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  • From: "Common Sense Foundation" <david@common-sense.org>
  • To: <common-sense@lists.ibiblio.org>
  • Subject: Consider This: Corporate Welfare Cheat
  • Date: Fri, 7 Jan 2005 14:16:20 -0500

Title: Corporate Welfare Cheat

The COMMON SENSE Foundation

Consider This…

CORPORATE WELFARE CHEAT

Anyone who still thinks corporate welfare is a necessary evil required to maintain competitiveness should examine the case of Chatham-Borgstena, an automotive seat-cover manufacturer that operated a plant in Surry County until late last month.

Back in 2001, city and county officials in Surry County fell all over themselves trying to give away cash to Chatham-Borgstena to get the company to move (within the county) from Elkin to Mt. Airy. Local government gave $600,000 in cashnot tax credits, but cashto the company in return for a contractual promise to stay at least five years, to employ 200 people, and to increase the tax base by $14 million.

You know where this is going: Chatham-Borgstena abruptly closed the Mt. Airy facility in December, putting more than 50 employees out of work just in time for Christmas. The company fulfilled none of its crucial promises.

Of course, local officials want their money back, but Chatham-Borgstena isnt talking about whether it plans to honor the agreement it signed.

Back in 2001, Chatham-Borgstena president Jim Meek told the Surry County Commissioners, Its very important that we get these funds up front. So they fronted him the cash, and now hes gone.

The Chatham-Borgstena cautionary tale ought to give pause to every government official who believes that giving cash away to corporations helps anyone but the corporations themselves. Surry County, which has been hit repeatedly by layoffs in textiles and manufacturing, can hardly afford to kiss $600,000 in taxpayer funds goodbye.

Lets hope that those state officials who pushed the giveaways to R.J. Reynolds, Merck, and Dell are starting to sweat. Those who take credit for corporate incentives ought to be held accountable when the incentives are abused.

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  • Consider This: Corporate Welfare Cheat, Common Sense Foundation, 01/07/2005

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