We are gearing up for another election year in Klamath County. One of the new phrases you may hear by those running for public office (whether it be city council or county commissioner) is “Economic Development”. Economic Development is such a positive sounding term. When someone running for office says it most think, “This is a wonderful person who wants to help our economy.” However, if you think a little more, you have to ask yourself, “What do they really mean?”
To be frank, Economic Development is another leftist term — or at least one that has been cooped by the central planners. When someone running for office (or in office) refers to “Economic Development” what they mean is that they want to use tax payer dollars to lure a particular industry or business to Klamath. More often than not that industry or business will personally or politically benefit the public official in some fashion (a form of crony capitalism). The other problem with this approach is that there is no way a few government officials can possibly know of all the options and all the opportunities in the county in which to make the best decision. So by definition, the best they can do is make a decision that is less than the best. Often times government directed Economic Development is simply a waste of tax payer dollars, because there is no penalty for risks taken — it is not their money and they’ll get another stash of tax dollars next year — and without risk, decision making becomes very skewed or warped.
The answer to this dilema is to bring in “economic experts”. In Klamath’s case these experts wear the name KCEDA (Klamath County Economic Development Association). This private organization raises money by extracting tax dollars directly from the city, the county and through grants offered by state and federal agencies. For instance in 2016 Klamath County will give KCEDA around $200,000. For what purpose? Economic Development. And what is that? Anything KCEDA needs it to be. Since KCEDA are not elected officials they can spend the money virtually anyway they want. What’s more KCEDA is not directly held accountable by tax payers for their results (or more often the lack of results). In essence, our tax dollars pay people to run around trying to recruit new business to our area. When one does come (whether through the efforts of KCEDA or not) KCEDA will run in front of the cameras to take as much credit as possible.
But for KCEDA’s magic to work, they often need governments to offer these new businesses sweetheart deals in the forms of tax breaks or reduced fees. This practice is unfair to businesses currently operating in Klamath County. For example why should a new shoe store get a reduced property tax rate for five years and all the other shoe stores in town pay the full property tax rate? Because the new shoes store makes KCEDA look good, that's why — and the government wants KCEDA to look good because they have paid KCEDA to bring new jobs to the area.
Shell Game vs. Real Economic Development
In essence this centrally planned economic development is just a shell game with our tax dollars. If we want real economic development in Klamath County, it will seldom come at the hand of a few self-appointed geniuses. Instead government should lower the tax rates at both the county and city levels. This will accomplish two things. First, it will make the cost of doing business in Klamath County less expensive. Second by lowering taxes it will put more discretionary income into the hands of Klamath citizens— a major metric retail businesses use to determine whether to locate a business in a certain location or not. When the cost of doing business is affordable enough to offset Klamath County’s distance from major markets, and when Klamath’s population has enough discretionary income to spend on a particular product, then — and only then — will new business begin to show up to Klamath in a major way.
That is real economic development, the kind that lets the market decide when, where how and what businesses will move here, not some government anointed economic development wizards. This is the real economic development that Klamath County needs. Therefore when you receive your ballots this May and November be sure to only vote for those running for public office who understand this real economic development from the shell game central planners love to play with your money.