The ever-expanding use of taxpayer dollars and sweetheart deals by public officials to incentivize and subsidize the private projects of some of the wealthiest corporations is a violation of the public’s interest.
The Krause Group wants the taxpayers to contribute monies for a sprawling new downtown soccer stadium project. The preliminary proposal would use $40 million to $50 million of taxpayer dollars. For decades, economists have deemed such investment a poor use of public money.
Research shows that such projects do not bring enough economic benefit to justify the cost. The conclusion of decades of research tells us that scarce economic development dollars could be better used for other investments. A 2007 study in the Journal of Sports Economics found that adding a professional team did “not have a positive economic impact on the local community” and contributed no rise in regional incomes.
In addition, the ongoing legal saga over Downtown Des Moines Fifth Project has taxpayers on the hook for over $47 million. Some suggest the Des Moines City Council selected the wrong builder for the project. The Council members’ approval of the sale without discussion is a dereliction of their duty as public officials. City Council member Josh Mandelbaum, cousin of the developer, abstained from the vote, according to The Des Moines Register. The troubled project’s final cost to taxpayers is still unknown.
The “sweetheart deal” between the City of West Des Moines and Google might have worse optics. The city is handing over $40 million to the trillion-dollar corporation Google, for a citywide internet conduit network.
Google Fiber’s statewide lobbyist is a member of the West Des Moines City Council. To avoid his “conflict of interest,” Councilman Matthew McKinney honorably withdrew from the final vote on the deal.
However, it’s foolish of the West Des Moines City Council to expect taxpayers to believe the Google lobbyist had no influence on the negotiation process of an agreement that includes bonding tens of millions of dollars for the build out of the project. To sweeten the deal, Google Fiber is guaranteed exclusive rights to the new network for 18 months as each section is completed.
The public is assured that these “economic developments” will provide financial and economic impact, the general improvement will benefit everyone, the handouts are necessary for the projects to happen and/or the projects will be lured away if tax handouts are not provided.
In an 1871 Michigan Supreme Court decision, Chief Justice Thomas Cooley stated that “using tax money to generate private benefits for a select group — even if they have economic consequence that ripples out beyond them — is against the public interest and unjustified.”
In his 2019 book, “The Billionaire Boondoggle,” author Pat Garofalo explores these popular economic strategies and their optics, such as ribbon cuttings and groundbreaking ceremonies, as opportunities for government officials to boost their favorite pet projects. However, mounting evidence demonstrates this popular economic development strategy does not produce the promised benefits.
Meanwhile, thousands of Des Moines area families struggle as the pandemic continues to rage.
Many in the Des Moines metropolitan area struggle with mental health concerns, food insecurity and a lack of affordable housing. A recent regional housing study identifies 29,000 renters and 25,000 homeowners throughout the metro area who are cost-burdened.
It’s time for our elected leaders to sharpen their focus on the immediate needs of our struggling neighbors and friends rather than the next shiny object with no guarantee of a true return on investment for this community.