Bad Projects Leading to Bad Government Investments

North Carolina government has a serious problem with the way it looks at good ideas. Traditional state government logic holds that if a project, proposal, or idea is good or was once good than government support will make it better or restore it to its former glory. There are countless examples that demonstrate that this is not the case. In reality, government support of things that are not public needs only distorts the marketplace and takes funding away from more necessary items such as highway infrastructure and public schools.

Poor government decisions about “investing” generally fall into three scenarios: bad projects that can’t get off the ground without government support, good ideas that work sometimes and are seeking government money to expand, and projects that want government funding to maintain competitiveness in a changing market place.

Bad projects that need government help just to get started have some of the most obvious problems. Projects like these, the Randy Parton Theater for example, can be identified by their advocate’s spectacular claims of economic development benefits which are followed by even more spectacular failures later on.

If it weren’t for government “investment,” Randy Parton, Dolly Parton’s brother, never would have been able to bring his county music show to Roanoke Rapids, and for good reason—there simply was not enough demand to support it.

Even with all of the “investment” the project was still a spectacular failure. The theater officially opened for business in July of 2007. In December 2007, officials asked Parton to leave because he was too intoxicated to perform. As he walked to his car, Parton gave an impromptu press conference that will not soon be forgotten. The town of Roanoke Rapids is still helping to finance the theater that has been struggling to make a profit.

The second kind of bad government “investment” happens when something is a good idea in some circumstances and the government seeks to widen its appeal with public support.  House Bill 349: Promote Green Roofs on Buildings—a recently featured Civitas Bad Bill of the Week—is a classic example of this kind of flawed thinking.

The bill seeks to incentivize property owners to build or retrofit buildings with green roofs by letting them get out of paying some water treatment fees and providing generous tax subsidies.  Green roofs are roofs covered with vegetation and in some circumstances they can help reduce heating and cooling costs.  There is nothing inherently wrong with green roofing, but it is much more expensive to install and maintain than traditional roofing and doesn’t make sense for everyone.

If the bill passes it will artificially lower the cost of green roofing and leave the taxpayers to pick up difference.  Subsidized green roofing will only cause property owners and developers to divert money away from other more economically sustainable energy efficiency improvements. If a green roofing project doesn’t make sense without a subsidy than it really doesn’t make sense at all.

The third category of bad “investments” is made up of causes that are trying to maintain their competitive edge with government funding.  It is no secret that the furniture industry is changing and in order to try to keep up, the High Point Furniture Market has unfortunately fallen into this category.

The Furniture Market has been receiving state funds for the last several years and HB 169, another Bad Bill of the Week, is seeking to continue the tradition to the tune of more than $2 million a year.  The furniture industry is important to the state, but if $2 million a year in taxpayer funding is needed to keep the Furniture Market alive, perhaps the Market isn’t as valuable as it proponents believe.

The Market is a massive event that doubles the population of High Point and provides a tremendous showcase for furniture manufacturers. Because it is the furniture manufacturers that benefit most directly from this Market, it only makes sense that they should be the ones to finance it. Taxpayers across the state shouldn’t be forced to subsidize this event.

If the marketplace decides that something is not worth funding there is probably a good reason. When investors decide to invest they are risking their own money, when the government decides to “invest” it is risking the tax payer’s money.  We have to keep paying the government to “invest“our money whether or not any of its investments actually work out. There is plenty of room for politics, convenience, and misguided logic to get in the way of good decision making.