It’s a cautionary tale that should be heeded in Harrisburg and every Pennsylvania county seat. But, sadly, it won’t be:
The Wall Street Journal reported the story last week on how “New York spent nearly $1 billion over the past decade on Elon Musk’s ambitious plan for what was supposed to be the largest solar-panel factory in the Western Hemisphere, one of the largest-ever public cash outlays of its kind.”
Andrew Cuomo, the Empire State’s then-governor giddily noted at a 2015 groundbreaking how the project appeared to be “too good to be true.”
As The Journal sums it up: “Eight years later, that looks like a pretty good assessment.”
Not only did New York state taxpayers put up the quarter-mile long factory building for Tesla, taxpayers also bought Tesla nearly a quarter-billion dollars of solar-manufacturing equipment.
As the story further notes:
“Musk had said that by 2020 the Buffalo plant each week would churn out enough solar-panel shingles to cover 1,000 roofs. The Tesla solar-energy unit behind the plan, however, is averaging just 21 installations a week.”
Let’s see… 1,000 minus 21 equals 979. Yep, taxpayers were snookered.
And all those grandiose predictions of ancillary suppliers flocking to the area?
“The only new nearby business is a Tim Horton’s coffee shop. Most of the solar-panel manufacturing equipment bought by the state has been sold at a discount or scrapped.”
In a word, it’s been a bust:
“A state comptroller’s audit found just 54 cents of economic benefit for every subsidy dollar spent on the factory, which rose on the site of an old steel mill. External auditors have written down nearly all of New York’s investment,” The Journal reports.
That is, taxpayers lost 46 cents on every one of its dollars “invested” by the state in the Tesla solar-power factory.
“’It was a bad deal,’ said state Sen. Sean Ryan, a Democrat who represents Buffalo. ‘A cautionary tale is you can’t give governors too much power to get on the phone with egotistical billionaires.’”
No kidding.
And there are numerous other similar taxpayer-subsidized projects around the nation that began with an all-a-ga-ga sprint but ended up among the all-too-predicable limping lame.
Though not as front-loaded as the Tesla project, we are forced to wonder if the heavily taxpayer incentivized Shell cracker plant in Beaver County will be the next government-blessed enterprise to fail to live up to the hoopla. Some reports already are indicating just that.
We’ve said it scores of times and we’ll no doubt be forced to repeat it scores more: Taxpayers have no business being turned into venture capitalists. Such corporate wealthfare is anathema to market economics.
That our “leaders” continue to throw the public’s money at the likes of the Elon Musks of the world is an affliction that sound public policy cannot abide.
And for which public policy makers should stop showing such blind affection.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
