or.... since this land is already motor business zoned.... we could kill the
planned businees park development and allow used car lots, fast food,
and "convenince" stores to develop willy nilly....
>>> Greg Brown <gregb@uidaho.edu> 11/07/95 01:41am >>>
Reflections on the City Council Meeting (11/6/95)
As expected, the City Council amended resolution 95-08 which
creates an Urban Renewal Agency and designating the wedge between
the
Troy Highway and Hwy 95 as "deteriorated." The Council took this
action to comply with the Idaho Urban Renewal Law and the Local
Economic
Development Act, laws that require the Council to find that there are
"deteriorated" or "deteriorating" areas in Moscow. The Council
unlawfully acted in June (IMO) creating an Urban Renewal Agency
without designating an area in need of urban renewal. By adopting a
consultant's report paid for by the City to generate the necessary
evidence for its resolution, the Council has now formally complied with
the Urban
Renewal Law requiring the lawful creation of an Urban Renewal
Agency.
That the Council would take such action to amend the resolution was
a foregone conclusion. To its credit, the Council admitted that creation of
the Urban Renewal Agency had nothing to do with urban renewal but
rather it was simply complying with Idaho Code to allow the Council to
proceed with plans for development of farmland for a proposed
business park.
With this action, the Council continues on its path to take advantage of
special interest legislation written by a Post Falls developer which allows
local governments to subsidize business development with tax allocation
financing if such communities constitute a "disadvantaged" border
community. The l1th hour special interest legislation sailed through the
Idaho legislature without scrutiny in 1994. Ironically, the Post Falls
developer has yet to take advantage of the business subsidization
legislation. Moscow appears to be the first Idaho community to begin
down the corporate welfare path in earnest.
The limited discussion at the Council meeting (there would have been
no discussion had not Linda Pall intervened on behalf of the few
individuals wanting to comment) centered on the alleged virtues and
necessity of a publicly financed business park. Comments from the
Council supported the idea that the business park would create jobs and
retain businesses in the area, especially those that "graduate" from the
incubator. That such economic outcomes would occur, of course is
pure ideological speculation, and is in fact, not supported by economic
studies. If Council had done any research, it would have found the
following 1989 report by the Council of State Governments pertaining to
the effectiveness of business incentives (e.g., tax increment financing)
and economic growth:
"And yet, a comprehensive review of past studies on the effects of
incentives reveals *no* [original emphasis] statistical evidence that
business incentives actually create jobs. What those studies do
suggest, overall, are some contradictory findings on the significance of
incentives: they *are not* [original emphasis] the primary or sole
influence on business location decision-making and, relative to other
factors, they *do not* have a primary effect on state employment
growth..." (pg. v, vi).
In fact, other location variables play a more important role than
incentives such as those offered by the proposed business park. What
location factors? Things like executive convenience, labor availability,
labor rates, labor productivity, corporate communications, and personal
contacts. The rationale that businesses are not staying in Moscow
because there is no place to locate is simplistic at best, and based on
extensive studies of business location decision-making, just plain wrong.
The report is quite insightful about the increase in government
intervention in the private sector and explains why the Post Falls
developer was able to secure special interest legislation and why the
City Council continues on its present course:
"To a great extent, the business community has been able to influence
legislative policy by playing one state against the other and convincing
neighboring states of the need to keep their tax structures competitive
with each other...until such time when there is better research and a
system of pacts, it is incumbent for public interest lobbying groups to
become more involved in state economic policy in order to counter the
influence that business lobbyists have held in the past in forming policy."
In this case, the EDC has played the City of Moscow against the
Port of Whitman County claiming that Moscow cannot compete, therefore
government intervention is required. AHA, the poster child of the EDC, is
used to elicit sympathy for the plight of the disadvantaged Moscow
businessperson. Through the EDC (dis?)information campaign, the
alleged problem of the private sector is transformed into a public
problem.
-----
I have tried to examine this issue from both a politically conservative
and liberal perspective. It doesn't make sense from either perspective.
Bad policy is bad policy no matter what one's political ideology happens
to be. Let examine the political perspectives:
A prototypical political conservative would be concerned about the
efficiency of government: he/she would generally be opposed to raising
taxes, would be opposed to government intervention in the public
sector, would advocate strong protection of private property rights, and
believes in the inherent efficiency of the market for allocating resources.
The alleged conservative Moscow Council members, contrary to the
beliefs above, exhibit no aversion to the issue of a public underwitten
business park. The business park represents government intervention
in the private sector (thus acknowledging the failure of the market),
increases the tax burden on Moscow residents (current and future), and
blurs the distinction between public and private property through the
co-mingling of ownership within the business park area. The very
same conservative
Council members who opposed City involvement in a low income housing
project claiming it is not the role of government to engage in such
projects
(that the market will provide a solution) now claim it is necessary for
government to intervene on behalf of private businesses and economic
development because the market has failed. Puzzling, no? Not really.
A prototypical political liberal would be concerned about repesentative
government, protection of civil liberties, and equitable distribution of
wealth; he/she would not be opposed to using government to achieve
these ends.
The alleged liberal Moscow Council members also exhibit no aversion
to the business park despite the fact that non-business residents will not
participate in the decision to bear the risk associated with approx.
$1 million in bonds and despite the fact that the tax increment financing
scheme proposed for the business park represents a de-facto transfer
of wealth from current and future taxpayers to the owners of the
businesses in the park who will not pay the full cost of their fiscal
impacts on the local community.
Thus, the enigma of the Council's present position on the business
park. Why the Moscow City Council is undertaking a course of action
that is not supported by extensive studies of business incentives and
business location decision-making, belies the very healthy and diverse
economy of the Moscow community, subsidizes corporate interests at
the expense of taxpayers, puts taxpayers at risk for close to a million
dollars, continues the trend of strip development away from the core of
the downtown area, stimulates growth when the City cannot fulfill its
present water usage agreements, and degrades the small-town
atmosphere that residents strongly wish to preserve, is a question that
Moscow residents should be asking their
Council members. Moscow residents should not be over-optimistic
about receiving a coherent answer.
-- Greg Brown (gregb@uidaho.edu) Computer Services Adjunct Assistant Professor, College of Forestry,Wildlife,& Range Sciences University of Idaho Moscow, ID 83843 (208) 885-2126 Fax: (208) 885-7539