Day: April 18, 2014

By Chris Freind

“We actually save money by doing this … natural gas is the equivalent of about $1.50 per gallon. The last time I looked, gas was still over $3 per gallon. The payback period on these trucks is going to be three or four years and our trucks usually last 10 years.”

So stated Aqua America Chairman Nick DeBenedictis as he recently touted the company’s planned acquisition of compressed natural gas (CNG)-powered vehicles.

He’s right about saving money, for two reasons:

A. As the math shows, CNG is considerably cheaper than diesel ($4 per gallon) and gasoline ($3.70 per gallon), so switching to CNG vehicles is a sound business decision.

B. More significantly, taxpayers helped foot the bill, to the tune of $225,000. Yep, those Aqua vehicles, as well as 14 vans purchased last year ($86,000 in taxpayer funds), were partially paid for by Other People’s Money. Namely, ours.

Saving money by having a capital investment pay off is one thing, but achieving that “feat” because of an outright gift from taxpayers is quite another. There are many innocuous-sounding terms for this type of government largesse: Grants, economic development, opportunity zones. But let’s call it what it really is: Corporate welfare.

Aqua America is by no means alone. Numerous corporations throughout the state are receiving funds to convert their vehicles. Twenty million dollars are being allocated through the Natural Gas Energy Development Program (funded by the impact fee imposed on natural gas companies), and another $8 million via the Alternative Fuels Incentive Grant Program.

But why? Why are Pennsylvanians forking over millions to profitable, free-market companies?

Consider:

1. This is nothing new. Presidents, governors and legislators, both Republican and Democrat, are complicit in handing massive amounts of money to private businesses. Often, their political coffers swell after doing so — and their post-political careers seem to become instantly brighter. Quid pro quo or not, the appearance of impropriety leaves an indelibly negative impression upon the pubic.

2. The money doled out to corporations, political friends and special interests could, by definition, be used for more productive purposes. We all complain about potholes and deplorable roads, but the government answer is, “There just isn’t enough money to fix all the roads.” Wrong. There is. And plenty would be left over for other projects. But when tax revenue is wasted on propping up businesses, everything else suffers.

Take the transportation bill passed last year. Despite Pennsylvania already spending $71,000 per road mile (11th highest), and exceeding $660 per person (more than 26 other states), Gov. Corbett and the state Legislature walloped Pennsylvanians with the highest gas taxes in the country to pay for new roads because they chose to keep spending money where it had no place being spent.

Maybe if the government hadn’t bailed out a shipyard to build ships with no buyers, spent taxpayer money to build a baseball stadium for the Yankees’ AAA affiliate, wasted millions on legal fees to stop the NCAA sanctions against Penn State (after the governor had agreed to those sanctions), and dished out huge consulting fees trying to outsource the lottery to a foreign firm, to name a few, there would be enough money to actually fix our roads and bridges without bending citizens over a barrel.

3. Before doling out cash to private sector companies to buy natural gas vehicles, it would have made more sense to put that money toward the massive state fleet, from police cars to dump trucks. But that hasn’t happened at anywhere close to the pace it should have, with Corbett saying it will take seven to 10 years.

4. We have come to expect reckless spending from our elected officials. All talk “fiscal responsibility” on the campaign trail, but the vast majority fall in line once they arrive at the capital. They play the go-along, get-along game and bring home the bacon as a way of ensuring re-election.

But far and away the biggest hypocrites are business leaders. For the most part, they are politically active Republicans, often deriding government interference in the marketplace. “Get government off our backs,” is their constant refrain to the pols. Yet, they seldom practice what they preach.

When there is a bill that could benefit them or their industry, they lobby hard for passage (such as the car dealers’ successful effort getting Chris Christie to derail Tesla Motors). When there is a regulation that would give them a competitive advantage, they advocate for it. And yes, when there is government handout, they are the first in line at the trough.

If a company, or entire industry, cannot make it on its own, that’s life. The strong shall survive and the free market will rid itself of outdated and mismanaged entities unable to do what it takes to be profitable. But government should not be Santa Claus, and has no place interfering in a company’s fortunes — or misfortunes.

Conversely, if a business is well-managed, it has no need for corporate welfare. Sure, business leaders can make justifications about how well the money will be spent or how many jobs it will help create. But as we all know — business leaders included — it’s still just a handout, nothing more.

Where does it end? That’s the problem; it doesn’t, and we are all paying dearly for the “let me get mine” mentality. From the $1.2 trillion annual giveaway to Wall Street firms (“quantitative easing,” whatever that means) that simply help the rich become wealthy (funded by imaginary funny money, to boot) to freely giving taxpayer money to companies buying new trucks, government has become the go-to source for cash.

It’s no coincidence that federal, state and municipal debt levels are at all-time highs, and that basic government services, from trash collection to education, are being curtailed or eliminated. Yet, the connected still have their hand out, always wanting more — and getting it.

The Piper is calling, but business and government keep turning a blind eye and a deaf ear. And when it finally dawns on them that the problem needs to be fixed, it will be akin to rearranging deck chairs on the Titanic.

As Thomas Jefferson stated, “We have the greatest opportunity the world has ever seen, as long as we remain honest, (but) if (the people) becomes inattentive to public affairs, you and I, and Congress and Assemblies, judges and governors would all become wolves.”

Wrong tense, Mr. Jefferson.

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