A Krimpet In The Keystone State Budget

In an age of salt-banning pols and

transfat fines, Ed Rendell is standing up for the fat kids. The Pennsylvania governor announced Tuesday that Tasty Baking Co., maker of Philadelphia's iconic Tastykakes, could take $1 million in low-interest loans from the state to avoid bankruptcy. Asked if more money was forthcoming, Rendell said "there is a limit to what you can do."

Fast Eddie's limit for Tastykake assistance is the definition of a fat kid diet. Eat all the candy when no one's looking, then refuse the lonely brown M&M found under the stove. Tasty Baking is sinking despite a brand-new $78 million plant at the former Philadelphia Navy Yard. The new plant received $32 million in taxpayer-financed, low-interest loans, a $1 million outright grant, and a city tax abatement through 2018. Pennsylvania also quickly agreed to be flexible with repayment of the already favorable loans.

Topping off the state largess is $15 million marked for redevelopment of the old Tastykake factory from Redevelopment Assistance Capital Program money, the off-budget fund for pet projects that issued $600 million in new debt this year in a state with a looming $5 billion budget shortfall.The old factory was sold for $6 million. $9 million profits do tend to get real estate sold and ambitious development projects approved.

State cash pumped in like so much cream filling couldn't solve Tastykake's main problem: It's just not competitive anymore. CEO Charles Pizzi (head of the Philly Chamber of Commerce for 13 years) cited the recent A&P bankruptcy as a factor in Tasty's troubles; you haven't thought about A&P since reading that Updike story freshman year. Tastykake's status as a declining regional favorite also stems from products with a shorter shelf life than competitors and failed attempts at capturing a share of the "better for you" snack food market (I'll take my cupcakes with sugar, thanks). The frosting on all this? The expensive new factory hasn't produced its projected cost savings because the computerized lines run too fast, burning up batches of Krimpets and KandyKakes.

Tastykake's meltdown is only one instance in which the Navy Yard project has underperformed after eating up hundreds of millions in state funding. 

More from Reason on corporate welfare here. 

Comments

[jeff]

The governor wants to save Tastykake because if they go under, Marvin Harrison may shoot someone. Again.

[Pablo]

I wonder if taxpayers are moist as a snack cake up there.

[John Cole]

You glibertarians never go after corporations.

[JW]

This makes me a little sad (the decline of Tastykake, not the teet latching). I grew up eating Tastykake. I still get a craving for their stuff now and then, but finding anyone selling them in the DC area is like finding an honest and sober congresscritter.

[B.P.]

Hell, I can get Tastykake in Denver... as long as the state of PA is willing to prop it up, I guess.

[creech]

It is doubtful that Tastykake's shareholders (except for maybe some insiders) got anything out of this compared to the union construction workers, the union employees, and Tastykake's vendors.

[Union Thug]

ahh look, lil creech tastycake's got somethin against us. breaks my effin heart

[P Brooks]

I find it all so very very hard to believe. Government officials (elected and appointed) did not make optimal decisions about resource allocations?

I feel all woozy.

[Pro Libertate]

That's not possible. I voted straight Philosopher King last election, so the wisdom of our leaders cannot be questioned.

[PA FatKid]

I'd rather eat a Little Debbie any day.

[Little Debbie]

No one can compete with my cream filling.

[Old Mexican]

The Pennsylvania governor announced Tuesday that Tasty Baking Co., maker of Philadelphia's iconic Tastykakes, could take $1 million in low-interest loans from the state to avoid bankruptcy.

Who said Socialism is not good for business?

[Old Mexican]

State cash pumped in like so much cream filling couldn't solve Tastykake's main problem: It's just not competitive anymore.

Competition? Competition? Nonsense! Markets are flawed - our Central Planners are wise, gifted individuals who possess the gift of seeing what others can't. Who needs a price system and competition when we can have corporate socialism, run by veritable perfect beings?

[AMG]

I'd eat a Tastykake over a Little Debbie or Hostess cake any day. Tastykakes have the texture and taste of real cake, especially the frosting. I didn't appreciate this until I moved away from Philly and found that competitors' products tasted processed and artificial.

[Tulpa]

Having grown up with Hostess, I never noticed its processed taste. So your beef is with the tastycakes.

[Tulpa]

Philly Ed cannot get kicked out of office soon enough. How long is it till Corbett's inauguration, a week or so?

[Joe M]

They should really rename the Redevelopment Assistance Capital Program to the
Capital Redevelopment Assistance Program.

[Kant feel Pietzsche]

You think they didn't notice this?

[Rock Action]

For some reason, the picture wouldn't load, but the orange link in its place reads "signing Ryan Howard through age 37 is approximate to bankruptcy."

I'm not kidding. Funny.

[Jeff]

Ed Spendell never met a PA taxpayer dollar that he couldn't redistribute to Philly.

[Bob Smith]

When I tried a Tastykake, I thought it was a rather poor product. Old timers tell me that at one time its products tasted much better, but changes to the product (presumably to cut costs) have destroyed its quality.

[Ken Shultz]

I haven't had one in years, but compared to Hostess Cupcakes?

Tastykakes ruled the dance hall!

[Ken Shultz]

P.S. KFC used to be good too.

No really.

[Troll]

Tastykakes haven't been good since somewhere around 1993. Please remember that Butterscotch Krimpets used to come in wax paper, and were approximately twice the size they are now. 35 cents. Reminds me of my paper route....

[Ken Shultz]

Just for the record, I've never seen a tax cut, tax holiday or tax incentive I didn't like...

Unless! It was tied to government funding.

TastyCake didn't owe the State of Pennsylvania--or the Federal government--a freaking nickle, the way I see it, until the government gave them money. Just because they didn't have to pay protection money to the mob (or whatever you want to call it) doesn't mean anybody else got ripped off...

Until they took taxpayer money!

I hope TasteyCake becomes a regional un-favorite for this reason alone--they took money out of taxpayer's paychecks.

[BakedPenguin]

Differential rates of taxation for competing businesses is bullshit. Essentially, PA is levying a tariff on Hostess, Little Debbie, Nabisco, and all other out of state snack cake makers. Funny, but I don't hear Congress talking about using its Commerce Clause powers to stop this shit.

Also, government loans and grants to a profit making business are out-and-out bullshit. But everyone here already knows that.

[Plate-O]

Perhaps their unpopularity is due to their name being spelled too similar to Bukake? Anyway that's what they seem to be doing to the taxpayer.

[Sol Rosenberg]

They call me Tastycakes!

I want the Jerky Boys back.

[Llama Face]

Yo, quit hatin' on Tastykake.

[BakedPenguin]

Maybe they could pay off Ivan Reitman to ret-con Tastykake guy in instead of the Stay-Puft Mashmellow Man as the evil monster at the end of Ghostbusters for when he does his Spielberg / Lucas "re-imagining" of the movie.