The ugly face of socialism has finally arrived in Schuylkill County. On Friday morning, the county Board of Commissioners unanimously approved a $5.8 million loan guarantee to Boscov’s in front of a packed hearing room at the courthouse in Pottsville. Schuylkill now joins Luzerne, Lebanon, and Cambria counties as enablers of corporate welfare. The only government body with any sort of sense in this matter seems to be Snyder County, who rejected the deal last month. Lackawanna, Butler, and Blair counties have scheduled votes of their own in the coming weeks and months.
Of course, the politicians who made this happen are trying to use less offensive buzzwords like “pass-through”, “risk-free”, “sure-thing”, and “middle-man” to lessen the sting of the reality that our elected commissioners just put our money at risk to bail out a failed business. Commissioners Mantura Gallagher and Frank McAndrew contend that no taxpayer money will be used in this deal and that the threat of losing 155 jobs from the Fairlane Mall was too much to bear.
First of all, if Boscov’s was such a “sure-thing” and loaning them money was “risk-free”, then why wouldn’t any other bank, lending institution, or angel investors touch this deal? If the return would have been lucrative for both sides, you would think that the private sector would want a piece of the action, right?
Well, that’s not what this loan is about. The money Boscov’s receives will not go towards inventory, employees, advertising, or anything else that will return the company to solvency. The bailout was originated to pay off a note to a bank who had loaned a couple hundred MILLION dollars to the investors that bought the company from Albert Boscov a few years ago. Since Boscov’s departure, the company has seen a steady decline in sales and profit, making the new owners unable to pay back the bank. When the note came due, all Boscov’s could do was file Chapter 11 bankruptcy protection and hope that someone would swoop in and save them from liquidation. Enter the taxpayer.
Secondly, if the Pottsville location was such a big money maker, making it a “sure thing” as the Commissioners contend, wouldn’t it be safe to say that even if Boscov’s went under, another department chain would be chomping at the bit to move right in? Isn’t feasible that a new, more financially viable store, would bring those 155 jobs lost initially back to the area and at a higher rate of pay for the employees? You might even make the argument that a new store might create even more jobs, which in this economy could be a god send to this area.
Finally, saying that “no taxpayer funds will be expended” is nothing but a ruse. The actual money from the bailout will come from HUD, which is financed by TAXPAYER MONEY. Governor Rendell is guaranteeing the loan with state economic grant funds. also known as TAXPAYER MONEY. If Bosvov’s fails and the state government has a budget shortfall when the federal government comes calling (which is not too far of a stretch the way Rendell spends), Schuylkill County will be liable for 5.8 million in real dollars, which will ultimately be repaid to the federal government from TAXPAYER MONEY.
So, if what the Board of Commissioners did on Friday was guarantee money that we don’t have to a company that has shown its propensity for failure, why did they agree? Are the Commissioners just that stupid? Hardly. Like everything else in politics, this comes down to one thing and one thing alone—-campaign money.
Boscov has been a large contributor to Gov. Rendell and the democratic party. Since 2000, he has donated upwards of $150,000 to Rendell’s campaigns and $50,000 to the PA democratic party.
Thus, once again fiscal discipline is set aside and the taxpayer takes it in posterior in order for politicians to pay back their campaign contributors from the public coffers.