States compete with each other for jobs and investment and state politicians are famous for touting their particular state’s business climates as a reason for companies to relocate within their borders.
But there are times when a company, or an entire industry, finds that its current state of residence has become very unfriendly to it and its products. Such is the case today with gun manufacturers based in Colorado and Maryland.
In an effort to stamp out gun violence by, among other things, limiting the capacity of ammunition magazines, Colorado has managed to convince two companies – Magpul and HiViz Shooting Systems – that it’s time to leave. Similarly, the Outdoor Channel, which was filming four programs in the state, is ceasing production and looking to take its business elsewhere.
In Maryland, a strict gun control law currently awaiting Gov. O’Malley’s signature has raised the possibility that arms manufacturer Beretta will take its operations elsewhere.
These are the sorts of policy fumbles that Virginia needs to take advantage of – immediately. Interestingly, one high-profile attempt to lure these companies to the commonwealth comes from GOP lieutenant governor candidate Pete Snyder.
Under the aegis of his venture capital firm, Snyder has reached out to the CEOs of both Magpul and Beretta and urged them to relocate to Virginia (Beretta already has a corporate presence near Fredericksburg).
In a letter to Magpul CEO Richard Fitzpatrick, Snyder offers to put his own money on the line, writing that he is willing to “discuss your potential capital needs” in order to make the move and the business a success.
That’s a far cry from Virginia’s traditional economic development pitch, which usually finds state and local governments offering taxpayer financed incentives to private companies looking for a new home. Is it a better approach? Arguably yes. Snyder, obviously, is looking for the political windfall his offer might bring to his campaign. But mobilizing Virginia’s entrepreneurial class to use its capital to bring new business to the state has several benefits:
1. The investors, not taxpayers, would bear the financial risks (and reap any potential financial rewards);
2. State and local governments could deploy the resources they use for economic development elsewhere (or even lower their tax burdens);
3. And best of all, it would put a stake through the heart of the corporate welfare system.
Private companies and venture capitalists have all the experience they need to take this step. They know how to foster new ideas and start-ups. There’s no reason why they can’t take that experience and apply it to mid-sized and established firms seeking to relocate.
There is one big downside, though: such an effort would prevent politicians from taking credit for creating new jobs and investment. And that could threaten the jobs of their press release writers.
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