Business Borrowing Follies

"State lawmakers yesterday approved borrowing a record $165 million to bankroll this year’s payments to scores of businesses under the Business Employment Incentive Program."

So sayeth the Ledger. And the reporter informs us that, next year, we’re looking at another $180 million – borrowed again – to fund the program.

Now, one can understand why the business community likes the program. Having been the victim of much of the Democrats’s massive tax increases – something on the order of $2 billion or more per year – getting this paltry percentage back strikes them as better than nothing.

But, let’s consider:

First, none of this massive new borrowing went before the people for approval, in patent violation of the Constitution as written, even if not as "interpreted" by our illustrious Supreme Court.

Query whether this spending is "on-budget"? If not, it demonstrates, yet again, that the Codey Administration’s tax and spending plan contained significant dishonesties, not fully listing all State spending for the next year.

More tellingly, the BEIP is little more than an industrial policy, attempting to pick out "winners" and award them with tax subsidies as "incentives". Obviously, this completely undercuts the Democrats’ oft stated position that tax policy does not drive businesses away; if a state grant will bring in a particular company, does it not follow that a tax increase will tend to drive other businesses away?

Rather than doling out borrowed funds to specific businesses – the sole purpose of which seems to be to give elected officials the opportunity to take credit for that one company’s decision to relocate or remain – would it not make eminently more sense simply to repeal the massive tax increases on ALL businesses, thereby benefitting everyone, rather than a chosen few?

If a $165 million gift to a few hundred select companies creates jobs, would not repeal of the $2 billion tax increase work wonders to encourage businesses generally to relocate and expand here?

‘Course, that WOULD require a few "hard decisions", such as the Democrats routinely assert need to be made just before they refuse to make them. (The only "hard choice" the Democrats ever seem to make is the difficult decision to raise taxes) It might mean rolling back some of the massive spending increases the Dems passed. But if they’re serious about wanting to create jobs – given their record, there is every reason to believe that they are not – a general business tax cut would send the appropriate message.