Republicans want to shift towards tax credits instead of grants
Taxpayers will fund $8 million worth of research and development for “green energy” thanks to another round of state grants announced Tuesday, but such funding might be cut off by the new administration in January.
The 21 new projects announced by Gov. Ed Rendell will be paid for with Department of Environmental Protection (DEP) grants combined with private investments. Unlike loans, these taxpayer-funded grants do not have to be paid back to the state.
After including $22 million in private investment, the projects announced Tuesday will create an estimated 221 new jobs, said Mr. Rendell. The average cost for each new job is more than $135,000 and taxpayers will be contributing more than $36,000 per job created.
Mr. Rendell said the state should be “nurturing” companies with taxpayer-funded investments.
“[Government] doesn’t create jobs directly, but it helps set the environment for creating jobs,” said Mr. Rendell.
With Republicans in control of both houses of the General Assembly and the governor’s mansion beginning in January, DEP grants are likely to be on the cutting board as the state looks to close an estimated $4 billion deficit next year.
Steve Miskin, spokesperson for House Minority Leader Sam Smith (R-Jefferson) said the new GOP majority will look to use tax credits in place of “picking winners and losers” with taxpayer-funded grants.
“We have to remember government doesn’t create the jobs. We want to level the playing field and decrease the cost of doing business in the state,” said Mr. Miskin.
Republican governor-elect Tom Corbett said he will “direct the Department of Environmental Protection to return to its core mission of helping people comply with Pennsylvania’s environmental laws and regulations.”
Calls to Mr. Corbett’s transition team for comment on DEP grant programs were not returned.
One of the projects highlighted by the governor is a $587,000 grant to Momentum Dynamics in Chester County, which is developing technology to allow electric cars to be recharged wirelessly.
Andrew Daga, of Momentum Dynamics, said having to plug-in electric cars in order to charge them is one of the main drawbacks to moving to electric-powered transportation. He said it would be the first demonstration of the process anywhere in the country.
Mr. Daga said transferring energy wirelessly is up to 15 percent more expensive in terms of the electricity which must be purchased.
The project will create 18 jobs, according to the state’s estimates.
Another project will give $235,000 in taxpayer grants to International Battery Inc., a company based in the Lehigh Valley. The grant will allow the company to demonstrate the long-term performance and manufacturing viability of advanced lithium batteries.
David McShane, executive vice president of International Battery Inc., said the grant would help the company market its products to potential buyers.
“Without this, it’s very difficult to convince a costumer to buy before you try. This grant enables us to demonstrate right out front that we have the best product,” said Mr. McShane.
While the state is helping International Battery make a profit off its products, the grant itself is expected to create only two jobs.
Also on Tuesday, the Department of Community and Economic Development (DCED) approved $7.9 million in grants and loans for 12 projects to develop alternative energy in Pennsylvania. The department claimed the taxpayer funds would save $2.7 million in energy costs for the state’s residents, leaving taxpayers at a loss of $5.2 million.
“The commonwealth is pushing forward to help businesses, families and local communities save money by becoming more energy efficient and by producing their own power,” said DCED Secretary Austin Burke.
