Where is Delaware’s economy headed?

The News Journal | Opinion | by Rep. John Kowalko

News Journal cover article“AstraZeneca cutting jobs” was the front page headline in a recent edition of The News Journal.

That chilling announcement should be cause for alarm among all taxpayers and working families in Delaware. The reality check that should be paramount in the minds of all legislators is where is Delaware’s economy headed and what has this administration done to exacerbate the decline. AstraZeneca is just the most recent failure of a costly economic adventure paid for with taxpayer resources.

In 1999, then-Gov. Tom Carper spent $40.7 million in taxpayer money to incentivize AstraZeneca to move its corporate headquarters to Fairfax with the premise/promise of an increase of jobs from 2400 to 4000 by 2004. Peak employment hit 5000 in 2005, but the job totals, at this facility, after these recent projected cuts is down to 1,500. Additionally, there was an outlay of Delaware taxpayer money to the tune of $70 million for new road improvements in Fairfax at the company’s site. Since AstraZeneca has put its campus on the sales block, all taxpayers in Delaware can take pride in the fact that their $70 million road improvement will upgrade the value of AZ’s property tenfold or more. That seems to be a pretty nice deal for AstraZeneca, but not fruitful at all to the taxpayers.

It is well past time to re-evaluate our corporate policies of giveaways and cuts. There has invariably been little to no return on investment and the outflow of money must be staunched. If this particular circumstance was the exception perhaps we could look at it in a different light, but this unfortunate outcome has become the rule. In August, when Gov. Markell proudly announced that AstraZeneca’s plant closing in Pennsylvania would result in a relocation of 134 workers to Delaware, we might have felt some pleasure in our good fortune, notwithstanding the job losses affecting our neighboring state. But simple math would suggest that with the proposed cuts here are at best a net gain of 14 jobs.

This current situation seems to define the futility and fruitlessness of this administration’s economic path to prosperity. The “corporate welfare” policies of this administration have cost the Delaware taxpayers $250 million during Gov. Markell’s term. This irresponsible wasting of the taxpayer dollars has resulted in no discernible return on investment, and has stopped absolutely no job losses from these wealthy corporations. Tens of millions were given to DuPont by the state, and the net outcome can be tabulated as a loss of 1700 well-paid research jobs from Delaware, in addition to the post-Dow merger Pioneer Seeds spinoff resulting in hundreds of jobs moving to Iowa, while keeping a handful of jobs here at the Wilmington headquarters.

Also, we should consider the fact that the proposed Pioneer Seeds facility construction in Newark was halted, permanently it appears. Further compounding this administration’s erroneous economic missteps is the recent policy that was passed, despite my no vote and objections, labeled the “Delaware Competes Act.” This corporate giveaway combined with the “The Commitment to Innovation Act” will forfeit more than $60 million in revenue to the wealthiest corporations with absolutely no appreciable effect to retain or grow jobs. Neither of these misguided economic policies will reinforce local business growth or stability, and will leave a gaping hole in Delaware’s budget that this administration will attempt to fill on the backs of state employees, seniors and the poorer families in Delaware.

Adding to the insult of these types of corporate giveaways is the actual statistical proof that these types of bribes and irresponsible economic policies have been marked by failure at an unaffordable expense. A cursory view of past economic practices shows that $22 million went to JPMorgan which profited to the tune of $24.5 billion last year with “promises” of job growth that would inevitably have occurred without this taxpayer outlay.

Consider the $11 million gift to Incyte Corp. with the promise of creating 130 jobs in the future on the heels of the announcement by Incyte that they were laying off 137 Delawareans. The Fisker and Bloom debacles speak for themselves as monuments to irrational and irresponsible wastes of taxpayer dollars. One tenth of that $250 million diverted to supporting locally based businesses for job growth, infrastructural investments and production improvements via tax credits and subsidies would ensure a healthy and robust growth in our local communities and not end up in the pockets of corporate profiteers.

Call your legislators and demand that they resist this callous and flawed attempt to redistribute and divert revenues from Delaware families into the coffers of wealthy corporations.

John Kowalko is the Democratic Representative of the 25th District.

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Posted in Opinion Articles.