Weekend Question 3: Why Am I Not Worried about Cincinnati’s Place in the “Cost of Doing Business” Survey?

Cincinnati is the second most expensive city to do business in, according to the Kosmont-Rose Institute Cost of Doing Business Survey (press release here). Philadelphia is the most expensive.

Before anyone jumps out of Cincinnati’s Carew Tower or abandons the City of Brotherly Love, it’s worth seeing a bit of the perspective of the survey’s authors on doing business in California contained in the press release. At least some of the criteria for what makes a city a better place to do business in are questionable at best:

Not all the blame rests on the state. Most California cities still grapple with providing affordable housing. The ever-present housing affordability gap threatens the low-skilled labor pool as well as the construction industry, which is adjusting to the slowdown in the housing market. The sky-high prices have left many area businesses struggling to attract employees from lower-cost states.

….. Proposed bond measures and infrastructure improvements offer some hope for cities. Governor Schwarzenegger’s $37 billion “Strategic Growth Plan” offers a blueprint for construction spending, including $4 billion for intercity rail systems. However, the plan does not quite specify how the funds will be used, and some analysts fear the funds could be distributed with little regard to California’s specific needs.

Most troubling, however, is The Anderson Initiative proposed for the November ballot designed to prohibit the taking of any non-government owned property. If approved by voters, this constitutional amendment would effectively eliminate the use of eminent domain as a tool to attract new private investment by outlawing the acquisition of blighted or underperforming properties. Cities would be left with significantly diminished resources to fund public-private deals.

So according to the geniuses who did this survey (with admittedly a bit of reading between the lines):

• Pumping money into subsidized housing makes a city a better place in which to do business.
• Wasting money on public transit systems that few will use and which will never make a profit makes a city a better place in which to do business.
• Protecting property holders’ ownerships rights and preventing arbitrary exercises of eminent domain by tax-hungry politicians and money-hungry developers makes a city a worse place in which to do business.

Phooey.

I’m not in a position to have an opinion about Philly. I can say that Cincinnati as a city is indeed more expensive to do business in than it should be. Its municipal employment level as a percentage of the population is ridiculously high. Its crime rate necessitates a lot more spending on security than would be required in many other cities. Its 2.1% earnings tax, which is assessed on all who work in the city, regardless of whether they live there (can you say “taxation without representation”?) should give the city more money than it should ever need to address its problems; but it’s never enough.

So Cincinnati as a place to do business has definite issues. But in pure dollars and cents, which the survey’s press release didn’t discuss, you won’t convince me that Cincinnati is the second most expensive place to do business. No, way.
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UPDATE: NixGuy has more.