Despite the Village of  Schaumburg’s “effort” in promoting economic development through taxpayer subsidies an property tax breaks the Village’s policies of command and control economic policies at the Schaumburg Airport costs the local community in excess of 1,600 jobs and over $150 million dollars in lost economic activity every year.

Justifying these taxpayer subsidies and special property tax breaks for the Schaumburg Airport Mayor Al Larson recently said “We (the Village of Schaumburg) are in the business of long-term economic development.” Really?

Looking back on Schaumburg’s past when the Airpark was in “danger” of becoming an industrial park in 1994, the Village of Schaumburg led by Mayor Larson stepped in, outbid an industrial park developer, and purchased the facility using taxpayer funds. Mayor Larson claimed in 1995 that at Schaumburg Airport “revenues from fuel sales, hangar rentals and business leases will more than offset operating costs.” This rosy prediction has turned sour as Airport users, two-thirds recreational flyers, have financed only 48.9% of the $12.8 million in total costs over the last 5 years.

The Village of Schaumburg has gone to great lengths to make up for the losses at Schaumburg Airport by forcing the taxpayers to pick up the bill. Over $20 million dollars in local, state and federal taxpayer dollars have been used for capital investments on the property during its 14 year history. Recently, Mayor Larson requested an additional $1.84 million in federal stimulus money for runway rehabilitation and energy conservation at the airport.

Additionally, the Village of Schaumburg has enacted a special property tax exemption for the facility, possibly worth an additional $8-10 million since 1994. This causes property taxes for schools, libraries, and other essential services to be disproportionably shouldered by other residents and businesses.

While the taxes have certainly been costly, the effects on job creation are much greater. According to the 2000 U.S. Census and Village of Schaumburg documents, Schaumburg’s 1,079 industrial park acres provided 15,748 manufacturing jobs at a rate of 14.6 jobs per acre. In comparison, a 2006 survey by the Village showed that Airport and on-site tenant employees only totaled 50 full-time and 54-part time employees, or only .89 jobs per acre. The 16.4 to 1 industrial park to airport job creation ratio is a startling reminder of the costs of Schaumburg’s command-and-control economic policies.

The Village of Schaumburg claims that the airport generates $10 million dollars in economic activity every year, or approximately $96,000 per airport job. This suggests that an average performing 117-acre industrial park in Schaumburg, with its estimated 1,700 jobs, would create well over $160 million dollars annually in economic activity for the local economy.

In comparison to what market-based policies could have brought Schaumburg, Larson’s agenda has created a comparative economic desert. Most of the effects of bad economic policies go unnoticed by the public because we can’t see the manufacturing businesses prevented from ever coming into existence at the site that now houses the Schaumburg Airport.

Larson may believe the free-market needs “checks and balances”, but the case of the Schaumburg Airport shows the Village’s economic policies are the ones in need of serious re-examination. This diminishing of economic freedom has created an unseen devastation to the local economy. The cumulative costs of Schaumburg’s airport policies over the last decade-and-a-half certainly surpass more than a billion dollars in lost economic prosperity for its citizens. A change in policy is long overdue.

No related posts.