Last Big Biz Subsidy Failed, Re-Evaluation Needed

This op-ed was offered to major Wyoming media outlets but not selected for publication.

By David Flemming, Wyoming Liberty Group

Wyoming appears on the verge of giving $100 million to BWXT for a nuclear manufacturing facility. Governor Gordon is expected to make a decision on December 15. This is likely the kind of deal Gunnar Malm, chairman of the Laramie County Commissioners,had in mind when he intoned" I do want my local and state government to pick winners."He proposes to do this through "tax incentives, streamlined permitting, and strategic infrastructure."

Streamlined permitting, certainly. Strategic infrastructure, if it benefits everyone.But tax incentives for specific firms?This vision is sharply at odds with Article 3, Section 36 of the Wyoming Constitution, which states that, "No appropriation shall be made for charitable, industrial, educational or benevolent purposes to any person, corporation or community to under the absolute control of the state."

If recent experience is any guide,perhaps Wyoming's founders were on to something.

The public grant tracker from Good Jobs First shows that Wyoming made a single grant above $10 million prior to 2023.Two grants exceeded that mark in 2023: one for $15 million to Mills Austin Engineering, and one for $20 million to Laramie Project Jupiter.

We learned in May that Laramie Project Jupiter was going bankrupt. Thankfully, Wyoming government should be able to recover most of the money. But governments in other states are often not so lucky.Wyoming government leaders have just given their largest ever grant to a company that went bankrupt two years later. Is quintupling that amount to $100 million really the best course of action? That's about 500,000 per job BWXT promised.

Taxpayers deserve to see if signs were missed when selecting Jupiter,so that the same mistake is not repeated with BWXT  (and others). Especially when an order of magnitude more money is at stake.

Mr. Malm's statement suggests Wyoming's government leaders are best positioned to spot areas in Wyoming's economy that can use a cash infusion to unleash a domino effect of innovation and business development across the economy.

Unfortunately,government leaders with a bird's eye view of the entire economy are more ignorant of individual circumstances that allow business leaders to allocate resources to where they will please the largest number of Wyomingites.This was what Nobel winning economist FA Hayek described as distributed knowledge. Worse,political leaders are largely insulated from the economic risk of million dollar mega deals.A government leader making a bad investment with public funds might lose an election. A business leader could lose their livelihood,which makes them operate more judiciously.