Maryland’s dubious plan to use the threat of eminent domain to force the “House of Cards” TV show to keep filming in the state coincides with the 30th anniversary of the state’s failed attempt to use eminent domain to keep the NFL’s Baltimore Colts from moving out of state. Nick Sibilla of the Institute for Justice – a public interest law firm that seeks to defend property rights – has an interesting article detailing the state’s confrontation with the Colts, which ultimately resulted in the team sneaking out of Baltimore in the dead of night in order to evade condemnation.
As I explained in my post about the plan to use eminent domain against “House of Cards,” the Colts case exemplifies the pitfalls of using eminent domain against mobile property. The owners of the property can usually avoid it by moving to a different jurisdiction. Even if the state occasionally manages to take an owner by surprise, condemning mobile property is likely to backfire in the long run, since it will deter owners of similar assets from bringing them into the state first place. That in turn is likely to be damaging to the state’s economy.
At the same time, state governments’ frustration with businesses like the Colts is understandable. As Sibilla explains in his article, Colts owner Robert Irsay was no innocent who merely wanted the state to leave him alone. Like many owners of professional sports teams, he was lobbying for massive government subsidies to build a new stadium, and eventually moved the the team to Indianapolis in part because that city met his demands. Similarly, “House of Cards” is lobbying for additional targeted tax breaks from the state. Both targeted tax breaks and stadium subsidies are dubious forms of corporate welfare that benefit politically connected interest groups without providing broader economic benefits to the community.
But the right approach to corporate welfare abuse is not to use eminent domain against the property of businesses who lobby for it, but to simply refuse to give in to their demands. Both TV shows and NFL teams should be free to locate in any state they wish. But both should also pay their own way, without the aid of government subsidies or differential tax breaks.