My idea of a “pro-business” state economic climate is one in which the tax base is broad and relatively free of exemptions, rates are relatively low, and state regulations make it pretty easy for new start-ups to enter the market and compete with incumbent firms.
A pro-business state’s economic policy would primarily focus on providing and maintaining public goods and services in the places where the most private investment is already happening, and making it easy for more people to live and travel to those places. In PA, this would mean committing most state economic development dollars to the top 5 metro areas, which produce fully 78% of the state’s GDP.
That is not what Tom Corbett thinks “pro-business” means. He thinks it means giving money to large corporations to entice them to move to depressed areas of the state, where most people do not live, and do not contribute meaningfully to the state’s economic output.
That is the idea behind the Shell cracker, and that is the idea behind this latest giveaway to Neiman Marcus. It is a recipe for making the state poorer, that ignores where PA’s GDP is actually coming from:
Pennsylvania taxpayers will give high-end department-store operator Neiman Marcus Group close to $900,000 in grants and tax breaks for the company’s planned $12 million, 200,000 sq ft warehouse in Jenkins Township, near Pittston, Luzerne County. In a statement Gov. Corbett said the chain will hire “at least 151.”
Corbett credited the subsidy and the state’s “pro-business climate” for Neiman Marcus’ plan to build in the depressed former coal region. Neiman Marcus has earned $150 million so far this fiscal year (first three quarters).