The End of Aerotropolis Subsidies?

A real spendthrift – even one newly resolved to be thrifty – cannot walk through a shopping center without stopping in a check-out line at least once. He will fasten on some trinket and congratulate himself for not blowing a much larger sum of money.

It is in that spirit that lawmakers in Jefferson City are now looking at the proposed legislation calling for creation of a “Midwest China hub,” or “Aerotropolis,” at Lambert-St. Louis International Airport.

According to newspaper reports, the legislature is prepared to scale back or totally eliminate $300 million in tax credits intended for owners of warehouses and real estate in and around the airport, while retaining $60 million in subsidies to encourage freight forwarders to route international freight through Lambert.

If so, that represents real progress – and a greater responsibility on the part of our lawmakers, including some of the prodigals who call themselves fiscal conservatives. However, while the final numbers are uncertain, talk of finding other means to funnel tax credits to Aerotropolis demonstrates a continuing blind spot on the part of legislators.

The question is: Why should the state of Missouri put up any money for Aerotropolis unless it supports the public good in some clear and identifiable way? Where is the justification for taking $60 million out of the pockets of Missouri taxpayers and giving it to unseen and unknown freight forwarders located in other cities around the world?

No one has advanced the slightest evidence that Missouri farmers or businesses have suffered a loss of exports – to China or anywhere else – because of inadequacies in the current transportation system.

Whether it is in shipping tools, pharmaceuticals, or frozen meat, there are fast and efficient means for Missouri exporters to reach key destinations around the world.

Supporters of Aerotropolis confuse economic incentives and competitive advantage. Yes, we can give taxpayers’ money to freight forwarders – the socalled travel agents of cargo – to offset obvious disadvantages in routing cargo through Lambert, which has no regularly-scheduled passenger or cargo flights to destinations outside North America. But that’s just asking people to take your money for doing something that doesn’t make any sense.

The real irony in the Aerotropolis saga is that our politicians and lawmakers – joined by business lobbying groups in St. Louis and Jefferson City – want to use taxpayers’ money to help Chinese carriers compete against U.S. carriers. In its eight-page economic impact report, the St. Louis Regional Chamber and Growth Association noted that “China has determined to grow their market share in air freight from 15-20% to 50%” in the transport of Chinese-made goods. Do we really want to help the Chinese government reach one of its objectives at the expense of our own carriers?

Our lawmakers may think that they should leave something on the table for the special interests that have lobbied long and hard for the Aerotropolis legislation.

But $60 million is not some trinket that a spendthrift might pick up upon leaving a store. It is taxpayers’ money and it is equal to the median household income in Missouri multiplied 1,300 times. Here’s a novel idea: Why not return the $60 million to Missouri taxpayers?

Andrew B. Wilson is a fellow at the Show-Me Institute, which promotes market solutions for Missouri Public Policy.