Why Subsidize It Once When You Can Subsidize It Twice?

There is so much demand for hockey in the Saint Louis region that officials and special interests want to subsidize not just one, but two new ice facilities. That’s right; even though the Hardee’s Iceplex in Chesterfield is going out of business, officials want taxpayers to help pay for two new facilities in its place.

One facility, planned for construction in the Chesterfield valley, would include $7 million in taxpayer handouts from a special sales tax district known as a transportation development district (TDD). If the TDD is approved (by the less than 1% of households in Chesterfield who get to vote), anyone who shops in the valley retail area will pay extra sales taxes to help subsidize the private venture. The other facility, which would double as a new practice facility for the Saint Louis Blues, would entail $6 million in taxpayer help from the City of Maryland Heights and 40 acres of free land in Creve Coeur Lake Park from Saint Louis County.

At least two aspects of these proposals warrant further discussion.

1. Proponents of both projects claim there is high demand for hockey and ice time in the Saint Louis region. This may or may not be true (though a recent market analysis concluded it is not). One would think the closure of the current ice complex in Chesterfield is telling of the market for hockey and ice time. But, suppose it isn’t, and that subsidy proponents’ claims are true; let’s say there is genuine demand for ice time in the region. If so, why does the public need to subsidize private ice facilities? If Saint Louis (or Chesterfield, or Maryland Heights) is a “hockey town,” and if these facilities will be such powerful economic engines, why are project boosters panhandling? If a project is meeting a real demand, it shouldn’t need taxpayer help.
2. One facility is leaving the market, and two are trying to take its place. This would be fine—if no public money were involved. Subsidizing a private business (especially in a depressed market) is questionable policy, but it is even harder to justify asking taxpayers to subsidize competing businesses. Suppose one facility puts the other out of business. What then? Are taxpayers left holding the bag as their “investment” in one facility goes down the drain? It should go without saying that it isn’t the taxpayers’ responsibility to subsidize one facility to siphon business away from another taxpayer-subsidized facility.

The region dodged a bullet when cash-hungry millionaires were denied $60 million in public funds for a professional soccer stadium in downtown Saint Louis. But some local officials, along with those on the receiving end of subsidies, still appear to have taxpayer dollars in their sights. Policymakers who want to know where demand exists for ice time (or anything else) would do well to listen to the market instead of special interests.