Soltas takes a close look at New York City’s 421-a tax incentive, a voluntary program meant to coax developers into adding affordable units to new construction. His conclusion? The marginal cost of delivering just one of those “affordable” units is about $1.6 million. Not per building—per unit.

To put that in perspective, housing vouchers or programs like the Low-Income Housing Tax Credit (LIHTC) can often serve a family for a fraction of that price. In fact, Soltas finds that the 421-a program is about six times more expensive than either LIHTC or Section 8 on a per-unit basis.

Supporters of these policies often say the premium is worth it because it moves low-income households into higher-income neighborhoods, opening up long-term opportunities. But even that goal comes with trade-offs. We can’t pretend money is infinite. When we choose to spend $1.6 million to house one family in a high-rent ZIP code, we are choosing not to house five or ten families elsewhere. Every dollar we overpay in one neighborhood is a dollar not spent reducing waitlists, repairing existing housing stock, or investing in other services.

The more we subsidize these costly outcomes, the more we distort the market—and not in subtle ways. Developers are rational. When inclusionary mandates make a project unprofitable, they don’t build. When they can get tax breaks for minimal public benefit, they take the deal. Soltas’s paper even shows that developer “windfalls” aren’t the biggest issue—it’s the simple fact that it costs far more to make units “affordable” in already expensive neighborhoods.

What this all points to is a deeper issue in housing policy: the unwillingness of lawmakers to prioritize. Inclusionary housing tries to solve everything at once—cost, segregation, opportunity—but ends up creating a system where we pay top dollar for minimal benefit. It’s the public policy equivalent of spending a fortune on a single winning lottery ticket while others go hungry.

We don’t have to take that path. There are more cost-effective ways to support housing affordability that don’t rely on distorting incentives or showering subsidies on high-income developments. Targeted vouchers, flexible zoning reforms, and letting supply meet demand are all better places to start.

Policymakers should stop asking, “How can we mandate more affordable housing?” and start asking, “What’s the most effective way to help the most people with the dollars we have?”

The post The Real Price of “Affordable Housing” appeared first on Show-Me Institute.

There are many arguments for maintaining the current post office monopoly on mail, and economic efficiency isn’t one of them. Arguments include:

• The necessity of subsidizing rural life (especially really, really, rural life)
• General feelings about preserving “public goods,” as if getting a folder of advertisements delivered to your door each day is a “public good.”

And the one argument supporters of the post office usually don’t say out loud:

• Maintaining a small army of allied voters on the public payroll.

There are several ways the nation could go about privatizing the post office. The easiest would be to simply remove its monopoly protections against other companies delivering mail. That wouldn’t be privatization, but it would give people a choice to use other options for routine mail services.

Even with all the advantages the post office has over Fed Ex, UPS, etc., such as not paying taxes, exemption from parking regulations, and so on, it still manages to lose a lot of money each year.

Let’s face it. In the modern world, mail is no longer a necessary public service for the vast majority of people. For the people who still need it, there is no reason they should get subsidized service paid for (even if indirectly) by the rest of us. If you don’t want to adapt to technology or choose to live in outer Alaska, that’s fine, but you should pay more for your mail.

I write this at Christmas time, which is the only time that many people make use of the mail anymore. My family is sending out Christmas cards now, and we will pay the same price whether we mail a card to neighbors across the street or to friends and family in New York. Those price mandates and mail protections are absurd. I’d like us to sell the entire post office to the highest bidder, but short of that opening it up to competition is the next best thing.

The post Yes, We Should Privatize the Post Office appeared first on Show-Me Institute.

Columbia is currently considering raising its municipal water rates. The proposed increase would be set at four percent, with higher increases for some water services during the summer. I have no criticism of the proposed increase if it is truly necessary and the revenue is properly used, but there is an even better option that Columbia citizens and leaders should consider: privatization.

There is no standard method for providing utility services in Missouri cities. Springfield, for instance, has a city-owned public utility that provides every utility service. Alternatively, almost all of the 1 million residents of Saint Louis County are customers of private utilities for water, gas, and electricity. The private sector also provides utility services in Jefferson City.

