Pittsburgh Public Schools is still selling property

Summary: Pittsburgh Public Schools (PPS) is in the process of receiving proposals for four former school buildings and a piece of vacant land. 

The request for proposals (RFP) lists evaluation criteria that the PPS board will take into account when deciding to sell the properties: the development concept, the benefits to PPS, other local governments and the community, the feasibility and expertise of the developer(s).

The total minimum asking price (or minimum reserve price) of the five properties in the RFP is $1.050 million. The highest is for the 23.6 acres of land at $350,000. The buildings—which were closed between 2006 and 2016—have annual utility costs that range from $13,000 to $57,000.

We examined a previous PPS effort to sell 23 properties in a 2012 Policy Brief (Vol. 12, No.28).    

Three of those buildings are contained in the current RFP. In a news article the district’s consultant noted that the delay in selling the properties could be related to “not finding the right buyer who can figure out exactly what to do with a property, whether there’s some limitations in terms of size, economics or parking.”  Besides a voter-approved parks tax, the PPS millage and the city’s deed transfer tax increased in 2020, which may be additional impediments. 

A search of the remaining properties in PPS board actions, the Allegheny County real estate website as well as information from the consultant handling the sales shows that 16 properties were sold and now have different owners and four were taken off of the market and are still owned by PPS. 

In Feb. 2013 the PPS board sold the former Schenley High for $5.2 million. The assessed value of the property, which now is classified by the county as a taxable 40+ unit apartment building, is $26.9 million and generates $633,734 in local property taxes based on 2020 millage rates (PPS, Allegheny County and the City of Pittsburgh including the special levies for libraries and parks). 

In the two months thereafter PPS published an asset maximization plan which contained a table with 20 properties and recommendations (sell, donate, demolish, etc.).  Thirteen of those sold to new owners for a sum of $4 million.  Of those 13, nine sold for $1.9 million and are currently classified as taxable property with uses that include commercial, independent senior living and condominiums.  Combined assessed value is $11.2 million and $264,504 is generated in local property taxes. 

The remaining four sold for $2.1 million but are owned by the city, the Urban Redevelopment Authority, a non-profit and a school development entity and are tax-exempt.  If taxable, the total amount generated in local property taxes would be $393,634. 

The combined annual operating cost of the 13 properties was $383,600 and PPS presumably no longer incurs that cost.

According to the consultant two other properties not listed in the 2013 plan also sold and a search of records shows currently one is taxable and one is exempt. The former generates $8,865 in local property taxes while the latter would generate $5,605 if taxable.

The combined assessed value of the four properties PPS decided to take off of the market is $30.8 million, with one property (Murray, which has been reopened as a new school) accounting for almost half of the assessed value total.  If taxable, the total amount generated in local property taxes would be $724,023.  In the 2013 plan the combined annual operating cost for these buildings was $190,600, an amount that has likely increased.

Based on the 2020 county certified assessment roll, PPS taxable value is $19.7 billion and exempt value is $11.5 billion.  Selling to prospective owners that will convert properties to taxable use will help to grow taxable value, thus benefitting PPS and the other taxing bodies.  The total assessed value of the buildings (the 23.6 acres of land not included) in the 2020 RFP is $7.1 million.  If they are sold and become taxable $167,806 in local property taxes would be generated.

A major component of the PPS effort to sell property in the early part of last decade was to address debt.  From 2013 through 2018 total primary government debt for PPS (net general obligation bonds and capital leases) has fallen from $399.6 million to $318.7 million.  It is not clear if all of the debt on the properties sold or retained has been retired.

If the board and administration are worried about budget shortfalls—as mentioned the millage rate increased and the district and the city tussled over a portion of the wage tax—then property sales can help.  As we noted in 2012, “if the buildings and land can be sold for a positive price, they should be sold as soon as practicable. The properties are generating no revenue and no educational benefits and are therefore a net drag on District finances.”  Hopefully the RFP properties are sold without much delay. 

Economics ignorance writ (too) large

Pittsburgh’s command economists say the darnedest things.

