Opinion: Daily Journal

Leave Taxpayers Out Of It

RALEIGH – The current controversy surrounding an economic-development agency in the Charlotte area allows me the opportunity to make Argument #347 for limiting the size and scope of government.

First the controversy, then the argument.

The Charlotte Regional Partnership is a $3 million agency that tries to help recruit new businesses to the area. It gets about half its money from voluntary means (memberships and contributions from local businesses) and half of its money from involuntary means (state and local tax dollars). It is also running a deficit for the current fiscal year – and, given the Charlotte metro’s higher-than-average jobless rate for most of the past year, its recent performance has led some local executives to question its effectiveness.

Some critics told The Charlotte Observer that they thought the regional partnership was top-heavy and poorly run. Others thought the partnership’s recruiters were pursuing a flawed strategy that relied too much on web, email, and personal contacts rather than on more-traditional advertising and marketing expenditures. Still others simply view the partnership’s programs as redundant given the economic-development programs already being run by businesses, trade associations, chambers of commerce, and local governments. The partnership’s defenders, naturally, disagree with all this.

You don’t have to take sides in this dispute to see why it makes the case for limited government. In fact, that’s the whole point: taxpayers shouldn’t be forced to take sides in the dispute, but the current system doesn’t give them the choice to sit it out.

Whenever the government gets involved in a dispute over how to spend money, it guarantees that someone will be treated unjustly. If public schools adopt a whole-language philosophy of reading instruction, taxpayers who know better are nevertheless compelled to finance the resulting (faulty) education. If taxpayers are compelled to pay for a sculpture to be placed in the town square, every taxpayer will become an art critic – and only some of them can be pleased with the final outcome.

It doesn’t really matter whether the governmental service in question is constitutional or advisable. For example, all governments properly force their taxpayers to finance law enforcement and the military. Still, if you are a pacifist, you are made to finance activities with which you strongly disagree.

Because taxpayer funding is like lighter fluid, guaranteed to stoke the fires of controversy where they might otherwise remain only sparks and cinders, it’s best not to wander around squirting it all over the landscape. Disagreements are inevitable. You should let people work them out for themselves, through argument and contracts and voluntary patronage, rather than using the power of government to “settle” the matter.

When it comes to economic development, there are many private and often-competing interests in play. For local landowners, developers, and other institutions that sell goods and services to new and expanding businesses – including, in a sense, counties and municipalities – it isn’t enough that a recruitment deal gets done somewhere their metropolitan area. They want to be in on the deal, and will compete with each other for it regardless of how many regional-partnership boards they sit on. Banks and utilities, on the other hand, may not care as much precisely where the new business goes, as long as it’s in the general vicinity.

Still other businesses are hurt by particular recruitment deals. For example, if economic developers bring in a prospect that will compete with existing businesses for land, labor, vendors, or customers, it may adversely affect the incumbent firms’ bottom lines. If taxpayer funds are involved, it is both inefficient and unjust to force these firms to subsidize their competition.

Given the existence of these and other complexities in the field of economic development, it’s best for state and local governments to focus their energies on competitiveness – on delivering core public services at the lowest-possible cost – and leave the deal-making to voluntary associations of local individuals and businesses.

Does Charlotte Regional Partnership CEO Ronnie Bryant make too much money? Is he a good manager? In an ideal world, taxpayers can afford to be blissfully uninvolved in such controversies. Unfortunately, we don’t live in that world.

Hood is president of the John Locke Foundation