Despite the structural differences between public and private provision, there is little difference between what customers pay in Columbia and Jefferson City. Both cities are below the national averages for utility costs. According to data from payscale.com, a residential customer of Columbia’s municipal electric utility has an average monthly charge for usage of $169.75, which is four percent below the national average. In Jefferson City, that average monthly electrical bill is $162.50, or five percent below the average. That’s obviously a small difference in favor of customers of Jefferson City’s private utility compared to Columbia’s city-owned utility.

Studies have demonstrated that private utilities are generally more efficient than municipal utilities. In 2000, economist B. Delworth Gardner of Brigham Young University determined that private water utilities in Utah charged lower rates for water than comparable public utilities, even after accounting for the large advantages in taxation and regulation that public companies have. Economists Daniel Hollas and Stanley Stansell found in a 1994 study that private gas utilities were more economically efficient than public gas utilities.

It is reasonable to suppose that private utilities would be more efficient in their costs and operations than Columbia’s current municipal utilities. Privatizing the utilities could benefit the city in a number of ways. Most importantly, the city would experience an immediate cash infusion from the sale. Eureka, in Saint Louis County, sold its municipal water and sewer utility to Missouri-American Water for $28 million in 2020.

Columbia would also see other fiscal benefits from privatizing the city utilities. The assets of the newly private utilities would become taxable, expanding the Columbia and Boone County tax bases. Finally, reducing the number of municipal employees entails scaling back the long-run taxpayer costs associated with government pensions and health care.

Currently, there is a question about how Columbia has been calculating the payments-in-lieu-of-taxes (PILOTs) from the water department (and likely the electric department, too). The Columbia city charter states that the public utilities shall pay to the city the amount that would be due in taxes to the city if the utilities were private. However, the city has long been transferring into the city’s general fund the total taxes that would have been due to all of the local governments, such as the county and school district, which is a much higher amount. While it may seem like a harmless transfer from one city fund to another, it also looks like a questionable use of water department revenues to increase Columbia city revenues while going around the requirements of the Hancock Amendment. Heavy users of water, such as swimming-pool owners, should pay high water bills to account for their greater use of water. They should not have to pay more for water because Columbia wants to transfer more money from the water division to the general fund as a subsidy to other city services. Privatizing the water and electric utilities would stop that appearance of impropriety for good.

Private utilities are just as capable of providing quality services at a low price to the residents of Columbia, and likely more efficient, than city departments. Privatization of the Columbia Water and Light Division would bring a needed cash infusion to the city, add substantial assets to the tax rolls, and reduce long-term public employee costs. Cities around Missouri have seen positive results from such privatization efforts, and there is good reason to believe that Columbia taxpayers and residents would also benefit.

The post Columbia Should Privatize Its Water and Electric Utilities appeared first on Show-Me Institute.

The land tax’s fundamental premise is straightforward. The tax collected is the product of the rate and some measure of the land. Any improvements to the land are not subject to the tax. With such a tax in place, the price of the land will change. Indeed, the price is simply the present value of the streams of future income that the land generates. Unlike most goods, the price change accompanying the tax implementation does not affect the quantity of land available. In other words, the supply of land is inelastic with respect to price. Under this rule, landowners seek the land’s use with the highest return. That is a good thing.

In addition, land taxation is easy to implement. The Kansas City version is based on assessed valuations of land already computed by various counties as part of the comprehensive property tax system. So, take the existing assessments, set the rate, compute the tax, and collect.

Kansas City is the only local government authorized to collect a land tax in Missouri. One would assume that when you are the only city in Missouri authorized to enact a tax that economists almost universally recommend, you would want to expand it and remove other, more harmful taxes, right?

Wrong. The Citizens’ Commission on Municipal Revenue (CCMR) recently recommended eliminating the land tax and replacing it with higher sales taxes. Whatever the sales tax is applied to will undoubtedly change the prices and quantities of goods and services. (As an aside, the proposed swap is not revenue neutral. The final result would be a substantial tax increase.) The CCRM, a group consisting mostly of lawyers and former government employees, did not explain why welfare would be higher under the sales tax. Rather, they pointed to the small monies collected from the land tax, which can be addressed by raising it instead of the sales tax. Other factors rendering the land tax undesirable, in their view, are its low growth rate over time, and the fact that it is confusing. They provide no analysis as to why the growth rate is low, and we frankly disagree that it is confusing. It is a tax on the value of land. What is confusing about that?

