No surprise —- PTIA is coughing up up another $52 million in support of Skybus’ new hub. Another round of applause, please.
Again, the spin is that the incentives will pay for themselves:
….the offer is not equivalent to a city or county incentives package, said Andrew Brod , director of the Center for Business and Economic Research at UNCG’s Bryan School of Business and Economics .
When a county or city gives tax money to a business, it takes away from other taxpayer services, Brod said. But airports make their money off the airlines and from parking fees, and they invest those revenues to keep growing.
PTI officials may be taking a risk on an unproven airline, but it is a crucial risk to bring in passengers and compete with the state’s larger airports, Brod said. That’s the only way PTI can help the region’s economy, he said.
“If PTI doesn’t take some chances — and this seems like the right kind of risk to take — I don’t think we’re ever going to break out of that status as a second-tier airport,” Brod said.
JLF’s John Hood, however, has a different view:
Is there any limit to the kind of corporate welfare Gov. Mike Easley is willing to pass out? Judging by the $3.9 million his administration just promised to a start-up airline setting up shop in the Triad, the answer is, essentially, no.
…..The governor denies that he is investing taxpayer resources into a speculative venture. The state welfare payments will only flow if Skybus meets its service and employment targets. But, of course, Skybus will only meet those targets by pulling revenues directly away from other firms doing business in North Carolina – and the promise of state subsidy will help its attempts to do that. In other words, the state of North Carolina is intervening on behalf of a favored competitor in the airline market, just as the original Goodyear legislation would have had the state favoring one competitor over another in tire manufacturing.
Easley seemed to understand that such a direct state intervention in the economy was wrongheaded – or, at least, that powerful and politically active folks in Wilson wouldn’t appreciate it if Bridgestone/Firestone got the shaft – but just a few weeks later, here he is standing gleefully in front of reporters at a press conference endorsing Skybus.
….North Carolina is becoming widely known as an easy mark for economic-development hucksters out to secure giveaways for their corporate clients (and a healthy commission for the consultants, I should add).
I’ll venture to add that, at the rate it’s going, the Triad will become known as the easiest mark of all.
