Newspaper article St Louis Post-Dispatch (MO)

Yes, GM Subsidy Is Corporate Welfare, but It's Necessary in a Competitive World

Newspaper article St Louis Post-Dispatch (MO)

Yes, GM Subsidy Is Corporate Welfare, but It's Necessary in a Competitive World

Article excerpt

It's hard to argue that a $50 million state subsidy for an automaker isn't corporate welfare, but Rob Dixon doesn't like the term.

Dixon, Missouri's director of economic development, had to defend Gov. Mike Parson's administration against conservatives' slings and arrows during debate over one of the governor's priorities, a bill that offers General Motors incentives to invest $1 billion in its Wentzville plant.

Republican critics said the bill made the state pick economic winners and losers, using a new "deal closing fund" that amounted to a slush fund. It's no such thing, Dixon says: The fund provides flexibility in handing out some Missouri Works tax credits, but still requires clawbacks if a company fails to create jobs.

As for the corporate welfare label, the criticism applies to much of what Dixon's department does, which is handing incentives to companies that invest in the state.

Missouri competes with other states, and Dixon doesn't see unilateral disarmament as an option. "Every state uses incentive tools," he said. "Whether you like it or not, they are indisputably a part of the economic development competition across the country."

Indeed, Alabama dangled $700 million last year to win a joint Toyota-Mazda plant. Wisconsin offered Foxconn $4.8 billion to lure a giant electronics factory, although the company now seems likely to build something much smaller.

Missouri has never played in such a pricey league, and the new economic development bill doesn't change that. In fact, Dixon says, it allocates no more money than the state was spending under existing programs.

"We think we're being somewhat conservative and fiscally responsible with this program," he said.

The bill extends a program created in 2010 to encourage a Ford expansion in Kansas City. The GM subsidies could start in 2023, after the old law's funding ends, at up to $10 million a year. …

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