Let us be clear. The sales tax replacement will be added onto an already comparatively high local sales tax. Thus, prices for goods and services subject to the sales tax will rise and the quantity purchased within the taxing jurisdiction will fall. Consumers will find lower-priced items in neighboring towns, including those across the state line, with lower sales tax rates. The point is that every other taxable item has a higher elasticity and therefore, will cause greater welfare harm to people. If Kansas City seeks to minimize the harm, it would raise the land tax, not eliminate it.

If eliminated, Kansas City is unlikely to be able to re-implement the land tax due to changes in state law since it was first instituted. Kansas City has a tax that other cities in Missouri should envy, and economists would almost universally encourage. And this is what voters are being asked to eliminate in August. We hope Kansas City voters think twice before replacing the least harmful taxes like the land tax with less desirable substitutes.

Joseph Haslag is chief economist and David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

The post Kansas City Land Tax Should Be Expanded, Not Eliminated appeared first on Show-Me Institute.

When a person walks through a neighborhood like Shaw that features aesthetic continuity, he sees only part of the story; historic codes like those in the Shaw neighborhood entail many unseen costs and negative unintended consequences, which I will attempt to enumerate in this post. For these reasons, historic building codes discourage the practical use of existing structures — the very thing they are supposed to encourage.

1. Historic codes violate private property rights.
    
   They restrict individuals from altering, adding to, or demolishing the buildings that they own. By purchasing an older property, an individual assumes the risk that it could lose value in the future. Property owners have an incentive to maintain their investment, because otherwise the value of the property will decline.
2. Mandating aesthetics should not be the role of government.
    
   Ensuring that a building is structurally sound is one thing, as David Stokes has written previously, but mandating how a building looks aesthetically is another. In my opinion, individuals should be free to enter into voluntary agreements of this nature, but only as a private matter (e.g., neighborhood covenants). I disagree that it should be the role of the government to ensure that the block “works visually,” as one person writes on Shawtalk:
   

   There is something to be said for architectural cognizance-for having the entire block look so different that it no longer works visually. Sort of like wearing a plaid shirt with flowered pants and a striped jacket-one can do it but it looks silly.

   Furthermore, mandating and regulating this conformity is largely redundant, because the majority will not choose to make egregious violations of social convention, such as paint their houses hot pink. As an analogous example, there is no law against cutting in line, but people choose to wait their turn out of social convention. People choose to wear jeans because many other people also wear them. Businessmen and politicians wear dark suits because their peers and colleagues do.

3. Historic codes increase the cost of the materials required to rehabilitate a house.
    
   A homeowner has to search for windows, doors, and millwork that fit the conditions of the code. There can also be additional costs for compliance, such as, say, the need to build a different fence because the one you have is an inch too short. As a negative consequence of this increase in cost, homeowners have less of a marginal incentive to repair their property.

   Tangentially, supporters of historic credits argue that the regulations benefit the local economy, because the code-appropriate items are often made regionally or locally. This argument fails because it ignores the unseen. The resources that are devoted to making code-approved materials could be put toward other uses. It’s possible that local manufacturers do not possess a comparative advantage in manufacturing windows and doors, and that they could manufacture other products more efficiently.

4. Historic codes discourages people from making technological improvements to their home, such as upgrading the energy efficiency.
    
   How new can something be and still be considered historic? Is modern plumbing historic? Is central air historic? Is an Internet hookup historic?
5. Housing codes are passed under the guise of protecting quality, but homeowners have other avenues of redress.
    
   Another commenter observes:
   

   It also plays into safety issues as some people would do very flimsy and faulty work in an effort to sell the house without regard for how well the job was done.

   This is one reason that the judicial system exists. If a carpenter does flimsy and faulty work, the homeowner can take him to court. Furthermore, if a carpenter does flimsy and faulty work, the homeowner would discourage his friends and neighbors from hiring him. The carpenter would lose business as a consequence.

6. Historic codes like Shaw’s favor home ownership over renting; cementing such preferences through policy also should not be the role of government.
    
   The Shaw Neighborhood Historic District Rehabilitation and New Construction Standards explicitly state the following:
   

   it is the intent of this ordinance to decrease the density of housing units within the neighborhood without demolishing buildings. Whenever feasible, buildings should remain with the same amount or less living units as the building was originally designed.

