over Dollars

3 October 2007

Montgomery County executive Ike Leggett has a tentative agreement with Live Nation to bring a different concert hall to the Silver Spring location. That concert hall could carry the name of the legendary Fillmore arenas. Construction costs for the project are estimated at about $10 million, of which the company would pay a whopping 20%. The other $8 million would come from the county and other state taxpayers. Pretty cushy deal for Live Nation — described as “the world’s largest producer of live music” — wouldn’t you say?

Meanwhile, once the deal to bring the Birchmere to downtown Silver Spring collapsed, the University of Maryland leapt in to to the fray to bring the Birchmere to College Park. That deal was led by the University’s Vice President of Adminstrative Affairs, one Douglas Duncan. That deal also depends on getting state funding. Duncan is hoping to get the $2 million that the state had already set aside to subsidize the Birchmere in Silver Spring.

Now the current county exec and the former county exec are scrapping over that state money. Of course, there is one way to make everybody happy — just have the state subsidize both businesses! Or, as Leggett spokesman Patrick Lacefield put it, “the more music and music venues, the better.”

Or, to rephrase that realistically, “the more corporate welfare, the better.”

And now, a short blogging break until next week.