In fairness, my colleague Joe Miller recently wrote that there are some reasons why a city might rightfully consider building a new terminal. The cost of current maintenance may be more expensive than a modern replacement, or a new terminal may be needed to accommodate increased traffic. Neither of those apply to MCI. While our traffic is up moderately, no one is arguing that we need to build for increased capacity. In fact, the new terminal proposal from the Aviation Department would reduce the number of gates we have now.

No one is arguing that the costs of maintaining the current MCI are prohibitive, either. Supporters of a new terminal seem to have strictly cosmetic concerns.

As for doing what we want airports to do, MCI is serving admirably. Consider the recent developments.

• In 2014, MCI picked up service from Spirit Airlines, and Seaport Airlines added service. Southwest announced that service to Ronald Reagan National Airport in Washington, D.C. has been approved.
• In 2015, Spirit started offering direct nonstop flights to Los Angeles. Allegiant Airlines will be flying nonstop to Florida from MCI, and Southwest offers new direct service New York LaGuardia, and Orange County, California. American Airlines added nonstop flights from Kansas City to Miami.
• And in 2016, Frontier Airlines will add flights to Atlanta, Chicago, and Philadelphia. Southwest recently expanded service in the form of direct flights to San Antonio.

In January, the Star catalogued some of MCI’s gains, including that annual traffic has grown each year since 2012 with the terminal we have now. Supporters of a rebuild point to possible (but by no means certain) increases in traffic as a result of a new terminal. But as Miller concluded in 2014:

To sum it up, the airlines (and common sense) say that building an expensive new terminal will not increase demand for air travel. Quite the contrary, the higher costs to airlines and passengers may mean fewer flights. Even if we agree with business leaders that MCI requires more amenities, certainly there is a cheaper way of providing these than a $1.2 billion new terminal plan. The cost is so much greater than the supposed benefits that the plan looks more like a vanity project than a sound investment.

In short, Kansas City’s airport is doing well. It has won high marks for its convenience; we’re unlikely to suffer the long waits seen at other airports because MCI does not use the TSA for security. Importantly, airlines seem eager to come and expand their service (despite their claims to the contrary). It is unlikely that Kansas City could improve on this. In fact, in taking on mountains of debt we risk losing the competitive advantage that many of us now take for granted. 

The post MCI Is the Envy of its Peers appeared first on Show-Me Institute.

Far from it. Of the 77 U.S. cities that KPMG ranked (which was not exhaustive of all major metros), Saint Louis ranked 45th and Kansas City ranked 46th. Among the cities cheaper than Saint Louis (and Kansas City) are regional competitors like Nashville, Omaha, Cincinnati, Memphis, Indianapolis, Cleveland, and Oklahoma City, to name a few. Worse yet, Saint Louis was more expensive than all 18 Southeastern cities KPMG looked at, from Atlanta to New Orleans.

So where did the Post-Dispatch get a top ten ranking for Saint Louis? If we only consider regions with populations greater than two million (of which KPMG ranked 31), Saint Louis is the 9th cheapest. I will leave it to the readers of this blog to decide if Saint Louis should pat itself on back for being cheaper than New York, Los Angeles, and Chicago, when it has higher costs for businesses than Nashville, Memphis, and just about every other regional competitor. But if we do decide to use population as criteria, it seems more justified to look at metros with populations similar to those of Saint Louis and Kansas City (between two and three million residents). When we do that, Saint Louis is 7th and Kansas City is 8th out of 14 such cities. That seems awfully middling.

That’s probably why, if one reads the study that the Post-Dispatch reports on, they’ll find that it does not claim that Saint Louis is among the most competitive cities in the country. KPMG didn’t even break down cities by population in the study, choosing instead to do so by region.  The Post-Dispatch story (while citing the study) is actually based on an ancillary KPMG press release, which lauds Cincinnati, and is careful to note context.

Titling an article “St. Louis among most cost-competitive cities for business, report says” when the report in question says no such thing is a questionable decision for a newspaper of record. But this is not just a problem with the headline. The article itself is equally misleading, and it was not a headline writer who placed this story front and center on the Post-Dispatch’s website less than a week before a vote on multiple tax issues (where the city’s business climate is an issue). 

The post Report: Saint Louis, Kansas City *Not* Among Most Cost-Friendly Cities for Business appeared first on Show-Me Institute.

