Corporate Welfare Hurts Other Businesses

Last updated on May 13th, 2019 at 02:36 pm

What hypocrites we are. We rail against taxes and waste and (sometimes) corruption, but when largess is demanded by business, our silence is deafening. The recent case of Cabela’s plans for a new big-box store in Washington County is a prime example of this.

Here is a successful and profitable retail business that purposefully chose their site in the path of progress. Yet, they are getting $4.5 million from Washington County for "trophy wildlife displays" and $5.25 million from the state for highway improvements.

This is plainly welfare for the rich, and an inexcusable use of taxpayer’s money.

Recently, I ran into Doug Zeigler at a fundraiser. He is the retired chair of The Zeigler Cos. and a well-known businessman. I congratulated him on the lawsuit he brought against Washington County regarding the Cabela’s giveaway. He believes that Washington County improperly designated displays that Cabela’s is using to attract customers as a public museum/educational project.

I agree. Zeigler also questioned the strategy of making the county’s subsidy to Cabela’s a "regional" project, similar to Miller Park. Actually, "questioned" is inappropriate. He knew the reason was that an earlier $4 million subsidy was defeated in August. That vote required a three-quarters majority approval. The new vote required only a majority.

Much of this was done in secret, and certainly not in the spirit of open discourse.

When are government subsidies proper?

Say you had a successful business located in the inner city of Milwaukee. The business has 200 workers, mostly within walking distance of its plant. It needs to expand, but the land adjacent to it is in a brownfield, not of the company’s making. They plan to hire and train 100 new workers on their site. Few of us would not agree that this is a good use of a government grant.

Or consider Manpower Inc.’s plans to move its headquarters from Glendale to downtown Milwaukee. This is an international organization that could relocate anywhere. They decided to move to Milwaukee and seek about $25 million in government assistance for the project. The business will bring 900 workers to the city’s downtown and plans to add more workers there in future years. This is less obvious than our first example, but could also be justified.

But the Cabela’s situation is quite different. Here we have a successful and profitable business that has selected a prime location for its big-box retail business. Part of their business strategy is to get as much money from local government that they can. You can’t blame this desire to sup from the public breast, but you can blame government for giving in.

In this case, competitors, like Gander Mountain, decided that they could not afford to compete against Cabela’s and stopped their own plans in this area.

I am a member of several business groups and have tried to have them publicly condemn the Cabela’s handout. My thought was, our members complain about high taxes and the way the state spends our money. Thus, I thought they would be angered by this giveaway.

Their glacial slowness to at least speak out on this matter is troubling. And it is hypocritical.

This is not a liberal/conservative issue or Republican/Democratic one. Rather it is a matter of good government, or the lack thereof.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

No posts to display