You might recall that when the heavily taxpayer subsidized and government-decreed Shop ‘n Save in the Hill District predictably failed, the city’s Urban Redevelopment Authority (URA) paid $1.6 million to reacquire the 2.57-acre plaza in which it was situated.

One intervention failed and the URA thought it necessary to intervene yet again to, in so many words, save the site from the vagaries, if the not the supposed ravages, of the marketplace.

Now, the URA says it hopes to, by month’s end, issue a request for proposals for those who might be interested in opening a new grocery store at the site.

One can only wonder what “incentives” the agency might dangle in its follow-up attempt to yet again “command” a market that clearly could not sustain such a store.

But all that said, Diamonte Walker, the URA’s deputy director, rationalized to the Post-Gazette that one reason the authority bought the property was that it would have flexibility to help residents, as the P-G put it, “in situations like this.”

That “situation”? The plaza parking lot provides a more level location for one of 17 stops that a roving food truck makes.

Well, thank goodness the URA spent $1.6 million, in part, for that, right?

Further speaking of those addicted to saying the darnedest things, departed VisitPittsburgh boss Craig Davis (he’s now doing a similar job in Dallas) continues to shill for a new – and likely heavily taxpayer-subsidized — hotel attached to the David L. Lawrence Convention Center.

Davis predicts such a facility would be, in effect, the greatest thing to happen to Pittsburgh since sliced bread, soft butter and mass-produced pierogies.

Never mind the plethora of privately built new hotels rooms in the city over the last few years, Davis told the Post-Gazette that a convention center hotel “is essential in the future.”

But not only would the estimated (and counting) $240 million cost of such a folly be another in a long line of taxpayer molestations in the erstwhile Steel City, it would force those privately built rooms to compete with government-built rooms.

This isn’t sound public policy. But it is astoundingly thorough in its economics ignorance.

Of course, this comes from the same person who, in the same P-G story, fondly recalls 2009’s G-20 economic summit at the convention center.

“The joke was that if we could host the top world leaders successfully, we could certainly handle your convention,” Davis said.

But there was a bigger, and worse, joke that Davis jokes past:

The G-20 turned much of downtown Pittsburgh into a secure ghost town that did one thing and one thing only – quash commerce.

Davis’ economic ignorance and revisionist history are appalling examples of public policy at its absolute worst.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

‘Paul’ is tiring of the ‘shakers’

Now that the U.S. Supreme Court has turned away an interstate trucker group’s lawsuit challenging the use of Pennsylvania Turnpike toll receipts for non-Turnpike uses, it’s past time for the state Legislature to slay the monster to which it gave birth.

In a nutshell, the Legislature created a voracious predator that forced the Turnpike Commission to turn over millions of borrowed dollars to “The State” to fund things like mass transit.

To pay off the borrowing, the Turnpike has been raising tolls, precipitously, for the last decade and gone deeper and deeper into debt.

Never mind that it’s not much different than an organized scheme to shake down one agency to bail out another, the courts now have consistently sided with the shakers.

Heck, one appeals court even ruled that if the truckers (and, by proxy, any motorist) don’t like it, nobody’s forcing them to use the highway. “Go find some other two-lane state road to tear up,” the courts might as well have said.

(Brings to mind Pittsburgh Mayor Bill Peduto telling the public that if it didn’t like crime Downtown, it should shop in suburban malls.)

Those who have defended the practice keep arguing about the need for “dedicated funding” for mass-transit agencies.

Sadly, we hear woefully little in this constant plea for a dedicated funding source about the Port Authority of Allegheny County’s outrageous costs to operate buses or the sheer scope of the alleged fraud and theft coming to light in Greater Philadelphia’s Southeastern Pennsylvania Transportation Authority.

And there should be absolutely no new “dedicated” taxpayer funding regimen to these organizations until their labor unions no longer have the right to strike and to extort untold million more out of the public purse.

The days of Peter constantly robbing Paul, and Paul having little or no recourse, is a horrid affront to sound public policy. This assault on taxpayers must stop.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

The state of Pa.’s business climate

Summary: Business optimism in Pennsylvania continued in late 2019 and only slightly diminished from a year-earlier reading, according to the findings of the Fall 2019 Keystone Business Climate Survey by the Lincoln Institute of Public Opinion Research. 

