In order to keep retailer Saks Fifth Avenue Downtown, Pittsburgh is preparing to offer the store low-interest loans and free “façade funding,” the Pittsburgh Post-Gazette reported. Calling Saks Fifth Avenue “an important business for our Downtown,” the Urban Redevelopment Authority is in negotiations to offer Saks Fifth Avenue what amounts to free money.
Indeed, the façade funding proposed by the URA is interest free and would not have to be paid back unless the building in which Saks Fifth Avenue is located is sold. Although a spokesman for Saks Fifth Avenue’s Downtown landlord said that “Saks realizes there won’t be any handouts,” the City’s proposal to provide Saks with free taxpayer dollars to make façade improvements can only be described as a handout.
Far from an anomaly, the use of taxpayer dollars to subsidize Saks Fifth Avenue is only a small part of the millions in taxpayer dollars spent on corporate welfare every year in the Commonwealth of Pennsylvania. The Publius Foundation has previously discussed the shameful Pennsylvania Film Tax Credit which costs PA taxpayers scores of millions of dollars every year in subsidies to major Hollywood films. A clear waste of taxpayer dollars, the movies produced using these subsidies are, unlike Saks Fifth Avenue, at least accessible to the average taxpayer.
While most Pittsburghers can afford a movie ticket, few Pittsburgh taxpayers can afford the expensive and sometimes ridiculous products on display at the Saks Fifth Avenue Downtown. The fact that all Pittsburgher taxpayers will be subsidizing a store that only benefits the richest of Pittsburgh taxpayers is not only bad fiscal policy but also a tasteless use of public funds during an economic downturn.
Giles Howard is the founder and president of the Publius Foundation. Email Giles at ghoward[at]publiusfoundation.com.
This wasteful use of taxpayers’ money is especially sickening when I think of all the homeless we saw in Pittsburgh and the people that we know are suffering from this economic crisis. How about “bailing out” some of the homeowners who have faithfully paid mortgages even when it meant cutting back on heat and food, but cannot now make the payment because of a job loss, medical bills, or some other necessity? Why is the average American expected to pay bills on time and carry the burden of “boosting the economy” while businesses are getting handouts from our governments?