Convention Center Authority FACTS

February 24, 2006

Once upon a time the Lancaster New Era was the "conservative" newspaper. That was before the newspaper became 1/3 partners in the biggest "public" project in the history of Lancaster county.

Read the story we printed a year ago next month for PROOF of what we're talking about!

No Hotel Tax! (says the Lancaster New Era)

This isn't a story we wrote but rather two policy papers we must commend. The writer of the papers is the Allegheny Institute Public Policy in Pittsburgh and they deal with FACTS related to two very important issues facing Lancaster County! Here is there website with extensive papers on various subjects: AlleghenyInstitute.org

The first report is called "Pennsylvania's Ever-Expanding Economic Development Industry" (right click and save to your hard drive)

Here is a few paragraphs of the 12 page report published last month to wet your appetite:

Pennsylvania is no stranger to handing out public money in its pursuit to build communities, develop infrastructure, and help companies create and retain jobs in the state. In fact, one could say that the state has quite a deep affection for economic development. This is certainly shown in the "alphabet soup" of programs available to stimulate the private sector.

For all of the questions surrounding its effectiveness, job creation programs have tremendous staying power. Regardless of party affiliation, regardless of the number of legislators and governors that come and go, economic development remains. In fact, it often expands. The current administration’s efforts have been bolstered by the passage of new programs in 2004 that aim to help promote site development, venture capital firms, tourism, agriculture, and water supply to chase down private dollars.

Though dubious, the administration has made, and continues to make, claims that its stimulus program is directly responsible for pushing Pennsylvania to an all time high in job totals and for depressing the unemployment rate. Even if all of the job growth were solely attributable to the economic development spending, its dollars spent per job created ratio would be far from cost-effective.

Much like other states, Pennsylvania is using the economic development programs at its disposal to reward favored companies and to compensate for the issues that are really the root causes of slow growth: taxes, regulations, and bad labor climate. Don’t look for these core issues to be addressed anytime soon. But do expect the state to continue its practice of doling out dollars as it tries to spur economic growth. The ultimate irony is that for all of the spending on economic development, Pennsylvania’s employment creation continues to languish.

The next report we recommend was published in 2002 but is still true the day it was written. It's about government authorities. We have called them "legislative Frankenstiens" because once created, they are nearly impossible to destroy. Look at the convention center authority - WHO will have the courage to pull the plug on this out-of-control-authority?

Here is a few paragraphs to wet your appetite for the entire 38 page report!

"The Case for Reining in Governmental Authorities" (right click and save to your hard drive)

Authorities have played a major role in providing services for Pennsylvania citizens since the 1930.s. These were created out of desperation, as a device by which constitutional debt limits could be circumvented.1 This stratagem would permit essential public needs to be satisfied legally. At the state level the first one was the General State Authority. Local governments likewise created their own once the courts had approved such arrangements.

Utilized initially to provide basic services such as water and sewer systems, their use has been expanded at both levels of government. A whole new variety of purposes has emerged. To name but a few, they have been used in the development of fast food shops, golf courses, department stores, stadiums, banks, dormitories and airports. Some of these privately oriented ventures might be questionable. That is, should public entities be used on their behalf? In reality, the application of the authority mechanism today for even a valid public endeavor might be disputed since Pennsylvania constitutional debt limits are no longer a major consideration. Nevertheless, their deployment continues for many reasons - none of which appear to be in the interest of efficiency or sound participatory government.

Voter approval for these authorities to be created or maintained has never been required. Consequently they have flourished unchecked and have become a permanent part of the government structure. Invisible, to most, they cast an unaccountable, ominous shadow over the citizens of the Commonwealth.

This study was undertaken to determine whether or not this continual use of authorities is an appropriate activity consistent with the principles of good democratic government. It is not an easy task since authorities have different identities, purposes and enabling legislative birth rights. In addition, information regarding them is limited and fragmented. Neither fish nor fowl they exist in the twilight zone between the public and private sectors. For the most part, they are out of sight and are difficult to bring to the fore. Their complexity notwithstanding there are four things that are certain and common to all of them regardless of their sponsorship (state or local) or purpose. That is: