Friday, February 12, 2016

Corbett: Why PA gave millions to Janney

States get "fat and lazy" when they're not forced to compete for corporate jobs by giving away millions in taxpayer subsidies, says the governor

Corbett: Why PA gave millions to Janney

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Janney Montgomery Scott says Pennsylvania and its local governments have hired the Philadelphia brokerage to raise money for public projects worth $5 billion over the past five years.

"If you'd give us more business, we'd be happy to increase that," cracked Janney chief executive Timothy C. Sheve today to Gov. Tom Corbett, at a reception celebrating Janney's new headquarters at Brandywine Property Trust's 1717 Arch St., where it's moving next summer.

But Janney wanted more. The company, based in Philadelphia for more than 100 years, made a show of shopping around for a new headquarters as its Market Street lease neared exploration.

So Pennsylvania promised $11.5 million in grants to encourage Janney to keep its 550 relatively high-paid financial jobs in Philadelphia, clinching the deal.

Janney is owned by Penn Mutual Life Insurance Co., which posted profits of $85 million last year. 

Would Janney have stayed in Philadelphia without the taxpayers' $11.5 million?

"It was a competitive process," Scheve said when I asked. Delaware's rival offer, especially, "was very, very competitive." (Delaware is eager to replace thousands of jobs cut by struggling Bank of America Corp.'s credit card business in Wilmington, and hundreds more lost when Wilmington Trust Co.'s management team ran the onetime du Pont family bank into the ground, forcing its sale to M&T Bank.) 

Why did Corbett, a Republican who has felt obliged to cut college subsidies and services to poor people in order to balance the state budget, feel he had to give Janney the millions, most of which was originally requested for Janney by his predecessor, Democrat Ed Rendell?

"It's a national competition" for companies and jobs, Corbett said. "I tell (New Jersey Gov. Chris) Christie I'm going to steal all his jobs," he added. "That's what makes this country great: We're not afraid to compete."

Even with taxpayers' money? Right, said Corbett: If states didn't have to compete for employers' favor, "we'd get fat and lazy." 

I suggested Corbett at least ask Janney to take a haircut (as brokers say) by cutting prices on its next few state general-obligation bond issues. He laughed.

State governments' job nowadays "is to do one thing: grow jobs, jobs, jobs," Corbett said. "We are making Pennsylvania a business-friendly state."

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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