Read more carefully, that’s  Other People’s Money, not OPiuM. This addiction is common to many business enterprises, whether business start-ups, real estate development, or plant expansions. It’s a normal part of doing business. Start-ups won’t start up without lines of credit from banks.  Bigger operations go to the public money markets with stock offerings or bond issues. It’s all perfectly legit

In these cases the lenders study the aspiring entrepreneur’s pro-formas, weigh the risks and take an ownership position. There are risks, of course. The operations may fold, in which case the bank earns no more interest and gets stuck with empty buildings or undeveloped land.

Stockholders, who are seldom in first position in a bankruptcy, will take a bath; but that’s a risk they know to expect.

When a municipality needs a hospital or library or a new slammer it issues long term municipal bonds (if the rating companies judge they can ‘service the debt.’) Municipalities rarely or never default on their bonds and the purchasers get a nice tax free cash flow.

So far we can live with all of this.

But there is a kind of OPM which is so one-sided that it ought to be avoided and that’s when it’s the people’s tax money. When the Magnifico Corp hits town with alluring tales of a job-creating factory or luxury hotel development it takes its dog and pony show to the city or the county or the state.

“Sounds great, go for it!” say the Pols.

“Well, there are certain conditions. We need sales tax forgiveness, or property tax forgiveness, and we’d like you to give us the property, too. Do you expect us to put in our own infrastructure? Hmm?”

The deals requested differ, but they are all the same in one respect: They expect the city, county, or state to spend future tax revenues…which are, after all, real money. And it never occurs to the pols that if these projects had a reasonable chance of success they would have obtained private financing.

I think we should be pretty skeptical of such deals. All across the fruited plain corporations use up their tax bennies and then move on.

But we may really really really need a new hotel. What to do? The next time one of these hustlers comes to town let’s offer to make a deal.  Demand an ownership position in the hotel corporation, or manufacturing corporation, or sales group.

The ownership position should be percentage of the company’s total capitalization “bought” with the future value of the offered tax benefits.

If the company pulls out we’d at least retain our partial ownership (and maybe some dividends) and we’d get back whatever it leaves behind.

According to his campaign biography:

David Crowe is a fourth-generation Arizonan born in Yuma, Arizona. He grew up in Sierra Vista and Scottsdale and graduated from the University of Arizona.  Crowe is currently the President and co-founder of Tucson Embedded Systems (TES), Inc., a provider of products, engineering services and embedded systems to the Aerospace, Defense and Commercial industries.

Yesterday the campaign announced that formerArizona Governor Raul Castro has come on board as an Honorary Co-chair of the exploratory campaign for U.S. Senate. In his endorsement statement Castro said, in part:

“David Crowe is a great asset to Arizona’s business community…..I’m thrilled to see a successful, young, Hispanic business owner stepping up to serve our state and the nation.”

This, from his recent press release:

As a small businessman, Crowe is focusing his campaign on common sense goals to move the state forward — job creation and strengthening the middle class — by developing new high-tech sectors such as renewable energy.

According to his Facebook page Crowe should probably best be described as a pro-business Democrat. We’ll have to wait to see what his positions are on the social safety net, taxation/tax reform, foreign policy, civil liberties and health care.  Plenty of time for that; the campaign is still young.

Jonathan Rothschild

Rothschild, a Democratic candidate for mayor, announced the opening of his campaign headquarters yesterday.

The headquarters is located at 3400 East Speedway, Suite 114- between Whole Foods and Ike’s.

Those interested in following the campaign can visit Rothschild’s web site: Jonathanformayor.com