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Survey respondents indicated the most significant problem facing their businesses was a lack of qualified workers with 38 percent highlighting this problem. The tight labor market poses serious difficulties as 75 percent of respondents noted they were having trouble hiring qualified employees.

This situation mirrors the latest National Federation of Independent Businesses (NFIB) survey results. “Finding qualified workers remained the top issue for owners in December, with 23 percent reporting it as their No.1 problem,” the NFIB data said. “Fifty-three percent reported hiring or trying to hire, but 94 percent of those owners reported few or no qualified applicants for the positions they were trying to fill.” 

In short, the very low unemployment rate nationwide is creating difficulties for businesses.

So, why are businesses struggling to hire qualified employees? Pennsylvania survey respondents listed three crucial factors with 58 percent indicating a lack of essential skills, 31 percent noted a lack of applicants and 17 percent pointed to the failure of applicants to pass drug tests. 

Lincoln Institute survey respondents also pointed to other problems affecting their business.  Eighteen percent indicated excessive regulations and 13 percent mentioned high taxes as obstacles to their businesses. These findings strongly suggest a need for the state to act on tax reform and improving the regulatory environment.  

On a more positive note, sales in Pennsylvania are relatively strong: Thirty-eight percent of respondents reported their sales had increased during the previous six months, 41 percent indicated sales held steady while only 15 percent claimed sales decreased during the prior six months. It’s another sign of strength in Pennsylvania’s economy.

While the fall 2019 survey conveyed continued business optimism, there was a drop off from the fall 2018 results. In the 2019 survey, 23 percent of respondents said business conditions were better than six months earlier, 52 percent reported they were the same and 22 percent believed they were worse. In the fall 2018 survey, the response was 39 percent better than six months earlier, 51 percent the same and only 7 percent worse.

Last year’s Policy Brief (Vol. 19, No. 1) detailed the Lincoln Institute’s fall 2018 Keystone Business Climate Survey in which business leaders attributed their business confidence to federal policies such as the 2017 tax cuts and regulatory reforms. The influence these tax cuts have on bolstering the economy are seen when survey results from fall 2019 and fall 2015 are compared. Both years represent the year leading up to the presidential election.  But the difference between responses from 2019 and 2015 further underscore the positive effects tax cuts and decreased regulation have on business conditions.

When asked the question about how they foresee business conditions over the next six months, 19 percent of respondents in the fall 2019 survey thought it would be better, 50 percent the same and 26 percent worse.  (The remainder had no opinion.) In the fall 2015 survey, business leaders, responding to the same question, indicated only 6 percent thought it would better, 42 percent the same and 49 percent worse.

Phrased another way, business leaders had little optimism in the fall 2015 survey with nearly half indicating business conditions would be worse in the coming six months.

Outlook for employment also contrasted sharply between the fall 2019 and fall 2015 survey. Of the respondents in the fall 2019 survey, 25 percent look to increase jobs over the next six months while 64 percent will hold at current levels.  A mere 6 percent expect to make cuts.

By contrast in the fall 2015 only 14 percent of survey respondents planned to increase employment, 67 percent would hold steady and 16 percent would reduce jobs. 

Thus, in 2019, 10 percent more firms expected to add employees in the next six months compared to the 2015 survey. And in 2019, 10 percent fewer firms planned to make cuts than the 2015 survey found.

While there is always uncertainty regarding upcoming elections, business leaders now are still displaying significant confidence, largely due to a more pro-business climate resulting from federal economic policies.

The majority of business leaders—60 percent—replied the current federal administration has the national economy on the right track. Pennsylvania’s business leaders note approval of the federal administration because, as discussed in a previous Policy Brief (Vol. 19 No. 1), they attributed their optimism to the federal tax cuts and regulatory reform measures in 2017.

Meanwhile respondents to the fall 2019 survey expressed disapproval with the state Senate (27 percent approved while 42 percent disapproved) and the state House (21 percent positive and 49 percent negative). The governor also was viewed negatively, 55 percent to 32 percent—further illustrating disappointment with state government on economic matters.

