School funding vs. corporate welfare

By John Cook

The juxtaposition of stories from the Friday paper and the Sunday paper concerning state funding is concerning, to say the least.

On Friday, Dec. 17, there was a front page story about the looming State budget shortfall for fiscal year 2011. The article points out that the state has been busily cutting public school funding and other benefits to the public at large. Part of the article said:

"Through two years of slumping tax revenue, the Democratic governor and Republican-led legislature already have eliminated more than a few thousand state jobs and reduced funding for public colleges and universities, early childhood programs, public health clinics and home care providers for the disabled, among other things."

On Sunday, Dec. 19, there was a front page story about $2,000,000 in state aid for a development project in downtown Cape Girardeau. A controversy has arisen because of some past bad check charges against the CEO of the proposed development project.

I think the controversy is on the wrong point. We should be more concerned that the state of Missouri deals with budget shortfalls by cutting education and any other program that benefits ordinary citizens so that the state can continue to pay out corporate welfare unabated. We do this because we have two fundamentally wrong ideas.

The first wrong idea is that education costs us tax dollars and we get nothing material in return. We seem to think that all we get from education is an informed citizenry which, most people agree, is absolutely necessary if a democratic form of government is to succeed. Well, that is a mistake. We also get a provable economic benefit from education. In higher education, for example, economists of all stripes concede that a dollar spent returns 5 dollars in economic benefit. This explains why Iowa, with two great state universities is a rich state and Arkansas is not.

The second wrong idea is that we must spend tax dollars to start businesses in order to have jobs. Let's start with the fact that the Friday article said we eliminated "thousands of state jobs" while paying $2 million of state money to create jobs. Why is this good? Because the presumed jobs we are paying to create with economic development are "private" jobs? Is it because our great capitalist system is so perfect that private industry and entrepreneurship are good and state jobs are bad? Oh, that it should be so.

In fact, it would be so if private jobs were created with private dollars and private risk and private entrepreneurship. If the state stayed out of private industry and private business and the businessmen and investors took risks and made profits (or went broke) then that would be a great system. However, it is not our system. Oh, no. Private individuals don't want to risk their own money on new ideas or new businesses. Good heavens! Risk their own money? Not reasonable! We have to have state money to start or maintain businesses.

And, of course, we have to pay taxes so private businesses can start up so we will have jobs. If the business fails, only the taxpayers lose. If the business succeeds then the private owners take the profit.

Lt. Gov. Peter Kinder, according to another article in the paper, criticized Gov. Jay Nixon for awarding this state money to a company whose CEO had some past bad check charges. If you look up "hypocrite" in the dictionary, you should find a picture of Mr. Kinder. He is the king of taxpayer largesse to businesses in St. Louis and Kansas City. The problem here is not the awarding of this particular piece of corporate welfare. It is the system of putting government in the business of taking the risk for businessmen who then take the profit if the business succeeds. The problem is that we think it is smart to put our tax dollars into businesses instead of into education.

This country was founded on the notion that government would provide defense, police protection, fire protection and other matters for the general good. Over the decades, we decided education was for the general good. But we always believed that a system of private capital, private risk and private rewards would make the best economic system. We should go back to those ideas.

John L. Cook is a Cape Girardeau lawyer.