I recently came across this Rhode Island Public Radio (RIPR) Bottom Line segment from August, in which Dave Fallon discusses with Providence Business News Editor Mark Murphy the value of business incentives financed at taxpayer expense. At one point, Murphy mentions an Attleboro company that the state promised $500,000 of incentives over five years to move 20 employees over the border and to hire eight more. He insists that the deal works out to less than $4,000 per job, which he clearly implies was a worthwhile use of taxpayer dollars.
This sort of thinking reveals a systemic desperation that has worked its way into the psyche of Rhode Island opinion-makers. So what if Rhode Island technically has a few more jobs on paper? The likelihood that the 20 existing employees will move based on a corporate hop over the border is low, and the likelihood that any movers would choose high-tax Rhode Island is even lower. As for the eight new jobs, they’re scarcely more available to Rhode Islanders than they already would have been.
Putting that aside and looking more generally, to believe that this $4,000 per job is worth the expense, you have to believe that (1) the jobs wouldn’t have happened anyway and (2) the money given to the company wouldn’t have been used for something better if left in Rhode Islanders’ own accounts. After all, if we believe that a relatively small subsidy is creating new jobs, there’s no reason to believe that the market wouldn’t have found an even better use than moving an existing company a few miles. Somebody, somewhere — or maybe multiple people in multiple places across Rhode Island — was not able to do something that might have been more valuable, in the long run, because politicians claimed the authority to pick a company for giveaways.
What taxpayers actually bought with this half-million dollars was a quick talking point for the state’s Secretary of Commerce, Stefan Pryor, allowing him to proclaim the success of Democrat Governor Gina Raimondo’s policies on the grounds that people are willing to take free money that she claims the right to dole out.