It’s troubling to assess state’s subsidy standard
Mayo Clinic in Rochester is appealing to state lawmakers for significant tax relief – $500 million – as part of its plan to spend billions over the next several decades and add something on the order of 45,000 jobs. The relief would come in the form of the tax breaks that cities sometimes give developments, in order to spur them. In return, cities expect construction and jobs, and that’s what Mayo intends. As we have noted in this space previously, we don’t have a problem with Mayo’s request.
Citizens should be aware of some things related to the interaction of government and business, though. One that springs to mind is the treatment the state plans for other medical providers. Is Minnesota prepared to give them significant breaks as well? Because it is only fair to do so. The state should not be picking winners and losers in a subsidy game.
Another issue relates to the gains and losses associated with public financing. We note in Lee Egerstrom’s column on this page, he points to a study that shows public expenditures on sports facilities for professional sports teams returned hundreds of millions to the state. This is not enough of an analysis. While it might be true that the state investment paid for itself and then some, what was lost was other investment opportunities, public and private. Hundreds of millions spent on stadiums could have been utilized elsewhere in the economy to do more good, and without creating the controversy and ill will associated with subsidizing billionaire sports teams owners.
While the Mayo project makes sense, not every other proposal does. How do state lawmakers sort all that out? Yes, that’s a very good question to ask.