   […] Buildings should not be converted from single-family to multi-family. Two-family structures should not be converted to more than two units. Four family buildings should not be converted to more than six units with no units having less than six hundred net rentable square feet.

   First, this code prohibits a person from subdividing her property. This means that she cannot lease out her property and receive rental income. Second, this policy restricts renters and people of lower income from moving into the neighborhood.

   Through this policy, the government favors home ownership over renting. Owning a home is a significant investment that isn’t suitable for all individuals; by renting, many people who can’t afford the investment commitment and risk of a home can live within their means.

The post Re: [Shawtalk] Historic Code appeared first on Show-Me Institute.

]]> https://showmeinstitute.org/article/budget-and-spending/audit-confirms-what-show-me-institute-scholars-have-said-all-along-tax-credits-are-overhyped/ Thu, 29 Apr 2010 23:08:04 +0000 http://showmeinstitute.local/audit-confirms-what-show-me-institute-scholars-have-said-all-along-tax-credits-are-overhyped/ On Monday, Missouri State Auditor Susan Montee released a study of tax credit cost controls. The audit’s conclusions have been covered by the media, as well as on Show-Me Daily. […]

The post Audit Confirms What Show-Me Institute Scholars Have Said All Along: Tax Credits Are Overhyped appeared first on Show-Me Institute.

]]> On Monday, Missouri State Auditor Susan Montee released a study of tax credit cost controls. The audit’s conclusions have been covered by the media, as well as on Show-Me Daily. The audit seems to affirm much of the Show-Me Institute’s scholarly work on tax credits; it reports that the economic impact of tax credits is routinely overestimated and their costs underestimated. Some key findings from the audit are outlined below:

Fiscal Notes

Fiscal notes tended to understate the cost of tax credits, some of which underwent further expansions after their initial passage. Of the 15 tax credits reviewed, the fiscal notes underestimated their total cost by $1.1 billion over a five year period. This is not surprising given the tendency that Show-Me Institute research assistant John Payne noted for politicians to overestimate the impact of their policies and underestimate the costs.

Four of the five tax credit programs for which fiscal notes underestimated the amount that the credits would disperse were new. They had lower participation than expected, as well as annual limits on the amount that could be redeemed. (See page 8 of the audit for a table displaying the projected and actual costs for all 15 of these tax credit programs.)

The audit notes that the short time frame — three years — of the cost estimates limits their ability to predict long-term effects. On the flip side, the audit also notes that even longer estimates are inaccurate and unable to predict true costs. Given that the fiscal notes had poor predictive power, the audit suggests that limits and sunset clauses may be necessary methods to limit the costs of tax credits.

Annual or Cumulative Limits

Annual or cumulative limits cap the amount of tax credits that can be redeemed from any particular program. This is one measure that the audit suggests be put into place for all tax credits, although 23 of the 53 programs redeemed in 2009 did not have annual or cumulative limits.

Some tax credit programs have seen their limits increased substantially, like the Missouri Quality Jobs program, which initially had a $12 million annual limit and currently has a $80 million limit. Officials’ ability to increase these limits through committees or departments, without having to go through the full legislative process, circumvents the purpose of limits.

Sunset Provisions

In 2003, Missouri passed the Sunset Act, which stipulated that each program must be reauthorized after six years. This allows the economic impact to be evaluated before further extensions are granted. Of the 18 tax credit programs passed after 2003, only 10 have sunset provisions. The audit suggests that sunset provisions be included in every new tax credit.

Conclusions From the Audit

Sunsets and both annual and cumulative limits could substantially control the cost of tax credits. As the audit points out, it is difficult to predict the long-term effects of specific tax credits; with a sunset provision, the effects are reviewed and evaluated before a program is continued. Annual and cumulative limits would hold tax credits to the amount specified by the bill, which would discourage underestimates as well as control tax credit expenditures. Currently accounting for 7.8 percent of the 2009 Missouri budget, tax credits will continue to grow if cost-control measures are not better implemented.

How has the legislature responded to the audit’s pronouncement on tax credits? The speaker of the House issued a press release disagreeing with its conclusions:

“Auditor Susan Montee and Governor Jay Nixon are playing a dangerous and damaging political game creating a fictitious conflict between education and Missouri jobs. Education and economic development are mutually beneficial, not mutually exclusive,” [the speaker] stated. “In the House, we have always welcomed independent, objective scrutiny on how to best reform and enhance tax credit programs. Missourians need jobs. Therefore, the Missouri House will continue to protect responsible economic development programs that create those jobs. And we will have the last word on this matter.”

