Arguments Against Federal and State Assistance for Public Works Projects Like Proposition A

Yesterday, I attended a forum/debate on Proposition A, the proposed half-cent tax to fund MetroLink’s expansion and other Metro services. Speaking in favor of the tax increase, Mayor John Nations of Chesterfield indicated that Missouri provides little or no financial assistance for projects like bus and light rail expansion, and he implied that the state should increase this amount. I disagree that Missouri and the federal government should provide financial assistance for Proposition A, for the following three reasons.

First, neither Missouri nor the federal government is presently flush with cash, and the money could instead be spent on other programs, like education, or returned to taxpayers. Missouri’s projected mid-year FY2010 budget gap is $690 million, and officials are seeking ways to reduce this deficit, not expand it.

Second, in general, public works projects should be paid as much as possible by the taxes of those who benefit. This is a more efficient means of taxation, and it encourages funds to be spent more wisely. If I were a taxpayer living in rural Missouri, I would not be enthusiastic about paying for the bus and light rail system in urban Saint Louis, which is something that I would use very rarely, if at all. If I were a taxpayer in a state other than Missouri, similarly, I would be even less enthusiastic about subsidizing public works projects with benefits concentrated in a state in which I may never set foot.

Third, federal funding is not “found money” — it still comes out of the pockets of taxpayers, no differently than money spent by state and local governments. Public works projects that use federal funds should exercise the same kind of fiscal responsibility as those that don’t. Unfortunately, when planners have access to federal funds, they are even more shielded from seeing the true cost of their spending, and this causes them to over-consume.