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Local incentives to selected businesses: A cycle that should be broken Date published: 3/24/2008
OUTSIDE BUSINESSES usually Both parties seek financial gain, which is why Fredericksburg has offered or aims to offer incentive packages--sales-tax rebates and such--to Kalahari water park, fancy Wegmans grocery store, Capital Ale House microbrewery/restaurant, and, for expansion purposes, downtown's Kybecca wine shop. The city hopes that these enterprises, at a time of flattening municipal income, will stimulate much of the taxable spending that Fredericksburg needs to operate. Alas, it isn't only the felicity of the English language that "incenting" violates. It also runs roughshod over sound democratic and free-market principles. For example: Private businesses should rise or fall on their own merits, neither hindered nor helped by government. Tax policy should not be twisted to the benefit of some companies and the relative detriment of others--i.e., those passed over for government-bestowed goodies. These "losers" are sometimes, outrageously, compelled to provide tax support to their very competitors. Entrepreneurial suc-cess is impossible for entrepreneurs themselves to forecast--remember the Edsel?--much less governments. Such principles are now greasy spots in the road outside City Council chambers, and it's about time that body said "enough." But let's also recognize that the council's foray into incentives, the sort of expedition that has backfired in some communities, is in ours palliated by circumstance, prudence, and strategic coherence. Mayor Tom Tomzak notes that the city is facing $90 million in mandated capital improvements, not to mention pressure on municipal-labor costs from Northern Virginia, at a time when the retail Mecca of Central Park is challenged by the counties' newer retail Medinas. Ginning up revenue is essential, and if that isn't done through business activity it will be done through property taxes.
Paul,
Sound democratic and free-market principle for the city means attracting businesses that can produce enough revenue to relieve the citizens of property taxes. The city’s decreased revenue is a result of the customer choosing to spend their dollars elsewhere. How do you attract more customers in a declining market? How do you attract those service when they are being courted by others? Prior to the incentives, Wegmans, Kalahari, Capital Ale and the Kybecca expansions weren’t even on the table.
You seem both confused and indignant. Where did you
get this "rule" about how private businesses should
operate? Tomzak's "pump-priming" success has been
repeated over and over all across America even though you
focus, predictably, on the states where failures occur. It's
always a half full glass around here. It's NOT hard to
understand support at all, it works, and it should be
obvious. Typical Fredericksburg, find a failing example,
perpetuate fear, manufacture outrage and get passed up,
yet again.
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