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Kentucky is the land of bourbon, horse racing, and – now – dubious tax cuts. Last week, The Courier-Journal reported that Ark Encounter, LLC, a company planning to build a facsimile of Noah’s Ark to biblical specifications as the centerpiece of an amusement park, may lose $18 million in state tax incentives due to religious discrimination. State officials are concerned by a job position posted by Ark Encounter that requires “applicants to provide salvation testimony, a creation belief statement, and agreement with the “Statement of Faith” of Ark Encounter’s parent organization, Answers in Genesis,” the organization behind Kentucky’s Creationism Museum.
Earth, five thousand years ago
Since the beginning, the Noah’s Ark theme park has been mired in controversy. Originally slated to cost $173 million, the project was scaled back to a $78 million first phase after funding failed to materialize and junk bonds remained unsold. In a remarkable failure to appreciate irony, the second phase of the theme park will include a replica Tower of Babel, widely understood as a cautionary tale against hubris and ill-conceived megaprojects.
Religious discrimination in hiring is, of course, illegal, so Kentucky’s willingness to bankroll this project in the name of “tourism promotion” is especially egregious. Gov. Steve Beshear (D) is a long-time supporter of Ark Encounter, to the chagrin of some state political observers. But religious objections aside, Beshear is not so different from virtually every other governor in the country in being all too eager to throw public money at private companies.
Take Gov. Brian Sandoval (R) of Nevada, who recently pledged $1.25 billion in tax cuts to Tesla Motors for a billion-dollar battery factory, at a cost of almost $200,000 per anticipated job created. Meanwhile, the state ranks 49th in per-pupil K-12 education spending and has cut higher education spending by hundreds of millions of dollars, forcing staff layoffs and rising tuition bills.
Or take Gov. Jay Inslee (D) of Washington, who signed an $8.7 billion incentives package for Boeing, “the single largest tax break any state has ever given to a single company.” Gov. Inslee and state lawmakers agreed to the package to keep production of the 777X jet in Puget Sound, but that didn’t stop Boeing from announcing that it would move thousands of engineering jobs and hundreds of manufacturing jobs to Oklahoma City and St. Louis. Now, some observers are grumbling that politicians “essentially gave [Boeing] a blank check.”
And please take Gov. Chris Christie (R) of New Jersey, who doubled down on $261 million in tax incentives for Revel, a casino and resort in Atlantic City, only to watch the $2.4 billion project go bankrupt. Even worse, the private market had already given up on the casino; Morgan Stanley was set to take a $1 billion loss rather than throw good money after bad in completing the project. Garden State residents can take solace in the fact that the tax incentives promised to Revel require that the casino make a profit, so they’re off the hook in that sense. But that didn’t stop the governor from investing $300 million in state pension funds with the hedge fund that owns 28 percent of the troubled casino. According to New Jersey Policy Perspective, Gov. Christie has spent over three times as much on business incentives since 2010 ($4 billion) as the state of New Jersey spent in the previous decade ($1.2 billion).
Who knew building a casino during a recession wasn’t such a great idea? Oh yeah, everyone involved.
So Kentucky may seem like an outlier, but it’s in good company. Politicians in every state selfishly put their desire to claim job creation or business bona fides above the priorities that would really spur economic development for their constituents – investments in education, support for working families, and improvements for vital infrastructure. As long as our leaders keep falling all over themselves to give corporations huge tax breaks disguised as “economic incentives,” we’ll fail to make the tough choices that will really put our economy on the path to prosperity.