Corporate Welfare
The Reno Gazette-Journal lamented the loss of Reno's innovative wind-power generator manufacturing company Mariah Power by writing, "Lack of available talent and the short-term $1.8 million interest-free loan offered by Youngstown, Ohio, is what caused Mariah Power to move its manufacturing plant out of state."
The RGJ argued that our climate of low taxation and little regulation aren't enough to attract businesses to Nevada. They believe we need to spend taxpayer dollars (even in times of revenue shortfalls) to create economic growth.
Ah ... corporatism again rears its ugly again. Had Reno given away a $1.8 million interest-free loan (read corporate welfare), that would have amounted to $300,000 per Mariah Power employee. Surely there are better ways to "invest" taxpayer money in Reno.
Reno could employ a single individual to do, well, whatever, at $60,000 a year for 30 years. Or it could give $35,000 at random to 51 area residents to spend as they please. While completely absurd, both "investments" offer Reno the exact same economic impact as a taxpayer "investment" in any corporation.
Giving away money to corporations means the same money can't be given away to other socialist pursuits like paying the health-insurance policies for 400 uninsured Reno residents.
If a better educated workforce was your priority you could send 250 low-income kids to local private schools.
Better yet, if Reno has $1.8 million lying around looking for something to do, the most efficient way to "invest" the money would be to give it back to taxpayers so they can spend it on the things they need, allowing Reno's economy to grow based on the needs of Reno's residents, rather than the needs of the politically well-connected.
The point is there are alternative uses for that $1.8 million, and all of them are better, more innovative and more productive for Reno than "investing" (aka spending) taxpayer dollars in an industry that can't fund itself with private investors. If a company can't keep itself afloat by convincing consumers to voluntarily fork over cash, you don't want that company in your town.
Luckily for Reno residents, the taxpayers and voters of Youngstown, Ohio, are this year's "suckers."
But, for those of you who aren't convinced by the practical arguments against corporate welfare, perhaps Nevada's constitutional prohibition on corporate welfare will persuade you. Quoting directly from Article 8, sections 9 and 10:
Sec: 9. Gifts or loans of public money to certain corporations prohibited. The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.
Sec: 10. Loans of public money to or ownership of stock in certain corporations by county or municipal corporation prohibited. No county, city, town, or other municipal corporation shall become a stockholder in any joint stock company, corporation or association whatever, or loan its credit in aid of any such company, corporation or association, except, rail-road corporations[,] companies or associations.
