Rob Douglas' column appears Fridays in the Steamboat Today. He can be reached at rdouglas@SteamboatToday.com.
Find more columns by Douglas here.
One of the pernicious trends in American governance today is the prevalence of groupthink when it comes to tackling problems that land on the doorstep of government. Combine groupthink solutions with a lack of metrics to determine if the solutions fix the problems, and you end up with what we currently have — government that wastes ever-larger amounts of tax dollars while the problems continue unabated.
From the way we educate children to America’s never-ending wars against terrorism, poverty, drugs and a host of other societal ills, government officials rarely stop to evaluate whether they are achieving results that justify the continued spending of tax dollars on solutions that often are pursued because “that’s the way everybody else does it.” Instead, they participate in groupthink by uncritically accepting prevailing bureaucratic solutions while ignoring the repeated failure of those so-called solutions.
In other words: Monkey see, monkey do.
One arena of government groupthink that has received far too little attention is the use of taxpayer funds to incentivize corporations to create or maintain operations in the jurisdiction providing the incentive. The corporate executives and government officials who engage in this practice, while often championing themselves as free marketeers, like to camouflage this corporate welfare by calling it “economic development.” In reality, it is a form of crony capitalism that makes a mockery of the genuine free-market principles that made America an economic powerhouse that now is in decline, in no small part, because of crony capitalism masquerading as economic development.
A variation of this insidious practice can be found here, where the Steamboat Springs City Council is on the verge of selling the city’s emergency services building on Yampa Street to a triumvirate of companies — Big Agnes, BAP and Honey Stinger — under the control of Bill Gamber for an amount the city estimates at $900,000 below fair market value and that others estimate could result in a taxpayer-provided benefit to Gamber’s corporations to the tune of several million dollars. The proponents of this giveaway in city government and on the council call it economic development for Yampa Street while also claiming they are solving Gamber’s real estate desires in light of, as the Steamboat Today characterized it, Gamber’s hint “that without the Yampa Street building, his companies’ future in the Yampa Valley is uncertain.”
However, the cat was let out of the bag by Interim City Manager Deb Hinsvark when she candidly told the council, “Only time will determine the benefit to the Yampa Street revitalization and its ultimate benefit to the city.” While Hinsvark meant her words to imply that the deal would be of significant benefit, the reality is that Hinsvark hasn’t a clue whether this deal will truly benefit Steamboat residents.
Coincidentally, The New York Times published a three-part investigative series this week examining the use of local tax dollars to benefit corporations. The series “examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies.”
The series, “As companies seek tax deals, governments pay high price,” found:
“The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.”
That last sentence certainly is true here in Steamboat. The council can consummate a below-market deal for Gamber. But contrary to current groupthink across the country and on our City Council, no one can prove the deal will create a single job — or any other type of economic benefit — that wouldn’t be created absent the financial loss from Steamboat’s coffers.
To reach Rob Douglas, email rdouglas@SteamboatToday.com.