Archive | Corporate Welfare

Hate to Say We Told You So…

Hate to Say We Told You So…

The City Council Auditor has recently released the results of their audit of the Jacksonville Economic Development Commission.

The audit reinforces what we have been saying all along. The promises made by the advocates of corporate welfare in the form of the Jacksonville Economic Development Commission are often not delivered. With over a decade long track record of corporate giveaways, handouts and bailouts, taxpayers have little to nothing to show for millions of dollars that have been “invested” .

We applaud the new mayoral administration’s proposed elimination of the JEDC but are skeptical of the dubious effort to re-brand corporate welfare as “public private partnerships” or P3s or PPPs. Unfortunately the P3s being touted bear no resemblance to the Navy aircraft flying over the city. Instead, P3s are just another euphemism for corporate welfare schemes where taxpayers bear all the risk of capital financing for a project and private individuals benefit when there (rarely) is a profit.

Now Mayor Brown has promised to reform the concept and focus on Downtown. Haven’t we heard the broken promises before? Lavilla Redevelopment? ? Lavilla Bistro River City Renaissance? Courthouse? Genovar Hall? Shipyards? Skyway People Mover? Our own John Winkler has performed his own investigation to summarize the just a few of the failed promises of the sages at city hall. The investigation is featured on our November show.

We do not doubt the sincerity of those who would like to see the urban core thrive. In fact, we would like to see downtown turn into a prosperous area where people actually enjoy going. Unfortunately, taxpayers can not afford to lose any more money on risky giveaways disguised as “investments” for some unquantifiable and intangible public good.

We urge Mayor Brown to reconsider the public dollar giveaway to the aspiring robber barons camouflaged as philanthropists.

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Size Does Not Always Matter!

Size Does Not Always Matter!

Using tax incentives to bring in job creating businesses is popular with Jacksonville city government.  From September 1998 to August 2009, the Jacksonville Economic Development Commission (JEDC) claims that it created 6,444 new jobs according to a list of JEDC “job generating projects” provided to the Concerned Taxpayers of Duval County.  Well, that sounds impressive, right?  Sure, you could point out that it is not clear whether these jobs would have been generated anyway without  incentives.   But if the JEDC had anything to do with the new jobs, then tax incentives for job creation sounds like a great deal!

Not so fast! A recent study appearing in the Harvard Business Review suggests that the secret to job growth is not in doling out tax breaks to big employers in an attempt to entice them to move to your city. If anything, cities with a lot of smaller firms tend to have higher job growth than cities with only a few large firms. Having a business environment that promotes entrepreneurship by reducing business startup and other small business costs imposed by the government is a far better way to improve the job situation in a city than tax incentives to larger established firms.

The benefits are not only in job creation, but also in product innovation. In the book From Poverty to Prosperity written by Arnold Kling and Nick Shulz, the authors argue that innovation does not tend to originate from established firms, but from entrepreneurs risking everything on a novel idea.  Established firms tend to be more conservative in their risk taking than entrepreneurs, but risk taking is essential for innovation.  So lots of entrepreneurs with big dreams lead to a lot more great ideas for goods and services that improve our lives.

I am sure that some government official is reading this and saying to himself “Maybe, we should increase the corporate welfare that is going to small businesses and entrepreneurs!”.  And he would be missing the point!  The best thing that the government can do is to provide the essential government services that cannot be provided by the free market and then get out of the way!

Here is one way for government to get out of the way of entrepreneurs.  When monks tried to sell simple coffins in Louisiana, the State Board of Embalmers and Funeral Directors threatened them with fines and jail time.  Their crime?  Not being part of the funeral parlor cartel that uses the government to protect itself from competition.  The free market does not need government help to weed out the entrepreneurs who do not provide anything of value to their customers that they cannot already find cheaper and better elsewhere.

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Concerned Taxpayers Resolution Against City Council Bill 2009-0940

Concerned Taxpayers Resolution Against City Council Bill 2009-0940

At the January 11th board meeting, the Concerned Taxpayers of Duval County adopted the following resolution:

A RESOLUTION OF THE CONCERNED TAXPAYERS OF DUVAL COUNTY IN OPPOSITION TO CITY COUNCIL BILL 2009-0940

Whereas City Council Bill 2009-0940 exempts the Gerdau Ameristeel steel plant located near Baldwin from paying the public service tax on electricity for five years; and

Whereas the Concerned Taxpayers of Duval County supports low taxes but only when they are applied equally to all businesses and individuals subject to the tax; and

Whereas the Concerned Taxpayers of Duval County opposes City Council legislation that is clearly tailored to providing a benefit to an individual business thereby ensuring city government a role in determining the winners and losers in the local economy;

Now therefore be it resolved that the Concerned Taxpayers of Duval County opposes City Council Bill 2009-0940.

