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Corporate Welfare / Subsidies

Part 2: It Is Time To Close The Book On Aerotropolis

By Patrick Ishmael on Feb 5, 2013

Last week, I noted that Aerotropolis is back in the legislative conversation as supporters try (again) to direct state subsidies to the Lambert-St. Louis International Airport-based project. Along with expressing our skepticism of the project’s economics, we have long-criticized the economic puffery surrounding the idea of Aerotropolis in Saint Louis. The Missouri Legislature opted not to give the project money in 2011 and again in 2012.

Yet public money has already gone toward Aerotropolis. Last year, Saint Louis County officials diverted $3 million in gambling tax revenues to support Aerotropolis. At the time, Lambert’s director, Rhonda Hamm-Niebruegge, told the St. Louis County Economic Council that with the gambling money (emphasis mine),

We are ready to go. . . . These funds put the muscle into our argument that St. Louis is the right place to move cargo around the world. We have capacity and we are happily uncongested, unlike most other United States cargo hubs, such as Chicago and New York.

What happened to the money? The St. Louis Post-Dispatch reported that not only did the original funds go unused, but that the airport is now gunning for a new $60 million cargo tax credit.

Last year, St. Louis County established a $3 million fund to subsidize cargo flights, but it has not been used. Airlines, say Hamm-Niebruegge, worry that they would burn through that pot too quickly; having a program worth $7.5 million a year for eight years will give the effort more staying power.

“It’s so critical for us to have a long-term view,” she said.

To summarize:

  • In 2012, $3 million in casino taxes “put the muscle into [the airport’s] argument that St. Louis is the right place to move cargo around the world.”
  • In 2013, not only was there such a lack of interest in the Saint Louis Aerotropolis project that no private actors drew on the money, but the airport says it needs more money. . . by a factor of 20.

If they have not already done so, policymakers have to ask themselves now: When will the Aerotropolis reality live up to the Aerotropolis rhetoric? Will it ever?

The fact is, Missouri’s economic development projects oftentimes live and die based on the promises supporters make, rather than the results they produce. Aerotropolis is simply a giant, tottering example of this unfortunate state of affairs. Now on its third time before the legislature and after literally years of puffery, it is time for Missouri to close the book on Aerotropolis and, more generally, other “big promise” tax credit projects. There are better ways to promote economic growth in Missouri. This is not it.

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About the author

Patrick Ishmael

Director of Government Accountability

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