Providence, R.I. – Rhode Island's economic development brass has awarded a $75 million loan to a video game start-up headed by retired Red Sox pitcher Curt Schilling. But the question is will taxpayers end up holding the empty sock this time.
So Rhode Island is going into the video game business. Your state government has guaranteed a $75 million loan to a business headed by Boston Red Sox legend Curt Schilling.
Schilling pledges to move the company and its jobs from its current headquarters in Maynard, Massachusetts to a new site in the Ocean State, reportedly in downtown Providence.
There is only one reason that this firm, 38 studios, is moving from Massachusetts. It's because Rhode Island taxpayers are giving Schilling a better deal in this risky business than would Massachusetts.
This company has no revenues and has not released its first product. The Massachusetts economic development director said that state was unwilling to offer such a big financial package to one company. If this company fails, Rhode Island taxpayers are on the hook for millions.
Governor Carcieri, a big supporter, acknowledged the risk, but said it was worth taking.
It is natural for recession-racked and job-starved Rhode Island to seek job-creating businesses. But one has to wonder why we keep backing one shot deals that often don't pan out. It also smacks of crony capitalism. And the hypocrisy is so thick one needs a chain saw to cut it.
Here is Carcieri, a conservative Republican, and Schilling, another prominent conservative Republican activist. They both claim to be supporters of the free market, except when government intervention helps them, their businesses or political reputation. Ah, more socialism for the rich.
Rhode Island has been down this path before. In 1993, a similar $33-million deal lured Alpha Beta Technology, a Massachusetts-based biotech start-up to Rhode Island. Then-Gov. Bruce Sundlun held a splashy ground- breaking. A few years later, the company went under, leaving taxpayers holding the debt.
As Carcieri prepares to leave office, he is desperately trying to burnish his economic development record, which we all know has been a huge failure. Rhode Island has 40,000 fewer jobs than the day he took office. (Has anybody noticed how much better Lincoln Almond's job-development record was than Carcieri's?)
So now the state's electricity ratepayers are subsidizing Deepwater, a wind turbine project off Block Island, and the taxpayers are getting into the video game business.
Some candidates for governor are against this giveaway. Both independent Lincoln Chafee and the Moderate Party's Ken Block are opposed but Democrat Frank Caprio supports it. .Caprio is the supposed champion of small business, so he should explain how this deal helps the small entrepreneurs who already call Rhode Island home.
This deal burns up 60 percent of the state money allocated for business development. It's fine to blather on the campaign circuit about helping small business, but putting money up instead of rhetoric would be much more effective.
Rhode Island's eggs-in-one-basket approach is in sharp contrast to Massachusetts.
In Boston, a joint state, city and private sector program gives start-up knowledge businesses free office space and technical help in a new Innovation District in South Boston.
A recent study of the 20 highest income cities in the United States ranked Boston in the top five. The one common thread among all these places _ from California's Silicon Valley to Massachusetts' Route 128 corridor _ is a well-educated work force that can compete in the knowledge-based industries of the 21st Century.
Rhode Island, of course, didn't make that list. Our state government has been too busy in recent years cutting millions in state aid to higher education.
But don't worry. Curt Schilling is on his way. And if his company fails, and Rhode slanders are left holing the bag, well, maybe they are looking for an aging right-handed pitcher at McCoy Stadium.