While the continued confident responses from business leaders in the fall 2019 survey are encouraging, the state’s business optimism is largely a response to federal tax cuts and regulatory reform. Tax cuts and regulatory reform at the state level along the lines of the federal policies would be of enormous help to the commonwealth’s economy.  One need only look around the country at fast-growing states to see the benefits of more pro-business and pro free-market policies.

Another bad mark for PPS

Yet again, the news is not good for Pittsburgh Public Schools (PPS).

Rocked by recent test results that showed already abysmal academic performance in key metrics further sliding, now comes word that one of the likely culprits of these continued pathetic results – chronic absenteeism – also is getting worse.

The Post-Gazette reports that district data suggest chronic absenteeism – that is, students missing more than 10 percent of their school days – is, halfway through the 2019-20 school year, on pace to increase by nearly 3 percentage points.

Thus far this school year, chronic absenteeism has risen from 25.4 percent in 2018-19 to 28.1 percent. The rate was 23.8 percent in 2017-18.

But a district official floats the possibility that the rise in chronic absenteeism might be a data collection error. PPS data boss Ted Dwyer says the data-collection system recently changed.

An “implementation dip” or “implementation bump” could be caused by discrepancies that arise between the time a new program is installed until it is performing properly, Dwyer told the P-G.

Additionally, Dwyer says teachers might not be recording attendance properly, i.e. marking as absent all day a student who might not show up for home room but arrives later.

System anomalies are one thing. Sloppy recording is another.

But if chronic absenteeism indeed has increased as the data’s first blush suggest, Pittsburgh Public Schools, a district, long in a shocking stall pattern, clearly has gone into a fatal spiral.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Incentives, losers, vices & virtues

General Motors, which closed and sold its Lordstown, Ohio, car assembly plant last year to an electric truck manufacturer, wants taxpayer help again.

The Detroit Free Press reports that GM has a purchase agreement to buy 158 acres of vacant land next door to its old Lordstown Complex – a hop, skip and a turnpike drive from Pittsburgh – to build a battery factory.

GM once owned the parcel but lost it in its 2009 bankruptcy reorganization.

But GM, according to the report, “is also in discussions with Village of Lordstown leaders on incentives to build there … .”

Incentives? Really?

Again, this is the same corporate behemoth that taxpayers bailed out.

It’s the same auto-making titan that made $20 million on the sale of the former car-making complex.

And it’s the same GM that has made available a $40 million loan to the buyers of its off-loaded car factory.

And GM wants a public “incentive”?

Sorry, GM, it’s past time to pay your own way.

The Pennsylvania Gaming Control Board is snapping its braces in announcing that gambling revenue climbed 4.5 percent in 2019 over 2018 – to more than $3.4 billion.

Of course, we are forced yet again to remind that such money is derived not from anything that was made but from billions of dollars that gamblers lost.

At the same time, “The State” continues to crack down on those who have the audacity to attempt to cut into the commonwealth gambling cartel.

Police now have been given court approval to once again begin seizing cash-paying video machines. But these aren’t those storied video poker machines found in bars and clubs and social halls all over the commonwealth. No, now there’s a new twist.

At issue, according to The Associated Press, are machines known as “Pennsylvania Skill,” video machines that pay prize money based not on gambling chance but on intellectual wherewithal.

State Police say there are upwards of 20,000 such machines in the Keystone State these days. The administration of Gov. Tom Wolf says the machines have, as the AP puts it, “siphoned more than $200 million in revenue last year from the Pennsylvania Lottery.”

Ah, yes, gambling is a dastardly vice. But if “The State” sanctions it, produces slick TV commercials to advertise it, then, of course, skims money off the top for its tribute, it’s suddenly a virtue, eh?

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Taxing it & taking it: Shale gas/oil follies

Let’s see, there’s glut of shale natural gas. That has led to depressed prices, now at historic lows. In turn, that has led to a major retrenchment in the industry.

Yet, there’s still talk of slapping a tax on top of a tax – adding an extraction tax on top of the impact fee. But it’s hardly a sure thing, especially with the shale gas industry in such a slump.

