Midwest Voices

Kansas City Star Editorial

None

Missouri Gov. Jay Nixon said he planned to call a special legislative session on economic development, but he and lawmakers are still wrangling over what should be on the agenda.

The to-do list is expected to include welcome measures retooling many of the state’s tax-credit programs, curbing some incentives and offering new ones for high-tech industries.

Among them are provisions to help Kansas City ward off attempts by Kansas suburbs to poach Missouri-side businesses.

But the centerpiece of the package deserves a closer and skeptical look. This is the plan to allocate $360 million in tax credits for development of a big air-cargo hub — an “aerotropolis” — at Lambert-St. Louis International Airport.

The project would subsidize development of warehouses and storage facilities around the airport and encourage the movement of cargo through St. Louis.

Sen. Eric Schmitt, a St. Louis County Republican, says a major goal is to expand distribution networks around the airport and encourage job creation. A smaller part of the legislation would give tax credits for air cargo shipment, which will encourage freight forwarders — people who book cargo space on carriers — to work in the St. Louis area. The two facets of the plan would help build a major air-cargo hub, says Schmitt.

But Tom McKenna, marketing director at Kansas City International Airport, says flatly the plan is unworkable. “Not everybody can buy their way into being an air cargo hub or aerotropolis,” said McKenna.

The St. Louis project envisions peeling off a major chunk of Asian air-cargo traffic, specifically from China, and diverting it to St. Louis. Greg Lindsay, author of a book on the aerotropolis concept, told the St. Louis Post-Dispatch that some trade from China could be diverted, but only until the subsidies expire.

McKenna says cargo hubs work like passenger hubs. They are most efficient and offer the highest value when cargoes are bound for multiple destinations and the planes needed to carry the items are located in relatively close proximity.

“To think you would get them to break out the Asian stuff, or just the China stuff, and incentivize them to aggregate that in St. Louis doesn’t make any sense,” McKenna said. “It’s not going to happen. … Missouri taxpayers should be very concerned about this.”

A few years ago, Kansas City officials studied ways to build up KCI’s cargo operation. McKenna said a big problem was the lack of cargo for the return trip to Asia, since no carrier wants to fly back empty.

Schmitt says the freight forwarders who would take advantage of the aerotropolis tax credit would provide those return loads. But if McKenna is right and they remain at major hubs like Chicago — where shipment networks are already well-developed — then the return loads won’t materialize. At that point, the tax-credit package simply looks like a massive subsidy by all Missouri taxpayers for development near the St. Louis airport.

That may have some merit and important spin-offs in the eastern part of the state. But the sheer size of the package is eyebrow-raising, given that a tax credit is the same as outright spending from the point of view of the state budget. The treasury is still short the money.

The economic development package contains several meritorious provisions, notably incentives for Missouri’s science and technology industries, including data storage. But the St. Louis aerotropolis proposal raises major questions and seems more dubious the closer one looks.

Comments

Sign in with Facebook to comment.