Aerotropolis Kingmaker “Fix” Isn’t Much of One
I’ve pointed out that the so-called “Aerotropolis” legislation could result in the Mayor of Saint Louis and area county executives becoming gatekeepers to as much as $300 million in tax credits. That portion of the legislation became affectionately known as the “kingmaker provision” at the Show-Me Institute.
We wondered what practical reason there was to transfer this sort of unbridled power to these local chief executives? And why wasn’t there anything in the legislation that would prevent them from using the power to pick winners and losers using questionable criteria of their choosing?
When legislators requested feedback from us about how to change the bill for the better, we suggested that the kingmaker provision be removed or, if not removed, that the process of determining what areas could be eligible for Aerotropolis tax credits be done publicly.
The Missouri Watchdog has just posted an updated version of the special session legislation. The kingmaker portion of the bill has been changed and, instead of cutting out the kingmaker portion altogether, it appears that the bill’s drafters have wrapped a bureaucratic maze around the provision in an effort to tamp down untoward use of executive power.
But will it do the job? The new “kingmaker compromise” system would proceed as follows:
- The Mayor of Saint Louis or a county executive would have to hold a public hearing to determine whether an area could be eligible for the Aerotropolis warehouse construction tax credits.
- The Mayor of Saint Louis or a county executive would then notify the Missouri Department of Economic Development (DED) if he or she determines that an area is eligible for the warehouse construction tax credits. They would also provide details about the area to the DED.
- The DED would then review the details about the area to make sure that it does fit within the restrictions detailed in the Aerotropolis legislation.
- If the DED denies the application to make an area eligible for warehouse construction tax credits, the Mayor of Saint Louis or a county executive may resubmit the application.
I applaud the bill’s drafters for their attempt to add some transparency to the process of awarding warehouse construction tax credits. However, the new language doesn’t actually address the fundamental problem: The Mayor of Saint Louis and county executives would still be gatekeepers to up to $300 million in state tax incentives.
Warehouse owners and developers would have to petition those elected officials to call such a public meeting and to find that their area is eligible for state subsidy. There is no other way for warehouse owners and developers to qualify for the Aerotropolis warehouse construction tax credits without the blessing of these officials.
I must admit that when I first read through the new legislation I thought that the DED might be able to exert some oversight. However, if you read carefully, the DED can only “verify” that the local chief executive has identified an area that fits with the restrictions in the Aerotropolis bill. Those restrictions are merely that the area be within 50 miles of Lambert International Airport and at least as large as 100 contiguous acres, in a special economic zone, within the boundaries of Lambert airport, or owned or managed by a port authority. That’s it.
In the end, warehouse developers and owners would still need the Mayor of Saint Louis’ or a county executive’s good favor to be eligible to receive the Aerotropolis tax credits. Which leaves me wondering, why are state legislators concerned with expanding the power of local elected officials? How does granting new authority to local politicians and power brokers advance the cause of good governance and fundamentally change the failing status quo?