And now a few words in praise of a Democrat – Sen. Janet Howell. As big a problem as the gentle lady from Fairfax has with the Senate’s rules, and as flat-out wrong as she is regarding the Attorney General’s opinion on state aid to private charities, Sen. Howell is absolutely right in her effort to discover whether Virginia’s corporate welfare programs – otherwise known as “economic development” – actually do any good.
Howell’s bill would have the state’s investigative arm, the Joint Legislative Audit and Review Commission (JLARC), “…to study the effectiveness of economic development incentive grants in Virginia.” Specifically, Howell wants JLARC to determine:
The Commission has conducted somewhat similar reviews in the past, including a 2002 report that concluded Virginia’s economic development efforts were essential – without them, Virginia would lose jobs to other states and reap lower tax revenues. The study did urge, however, that potential grantees be screened more carefully to “avoid undesirable effects on the population at large.”
One would hope that any new Commission study will take into account academic research which has found that up to 90 percent of economic development spending is “simply a waste of money.” If nine out of every ten cents spent luring companies to the commonwealth is indeed wasted, that would seem to be a profoundly undesirable effect on the population. Or at least on their wallets.
Howell’s bill is moving quickly through the state Senate and will likely pass that body sometime this week. Its fate in the House, which is far more in-tune with the current administration’s corporate welfare policies, is uncertain.
It shouldn’t be. If the General Assembly is intent on becoming a magnet for rent-seekers, then it owes the taxpaying public at least the lip service of a JLARC report.
Or it can plunge ahead and wait for someone else to bring their grant-making to a halt. Just ask Boeing, which recently lost a case before the World Trade Organization over “improper,” and lucrative, government subsidies.
Among those subsidies are generous tax breaks and grants from Washington, Illinois and Kansas – the sort of breaks that Virginia is only too happy to provide to companies who promise to bring jobs to the commonwealth.
