Op-Ed: Money for mall could be better spent elsewhere

Tuesday, July 26, 2011

THE UGLY FALLOUT between Democratic legislators and Governor Christie in the aftermath of the 2012 budget battle has distracted attention from one outrageous taxpayer bailout on which they seem to agree.

On the same day they passed the budget, legislation also passed that permits public funding for the unfinished eyesore of a shopping mall formerly known as Xanadu. It turns out that the potential $350 million grant to the new developers of what’s now called the “American Dream in the Meadowlands” was not even legal when it was announced; the Economic Development Authority had no legal standing to issue the financial incentives.

To correct this, Christie quickly reached out to Newark Democrat Albert Coutinho to introduce an exemption. It now awaits Christie’s signature.

It’s an unfortunate reminder that for all the battles between Christie and Democratic legislators over the millionaires tax and cuts to programs and services, politicians in both parties seem willing to award massive amounts of public dollars to large corporations with little or no debate, transparency or public input.

The governor, however, has taken corporate welfare to a whole new level. According to an analysis of state spending conducted by the research organization New Jersey Policy Perspective, the governor has awarded as much as $800 million to corporations since he took office in January 2010.

$1 billion

If Christie signs the Xanadu bill and the Economic Development Authority approves the application, it is very likely that number will exceed $1 billion.

Proponents of subsidy and incentive programs argue that they create jobs, but the truth is that many of these programs haven’t held up under scrutiny. We don’t know if these programs actually create jobs or simply subsidize expenditures and hiring that businesses were going to make anyway.

Meanwhile, despite all this largesse to corporations, unemployment remains at nearly 10 percent.

Democratic legislators have expressed entirely appropriate outrage over the latest round of draconian cuts to after-school care, education for the blind, nursing homes and public safety. But what is often missing from their press releases and budget hearings is a frank admission that every dollar given to Xanadu or Citibank is a dollar that could have been spent on worthy programs they want to protect.

In a rare moment of candor, when asked about the impact the staggering $800 million in corporate tax breaks the Legislature proposed last fall would have on this year’s budget, state Senate President Stephen Sweeney said, “If things are going to get tighter, they’re going to get tighter.”

Christie couldn’t have said it better.

We’re now a year and a half in to Christie’s “new normal” of tax cuts for the wealthy, generous subsidies for big business and higher property taxes and reduced services for everyone else. By now it is clear that his American Dream – and the dream of the Democratic legislators like Coutinho who give him cover – is about as removed from the daily life of working families as the mythical palace for which Xanadu was originally named.

Shortsighted

It’s also a shortsighted vision. While there may be little evidence that corporate subsidies create jobs, there is ample evidence that businesses are attracted to communities with highly trained workforces, good transit and transportation systems, and safe streets.

Awarding billions to corporations while making it harder to get a college degree, commute to work or find affordable after-school care isn’t a realistic long-term jobs strategy.

The real American Dream must mean a prosperity all can share in, but to get there New Jersey’s elected officials must invest in the community institutions that make it a great place in which to live, work and do business.

Originally available at: http://www.northjersey.com/news/opinions/holland_072611.html