So, what have the economic mavens in Harrisburg proposed? Why, a 150 percent increase in the fee that the state charges operators to drill each Marcellus and Utica shale well.

Under a rule change approved by the Pennsylvania Environmental Quality Board, the fee will go from $5,000 per well to $12,500 per well.

As the Post-Gazette notes, that’s the highest such permitting fee in the United States.

Brilliant!

Regulators rationalize that the $12,500 fee represents only 0.16 percent of the $8 million it costs to drill a new well. But as more than a few observers have noted, the more you tax something, the less you get of it.

In an industry consolidating and scaling back and struggling with plummeting earnings, such a dramatic increase in the cost to do business easily could lead to even fewer wells being drilled and for a longer period of time.

Some DEP officials have made no bones about the fact, in word and in deed, that they don’t care much for the shale gas industry. So, this latest attempt, on top of prior attempts, to tax the industry out of existence, should surprise no one.

The massive permit fee increase still must be reviewed by state House and Senate environmental committees and the state’s Independent Regulatory Review Commission.

One can only wonder if any of the reviewers will see the fee hike for what it is.

The Pennsylvania Supreme Court has preserved the century-old legal principle of “right of capture,” ruling that it applies to natural resources secured by fracking.

That is, because of the nature of shale oil and natural gas – even they migrate underground even in shale formations, supposedly – a procurer whose drilling ends up tapping such product from under an adjacent property for which rights have not been secured not only cannot be charged with trespassing but has no legal requirement to compensate the landowner.

The law has generally held that the first to drill for such a resource has the right to it, even if that resource migrates from another property.

There is, however, an important caveat (but one most difficult to enforce). As one attorney supporting royalty owners put it to the Post-Gazette:

“The court left the door wide open that if the plaintiff can prove there was an actual, physical intrusion as part of the (fracking) then the rule of capture will not insulate the driller.”

Which borders on being able to count the number of angels on the head of a pin.

As argued previously herein, the rule of capture may have a long lineage of court affirmation but that’s no excuse for what, at its base, is unlawful taking.

In this day and age of grand technological advancements, it should be  the onus of the procurer to show whether or not it captured unlicensed product through natural flow or by the act of fracking that extended into property for which no rights had been secured.

Placing that onus on the adjacent property owner is, pure and simple, a blow to property rights – property rights, by the way, that are far older and sacrosanct than the “rule of capture.”

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Allegheny County’s household employment lagging

Summary: As 2020 began, Allegheny County Executive Rich Fitzgerald touted the economic performance of the county since 2000.  As noted in late 2019, an Institute Policy Brief (Vol. 19, No. 44) reported that the seven-county Pittsburgh Metropolitan Statistical Area’s employment growth has fared quite poorly recently compared to similar-sized metros. Allegheny County makes up about half the population of the seven-county region.

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The Policy Brief findings were based on surveys of employer payrolls. These surveys cover only metro areas and do not report data by county. However, U.S. Bureau of Labor Statistics does collect household employment and labor force data at the county level through phone surveys.   

In the earlier Brief, the Pittsburgh metro area was compared with the Charlotte, Cincinnati, Cleveland, Indianapolis and San Antonio metro areas. This Brief looks at household employment data for the counties that host the cities for which the metro areas are named. They are Mecklenburg, N.C. (Charlotte), Hamilton and Cuyahoga, Ohio (Cincinnati and Cleveland), Marion, Ind. (Indianapolis) and Bexar, Texas (San Antonio).  Additionally, this study will include the performance of the nation and state. 

Household employment for Allegheny County in 2000 stood at 612,461 people (all figures are the 12-month average for the year cited).  In 2019 employment had increased to 625,287—a rise of 2.1 percent. In the sample of counties, it ranks as fourth best ahead of Cuyahoga (-11.4 percent) and Hamilton (-1.4 percent), but well behind Mecklenburg (57.5 percent), Bexar (45.7 percent) and Marion (7.8 percent).  Nationally household employment rose 15 percent and Pennsylvania’s count moved up 6.5 percent. 