With all of the evidence that tax credits cost more than anticipated with less impact than predicted, greater scrutiny is warranted before the state considers passing any further credits. The audit brings to light important issues that proponents of tax credits must face in order to bring greater fiscal responsibility to Missouri’s budget.

Aside from the audit’s careful consideration of the unforeseen costs that tax credits entail, it’s also important to consider some of the broader economic reasons that such targeted industry credits are not as effective as their proponents suggest. As Show-Me Institute scholars have repeatedly pointed out, tax credits are less efficient than lower tax rates, both because legislators have no special talent for picking winners and losers in the economy, and because the credits distort economic incentives, causing a misallocation of capital — subsidized producers have an incentive to produce more than is efficient, and some other set of unsubsidized goods or services are slightly underproduced as a result.

Perhaps this audit will encourage a the legislature to consider lower tax rates in lieu of inefficient tax credits.

The post Audit Confirms What Show-Me Institute Scholars Have Said All Along: Tax Credits Are Overhyped appeared first on Show-Me Institute.

]]> https://showmeinstitute.org/article/taxes/missouris-green-tax-rebates-a-wasteful-use-of-state-funds/ Wed, 21 Apr 2010 16:00:00 +0000 http://showmeinstitute.local/missouris-green-tax-rebates-a-wasteful-use-of-state-funds/ On April 19, Missouri began a weeklong program of providing $5.6 million in rebates and eliminating the state sales tax on Energy Star appliances. This is a wasteful use of […]

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On April 19, Missouri began a weeklong program of providing $5.6 million in rebates and eliminating the state sales tax on Energy Star appliances. This is a wasteful use of state funds that also entails significant unintended consequences.

Instead of creating new economic activity, programs that offer rebates on specific products like appliances and cars merely distort the market. Such transactions would occur anyway, in the future, independent of a rebate in the present, because consumers naturally upgrade to new machines as their older models begin to wear down or break. Additionally, the promise of increased energy savings is already a significant incentive.

The intended environmental impact of such rebate programs is negated by the way they are usually constructed. The subsidy creates an incentive to destroy operational appliances and build new machines to replace them. This destroys wealth in the Missouri economy, because the resources used to create these new appliances could have been used elsewhere. Acquiring a more fuel-efficient new appliance could also encourage the purchaser to wash dishes and laundry more frequently than before, which means that the overall decrease in energy usage may be much smaller than anticipated — or could even increase. If usage does drop as a result of sanctioned purchases, however, the reduction in overall Missouri energy usage will still be minimal at best unless every Missouri resident purchases a new appliance during the week that rebates are offered.

As a negative unintended consequence of the program, Missouri will lose a significant amount of tax revenue, independent of and in addition to the $5.6 million rebate. First, the state loses sales tax revenue from new appliance purchases. Then, if households do use less energy, the state will lose out on utility tax revenue in the future.

Programs like Missouri’s green tax holiday illustrate the parable of the broken window by economist Frédéric Bastiat. When the government spends money on rebates, it cannot devote this money to other programs that could otherwise benefit, or return it to taxpayers who would spend it in any number of other ways. When the government uses taxpayer money to stimulate one part of the economy, it comes at the expense of those other sectors in the economy.

The tax holiday is undesirable on a fundamental level, as well. It reinforces the flawed idea that individuals should look to the government for approval of which products and services to buy and how to behave. By eliminating state sales taxes on only those appliances that have the Energy Star designation — the Environmental Protection Agency’s stamp of approval — the government favors certain products and behaviors over others. When seeking direction on their buying behavior, consumers would be better off if they consulted third-party sources, such as Consumer Reports, that aren’t as swayed by special interests.

The green sales tax holiday is a wasteful and inefficient program, and Missourians would be better off if the $5.6 million in rebates were either spent in a useful way or returned to taxpayers.

Christine Harbin is a research analyst with the Show-Me Institute, a Missouri-based think tank.

