Corporate welfare rarely produces jobs

Joe Van Ginkel

Des Moines Register

March 1, 2005

Kemin Industries recently received $1.1 million in tax relief and a forgivable loan from the city of Des Moines. It also received a $1.25 million loan from Polk County, $550,000 in state loans and nearly $1.5 million in state job training and tax credits for a total package worth nearly $4.4 million.

All this in exchange for a veiled threat to move its headquarters and proposing to expand and hire 40 workers at an average wage of $28.37 per hour during a five-year period. This averages out to $110,000 per proposed worker. This company has received our money in the past.

Apparently, everything was worked out in advance, because the company had already decided to keep its headquarters in Des Moines before the state and county governments voted to provide funding.

Unfortunately, each proposed worker will need police and fire protection, snow removal, lighted streets, pothole repair and a government that actually represents them and spends their tax money wisely. This government gives away huge amounts of tax money faster than it can fund necessary services.

The practice of corporate welfare almost never produces jobs. It leaves the doors wide open for political corruption. It is often used to fund sprawl. If the money was applied to property- and income-tax relief, there would be new jobs popping up all over the place.

It looks as if the only way to call their bluff is to ban the practice of economic-development grants at every level of government. Eliminate tax increment financing, the Revitalize Iowa's Sound Economy program and the Values Fund and hold elected officials accountable. Or, if we ever find a case that pays off, we should give all the tax money to corporations.

Joe Van Ginkel,