The first decade of the new millennium ended just as the deep recession was drawing to a close with four counties having lower household employment in 2010 than 10 years earlier (Allegheny, Cuyahoga, Hamilton and Marion).  Pennsylvania also saw a drop while nationally household employment posted a very small 1.6 percent gain.  Meanwhile, Mecklenburg and Bexar (16.4 and 18.4 percent, respectively) recorded solid growth. 

With a rebound from recession levels and ongoing strong gains in recent years, the national household employment count climbed 13.2 percent between 2010 and 2019 while Pennsylvania posted a 6.5 percent rise. Unfortunately, Allegheny County, at 6.4 percent, trailed well behind the national gain and managed to surpass only Cuyahoga’s 1.8 percent. Allegheny’s growth fell far behind Mecklenburg (35.3 percent), Bexar (23 percent), and Marion (17.7 percent). Hamilton County, at 8.9 percent growth, was marginally better than Allegheny County’s gain. 

Another measure of the economic vitality of an area is labor force growth. The labor force consists of those who are employed and those who are actively seeking employment.  It does not count members of the population under age 16, retired or in an institution such as a school or hospital. 

From 2000-19, labor force in Allegheny County ticked up from 638,137 to 650,557 or barely 2 percent.  Over the same period the national labor force rose 14.7 percent, while the commonwealth rose by 6.5 percent.  Among the counties reviewed, Mecklenburg County’s labor force jumped by 58.9 percent followed by Bexar County at 44.3 percent and Marion County at 8.4 percent.  Both Ohio counties, Hamilton and Cuyahoga, had losses of 1.5 and 10 percent, respectively. 

While better than two Ohio counties, Allegheny County’s very slow 19-year labor force gain does not signal strong economic vitality in comparison to the nation and many counties across the country.  

As mentioned above, labor force is dependent upon the population at large—generally speaking, a growing population allows for a growing labor force.  While the next decennial Census will be taken in 2020, recent county population comparisons can be made using annual population estimates, with the 2018 estimate being the most recently available from the U.S. Census Bureau.

In the 2000 Census Allegheny County’s population was recorded as 1,281,666. By 2010 the count had fallen by 4.6 percent to 1,223,348.  The losses slowed to just 0.4 percent between 2010 and the 2018 population estimate of 1,218,452.  Over the time frame 2000 to 2018, Allegheny County’s population fell by 4.9 percent. 

By contrast, Pennsylvania’s population count over the two decades increased by 4.3 percent.  The bulk of that increase happened in the first decade (3.4 percent) before cooling off to less than one percent between 2010 and 2018. 

From 2000 to 2018, Mecklenburg led the six-county sample with a jump of 57.3 percent to the population (695,454 to 1.1 million) and will likely surpass Allegheny County in the next Census count.  Bexar County’s population climbed 42.3 percent to 1.99 million people, up from 1.4 million in 2000.  Marion County grew 11 percent over the period. However, Hamilton County and Cuyahoga County each saw population losses. Hamilton’s drop of 3.4 percent was smaller than Allegheny County’s.  But Cuyahoga was very hard hit with a population loss of 10.8 percent. 

In short, Allegheny County’s economic performance, as measured by household employment and labor force gains in comparison with the nation and state and several counties, has not fared well over the last two decades.  Of course, part of that story is tied with the loss of population.  But it all comes down to the availability of jobs and the business climate.  Job availability draws people to a county and boosts labor force and employment levels.

As many earlier Policy Briefs have noted, the business climate in Allegheny County has been less than ideal for job growth.  It is not free market-oriented or business friendly. A large part of that is the stifling regulatory climate coming not only from the state level but also from the county’s core, the City of Pittsburgh.   

It also has a lot to do with burdensome taxes, such as the additional one percent Regional Asset District sales tax, the drink and rental car tax and the very high level of school real estate taxes within the county.  Until the county reverses course and becomes more welcoming to businesses—without using public subsidies to draw them here—the slow growth that characterized the first two decades of this millennium will continue.

