INC NEWS - Cut corporate welfare (Downtown Durham)

[John Schelp]

Don't raise taxes, cut corporate welfare 
by Sean Haugh, June 25, 2005

John Schelp had a fantastic op-ed in Sunday's Durham
paper [reprinted below]. I am less active in my
neighborhood association than I would like, mostly
because I don't do Mondays and that's when they meet.
It's budget time for both the city and the county, and
our neighborhood activists have come up with some
needed proposals for improving services, particularly
the courts and animal control.

What makes John's column so welcome is that he looks
beyond the simple urge to just raise taxes to pay for
these programs. Instead he suggests we look for the
funding in the millions in local corporate welfare
being doled out. "We all need to look at the
'downtown' money flowing south of the railroad tracks
to benefit Capitol Broadcasting: $16 million for the
Bulls, $43 million for the new parking decks and now
$18 million for a new theater."

John asks the right questions about who is asking for
all this corporate welfare and what benefits we have
truly received from it all. He begins by pointing out
the very first thing that needs to be cut from any
government budget, giving taxpayer money to advocacy
groups so they can lobby for more taxpayer money.
Downtown Durham Inc. (DDI) is the main advocacy group
for the above wish list, receiving $181,000 annually
to promote their agenda. With this dynamic of public
funding of advocacy groups, it is far more likely that
such organizations work for their corporate and
political special interests than the true needs of the
people.

All this corporate welfare, and DDI's core mission, is
allegedly to promote downtown development. So, after
twelve years of their tireless efforts, what does DDI
have to show? Less than nothing, as Main Street is
just as moribund as it was when they started and
businesses from other parts of town are lured to the
American Tobacco corporate welfare zone, causing no
net gains citywide. John writes, "The rich get richer
while gateway business districts like Fayetteville
Street and Northeast Central Durham only watch while
business subsidies flow to the American Tobacco
District."

And that is what really gets under my skin about all
this corporate welfare. It's the classic reverse Robin
Hood scheme, robbing from the poor to give to the
rich. Jim Goodmon, President of Capital Broadcasting
as well as the owner of the Durham Bulls and the
American Tobacco Project, is already one of the
richest men in the Triangle. Why are we giving him
millions more dollars in taxpayer money? Doesn't he
have enough already to pay for his own business
ventures? And if his business ventures won't be
profitable to him and his shareholders, why should we
be forced to pay for them? Similarly, Duke University
has an endowment value of almost $2 billion. Why
should we be forced to pay for a new performing arts
theater when Duke has the money and the willingness to
do it themselves?

This junk is foisted on us because they tell us it
will create jobs and increase the tax base. So why are
the city and county wanting to raise taxes and fees on
all of us to keep paying for these projects? If they
truly increase the tax base, shouldn't regular
citizens be seeing a tax cut instead? John points out
that these incentive programs succeed not by creating
new jobs and businesses but by stealing them from
elsewhere in the city. Overall, many studies have
shown that small businesses create over 80% of new
jobs. So why are we taxing and regulating small
businesses to death, our real engine of economic
growth, to pay for these corporate pipedreams?

Here's an idea for real downtown development. Why not
get rid of all that pesky corporate welfare and
replace it with tax breaks and exemption from
regulations for the core downtown district? Make it a
free enterprise zone, where the inducement to set up
shop downtown becomes lower costs and less red tape,
rather than being bribed with our own money. Many
cities across the country have revitalized their
downtowns with this approach, while those who use the
subsidy and regulation paradigm most often fail to
produce any constructive results.

As a Libertarian, I believe that government should do
few things and do them very well. We need an efficient
court system that keeps criminals off the streets and
a fully funded animal control department to keep up
with the problems of our growing stray animal
population. We don't need to keep raising taxes just
to hand it over to our richest citizens and
corporations, while these core civic needs struggle
for adequate support. And we definitely don't need to
cannibalize the truly productive and vibrant business
districts in our city just so we can feel good about
some new palace of corporate welfare near downtown.

