Imagine setting up a meeting with your boss and summoning him to your office with no explanation or details. When he arrives perplexed, you inform him you’d very much like him to give you a $5,000 raise. In return, you promise to spend $100,000 on a new fishing boat, and as an added bonus, you mention that you’ll refrain from hitting any of your co-workers in the face with a wrench. Do you think you’d get the raise?
Just a few short weeks ago, I found myself in a similarly bizarre position. Asked to attend a mysterious meeting in the governor’s office, I was quickly pitched on what was destined to consume much of the narrative in the following days: a $50 million tax credit and other “workforce development” measures aimed at appeasing General Motors, which was threatening to close its Wentzville plant if the company wasn’t provided with an incentive package to stay.
More meetings ensued with various parties. We were told that GM plans to “invest” $1 billion in expanding their manufacturing plant in Wentzville. No new jobs would be created. No public infrastructure would be expanded. The deal was pitched as a “jobs retention” package. Translated, that simply means they wouldn’t lay off hundreds of workers if we did what they asked.
I do not support tax credits for economic development. They represent a manipulation of the free market, and amount to little more than the government choosing winners and losers. But even if one is inclined to support such intervention, this deal represents the absolute worst of such negotiations.
To start, the concept that GM is “investing” $1 billion is fanciful. Their plan involves making such an expenditure only to fund expansion of their own facility. GM expending funds to expand GM’s plant on GM’s land in order to increase GM’s sales is indeed an investment — in GM. In the same way that one’s boss is unlikely to grant a raise simply to finance the purchase of a fishing boat, the General Assembly should not entertain the idea of extending incentives in exchange for private investment in a particular company’s property.
Moreover, it should not be the policy of this state to negotiate under duress. Much as one promising not to hit a co-worker with a wrench would reasonably be seen as a threat, so is GM’s suggestion that they might close their Wentzville plant. To entertain further discussion under such a threat simply invites similar actions by others.
Finally, the entire legislative process surrounding this deal is suspect. Rather than approaching the General Assembly early on so that a comprehensive discussion could occur, GM chose to wait until the closing weeks of the session to push for action. Negotiations happened not with the involvement of the Legislature, but with the governor’s office. Then after a protracted battle involving the Senate leveraging a House budget bill, we were asked to vote with virtually no notice on an omnibus package in the form of an amendment to an existing bill — one that had initially had nothing to do with GM.
The General Assembly should not tolerate these types of tactics, and neither should the electorate. It is long past time to stop the escalation of corporate giveaways that amount to nothing but redistribution of tax revenue to pad the bottom lines of big business. It’s time for voters to hold their representatives accountable, and demand that they stop supporting manipulation of the free market. It’s time to stop threatening people with wrenches. It’s time to support liberty.
State Rep. Tony Lovasco (R) represents Missouri House District 64.