White Elephants

No, the circus is not coming to town, at least not literally: the City of Pittsburgh has to choose the best site for a slots casino. Properly sited and developed, the project has the potential to spark revitalization in its host neighborhood. Or, this project has the potential to become a white elephant – a massive physical eyesore and fiscal anchor that will drag down the whole city. Weighty stuff indeed; luckily Pittsburghers can rest assured that the choice of who to award the license will be decided on the project that will provide the best return for the City. (pause for comedic effect)

Ok, there is the rub. We shouldn’t be concerned that the decision will be based on political payoffs, it probably will. What we can do is make sure to apply pressure for the right proposal and provide the payoff for that choice.

In the parlance of gambling, which proposal offers the greatest chance of the greatest payoff. This requires that we consider the most likely “guaranteed” return as well as the jackpot potential. Since a casino itself is by its nature – a gamble – then the guiding criteria should be how it fits into the fabric of the community and how it will impact the surrounding neighborhood. Since the return of the casino itself is a gamble, then the greatest guaranteed payback is from the multiplier effect that a new development will generate even if the casino is not successful.

So which proposal fits its site better but will also enhance the surrounding developments and increase property values in the adjacent areas. These are the projects that will add the most value to the City. Increasing the value of adjacent property is a major component of future value. Sites that are isolated by rivers, highways or other major infrastructure will limit this positive spillover. If the adjacent properties are tax-exempt, or controlled by a few individuals or developers, then the spin-off benefits from the casino for the public will be limited.

For all of the negative side effects that come with casinos and gambling, we need to maximize the public return on expanding this activity in our City. Let’s hope we can make the best choice.

Pay for Police

Here is a good letter to the editor from the P-G:

Pay for police

Bravo to state Rep. John Pallone, D-New Kensington, who recently proposed legislation to bill municipalities for using state police to provide local police service. This legislation will reduce a hidden subsidy that has been provided through the generosity of state taxpayers who subsidize service for the fortunate few.

In 1997, the state police estimated that local coverage costs approximately $102 per resident. Inflation would boost that cost to $120, so Rep. Pallone is offering these communities a bargain. If they don't like it, they can contract with other municipalities or fund their own service.

It would help to compare "free rider" communities with others in the same county that provide their own local service and Westmoreland County provides both kinds of communities. Rep. Pallone's legislation excludes municipalities with fewer than 9,000 residents, but I am not as generous. In Westmoreland County, there are nearly 46,000 households with 117,000 people (one-third of the county's residents) that currently receive subsidized local service from the state police.

These "free rider" municipalities are currently paying only $42 per household for state and county police compared to $256 per household for Westmoreland residents who fund local police services.

The argument that paying $100 per person for police coverage would force them to increase their taxes misses the point -- others bear the burden for the services that the "free riders" receive. I wonder if those residents are happy to subsidize their neighbors.