Airport Authority ‘uh-ohs’ & debunking an acolyte
The Allegheny County Airport Authority has unveiled development plans for a 195-acre tract overlooking Pittsburgh International Airport (PIT). But questions abound.
The same authority that posted an embarrassing record in 2018 attempting – and, predictably, failing — to command the air-services marketplace with public money now is touting something it calls an “innovation campus” at the Findlay Township site.
As the Post-Gazette’s Mark Belko describes it, it “could house offices, research and development labs and industrial manufacturing facilities – all built around a town center with restaurants and retail.”
There’s even talk of a light-rail link.
Airport Authority CEO Christina Cassotis told the newspaper her agency will be working on a strategy to attract companies to the “campus.”
Added Allegheny County Chief Executive Rich Fitzgerald, announcing the plan on Dec. 6, “Today is about economic vitality and about jobs.”
Added Dennis Davin, the former county development chief who now heads the state Department of Community and Economic Development, “This is something I think can be transformational.”
So what are all these “uh-ohs” about?
Well, given the government’s history of touting its development schemes as the best thing since sliced bread and soft butter, the immediate questions that comes to mind are these:
How much public money is going to be dangled over and/or thrown at this latest government central plan?
Will public dollars – i.e. from shale gas drilling and gambling proceeds – be offered?
And then will Airport Authority officials rationalize the corporate wealthfare as “not coming from taxpayers”?
Will tax-increment financing (TIF) be employed, never mind that TIF is a poor use of such an “incentive,” given retail’s insignificant multiplier effect and cyclical nature?
Light-rail? Really? Talk about a boondoggle in the making that might just dwarf the boondoggle that is the North Shore Connector.
Of course, if PIT’s “innovation campus” really is the be-all and end-all that government types insist it will be, here’s a novel idea:
Let those who want to be a part of it invest their own money in pursuit of profit.
But to the usual suspects that’s archaic thinking, if not old-school economics, by which they simply cannot abide. Of course, that’s the kind of mindset propagated by central planners and command economists who are all too willing to turn public dollars into a venture capital kitty.
Speaking of the Airport Authority, acolytes for bad economics continue to defend the authority’s practice of subsidizing airlines with public dollars, a practice that has, predictably, failed spectacularly in 2018 at PIT.
Writes one regular defender of the subsidies, responding to an Allegheny Institute commentary of the market-perverting practice in the Tribune-Review:
“The British Airways flight will only cost $3 million in incentives over two years but will generate $57 million per year,” the writer claimed.
But that claim is farcical, as Jake Haulk, the institute’s president-emeritus and senior advisor, wrote in Policy Brief Vol. 18, No. 31, this past August.
In fact, Haulk, a Ph.D. economist poked so many holes in the study touted by the Airport Authority – from a dubious methodology to making conclusions not supported by reality –that it wouldn’t even qualify as Swiss cheese.
The same writer takes issue with the institute’s contention that public dollars are being used to pay airline subsidies:
“They come from casino revenue and natural gas drilling revenue from airport land,” he says. But that clearly is public money. And it’s being pledged and allocated by a public authority.
The writer further touts that Qatar Airways, the cargo carrier that shook down public coffers for $1.48 million – and was incentivized by contract to fail — now is operating subsidy-free at Pittsburgh International. Never mind that officials are discussing future subsidies.
Then there is the writer’s defense of Delta Air Lines’ suspended Paris flights. He barks at how Delta operated for eight years “subsidy-free” after the Allegheny Conference on Community Development pulled its subsidy.
Conveniently not mentioned is that the Delta reduced those regular flights to seasonal when the subsidy ran out and, when the Airport Authority announced the multimillion-dollar subsidy for British Airways, a direct international competitor, Delta said it would pull out of PIT.
Sad to say, the facts are such the inconvenient thing for the Trib commentator.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (email@example.com).