Michael Sauers
January 30, 2025
According to Pennsylvania Department of Community & Economic Development (PDCED) and a very competitive Governor Shapiro, Pennsylvania recently came out on top in a multi-state economic development battle. The prize is landing a well known and seemingly successful global pasta maker, Il Pastaio. These competitions usually involve a number of factors; cost of labor, transportation, location to markets and, most importantly, incentives or corporate welfare offered by the states.
So, Pennsylvania won. Pennsylvania will grant $111,000 to train workers and up to $72,000 in tax credits through the PA Manufacturing Tax Credit Program. Also, because the plant will be built in a Keystone Opportunity Zone (KOZ), Il Pastaio will receive significant tax savings. This means that Il Pastaio is authorized to apply for state and local tax credits, exemptions and tax abatements. How much taxpayer money will be allotted to Il Pastaio? I don’t know yet. Governor Shapiro was not talking about those numbers.
The Governor likes to expound on the amount of private capital he has brought into Pennsylvania, 3 billion so far. That is a good thing. However, he never talks about the taxpayer money doled out to attract the capital investment. I call it corporate welfare. The majority of the companies he doles incentives/corporate welfare out to are very successful and fully capable of financing their expansions. Instead, they dangle their projects to states/politicians eager for economic development. This is highly unethical since it has a direct impact on taxpayers, families, schools, etc. There can only be one winner and that state pays dearly. Surely there must be a more equitable, fair and less demeaning business model.
The Press has gagged itself on this issue. They never report on it and get defensive when you point it out. They are a bit thinned skinned.
Of course, this is business as usual and it has been going for decades. Politicians are also very defensive regarding corporate welfare. They prefer the word incentives. At the very least taxpayers deserve to know how much money is being taken out of their pockets. They also deserve to know how they are benefitting and if not them, who?