$16 Million For Two Blocks?
Should Missouri and St. Louis taxpayers provide more than $16.5 million in tax subsidies to move Laclede Gas two blocks from 720 Olive to the General American building on Market? Read the TIF application.
We’re standing here at the Laclede Gas building at 720 Olive in downtown St. Louis. The main tenant here is planning on moving two blocks south to the vacant General American building. There’s nothing wrong with that. It happens all the time in any big city. The catch is that city and state taxpayers are going to subsidies that move with over sixteen-and-a-half million dollars. That’s other people’s money to help a company move two blocks.
The economic evidence is strong that local earnings taxes harm cities more than property taxes do (see: Local Revenue Hills: Evidence from Four U.S. Cities, New Evidence of the Effects of City Earnings Taxes on Growth, How an Earnings Tax Harms Cities Like Saint Louis and Kansas City, and Triumph of the City). So why exactly is the city giving up the less harmful tax in order to keep more of the more harmful tax?
Sixteen-and-a-half million dollars in subsidies. 2 Blocks. Lower taxes for some and higher taxes for everyone else. Economic Development, if you can call it that, in the St. Louis region is insane.
This subsidy will not grow the economy of St. Louis city or our region. One empty building becomes full while a full building loses its main tenant. If the city’s doing this because it’s concerned about losing the earnings taxes of the Laclede Gas employees, perhaps the city should get serious about removing the earnings tax instead of hollowing out its property tax base.
For the Show-Me Institute, I’m David Stokes.