Some toll road opponents have latched onto this bankruptcy as an example of how privatized toll roads are a bad idea. But when we look closer, the case of SH 130 (as well as the Indiana Toll Road) teaches the opposite lesson. A private, international investment consortium—and not the Texas Department of Transportation—spent almost a billion dollars improving highway infrastructure in Texas. Traffic estimates did not live up to expectations, but that is a normal risk with highway expansion, a risk that would normally be that of state taxpayers.

SH 130 received no money from the state of Texas. The only public support for the project came in the form of over $400 million in Transportation Infrastructure Finance and Innovation Act (TIFIA) loans from the federal government. If the SH 130 Company is unable to restructure its debt and cannot find a buyer for the toll road, the federal government (and hence the taxpayer) is at risk of taking some loss on the loan. But as we have pointed out before, financing part of infrastructure projects with federal loans (with the risk of losses) is a vast improvement over the current modus operandi, where the federal government provides 80 to 90 percent of a highway project’s funding with no mechanism for getting a return.

So what is the future of SH 130? While the bankruptcy is proceeding, SH 130 Concession Company will continue to operate the road. The company will then either restructure its debt or the toll road will be sold to a new operator (as happened with the Indiana Toll Road). It is too early to say whether the company will default on any federal TIFIA loans. Whatever the end result, Texas residents will continue to enjoy the highway that private investment built. 

The post Texas Toll Road Goes Bankrupt, but Taxpayers Don’t appeared first on Show-Me Institute.

From D.C. to Atlanta, from San Antonio to Salt Lake City, streetcar projects have run into delays, cutbacks and other snags, and some have been scrapped altogether. The most dramatic recent example was November’s demise of a $550 million, state-aided streetcar project in the liberal, traditionally pro-transit D.C. suburb of Arlington County, Va., which had turned politically toxic as its price tag more than doubled. (DOT rejected an application for federal funds for that project, but supporters believed a second attempt would succeed.)

The project in Arlington, Virginia, has come to a complete stop because of problems. This is noteworthy because the region was held up as a positive example by streetcar booster Councilman Russ Johnson at the two-mile starter line’s groundbreaking. According to POLITICO:

In D.C., the H Street line is three years late in opening, marred by missteps like a test run in which the streetcar had to stand still for 15 minutes while an ambulance blocked its path. This fall, the District cut the size of its planned streetcar network from 20 miles to eight miles.

Kansas City voters wisely rejected a streetcar expansion effort in November, but city leaders seem intent on putting it on the ballot again. If city leadership won’t listen to voters, perhaps they will heed their peers around the country who are rethinking their positions.

The post Streetcars Continue to Fail appeared first on Show-Me Institute.

Recently in San Antonio, voters were outraged over their city’s efforts to fund a streetcar without a public vote. As a result, the council is adopting a proposal that

“would amend the city charter so that no money could be spent on streetcar or light rail, nor would the city grant permission to use city streets for those kinds of rail projects, unless a majority of voters agrees to it.”

Opponents in San Antonio echo arguments elsewhere, that transit needs can be met much more efficiently through existing or new technologies such as rapid transit like the MAX bus or through driverless cars. Technology of Tomorrow shows a video summarizing their viewpoint. The video contains a segment of a TED talk by (speaking of creative class) Sebastian Thrun, director of the Artificial Intelligence Laboratory at Stanford University, in which he says [starts at 16:30],

“If you’re one of these people who argue the only way to solve the congestion problem is to move traffic off the road on to rail, think again. We have the space, we’re just not using it.”

[youtube http://www.youtube.com/watch?v=r_T-X4N7hVQ?rel=0]

The advent of driverless cars and their impact on urban transit is nothing new. We’ve written about their impending arrival in Kansas City, and we’ve lamented City Hall’s inability or unwillingness to prepare for it. It’s difficult to know exactly if or when driverless cars will be in every driveway and precisely what effect they will have on a traffic system. But if Kansas City wants to be the city of the future, it needs to prepare to quickly integrate all the opportunities the future presents, not protect the special interests of their cronies or rebuild the infrastructure of the past.

The problem in Kansas City is that government does not appear to respect the will of voters on this matter, unlike San Antonio. Despite tenuous claims of need, despite the cost, despite numerous ballot defeats, despite coming new technologies, City Hall can be expected to try again to come at voters with expensive rail proposals regardless of what better options new technology presents.

The post The Future of Transit appeared first on Show-Me Institute.

“Good, smart transit—a mix of buses rails, and other people movers—is a vital component of any successful city.”

But does a city really need a streetcar, or for that matter any type of light rail, to be successful?