Thanks John!


source:
http://genushaha.blogspot.com/2005/06/dont-raise-taxes-cut-corporate-welfare.html

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Guest Column: American Tobacco gets lion's share of
subsidies (Herald-Sun, 19 June 2005)

In its ongoing lobbying for the proposed $35-million
theater next to Capitol Broadcasting's American
Tobacco Campus [Herald-Sun, June 16], Downtown Durham,
Inc. forgot to mention that the current theater
proposal is much better than the earlier Clear Channel
debacle they were pushing.

Why? This time, better efforts were made to include
the public in the discussion. Thanks to more community
involvement, we have a better deal for the theater
than the original boondoggle advocated by DDI.

It's misleading for proponents of the theater to
repeatedly say the project was all about the American
Dance Festival. Senior Duke vice-president Tallman
Trask III told me two years ago that Duke was going to
build a performance hall on Central Campus "to replace
an aging Page Auditorium and keep ADF in Durham." Now
taxpayers are looking at $18 million in public
subsidies for something Duke would have built with its
own money. And ADF is suddenly looking at a $9-million
bill to build its own black box theater and offices.

We all need to look at the "downtown" money flowing
south of the railroad tracks to benefit Capitol
Broadcasting: $16 million for the Bulls, $43 million
for the new parking decks and now $18 million for a
new theater. When is enough going to be enough for
Capitol Broadcasting?

In the middle of this controversial mess is DDI -- an
organization that receives more than $180,000 in
taxpayer subsidies annually. As part of its strategy,
DDI attempts to recruit existing Durham businesses to
relocate downtown from other Durham locations. DDI
should stop cannibalizing existing Durham businesses
or lose its generous subsidy from taxpayers.

DDI's predatory tactics are troubling. DDI president
Bill Kalkhof admitted actively recruiting existing
Durham businesses to move downtown in a Sept. 22
letter to the editor:

"If we are informed that a business is nearing the end
of its lease in a location outside of downtown, we
will discuss with the business whether it would be
interested in locating downtown."

It's not good public policy to move businesses from
one part of Durham to another, with no net growth, in
the name of "economic development." This is nothing
but a shell game.

The rich get richer while gateway business districts
like Fayetteville Street and Northeast Central Durham
only watch while business subsidies flow to the
American Tobacco District.

Why are the taxpayers giving DDI $181,000 a year so
that DDI can turn around and lobby elected bodies to
spend more of our tax dollars, including these
generous subsidies for American Tobacco and the
proposed theater? This is a conflict of interest for
DDI.

Finally, DDI defends getting $181,000 from taxpayers
because the downtown property tax base has increased
since their organization was formed. Never mind that
most property tax values have increased everywhere
over the past 12 years. And it's silly for DDI to
argue that they're responsible for almost all the
investments downtown. Nonsense.

Is an increased property tax base in downtown really
the best metric with which to measure the success of
downtown revitalization? Increased property values due
to investment and renovation are certainly important.
But, from a citizen's or visitor's point of view, you
cannot walk down Main Street and see a "tax base."

If you stop anyone on Ninth Street and ask them to
describe the success of this commercial district --
what they like about it and why it thrives -- they
won't say it's because the "tax base" is high. They'll
tell you that there are people and energy on the
street, a good mix of shops and restaurants with a
unique character. This has already happened in most
other downtowns across the state and country.

By contrast, downtown Durham still suffers from the
same vacant storefronts and resulting lack of people
and energy on the streets as it did when DDI surfaced
in 1994. The success of downtown Durham is still
missing this critical element -- activity on Main
Street.

DDI may tout American Tobacco as a recent success
story. But our Main Street is unfortunately as dead as
ever, despite DDI's decade of public subsidies.

The City Council and County Commissioners should
stipulate, in writing, that DDI cannot recruit
existing businesses to relocate from anywhere else in
Durham. Or, DDI shouldn't get a dime of taxpayer
money.


The author lives in Old West Durham. 

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