I’ve been reading current and past news coverage carefully, though, and I can’t seem to find a firm commitment from China or from Chinese flight companies to increase freight traffic to the Saint Louis airport if these tax incentives are authorized.

More troubling, the “aerotropolis” legislation, the bill that details all of the various state subsidies relating to the “China Hub” dream, does not specify that the subsidies are void if there is no commitment from China. (And, actually, I can’t seem to find the word “China” used even once in the legislation itself.)

Yet that potential trade with China is the justification provided by China Hub proponents for the subsidy.

From the St. Louis Post-Dispatch:

“China was losing patience because we were not coming in with anything,” [Steve Stone, an attorney involved with the negotiations,] said.

Then Stone brought up the Aerotropolis package, which would create $60 million in tax breaks for shipping companies that export by air from Missouri, and $420 million in credits to build cargo warehouses and other facilities in certain spots, like the region’s now-closed auto plants or the NorthPark business park east of Lambert. It would lower the cost of flights, and help draw more companies to locate around a cargo hub, Stone said.

“The mood changed,” Stone said. “They see a way here for them to succeed.”

Am I missing something? When I wrote about the great deal of public subsidy slated for warehouse construction, Post-Dispatch reporter Tim Logan pointed out on Twitter that, in fact, there are no agreements, just negotiations.

The Post-Dispatch reports that, according to a letter supplied by that attorney:

[…] a top China Cargo executive sent a letter to Mayor Francis Slay. He called the proposal “truly wise and innovative,” according to a copy supplied by Stone. He also said that without Aerotropolis or something like it, “opening a new air route to St. Louis will be very difficult, or even inconceivable.”

That hardly sounds like a commitment. If Missouri is willing to create incentives for this project for a specific duration of time, why isn’t China willing to commit to sending a certain number of flights to Missouri for a specific duration of time?

And, if it is the case that Chinese representatives won’t agree to sending more planes to Missouri without the subsidy, why aren’t they saying so in a clear, verifiable way? Why is an attorney with a vested interest in the project speaking for the Chinese?

Here’s another equivocal statement from Lambert Airport Director Rhonda Hamm-Niebruegge, as reported by Channel 4:

“I think if we really want to build an international cargo hub, if we don’t get this, we could see it not happen,” Hamm-Niebruegge said.

Could? Is there a commitment or not? Is China depending on this bundle of tax credits and incentives or not?

Readers of Show-Me Daily know that I prefer for government to state such claims in writing. Written documents provide some level of transparency and accountability, as opposed to unsubstantiated opining.

As the proposed legislation stands, it will likely cost more than $480 million — which is already close to half a billion dollars — and, as Christine Harbin pointed out, the benefits of the China Hub will be concentrated in the Saint Louis area.

If Missouri legislators are going to continue to push to give out a great deal of taxpayer money, the least they can do is get a real commitment from Chinese representatives, or write  safeguards into the aerotropolis legislation. Is that so much to ask in exchange for about $80 in taxpayer money for every Missourian? Or is it all too tenuous to put in writing?

It isn’t good public policy to subsidize warehouse construction and operation with no real likelihood of increased freight traffic.

The post Wait … Shouldn’t Missouri Have a Firm Commitment From China Before Awarding $480+ Million? appeared first on Show-Me Institute.

As I’ve written previously, the city’s Land Reutilization Authority (LRA) owns more than 9,000 parcels of vacant land, and isn’t selling most of it. Cheatham investigated two properties where the LRA had turned down great offers, for no apparent reason. To my (happy) surprise, Cheatham’s investigation led to the LRA re-evaluating its rejection of one offer to buy property: Anthony Barber’s offer to purchase 1252 Academy Ave. in order to develop the property into a restaurant. You can see 1252 Academy in the photo below.

Photo by Thomas Duda

According to Cheatham’s report, the LRA met with Barber today to reconsider his offer. The agency may, facing public scrutiny, accept Barber’s offer.

This is great news! If the LRA sells 1252 Academy, that is one less vacant eyesore, and one less property the city has to spend money maintaining — and those costs can add up. Furthermore, I am sure the neighbors of 1252 Academy will prefer living next to a restaurant rather than a vacant, boarded-up city property.

But the LRA’s decision to reconsider its decision on 1252 Academy makes me wonder whether the agency is open to reconsidering other offers it has rejected. According to Show-Me Institute research, the agency has rejected offers to purchase more than 2,200 of its properties. Only about a quarter of them were rejected because the agency thought the would-be buyer didn’t have the means to complete the project. The most common reason for rejection was that the agency was holding property for “future development.”

Of course, in most cases, that future development has yet to materialize.

Is the LRA open to taking a fresh look at some of the other offers it has rejected? As part of my research into the city’s landholding policies, I’ve worked to collect the data necessary to put together a list of other offers that might be worth reconsidering. It would be wonderful if the agency would seriously consider recanting some of its past rejections.

