Place Your Bets: Big Taxpayer Gamble May Be Funded In Part By… Casino Tax Revenues
posted at 4:13 pm on March 30, 2012 by Patrick Ishmael
There are lots of stories about failed “big idea” development programs out there, and Hot Air touches on most of the big national ones. Solyndra in particular is probably the most famous recent member of the failed government-backed enterprise coterie, and while it may not be the only eco-devo disaster on the current Administration’s watch (“per se“), Solyndra holds high the flag of cronyism and beacon of bad government.
But bad government investments aren’t unique to the federal government, and you’ve probably seen similar boondoggle projects crop up in your states, too. We’ve certainly had our share here in Missouri, and if you have any examples of your own, definitely leave them in the comments, or holler at me on Twitter.
Here’s but another story in that vein.
At the Show-Me Institute, we have long-followed one project coursing through the Missouri legislature called “Aerotropolis,” which I’ve talked about in the Green Room before.
What’s an “Aerotropolis”?
The idea is that decades from now, the animating appendage to the most successful cities will be massive international transit hubs combining air, rail and wheels that can get product from manufacturers in, say, China to buyers around the United States. It requires massive inventories of warehouses around the airport to store the product, massive improvements in the airport itself to handle the air carriers, and predictably, massive, massive public subsidies, at least if you’re going to build the thing from scratch on the backs of taxpayers.
It it were a musical, the Aerotropolis project might look something like this:
After failing spectacularly in the legislature last year, there has been no significant movement on the originally half-billion dollar project in the last few months — that is, until this week.
Two different stories on Aerotropolis are now circulating in Missouri media. (Coincidence? Probably not.) The first came out Tuesday and dealt with efforts in the state legislature to once again drive state tax credits to the project. It looks like House leaders may try to tuck Aerotropolis back into an economic development package that the chamber is preparing.
The second story was published Friday and is the more fascinating of the two. It reveals that Saint Louis County may apply $3 million in casino tax revenues to support the Aerotropolis project. If true, the funding source would certainly be apropos, given that Aerotropolis almost certainly is a huge gamble. Over the last year, Show Me’s Audrey Spalding and I (as well as Chrissy Harbin) have discussed at length the merits (or lack thereof) of Aerotropolis, a project that originally clocked in at a cool $480 million when it was first proposed. That figure is worth keeping in mind as proponents of the Aerotropolis plan pine for state money. Taxpayers have been told that Aerotropolis “needed” a half billion dollars to take flight; then $360 million; and then just $60 million. Maybe Aerotropolis should not receive any money from taxpayers?
This also may be a case of life imitating art, as this Show-Me Institute PSA (narrated by Show-Me’s own Rick Edlund) on tax credits makes clear.
No doubt, a plethora of interest groups are still actively campaigning to resurrect Aerotropolis, but proponents of the boondoggle — as proponents of boondoggles are wont to do — have still failed to make the case that 1) the Aerotropolis plan will work, and 2) public money is required to resolve some market failure standing in the way of the project’s success. Last year, it looked like private parties just wanted to gamble with the public’s money, which for this sort of thing isn’t all that unusual. “A game changer at $480 million! A bargain at $360 million! Just $60 million will do the trick!”
It sounds like we have a problem gambler on our hands. Maybe the best thing to do is to simply cut them off.
Recently in the Green Room: