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Commentary Detail

Saint Louis Aerotropolis ó Another Flight of Fancy
Commentary by: Christine Harbin
Aired May 06, 2011


Attracting international trade from China and elsewhere sounds like a great idea. But when it comes to Aerotropolis, the devil is in the details...and the details donít add up. The so-called China Hub could be an expensive flight of fancy.

Missouri lawmakers are being asked to award $360 million in tax credits to Saint Louis warehouse developers, with the hope of boosting international trade. The tax credits would subsidize the construction and operation of cargo warehouses near Lambert Airport.

This proposal is more about subsidizing business as usual than encouraging international trade. According to the latest version of the bill, a warehouse could get a subsidy if it devoted as little as 10 percent of its operations toward sending cargo to international destinations.

Weíre robbing Peter to pay Paul. All taxpayers will bear the costs, but only a small group benefits. Missourians who live outside of Saint Louis will have to prop up this policy with their tax monies.

We are relying on government to make the investment choices that private entrepreneurs should be making. In fact, if trade with China will be such a booming business, why havenít private developers already broken ground on some warehouses? Why wait for tax credits?

Tax credits arenít just Monopoly money. They take money out of the pockets of taxpayers... real dollar bills that could be used on college tuition, health care, or a tank of gas.

Supporters argue that if we donít build offer incentives to build an Aerotropolis, other states will. But just because other states hand out tax credits doesnít mean itís a good policy for Missouri. Plus, other states studied the issue rigorously early in their discussion Ė Cleveland, for example, published a 144 page study. St. Louis has only a poorly organized 8 page report from the RCGA.

And where are the guarantees? This isnít a Field of Dreams, where if we build it, they will come. There is no agreement with the Chinese that trade will indeed follow the construction of these warehouses.

Finally, ironically, at the eleventh hour, legislators decided to tack on the China Hub tax credit proposal to another bill that would limit tax credits in Missouri. So which is it...do they think tax credits are good or bad?

The China hub bill is yet another example of government picking winners and losers...but this is a roll of the dice thatís a really bad gamble.


(The opinions expressed are not necessarily those of St. Louis Public Radio.)

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Christine Harbin

Christine Harbin

Commentator

Christine Harbin, a recent transplant from Wisconsin, joined the Show-Me Institute as a research analyst in July 2009. She holds undergraduate degrees in economics, mathematics, and French from the University of WisconsinĖMadison, and an MBA with an emphasis in operations management from the University of WisconsinĖEau Claire. She interned with the National Economic Council at the White House in Washington, D.C., during spring 2007. Prior to joining the Show-Me Institute, she worked as an advance planning analyst for hospitals and health care systems.

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