Public-private partnership for economic projects needed
Published 1:00 pm Saturday, November 3, 2012
Given the record federal budget deficit, it is no surprise there is a growing sentiment for shrinking the government.
In many respects, it is a reasonable conclusion to make and an idea that is hardly new. “Costly thy habit as thy purse can buy,” was Polonius’ advice to his son in Shakespeare’s Hamlet.
In other words, don’t spend more than you make.
With that in mind, there are many who view today’s economic reality as a contest between the public and private sectors or, if you will, big business vs. big government.
But if you move beyond the often overheated rhetoric, you will discover the lines of battle are rarely as clearly drawn as this. You will also discover that many of the projects, programs and enterprises that are universally applauded — even among deficit hawks — can rarely be attributed solely to business or government alone. In fact, it is Big Business and Big Government that generally produce the biggest results.
The examples are everywhere to be found. …
When it was announced KiOR wished to build its initial plants in Mississippi, state lawmakers called a special session to approve a $75 million loan with very little discussion.
Such agreements have become common practice everywhere. In our area alone, there have been tens of millions of dollars in tax incentives offered as inducements to lure such entities as KiOR, Severstal, Eurocopter, PACCAR, etc.
Though questions exist regarding the payback of such public investments, the need to use tax dollars to encourage development is a reality. Without them, nothing happens. Regardless of the tax burdens these companies may avoid by these arrangements, the companies do generate tax revenue through the normal flow of daily business. The people they employ certainly pay taxes, too. So ultimately, these public-private arrangements can make fiscal sense. The public benefit can outweigh the concessions made.
The truth is big business and government rarely, if ever, have functioned entirely independent of one another. Regardless of the rhetoric of this political season, neither political party is well served by pitting the private sector against the public one.