Favoritism

$27 million tax gift to Cabela's is misguided as an inducement

Folks in the economically hard-pressed area between Reading and Pottsville are said to be eagerly awaiting the opening of a Cabela's superstore at the intersection of Interstate 78 and Route 61.

Unemployment in northern Berks and southern Schuylkill counties is higher than the state average and has been for decades, since the decline of the anthracite coal industry and the loss of textile and steel-foundry jobs to foreign producers.

Long neglected, the region is about to become the beneficiary of a major infusion of government funds. Pennsylvania taxpayers will provide $27 million toward the $59 million cost of the Cabela's store, which Schweiker administration officials justified on the grounds that it would create a new tourist destination, similar to Hershey park.

And just last week, the federal government awarded a $100 million grant for construction of a gasification/liquefaction plant in northern Schuylkill County that will produce a sulfur-free diesel fuel from coal waste. That project will employ 1,000 people in its two-year construction and 160 permanent workers.

Two very different projects and two generous contributions of taxpayer dollars, though one is far more credible than the other. The coal waste-to-clean coal project could well be the launching pad for an entire new industry that will help to clean up huge tracts of culm banks that litter the coal region and contribute to reducing the acid-mine drainage that turns streams lifeless.

And the product of that endeavor will be a domestically produced clean liquid fuel from a region with vast supplies of the coal needed to produce it. We would expect that this industry will pay higher than average wages and will be a good place to work.

On the other hand, Cabela's was going to build a superstore somewhere. Another eastern Pennsylvania site also was under consideration, though the site it finally selected had more to offer than the advantage of having taxpayers pick up nearly half the cost. But among the 600 jobs this Wal-Mart-sized store is expected to offer, about half will be part-time, and almost all will be in the low-wage category, if higher than the minimum wage. Likewise, most of the additional business expected to be generated around Cabela's in Berks County will offer similar types of employment.

The state and various local entities have put together an inducement for Cabela's that equates to about $45,000 per job - a job that will not pay, as one local resident told The Philadelphia Inquirer, "enough to support a family and a mortgage."

In addition, the arrival of Cabella's isn't likely to have a positive impact on the many small, long-established businesses that trade in the same outdoor, hunting-and-fishing related gear.

The problem with this all-too-generous helping hand of taxpayer dollars - to a company that might well have located in Pennsylvania without it - is that it is reactive rather than proactive. The coal region has been in a long economic decline, but neither the region nor the state has sought to assess its strengths and potential and formulated a plan to reverse this downward spiral.

The coal-waste project takes full advantage of the region's unique strengths and turns what has long been a liability into an asset. Though nothing is a sure thing, the conversion of coal to clean liquid fuel looms large in a world whose basic energy supply is hostage to international events and as pressure builds for cleaner emissions from trucks and other users of diesel fuel.