The post Is Saint Louis Now Open to All Development? appeared first on Show-Me Institute.

I think the key issue here is the idea of competition. In a report for San Diego, the authors at Reason put it well (emphasis added):

“Taxpayers win whenever there is competition, even when the competition is won by public sector providers” said Adam B. Summers, policy analyst at Reason Foundation and co-author of the report. “They get more accountability, better results, and lower costs. […]”

Private screening companies are used at only 16 airports in the county. Springfield-Branson would have been no. 17. The very existence of competition brings a greater degree of efficiency to the TSA, even if it continues to do the screening in the vast majority of American airports. I know we aren’t used to thinking about the terms “government employees” and “complacency” together, but if the presence of competition in a small number of airports serves to reduce the TSA’s complacency, that benefits all of us.

One six-year-old report found that private screeners did a better job than government employees, but another report said that there are no cost savings because the TSA still overseees the private security companies, which operate according to the same requirements, rules, etc.

I believe the real reason for this denial of the private screening option has more to do with organized labor. From the KMOV Channel 4 report on this story:

The American Federation of Government Employees, the nation’s largest federal employee union, has praised [TSA Administrator John] Pistole’s decision.

TSA employees will be deciding on union representation shortly. Government unions are generally the most ardent opponents of any type of privatization.

Anytime I write anything about Branson, I always think, “What would Yakov say?” So, here is my best attempt at a Yakov Smirnoff–style joke about this situation:

In USA, people worry they the screeners will touch their junk as they board the plane. In Russia, people worry about the plane itself because the whole plane is made of junk!

Fire off better jokes in the comments, if you dare!

The post Private vs. Public Airport Screeners: Who Gets to Touch Your Junk? appeared first on Show-Me Institute.

Last Tuesday, Nov. 9, David Stokes and Dave Roland appeared on the Bernie Hayes Show on WGNU St. Louis AM 920 to talk about occupational licensing generally, and African hair braiders specifically. You can listen to the whole show here.

On Thursday, Nov. 11, Audrey Spalding was a guest on a panel discussing public education and the film Waiting For “Superman,” at Plaza Frontenac. Audrey was quoted in the St. Louis Beacon and on the St. Louis Business Journal‘s blog about the film and the issues of school quality and choice that it addressed.

Thursday night, David Stokes was quoted in a KMOV CBS Channel 4 story about public pensions. Show-Me Institute scholar Dr. Susan Feigenbaum was also interviewed for the story, an issue that the institute has addressed previously. If I could stress one point further, it would be to repeat the point Dr. Feigenbaum made in her interview that governments themselves are to blame for much of the public pension shortfalls by not making adequate contributions during good fiscal times.

On Friday, Stokes was quoted in a St. Louis Business-Journal piece by Dave Drebes about the potential for the city of St. Louis to re-enter St. Louis County. (You need to subscribe in order to access the full story online.)

Last, but not at all least, is yesterday’s major Post-Dispatch article on economic development, tax-increment financing (TIF), etc. Show-Me Institute intern Tom Duda and Stokes were both quoted in the story on how “economic development” in the St. Louis area amounts to nothing more than using tax dollars to lure business from one part of the area to another — sometimes only a few blocks away.

As a fun parlor game from the Post-Dispatch article, I’ll give 10 Show-Me Institute bonus points (whatever those are) to the first commenter who correctly cites the blatant red herring argument used by someone quoted in that last story.

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I was curious whether the fire department in this case was a private company (many areas in Tennessee make use of privatized fire departments). However, as best I can determine from the city’s website, it is a standard municipal fire department, rather than a private contractor. But should they have put out the fire anyway, and just sent the family a bill afterward?

The easy answer is “yes,” but that is simple to say when you are not the one responsible for putting out the fire. Firefighting is an inherently dangerous act, and expecting someone else to put out a fire for people who have not fulfilled their end of a contract is rather presumptuous. It is important to note that the particular fire in question did not occur within the city limits of the responding fire department. Although they don’t have to do so, the department agrees to serve people outside the city limits who pay an annual bill.

Ben Franklin would not have put the fire out. When I visited Philly in 2000 for a certain convention, I took the city’s historic tour. I remember the guide talking about how the fire department / insurance company (which Franklin founded) would not put out your fire if they arrived at your house and saw that you had not paid the bill that year.

I think Daniel Hamermesh at the Freakonomics blog makes a good point about the differences between rural and urban areas. In a rural area, you may be able to distinguish between houses that are far apart. In an urban area, the threat of the fire rapidly expanding to other homes is too great, so a more efficient way to manage risk is to charge for the service via taxes to make sure that everyone receives proper fire service. I can agree with that, but I see nothing wrong with the way that the department in Tennessee acted.

The post Ben Franklin Would Have Let the House Burn Down, Too appeared first on Show-Me Institute.