 

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]]> https://showmeinstitute.org/article/energy/the-jobs-fallacy/ Wed, 17 Feb 2010 04:14:55 +0000 http://showmeinstitute.local/the-jobs-fallacy/ A number of people turned out in Columbia on Monday morning to call on Congress to pass a clean energy bill, which the activists claimed would create 36,000 jobs in […]

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]]> A number of people turned out in Columbia on Monday morning to call on Congress to pass a clean energy bill, which the activists claimed would create 36,000 jobs in Missouri. That sounds nice enough, but it would actually be a bad thing. Jobs are not goods; they are what people do to pay for goods. If people want work to do, they can come over to my apartment, and I can have them clean the place, cook meals, and start running errands for me. I’m not actually willing to pay more than, say, $5 an hour for those services, but it would be a job.

What these activists are saying is that with a clean energy bill, we will get the same amount of energy, but it will take 36,000 more workers to create it, which means much higher energy costs. An economy is more efficient when it employs fewer resources (e.g., energy, labor, and steel) to make the same amount of a good or service, but the economic argument these activists are trying to advance is that we can get rich by doing less with more.

There are environmental arguments for supporting clean energy, and some of those may have merit. If you want to advance those arguments, there is a productive discussion to be had, but this jobs argument is completely specious and should be buried once and for all.

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]]> https://showmeinstitute.org/article/transparency/a-country-that-raises-corn-and-cotton-with-a-little-help-from-the-government/ Thu, 28 Jan 2010 04:41:17 +0000 http://showmeinstitute.local/a-country-that-raises-corn-and-cotton-with-a-little-help-from-the-government/ I don’t have a precise answer to the Show-Me Institute Question of the Week, which asks which lifestyles are most heavily subsidized, but I agree with David Stokes that rural […]

The post A Country That Raises Corn and Cotton … With a Little Help From the Government appeared first on Show-Me Institute.

]]> I don’t have a precise answer to the Show-Me Institute Question of the Week, which asks which lifestyles are most heavily subsidized, but I agree with David Stokes that rural communities should be high on the list. The first rural subsidies that come to mind are agricultural ones, like the cotton subsidies that appear in this Southeast Missourian article. Here’s the rationale behind them:

Michael Milam, an agronomy specialist with the Missouri Extension in Kennett, Mo., said that underscores the important role subsidies play in the survival of farmers.

“The subsidies have kept farmers in business,” Milam said. “The help from the government allows the farmers to compete on a level playing field with the rest of the world’s cotton producers. If the farmers that produced not only cotton but other crops dropped out because they didn’t receive the subsidies, I believe you’d see a domino effect of higher prices passed onto the consumer.”

The effect of ending the subsidies wouldn’t be as disastrous as this specialist imagines. Everyone could enjoy a lower tax burden if the government stopped paying Missouri farmers to grow crops that could be grown more cheaply someplace else. And there’s no reason to assume farmers who grow both cotton and more profitable crops would drop out of farming altogether. More likely, they would concentrate on raising crops that the market will pay for.

We shouldn’t try to level the playing field between Missouri and other places, because it’s a waste of money. We could pay farmers to grow oranges and level the playing field between us and Florida, but what would be the point? We can just ship in oranges with less trouble and expense. It’s the same for cotton and all the other crops that don’t bring in a profit when grown in Missouri.

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]]> https://showmeinstitute.org/article/transparency/missouri-first-tax-credits-go-from-bad-to-worse/ Wed, 06 Jan 2010 05:56:27 +0000 http://showmeinstitute.local/missouri-first-tax-credits-go-from-bad-to-worse/ As Christine Harbin has convincingly argued, targeted tax incentives for businesses are a poor use of resources. When the state gives a tax credit to a particular company or industry, […]

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]]> As Christine Harbin has convincingly argued, targeted tax incentives for businesses are a poor use of resources. When the state gives a tax credit to a particular company or industry, that recipient gains at the expense of everyone else.

Now here’s a worse idea: Fiddling with tax credit programs so that a larger percentage of available credits goes to companies that were located in Missouri to begin with (as opposed to out-of-state businesses that came here to get the tax break). If all companies in an industry have a chance at getting a tax credit, it’s possible that the most productive one will win it. It would still be a wasteful use of tax dollars, but the waste would at least be kept to a minimum. If, however, the tax credit program is rigged so that it favors preexisting Missouri companies, the state ends up picking a winner once, in singling out an industry for the subsidy, and then it makes yet another arbitrary choice based on location rather than merit. That compounds the inefficiency.

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