Subsidized pizza? Send it backEDITORIAL
April 07. 2012 11:12PM
Pizza afficionados can buy the well-reviewed American Flatbread brand frozen pizzas in supermarkets from Maine to Florida and as far west as Seattle. They are even sold in the Cayman Islands. If you have not tried one, maybe you should. After all, you might soon be paying to make them.
Last week, the New Hampshire Community Development Finance Authority announced that it was awarding a $500,000 grant 'to help pizza maker Rustic Crust expand its retail operations and create 25 new jobs.' Rustic Crust is the parent company of American Flatbread pizzas and Rustic Crust brand pizza crusts. It also is, as the NHCDFA boasted, the third-fastest-growing pizza maker in the United States as measured by year-over-year sales. Only Newman's Own and Totino's are growing more quickly.
The 'grant' is really a loan, at 7 percent. It comes from the federal Community Development Block Grant program. It is funded by the Department of Housing and Urban Development, and its purpose is to 'provide housing and create jobs primarily for low- and moderate-income people.' So in these desperate times, when struggling young entrepreneurs are finding it difficult to obtain capital, it makes sense to loan this taxpayer money to a booming business that has experienced a biennial growth rate of more than 40 percent over the last five years.
Oh, wait. No, it doesn't.
So that there can be no confusion about why Rustic Crust got this loan, the authority helpfully explained, 'This loan will let Rustic Crust meet the demands of their multimillion dollar contracts with Nutrisystem and Costco.'
Multimillion dollar contracts? Well, wouldn't a business that successful have access to private capital to finance an expansion of its production facilities? Yes, it would. Rustic Crust's is funding the remaining $700,000 of its $1.2 million expansion with private equity, according to the NHCDFA.
Fortunately, there is still time to stop this waste of public money. The Executive Council has to approve this loan. It ought to vote no. Subsidizing successful businesses is not the business of the taxpayers.