The bad news is that Pittsburgh City Council wants to raise the city’s realty transfer tax, already the highest in Allegheny County at 4 percent, to 5 percent. The good news is the measure has no legs, lacking a majority.
The one percentage point hike was proposed to fill a trust fund that would leverage other dollars to help underwrite homes for low- and moderate-income families.
Critics – among them, real estate agents and residents – argue the increase would discourage buying a home in the city.
But in typical government fashion – and from the Department of You Can’t Make This Stuff Up — one councilor who favors the tax hike, remarked, as the Post-Gazette reported it, that the impost increase legislation would make lower- and middle-income home buyers eligible for extra assistance – more than enough to cover the higher transfer tax.
Pennsylvania appears to be out of the running for that new Foxconn display panel factory. And that could be a blessing in disguise. For Pennsylvania was burned by Foxconn four years ago.
Various media reports have it that the Taiwanese electronics maker has chosen Wisconsin as the new home to a multibillion-dollar operation that could employ up to 50,000 people. Another facility might be built near Detroit.
Pennsylvania and six other states were “competing” for the facility, which means they were ready to throw all kinds of taxpayer “incentives” to land the operation. Exactly what these facilities will cost the “winners” remains undetailed. But if past is prologue, the public will pay a premium as the government turns them into venture capitalists.
In a July 23 examination of what amenities all seven states might have to offer Foxconn, The Associated Press said Pennsylvania Gov. Tom Wolf was touting the Keystone State’s low energy costs and its proximity to ports and major markets.
The wire service also noted the commonwealth’s $1,000 tax credit per job created. But it cited business groups who detailed Pennsylvania’s high corporate income tax rate, difficulty finding skilled workers and a slow permitting process.
Sound familiar?
All that said, the “winners” of the Foxconn sweepstakes might look to Pennsylvania for an object lesson in caution when it comes to this Asian manufacturer.
As The Washington Post detailed in March, this is the same Foxconn that, in 2013, said it would build a $30 million facility that would employ 500 workers in Central Pennsylvania.
Nothing ever came of it. But, amazingly, the newspaper reports that Pennsylvania economic development types kept touting the facility as if it had come to fruition.
Good grief.
As The Post also detailed, Foxconn has a long history worldwide of making grandiose promises that fail to materialize.
Indeed, Pennsylvania has many systemic problems when it comes to a “business-friendly climate.” But it perhaps should count its lucky stars that it didn’t succumb to a follow-up snookering.
Inquiring minds want to know: Just how much money did Pennsylvania taxpayers lose in the Aquion Energy deal?
Aquion, you might recall, is the saltwater-based battery maker that went belly up. It was based in the former Sony plant in Westmoreland County, home to a long line of failed government-backed enterprises over several decades. A Chinese-American investment company purchased Aquion out of Chapter 11 bankruptcy for $9 million.
Now, the president of the Regional Industrial Development Corporation says the RIDC took “a significant haircut” on money it lent Aquion. And he says the same is true regarding money lent to Aquion by state economic development agencies.
As the Allegheny Institute noted (in Policy Brief Vol. 17, No. 19), millions of public dollars were “invested” in Aquion. The institute raised serious concerns at that time – in April – about how much of that money could be recovered.
From what the RIDC official is saying, apparently not much. How sad – another testament to the all-too-common result of government attempting to pick economic winners with public money.
The commonwealth has a responsibility to say how much this “haircut” cost taxpayers. At least.
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
