Sunshine & subsidies

Sunshine & subsidies

The Pennsylvania State System of Higher Education and the union representing PSSHE faculty have reached a tentative new contract. It comes a year after faculty went on strike protesting the lack of a deal. It was the first such strike in the 14-school system’s history.


But details of the deal are not being released – at least until union membership ratifies it and the State System’s board of governors approves the new contract.


Sorry, but the public pays a premium for this badly broken conglomeration and it has every right to details of this accord before it is signed, sealed and delivered.


The PSSHE’s problems – tanking enrollment (down nearly 2.4 percent from last year and 14.4 percent since 2010) and too many faculty, among two — will fester and grow worse “with more inter-institutional rancor and more calls for tax dollars without reforms,” noted Jake Haulk, president of the Allegheny Institute (in Policy Brief Vol. 17, No. 39).


And that should include making public tentative faculty contracts. After all, that public has every right to see what it is expected to underwrite before such contracts are in full force.


The Beaver County Times reports that during Royal Dutch Shell’s hour-long presentation this month to investors in London, a high-ranking officials touted the robustness of the petrochemical industry.


It has “strong market fundamentals, high growth rates and attractive returns,” John Abbott, Shell’s “downstream director” is reported to have said.


Global demand for petrochemicals is expected to grow by about 50 percent by the end of this decade, he also said.


And, as The Times reports, “In addition, Shell predicted in can nearly double its earnings in the chemical business to $3.5 billion (or) $4 billion by the end of the decade as (its) new petrochemical projects come online.”


Shell, of course, is building a massive ethane “cracker” plant in Beaver County’s Potter Township. It’s also planning new facilities in Louisiana and in China.


The bottom line is that Shell is a very wealthy corporation that, thanks to shale gas, stands to make uber-profits from these new facilities and grow by leaps and bounds.
So, why are taxpayers ponying up $1.6 billion in “incentives” for the Pennsylvania plant?


The very same question should be asked about Amazon. Cities from around the nation submitted their bids to the Seattle Internet retailing giant on Oct. 19, hoping to lure its second headquarters to their respective areas.


Pittsburgh was among those to submit bids, smitten by Amazon’s promise of $5 billion in investment and 50,000 jobs. That bid alone is reported to have cost between $300,000 and $400,000 to prepare.


While specifics of the local proposal are not known, The Philadelphia Inquirer reports that state officials have pledged more than $1 billion in unspecified incentives should Amazon locate in Pennsylvania.


But, like Shell, Amazon is no pauper organization. Revenue was $136 billion in 2016. It had operating income of $4.2 billion. Net income last year was $2.4 billion. Amazon had $83.4 billion in assets and total equity of $19.3 billion as well.


Simply put, it can afford its own capital expansion. And more directly put, the public has every right to know – now – what elected leaders have pledged to Amazon in the way of “incentives.”


Public officials cite “non-disclosure” agreements; such agreements should be barred in such dealings.


Which prompts this age-old question: What should government do to facilitate private-sector development? Get out of the way. How’s that done? Offer a regimen of fair and equitable taxation to all comers and a predictable regulatory climate that is not oppressively burdensome.


It’s that fundamental. Government has no warrant to constantly keep turning taxpayers into venture capitalists.


Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (