Boscov’s: Bailout or Boondoggle?

Submitted by David Hafer

As the global economy implodes, we are beginning to see the ramifications creep into our region as politicians scramble to provide taxpayer subsidized bailouts to their favorite financially troubled corporation.

The Snyder County Commissioners who value fiscal responsibility over political expediency deserve their constituents’ support. The important question the public should ask is why Boscov’s chain is so special that it deserves a $35 million bailout from the taxpayers of Pennsylvania.

Pennsylvania has no formal legal procedures for using tax money to bail out a failing retail business. With increasing budget problems, the state cannot afford to rescue every private business in trouble. We should ask why a small economically distressed county should provide collateral for a loan to a big corporate business that is failing through no fault of the county’s taxpayers.

The five million collateral in the form of Community Development Block Grant funds represents a critically important funding resource the county would lose if Boscov’s defaults on its loan. Considering the precarious state of the consumer economy, along with stiff competition from other chains, there is good reason to be skeptical of rosy claims that Boscov’s will return to profitability.

Loss of CDBG funds could impair the county’s ability to repair bridges and upgrade sewer and water systems forcing county officials to raise taxes or curtail services, prospects that would add to the hardships of residents already struggling to make ends meet.

Rather than propping up a failing retail store in an area already saturated with malls and big box stores, we should be looking at more productive ways to use public money to create jobs.

For example, reviving the region’s manufacturing economy. During the past decade, over 4500 manufacturing jobs, including 800 in Snyder County, have been lost. Industrial jobs provide substantially more in wages and benefits than dead end work in big box stores that pay minimum wage and import all their wares from China.

Bringing back manufacturing jobs will require substantial changes in the nation’s trade policies. Doing away with so-called free trade that siphons industries and jobs from Pennsylvania to the sweatshops of Asia would be a significant step in the right direction.

Changing trade policies may be a challenging task, but in the long run it will bring more economic benefits to our region than gambling away public money to save a retail dinosaur.

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