Subsidizing Tourist-Related Private Businesses

Watauga County Commission Chair Jim Deal's scheme to subsidize Tweetsie Railroad to the tune of $4 million + is certainly not the first time that local North Carolina governments have paid out of the public treasury while chasing after tourism dollars. The city officials of Roanoke Rapids, North Carolina, borrowed $21.5 million to build a theater and agreed to pay entertainer Randy Parton (brother of Dolly) $1.5 million a year to manage the theater. How'd that work out? Can you spell "boondoggle"?

We find ourselves agreeing with Bob Orr, who recently finished third in the NC Republican primary for governor. Orr, who spent a combined 18 years of service on the NC Court of Appeals and the state's Supreme Court, was a leading critic of government subsidies to private business. As executive director of the North Carolina Institute for Constitutional Law, Orr was key in suing the state and local governments over the $300 million in taxpayer subsidies given to Dell Computers, but the state Supreme Court refused to hear the case.

Although such subsidies are evidently acceptable under the state constitution, we still find them unappetizing extensions of government power, especially local government.

Although the Tweetsie bail-out was sprung on the citizens of Watauga County as a highly detailed and "done" deal (the April 15, 2008, letter of agreement between Jim Deal, Rob Holton, chair of the Tourism Development Authority, and Chris Robbins of Tweetsie, runs to four pages of single-spaced "summary of measures the County will immediately pursue" for Tweetsie's benefit), there is one clause in that letter (which reads very much like a contract) that opens the door just a crack for an unforeseen change of direction, should the citizens be heard. Jim Deal wrote:

Of course, any indications of support contained in this letter of intent are subject to a public notice, public hearing and final corporate approval by the Watauga County Board of Commissioners as required by N.C.G.S. 158-7.1. However, based upon conversations with other Watauga County Commissioners, it is my belief that there is sufficient support for this proposal, provided that comments from the public or other information received do not change those preliminary opinions.

The public hearing on the scheme has been scheduled for May 20 at 6 p.m. in the Commissioners Board Room. "The Proposed Partnership Agreement with Tweetsie Railroad" is posted on the county's website in the form of a sales pitch that omits any particular accounting for the park's revenues and trends since 2004.