Here we go again

Dr. Malcolm Cross
Dr. Malcolm Cross

Both The Flash Today and The Stephenville-Empire Tribune recently reported that the Stephenville Economic Development Authority met to consider a request for up to $1.2 million in aid to the Lone Star Arena.  Ultimately, the SEDA declined to take action, given that the Lone Star Arena is located outside Stephenville’s extra-territorial jurisdiction, and is therefore ineligible for aid.  Their reports can be read at and

Yet while SEDA will not act on the request at this time, the request itself raises anew issues discussed before, but which are likely to return, and therefore, should be discussed again.  The most pertinent question is whether the city should promote economic development by giving financial aid—grants, loans, tax breaks, whatever—to specific businesses.

I’ve long argued the city should not.  To give financial aid to some and not to others is to raise basic questions about fairness—why should one restaurant get a tax break while others do not?  Even the city council member who defeated me for re-election in 2014 and pushed for the creation of the SEDA and its funding mechanism—a portion of the sales tax—seemed to be bothered by this point when the City Council approved the tax-abatement for the prospective restaurant to go where Fiddle Creek had been. 

But so far not enough others seemed concerned.  Perhaps they should be.  Consider:

The request for aid for the Lone Star Arena may be the first of many more to be submitted to the SEDA and, if approved, to the city council as well for final action.  How edifying will it be to see more and more people coming to the city for help in financing their business in the name of “economic development?”  What impact will this have on the attitudes of business owners who fail to get aid while still having to compete with those who do?

And will giving aid and thereby propping up businesses which can’t otherwise remain open be the best way to spend the taxpayers’ dollars?  Couldn’t the money spent on failing businesses better be spent on needed public works projects, such as roads, or sewers?  Or if there’s no such need for additional expenditures, shouldn’t the money be returned to the taxpayers themselves as tax cuts.

So far, the answer remains “no.”  The use of public funds to aid private businesses seems to remain popular in theory.  Whether the idea remains popular as more and more of the taxpayers’ money is given out as corporate welfare remains to be seen.

In the case of the Lone Star Arena, it’s been argued that it has brought many money-making events to Stephenville in the past, and it should therefore receive some type of assistance in the name of increasing the collective wealth of Stephenville.  If so, why can’t those who profit the most from the Lone Star Arena’s operations supply it with whatever aid may be needed, to reap greater profit down the line?  And why can’t the Chamber of Commerce and STEDCO follow suit?  Let the private sector make the necessary investments in private businesses to enhance profit for all, and let the city do what it does best—maintain outstanding services at a reasonable cost, and maintain a level playing field with simplified rules promoting competition with fairness for all, favoritism for none.

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