The East-West Gateway Council of Governments released a report that largely confirms what the Show-Me Institute has been saying all along: State and local government incentives don’t deliver on their promises in Missouri. The local government has provided $5.8 billion in subsidies to private development in Saint Louis, but doesn’t have much to show for it.
The report found that local incentives haven’t encouraged job creation, consumer spending, or economic growth in the Saint Louis region, and concluded that the reporting requirements are “seriously deficient.”
The report also found that tax-increment financing (TIF) hurts neighboring municipalities. As I have discussed before, economic development is not a zero-sum game, and municipalities in Missouri can grow faster if they didn’t view their neighbors as competitors.
The editorial board at the St. Louis Post-Dispatch provides a great commentary on the report. The following is my favorite passage:
The money has moved around within the region, however, as vampire-like new developments suck the life out of existing ones. So publicly subsidized retail developments in Chesterfield and Fenton bleed business out of existing centers in, say, Ballwin. New big-box developments in Manchester drain the vitality out of older shopping centers in Crestwood, and so on. Net gain for the region: virtually zero.
If these local incentives don’t result in overall gain, why provide them at all?
Missourians would be better off if they were allowed to keep their earnings and spend them as they desire in the private sector. If the government were serious about encouraging job creation and productive economic growth, it would eliminate such market incentives entirely.