The resolution was read to City Council members at their January 12th meeting.

Posted in Board Decisions, Corporate WelfareComments (0)

Downtown, No Finer Place For Sure…

Downtown, No Finer Place For Sure…

The title of this post is from the song Downtown sung by Petula Clark in the mid 1960s.  The song was inspired by composer-arranger Tony Hatch’s visit to New York City in which he extols the vibrant atmosphere of Broadway and Times Square.  Having been to New York City, I would agree with this characterization of Manhattan.  With its museums, nightspots and Central Park, New York City truly is the city that does not sleep!

If you read the recent Florida Times Union series on downtown Jacksonville, you get a sense that Jacksonville’s political leaders really want to transfer some of that vibrancy to Jacksonville’s city core.  According to the Florida Times Union, downtown Jacksonville is essentially dead in the weeknights and weekends and is short on residents and workers. What city leaders envision is a walkable downtown full of shops, restaurants, condominiums and lots of people frequenting and living in them. As usual, this vision requires tax money and city government planning.

Before we go flying off the cliff in our enthusiasm to keep moving forward with this vision, let us pause for a second and ask why we need a vibrant downtown.  Even if we agree that the downtown area should be different from what it currently is, is it possible for realize this new vision for downtown? How should we realize this vision? How much taxpayer money are we willing to sink into downtown to realize this vision?
Read the full story

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The Government Is Sure Good At Throwing Our Money Away!

The Government Is Sure Good At Throwing Our Money Away!

As pointed out by Abel Harding in a recent Florida Times Union blog entry, Florida and Jacksonville taxpayers are on the hook for $918,000 in incentive money given in 2006 to commercial lender CIT Group Inc which is now in the 5th largest bankruptcy in U.S. history.  There is no word on whether the Jacksonville taxpayer will get any return on its “investment”, i.e. jobs promised in return for the incentive money, even though this seems unlikely now. Wouldn’t we have more fun if the government would simply throw all our money in a pit and set it on fire so that we could at least roast marshmallows over the flames and sing “Kumbaya” together?

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The JEDC Is At It Again!

The JEDC Is At It Again!

As usual, the Jacksonville Economic Development Commission (JEDC) is prostating itself in front of another business that is moving jobs to Jacksonville.  Whertec Inc. is planning a move to the Westside of Jacksonville and the JEDC already has its checkbook open to the tune of $48,600 (yes, we taxpayers fund the bank account on which the checks are written!). Is it just me or does it seem like every business decision these days starts with “What kind of government grant can we get to finance our business expansion?”

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Corporate Welfare: Do We Really Need It?

According to a study, Florida has the 4th best business climate among the states.   So could someone explain to me again why do we need corporate welfare, i.e. Jacksonville Economic Development Commission?

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Jacksonville City Government Tax and Spend Hall of Shame

  • Out of Control County Courthouse Costs
    The original cost of the new county courthouse was supposed to be $190 million, but it soon ballooned up to $400 million before it was finally approved at $350 million by the City Council.
  • Peyton's Three New Fees
    Following the property tax reductions enacted by the Florida legislature, Mayor Peyton and the City Council rolled back needed tax relief by imposing three new costly and regressive fees on Jacksonville taxpayers.
  • Shipyard Debacle
    What do you get when you join a poorly drawn up contract with lax oversight of the downtown riverfront project by the city? $36.5 million spent, no downtown park and riverwalk and a black eye for the JEDC.

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Jacksonville City Government Tax and Spend Hall of Shame






Out of Control County Courthouse Costs

The original cost of the new county courthouse was supposed to be $190 million, but it soon ballooned up to $400 million before it was finally approved at $350 million by the City Council.

Peyton's Three New Fees

Following the property tax reductions enacted by the Florida legislature, Mayor Peyton and the City Council rolled back needed tax relief by imposing three new costly and regressive fees on Jacksonville taxpayers.

Shipyard Debacle

What do you get when you join a poorly drawn up contract with lax oversight of the downtown riverfront project by the city? $36.5 million spent, no downtown park and riverwalk and a black eye for the JEDC.