The Mayor, the County Executive, and the RCGA All Likely Have Vested Interests in the ‘Aerotropolis’ Legislation: It Could Enhance Their Power

If the Missouri legislature calls a special session and passes the so-called “Aerotropolis” legislation, it will award a great deal of power to the Saint Louis mayor and the nearby county executives. It should come as small surprise that some of the strongest voices arguing for the Aerotropolis legislation come from the very individuals who stand to benefit from it.

The Aerotropolis bill (as written during the 2011 legislative session — we’re still waiting on updated text for the special session) would give the authority to the mayor of St. Louis or the executive officers of nearby counties the power to designate “gateway zones.” While this power sounds innocuous, it has important ramifications.

First, those chief executives would become gatekeepers in the distribution of millions of taxpayer dollars. The Aerotropolis legislation would create $300 million in tax credits that would subsidize warehouse construction. That tax credit money could only be awarded only to warehouses built in gateway zones.

Even if motives are pure, the ability to determine which areas are eligible for hundreds of millions in tax credits would be an incredible power. The legislation does not say anything about monitoring such designations. Nothing in the legislation would prevent one of these chief executives from using such power as an indirect way to acquire campaign contributions or other untoward benefits.

A simple way to stop any such abuse of power would be to take the city and county chief executives out of the equation. If legislators — despite a lack of substantive empirical evidence that these tax credits will do any economic good — really want to subsidize warehouse construction, at least let all owners of vacant land compete equally for tax credits. There is no need to give special powers to city and county executives to achieve this (questionable) goal.

Second, this legislation would allow city and county executives appoint a three-person board to oversee millions in special tax revenues. That board could impose a special tax on the warehouses receiving the Aerotropolis subsidies, and then would oversee how those tax revenues are spent. Of those special tax revenues, 50 percent would go to the St. Louis airport. But the other 50 percent would be given to a “tax-exempt regional economic development association or associations…” The three-person board would select which association(s) would receive the money.

This, too, represents increased political power. The chief executives of Saint Louis and nearby counties will be in a position  to appoint the people who determine what agency gets part of those special tax revenues. Nothing in the Aerotropolis legislation would prevent them from appointing individuals who have a vested interest in where those special tax revenues go.

Interestingly, it seems that the St. Louis Regional Chamber and Growth Association (RCGA), the organization that pushed hard for the Aerotropolis tax credits, is a “tax-exempt regional economic development association.” There are others, such as the St. Louis County Economic Council. It appears that these organizations could qualify for the Aerotropolis special tax revenues. Awarding a steady stream of tax revenue to organizations that argued for the legislation that created that tax revenue is exceptionally poor public policy.

There’s a simple answer to all of these problems. Remove the possibility, however remote, of using the Aerotropolis subsidies and tax revenue as a political tool. There doesn’t seem to be a practical reason to include these mechanisms in the Aerotropolis legislation. They do, however, invite corruption into the process. The economic merits of the Aerotropolis tax credits are questionable as it is, but if the legislature insists on enacting them, they should not allow that money to be controlled by political figures.