Doing Corporate Welfare Better


Ted Nesi highlights something from a Newsmakers interview with Rhode Island House Minority Leader Patricia Morgan (R, Coventry, Warwick, West Warwick) that might leave conservatives scratching their heads:

“Listen, there is a place for the corporate welfare, as I call it,” Morgan said on this week’s Newsmakers. “There is a place for it. There’s no doubt about it. I just think it’s been done poorly in Rhode Island. And I also think we wouldn’t have to be so aggressive about giving money out to companies if we fixed some of the fundamental problems.” Morgan cites the success of Quonset, the thriving military base-turned-business park, as “a shining example of what can happen when you create an atmosphere that is easier for companies to come, grow, build. I would like to see us have a similar Quonset, so to speak, in Northern Rhode Island and maybe on the East Bay, where our Commerce Corp. would actually get a large piece of land and manage it the same way we do Quonset.”

“I’ll do corporate welfare better” isn’t a very inspiring promise from a Republican candidate.  The “moderate” position should be that maybe when the state is in the top quarter among states for business environment and taxes, if even then we struggle to attract economic growth, then some wheels can be greased.  But as with every compromise with the big-government set, doing the thing they want first means compromise is essentially rhetorical.  We never seem to get to the border security or to the reform that was supposed to compromise some tax increase.

Pointing to Quonset as a shining example of something that was at least not a demonstrable flop isn’t sufficient to prove the case for similar approaches around the state.  The standard for government activities shouldn’t be that it was better than nothing, but that it was better than the thing it displaced.

That is also an unmentioned aspect of the John Stossel video posted in this space earlier today. The NYC bureaucrat insists that all of the things that drive up the costs of a project, from union labor to excessive planning, are worthwhile, but the practical question is whether they were more valuable than whatever use $1.7 million would have answered had the city not paid $2 million for a $300,000 bathroom facility.

The same is true of Quonset and every other government experiment in private-sector-type activity.

  • Patricia

    You misunderstand the comment. I am not even remotely suggesting we give tax subsidies to companies in the new industrial parks. To my knowledge, Quonset companies, except maybe Ocean State Job Lot when they recently doubled their space, have not received tax subsidies, grants, etc. What they have received is an industrial park that is pre-permitted. That allows them to buy a space and build their facility without having all the time-consuming and costly impediments that municipalities require. Those fees, inspections, permissions, etc slow their progress and sap their ability to grow. Quonset provides an environment that helps small businesses. But that is not in the form of corporate welfare.

    That being said, sometimes Corporate welfare may be necessary. We already give tax dollars to CVS, for instance. And also to Fidelity. They provide plentiful , full time and well paying jobs at all levels…entry to executive.

    But tax grants should not be the SOP. We simply can’t pay for every new job. Clearly giving money to hotels, as the Governor is doing, is pure folly. Seriously, what kind of permanent jobs do hotels provide? Not to mention that, the hotels would have come without the subsidies, if the market will bear it.

    For years I have talked about reforming and eliminating bad policies, so our home grown businesses will thrive and also so we don’t chase either them or out of state companies with cash. All should come because Rhode Island is a great place to run a business.

    • Mike678

      “That being said, sometimes Corporate welfare may be necessary. We already give tax dollars to CVS, for instance. And also to Fidelity. They provide plentiful, full time and well paying jobs at all levels…entry to executive.”

      Why do we have to pay CVS and Fidelity to stay here? Reverse those policies and then the ‘leadership’ can stop picking the lottery winners…if they are willing to give up that perk.

      • Patricia

        The bottom line is: If we reformed and eliminated the bad policies that weigh down our economy and crush our small businesses, companies would come because we are a great state in which to grow and do business. And our home-grown small businesses that have
        loyalty to our state would be able to thrive. That’s where leadership should be putting their effort. If elected, I will! And I will change Commerce RI’s emphasis from “picking winners and losers and handing out our money, to helping me make the case for changing the policies and regulations that are hurting us.