Marketplace perversions

As market-perverting and taxpayer-pickpocketing Pennsylvania’s Dairy Investment Program is, there’s another facet of it that simply is beyond the pale:

As the weekly Farm and Dairy notes, one grant recipient, Ryan Caputo, told the state Senate Majority Policy Committee “that being required to pay prevailing wage was a hindrance.”

“Caputo heard of some recipients being unable to use their funds because of such issues,” the weekly newspaper also noted.

We’ve asked myriad times why taxpayers should be forced to subsidize capital investments for an industry struggling with faltering consumer demand, i.e. “Darn, milk consumption has tanked so let’s all make government-subsidized cheese!”

But also subsidizing the wages of those involved in this subsidized attempt at commanding markets amounts to a caricature of a caricature of government interventionism.

Such houses of cards rest on the flimsiest of economic theory and, as per usual, require intervention after intervention to cover up the lie of each successive, and supposedly “beneficial,” government intervention.

Ah, the definition of government insanity restated.

Speaking of marketplace perversion, “green energy” producers are crying “Foul!” over a new Federal Energy Regulatory Commission (FERC) requirement that, as the Post-Gazette reports it, the Valley Forge PJM, the nation’s largest electric grid, “greatly expand the application of its minimum price rule to include most resources that receive a state subsidy.”

That is, monumentally taxpayer-subsidized “green energy” no longer will have a government-installed price advantage over traditional energy producers such as coal and natural gas.

The bottom line is, as the P-G notes, a rule change “that could exclude most new renewable energy projects and other state-subsidized power sources from being paid to be available to feed the” Valley Forge PJM.

Or as FERC Chairman Neil Chatterjee put it:

“An important aspect of competitive markets is that they provide a level playing field for all resources, and this order ensures just that within the PJM footprint.”

Imagine that! Competition!

No wonder “Gang Green” – and the marketplace-rotting implications that go with that moniker applied to the “green energy” crowd – is being treated for apoplexy.

The very group of people who shout from rooftops how the use of fossil fuels is not sustainable never have come to grips with the fact that “green energy” – with its lack of economic and operational efficiency,  not to mention the need to have heavy subsidies in government-created “markets” – is antithetical to sustainability.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Crowd green’s ignobility

Pennsylvania solar power aficionados, take note. Then take heed:

There has been lots of media attention over the last few weeks focused on the utter, total and complete failure of the once highly touted but now mothballed Crescent Dunes solar energy plant in Nevada.

The facility used mirrors to capture the sun to turn salt into a molten energy storage system that produced steam to turn turbines that generated electricity, even at night.

Of course, as most “green energy” is, it’s oversold and under-performs. Oh, and it’s also heavily subsidized by taxpayers because there is not operational or economic efficiency to it.

Which, surprise, surprise, proved to be the case with Crescent Dunes. It never produced (and never came close to producing) the amounts of energy that were promised, even with a $737 million federal loan guarantee. Then there were the $100 million-plus in state tax abatements. The private investment paled by comparison.

Indeed, this was a unique solar experiment. But its failure was foretold in a much smaller test model years before. As The Wall Street Journal noted, even at that level, the U.S. Department of Energy concluded it “was never expected to be a viable commercial-scale plant and, in fact, did not validate economic feasibility.”

Now, but-but-ers and tut-tut-ers will be quick to tort-tort that the Nevada example doesn’t apply to standard solar panel generation. Indeed, it is not a parallel. But even solar panel generation has proven to be problematic – from cost efficiency (natural gas generation remains, by far, more cost efficient) to safety (i.e., the fire hazards of large battery storage facilities).

As Ross Marchand, director of policy for the Taxpayers Protection Alliance, noted in an October commentary in Townhall.com:

“Until the U.S. commits itself to free, open and unsubsidized energy markets, solar boondoggles will continue to bury taxpayers in a mountain of debt.”

Yet, all across Pennsylvania, schemes are being hatched by Crowd Green to “save the planet” by encumbering taxpayers taken for rubes.

It was the 19th-century proverb that reminded us how “the ignorant classes are the dangerous classes.” How tragic then that where sound public policy is involved, too many of our elected and appointed “leaders” are proud members of that ignobility.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).