Last I was aware, there was no evidence that this investment provided any return.
Not that it matters because that still wouldn't justify a huge investment by the public into a private entity without any ownership stake.
If the idea was really to create something resembling a grant to private organizations to create business that stimulates the economy, you would rationally have some kind of process around for screening candidates based on merit and be more diversified in your awards.
I'd like to believe it's anything other than a kind of blackmail where these organizations use their media power (== public opinion) with impunity to bully municipalities into providing them the tax revenue of citizens, wasting money that could otherwise be used for individual or public good, but that's all I can make out of it.
I do not see how, given that the money they used were federal. While in terms of entire country that is certainly suboptimal, it is hard to imagine how on a state level getting a grant and using it to generate local business could be bad.
So: one person who might have private sector experience. And you didn't look at the biggest nonprofit. Or the potential for kickbacks from their salaries in the form of campaign contributions.
Recall that the claim was that they could make multiples of those salaries in the private sector. You're not showing much evidence for that.
And of course, the overall question is, is the City getting any value for that money?
This is a pretty weak point, essentially "Lets give that guy money, he might do good things with it, he's done good things with it in the past." except instead of being a personal investment this concerns tax payer money being funneled to a private corporation.
They'd be much better spending that money on their neglected public transit or their neglected public housing...
The public generally looks askance at public funds being used for private benefits. Publicly funded incentives often are used to lure large corporate manufacturing facilities into town, but these generally are already very large and looking to employ thousands of locals.
It would be a hard sell to convince the voters that you should give $1 million of their money to three guys with some laptops that weren't planning to hire any more people for the next few years.
I'm just asking for proof of B. Even though I would argue the portion returned in taxes would be insignificant.
I gripe frequently about local towns awarding contracts to entities not within the town/state/region, but I'd like to see some sort of data about how this helped the local economy and wasn't just a xenophobic/isolationist response.
I'm more concerned that the elected mayor, who has an obvious vested interest in the project being a success, wants to target "those most likely to make good decisions" - how is that universal?
The whole pretext of these plans is that there is no qualifying conditions or criteria for participation. If you only give money to a group filtered for a target outcome it's (a) just another social assistance program and (b) not an experiment
You’ve missed the point entirely, as that is precisely my point. Merely hand waving it away and saying “it was spent on local construction companies” is not a sufficient argument.
It takes a hell of a lot to justify these sorts of investments and usually the ROI doesn’t materialize for the State.
A very valid point! No one can deny that all organizations can claim things like this. There are good and bad parts of them, such as everything in Pittsburgh looking for their seal of approval first - which could lead to a herd mentality for or against a company.
However - I personally know several companies that wouldn't have started sans their investment and efforts. There is a certain "activation energy" with companies that orgs like YC and Ben Franklin (Innovation Works / AlphaLab locally) provide for. This was true for my company.
The "say in PA" part of the program I agree is a bad thing. They should force PA to work to retain companies - not using golden handcuffs... However, all in all, if I was going to spend tax money - I'd rather put it there than into potholes.
It's an incentive, not a bribe. No one is secretly getting money illegally.
I think governments should be able to make a calculus as to whether something like this will benefit their constituency.
This is not PR or high profile loss leader or trophy white elephant or other gimmick like the olympics or new stadiums. This is a bet on the company improving the local economy attracting other employers, competitors, increasing competition for employees, etc.
If I lived in MA I'd be all for this, just like SF bet on twitter reviving mid-Markt street --which it has.
I don't dispute that point - however, investment in a company that can't turn a profit by a magnitude of $750 million of our tax dollars and area doesn't seem to be a wise use of dollars. That's really my overarching concern. There's no real benefit to the local economy, so why do it? That's my business mind, not my political mind on what's good or not for the environment. In the end it's tax dollars (rather high at that) that I'm putting directly into these incentives .. asking for some better investment is all.
I personally don't think it's great that cities take money from me by force to fund companies I may or may not think are viable. I love what these seed funds are doing, and their is no reason a private one like YC couldn't be created in PA with those restrictions on keeping people there etc. Hell, you could make it an optional tax that citizens volunteer to pay -- just like we do with campaign funding.
I feel that the most damning part of this suggested regulation is that it directly feeds into funds that already exist with no real evidence that the half a billion leaves us underfunded. There is also the idea that states/muni governments would make themselves less attractive for business to give that tax money to a subsidy fund... Instead of their local government monetary funds.
What an annoying click bait title. But the article is good (if short). I guess I wonder why something like this is even legal. It seems corruptive of the marketplace to just hand billions of dollars to some companies and not others and it seems there's no good way to stop it as long as this is a tool that municipalities are allowed to use in competition with one another. Has it always been this way or did we have a fix in the past?
A strong line of critique has been, "City A" knocks down a "blighted" business zone and replaces it with a single business w/ large parking lot & grass everywhere- but when you examine the financials, the new business brings less revenues to the city than the old "blighted" corner mall.
Not that it matters because that still wouldn't justify a huge investment by the public into a private entity without any ownership stake.
If the idea was really to create something resembling a grant to private organizations to create business that stimulates the economy, you would rationally have some kind of process around for screening candidates based on merit and be more diversified in your awards.
I'd like to believe it's anything other than a kind of blackmail where these organizations use their media power (== public opinion) with impunity to bully municipalities into providing them the tax revenue of citizens, wasting money that could otherwise be used for individual or public good, but that's all I can make out of it.
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