Halfway but not quite there

An op-ed in today's Post, "Prince George's Stadium Plan Merits a Yellow Card," suggests that independent bodies should evaluate economic impact claims when it comes to government subsidies or other use of government power when it comes to private development.

In 2005, in the aftermath of the Kelo decision by the Supreme Court, which held that making more money in terms of public finance was in the public interest and therefore justified taking private property to give to another private entity for redevelopment, a couple professors wrote an op-ed in the Boston Globe outlining ways to strengthen the openness, transparency and fairness of the eminent domain process. From "Make Eminent Domain Fair for All":

• Requiring, as Justice Anthony M. Kennedy suggested in his Kelo concurrence, that any exercise of eminent domain for economic development have a primarily public purpose rather than a merely incidental one.

• Requiring the government to demonstrate the public benefit through a full-scale financial analysis that could be challenged in court.

• Requiring that eminent domain not be used for a solely fiscal purpose and that it instead must be part of a comprehensive land use plan.

• Requiring that the affected neighborhood have adequate participation in the planning process, a right that would be backed up by state-provided technical assistance upon the neighborhood's request.

I think that these principles should be applied to all situations when the government uses its power and authority (for providing land, tax subsidies, tax abatements, etc.). (As mentioned in a variety of past blog entries.)

And I think that there should be an independent evaluation process. But unlike Colin Helmer, writer of the op-ed in today's Post, I don't believe that local universities, especially public universities, can be fully independent in such evaluations.

Mr. Helmer suggests that the University of Maryland, located in Prince George's County and fully aware of the need to keep elected officials from PG County serving on both the county and state government happy, will be an independent party evaluating the economic impact of a soccer stadium proposed in PG County. I think not. Similarly, because the University is reliant on state appropriations, they only have so much social and political capital that they can expend promoting independent judicious academic analysis that can be at odds with what the politicos want. And the politicos have the means to reward or to punish the University.

The same goes in DC. Local universities seek to use the city's tax exempt bonding authority for construction projects, want zoning benefits, have to get approval of campus plans every 10 years, etc., and they are not likely to be willing to challenge the status quo too significantly.

New York City funds the Independent Budget Office, somewhat comparable to the relative fairness and nonpartisan activities of either the Congressional Budget Office or the Government Accountability Office, which advise Congress, and conduct analysis (and/or audits) of various government activities, in response to Congressional directives.

From the IBO website:

The Independent Budget Office (IBO) is a publicly funded agency that provides nonpartisan information about New York City's budget to the public and their elected officials. IBO presents its budgetary reviews, economic forecasts, and policy analyses in the form of reports, testimony, memos, letters, and presentations. IBO also produces guides to understanding the budget and provides online access to key revenue and spending data from past years.

Such an entity should exist to provide a similar kind of service for state and county and center city governments.

And if you're going to hire a university to evaluate economic impact, even though it's impolitic to not spend the money locally, it makes sense to contract another university outside of the state, because the university will not likely have the kinds of potential conflicts typical of a local institution.