December 20, 2012

Government Failures Abounded in Southwestern Ohio in 2012

Filed under: Economy,Ohio Economy,Ohio Politics,Taxes & Government — Tom @ 11:00 pm

And they won’t learn from their mistakes.

This post went up in revised form at earlier this evening.

The supposedly conservative and heavily Republican southwestern portion of Ohio had quite a run of big-government failures and failures in the making in 2012. While it would be easy to assign the blame for most of them to the once proudly conservative but now almost hopelessly liberal City of Cincinnati, the city’s suburbs and exurbs have also more than done their part.

To be sure, it’s was pretty bad inside Cincinnati’s city limits. In July, it reopened Washington Park, a now eight-acre land expanse north of downtown, after spending a mind–boggling $48 million for a 450-car underground parking garage, land acquisition, several new facilities and significant renovations. Admittedly, the park’s appearance and amenities represent an impressive improvement over its decrepit prior condition, and, to be fair, about 45% of the funding came from private sources. That said, it’s still hard to imagine how this so-called “investment” will ultimately be worth it. Supporters believe it “will serve as a catalyst for future development of at least 25 surrounding vacant properties.” Let’s see if they’re right in a few years. I doubt it.

Two decades ago, the city said that the heavily subsidized and now half-empty Tower Place shopping complex downtown would be a catalyst for a revival there. An Associated Press report covering the city’s late-November offer to buy the entire mess with $8.5 million it really doesn’t have described it as “a once-thriving downtown Cincinnati mall.” That’s sheer historical revisionism. My recollection is that the mall had high vacancy rates and disappointing shopper traffic virtually since its inception. Just two years after its 1991 opening with the help of $10 million in city “investment,” the now-defunct Cincinnati Post, normally a see-no-evil cheerleader for city commerce, wrote that it “hasn’t been able to meet expectations.” The mall’s situation never really improved, and it has been an economic millstone around the city’s neck for over two decades.

Of course, the city isn’t learning from its mistakes. It’s deciding to make new ones. In February, after two voter initiatives failed to stop it, it broke ground on a four-mile streetcar project with an estimated cost of $102 million before the predictable cost overruns occur.

The government of Hamilton County, where Cincinnati is located, is still paying dearly for its ill-advised decision to build two stadiums for the Reds and Bengals, the city’s professional baseball and football teams.

In 1996, the county’s commissioners convinced taxpayers to approve a sales-tax increase which would supposedly be enough to cover all costs involved while providing property tax relief for homeowners. Sales tax revenues, based on far too rosy projections, weren’t at all sufficient. Sixteen years later, the commissioners didn’t even attempt to force goodwill concessions from the heavily tax-favored teams. Instead, facing a $7 million deficit in the stadium fund, they reneged on half of the property tax rollback in early December by a 2-1 vote while claiming that the de facto tax increase will only be in place for two years. We’ve all heard that before about “temporary” tax increases, haven’t we? The lone vote against the tax increase came from a Democrat.

From Clermont County, Hamilton County’s eastern neighbor and supposedly a Republican and conservative stronghold, came news in November that for reported “financial reasons,” the Jungle Jim’s retail grocery store in the Eastgate area would be laying off 30-40 employees just two months after it opened.  An emailer who lives in the area informed me that this is yet another example of the government trying to pick winners and losers, and — as all too often happens — picking a loser:

Let’s recap: Union Township and Clermont County taxpayers paid $8.5 million for Jungle Jim’s to set up shop even though another merchant was reportedly going to come in on their own accord. … Then we “bailed them out” with $1 million more because they couldn’t make their first payment.

… The market is saturated with eight grocery stores in a two-mile radius. … But they called this “the greatest thing to ever happen to the county.”

… Self-described conservatives … think nothing of government starting businesses with our money, indicating their fundamentally flawed view of government’s proper and intended role.

Government was never designed to interject itself into — and thereby manipulate — the market in order to create jobs; rather it should stay out of the way so that the market can dictate which industries are sustainable.

Sadly, the idea that our local and county governments will learn from their 2012 mistakes and conduct themselves in accordance within a properly limited framework in 2013 is probably way too much to hope for.


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