Certainly many cities in the United States, more than 50, have some form of fixed rail transit. The largest rail systems are the New York City Subway and the Chicago L, but many small cities like Kenosha, Wis., Little Rock, Ark., and Tucson, Ariz., also have light rail or streetcars. However, many cities, large and small, do not have rail transit. Cities like Honolulu, San Antonio, Orlando, Indianapolis, and Cincinnati have been popular cities to work and play in for many years without much or any fixed rail. These cities, and many others like Kansas City, rely on bus systems.

There’s no reason why Kansas City cannot continue to rely on buses. Whether it’s rapid transit or simply providing service to wide areas, buses are capable of meeting cities’ needs in most situations. For example, the Chicago Transit Authority’s bus system had more than 314 million boardings in 2012. KCATA only had around 16 million boardings that year. The limits of KCATA’s bus system is yet to be reached.

While rail systems may be necessary in cities with significant congestion and population densities, nowhere does Kansas City have population or traffic to make rail necessary. And while it is not necessary, rail has its drawbacks, paramount of which is cost. For instance, Kansas City’s proposed streetcar expansion (less than 10 miles of routes) costs were more than double the entire capital spending on KCATA’s 250-plus bus fleet from 1992 to 2002.

Rail supporters contend that rail transit creates development, drives density, and is necessary to make Kansas City an attractive city for people to live in. But much of that belief is based on anecdotal evidence from successful cities with rail, usually ignoring places where rail has failed to drive development. Cities like Cleveland, Detroit, Baltimore, Buffalo, and Saint Louis have seen little regeneration from their rail lines, some of which cost more than a billion dollars.

Kansas City needs efficient transit that serves the community. It does not need rail to be successful, and residents should not let city officials with status anxiety waste hundreds of millions just to say Kansas City has rail.

The post Does Kansas City Need Rail Transit? appeared first on Show-Me Institute.

In our new report Rich States, Poor States, prepared for the American Legislative Exchange Council, we compare the economic performance of states with no income tax to that of states with high rates. It’s like comparing Hong Kong with Greece or King Kong with fleas.

Every year for the past 40, the states without income taxes had faster output growth (measured on a decadal basis) than the states with the highest income taxes. In 1980, for example, there were 10 zero-income-tax states. Over the decade leading up to 1980, those states grew 32.3 percentage points faster than the 10 states with the highest tax rates. Job growth was also much higher in the zero-tax states. The states with the nine highest income tax rates had no net job growth at all, and seven of those nine managed to lose jobs.

There are many excellent analyses and anecdotes in Rich States, Poor States. From state-specific stats to broader policy discussions, RSPS serves as a fine starting point for assessing our states’ economic health.

But some RSPS history needs to be noted regarding the book’s specific discussion of Missouri’s “economic outlook” (RSPS‘s forward-looking metric). Laffer and Moore’s observations about states without income taxes bears repeating — they have grown significantly in contrast to other income tax-reliant states — but from the perspective of policymakers and legislators here, the view RSPS paints of the Show-Me State is starting to diverge from the book’s own backward-looking “economic performance” metric.

How has Missouri done according to RSPS‘s metrics over the book’s last five editions? Well, the state has risen to seventh from 25th of the 50 states in “economic outlook” over the last five years, even as its actual performance has languished by RSPS‘s standards around 40th (roughly consistent with BEA and BLS statistics).

As the chart shows, the disparity between “where Missouri is going” and “where Missouri has been” has never been greater. I think that is a problem with RSPS‘s “outlook” metric, not the policy Laffer and Moore advocated in the Wall Street Journal. More to the point, the state has continued to flail in growth, arguably in part because the state continues to cling to its income tax and tax credit system, rather than shifting to a more effective, and less destructive, taxing system that does not pick winners and losers and does not penalize income.

Unfortunately, that hugely important point could get clouded when people see Missouri’s “outlook” ranking, which only considers the impact of income taxes as fractional, evenly-weighted components among more than a dozen factors of varying real-life importance. Missourians across the ideological spectrum do not agree on much, but what they certainly do agree on is that Missouri’s economic status quo is unacceptable and is not improving. In substance, Laffer and Moore agree with that assessment, despite what RSPS‘s “outlook” metric suggests.

The pathway to state growth that Laffer and Moore articulate is a clear one; Missouri is lacking only the political will and leadership to take it over the finish line. The outlook for finding that sort of political leadership, unfortunately, is decidedly more mixed, and while it remains mixed, Missouri’s economic performance will continue to suffer.

The post Laffer’s Important Lessons For Growth, And A Note About Missouri appeared first on Show-Me Institute.