Has Corporate Welfare Ever Failed?

A reader asks us if we know of any examples of corporate welfare where it has failed – not just on the Macro level, giving grants to select corporations while taxing others, which has proven to undermine economic growth – but individual companies that took taxpayer money and moved or cut jobs.

Here are but a few examples off the top of my head:

• Under Bob Casey Sr., Pennsylvania gave Sony $40 million to come to PA (Westmoreland County), that lasted about 15 years. They gave them $1 million to stay, that lasted about 1 year. The plant is now in Mexico.
• Lazarus Department Store in Pittsburgh took local funding, before closing down a few years later. In a similar case, Kolovani’s and Company in Lebanon took state money to last a few years.
• Amazon.com recently got state funding for a distribution center in Hazleton. They subsequently closed a distribution center in Chambersburg.
• An audit of Pennsylvania’s Opportunity Grant Program found numerous cases of companies receiving grants and loans, yet going out of business. These include $900,000 to AcceLight and $250,000 to Laclede Steel.
• Harley Davidson got $4 million in 2000 to stay in PA “forever.” The company again threatened to leave in 2009, and got $15 million in taxpayer money to only cut half its workforce.
• Finally, the Pittsburgh Penguins threatened to leave, got millions for a new arena, and afterwards owner Mario Lemieux noted there was 0% chance they would have left.

Despite this abysmal record, Pennsylvania lawmakers keep doing it.