When George Washington left office, he issued a “Farewell Address” in which he warned our young nation to avoid foreign entanglements. Now I’m leaving office, and I have a farewell warning for the Hays City Commission.

As you read my opening words, you may have immediately said to yourself, “I knew George Washington, and you, Kent, are no George Washington.”

Of course that’s true. Nevertheless, on a more modest note, I offer this advice: City and county governments should say no to almost every request for handouts to private business, whether in the form of CIDs, IRBs, tax increment financing or whatever the latest scheme might be to extort money from the common people and give it to rich people.

Such schemes have always existed, but until recent decades, they were far more common at the federal level. They began to trickle into state government in the pre-World War II South, and now they have become a flood throughout the nation. Welfare for business people has become status quo — and has even taken on the aura of respectability.

This makes no sense. There are multiple arguments against it, which can be found throughout research literature. Example: Tax abatements to lure businesses to a community tend to prop up marginal-to-worse businesses that inevitably fail. Example: Profitable businesses simply move on to the next community when the abatements end. Example: The cost of providing incentives for businesses are paid mostly by those least able to afford the higher taxes (note: government has no money except what it takes from citizens in fees and taxes).

Here’s the most important reason. CIDs, IRBs, tax increment financing and so forth short-circuit the free market system. They reward inefficient business and punish efficient business. If you give $3 million to The Mall, you surely do help The Mall, but you also hurt The Mall’s competitors. A tenant that would have opted for a better location — helping an efficient builder or an efficient landlord — now may stay at the improved Mall. So, the Mall is helped, but better-run businesses suffer and the overall economy of Hays is harmed. Government is not qualified to meddle in the private economy. Businesses should be left to succeed or fail on their own. When inefficient businesses fail, efficient businesses replace them, and the economy grows stronger.

According to a survey of research literature conducted at the University of Kansas in 2001, “Many economists have been prompted to question why municipalities continue to offer abatements indiscriminately when they have been shown to be largely ineffective and resource wasting.”

More simply, you might ask why state lawmakers and local elected officials continue to give away your money for no good reason.

Another research paper, Wolman (1988), offers three likely answers: 1. “decision-makers may be unaware of the literature regarding the ineffectiveness of abatements;” 2. “even if the decision-maker knows abatements are ineffective development tools, he or she may feel the need to offer them anyway because everyone else is doing it;” and 3. “abatement policy may be implemented to serve as a signal to potential businesses that local government is committed to economic growth.”

For whatever reason, the various giveaways are increasing, not decreasing. At first they were used almost exclusively to lure new businesses to town, but now everyone feels entitled to a government handout. The theory goes that by building a new business or expanding an existing business, I will create jobs and increase tax revenue, so you owe it to me. Of course that ignores the fundamental reality of the relationship between businesses and the community they call home. The community provides the workforce and the infrastructure and the customers for a business, which is why the business wants to build or expand in that community. In turn, the business creates jobs and pays its taxes and earns a profit for its owner. It is a symbiotic relationship, and there is no rationale for why the community should pay tribute to the business for doing what it exists to do.

Furthermore, business owners often insist they need the handout to make the business plan viable. “If you don’t give us the money, we cannot build or expand,” they say. This is no doubt true in some instances, but there is no way to confirm it. Short of hiring an auditor to thoroughly examine their books, which is not possible for proprietary reasons, city officials have only the word of the business owner. And even then there is no proof the owner could not have found additional investors or bank loans to boost his financial portfolio. There are documented cases, including one in Hays, in which a business stated it could not build without the handout even though construction had already begun. It is a poor city policy that gives away the taxpayers’ money with no possible way to prove the recipient needs the money.

None of this applies to public parks or streets or fire stations or public convention centers, by the way. There may be other reasons why a specific public project is not needed, but it is perfectly appropriate to fund needed public projects with tax money. That is a proper role of government.

I predict a prosperous future for Hays, but state and federal funds are drying up. With dwindling resources, now more than ever we need local officials who take the trouble to educate themselves on the folly of tax giveaways and then have the fortitude to vote no.

We need leaders who give more than lip service to the free-market system, who actually believe in capitalism and act accordingly.