BCT Editorial – 1/7/07

This page was last updated on January 7, 2007.

Enough is enough; Editorial; Beaver County Times; January 7, 2007.

Below is a detailed critique of the subject editorial.

“State and county officials stand by their offer on operations center

“Allegheny County and the state are right in not getting into a bidding war to lure US Airways into building a $25 million flight operations center in the region.”

[RWC] At no point in this editorial do you read that while US Airways is trolling for taxpayer dollars, it found $8 billion in cash and stock to make an offer to buy Delta.

“At some point, you just have to just say ‘no’ to the unreasonable offers others are making to attract companies.”

[RWC] That point is from the very beginning. Government has no business taking money from our paychecks and pension checks to give it to someone else, whether that someone else is an individual or a business.

“Pittsburgh is competing with Phoenix and Charlotte to land the flight operations center, which US Airways claims will employ 600 people, including dispatchers for all of the airline’s flights and flight-crew schedulers.

“Our region would seem to have a built-in advantage. US Airways has had a 450-employee operations center in Findlay Township for a decade. However, since its merger with the former America West Airlines, US Airways has also operated a second center in Phoenix. The new center would replace the two existing ones.”

[RWC] A “built-in advantage” over Charlotte, perhaps, but not Phoenix. I don’t buy the idea Pittsburgh has any advantage over either location, though.

Let’s recap. The flight operations center was located here when Pittsburgh was the major US Airways hub. That’s no longer the case. US Airways has been downsizing its Pittsburgh operations in favor of Charlotte and Philadelphia. Its headquarters is in Tempe, AZ. Why would US Airways want to keep a flight operations center nowhere near its major operations centers or its headquarters?

In my opinion, Pittsburgh is in the mix only to drive the bidding. I’d be surprised if Pittsburgh retained the flight operations regardless of its bid, short of the totally ridiculous.

“As Allegheny County Chief Executive Dan Onorato said last week, the county and state have put together a $16.25 million package that includes up to $12.5 million in loans, $3 million in state and county grants and $750,000 in potential tax breaks.

“Phoenix has upped the ante. As The Times has reported, Phoenix has more than doubled its initial bid and is offering incentives totaling up to $36 million over 25 years. (Charlotte has not released the details of its offer.)

“Instead of topping the Arizona ante, Onorato said the county and state are standing pat. ‘We feel that we have put forward a very strong and competitive proposal, and we’re not going to get into a bidding war with Phoenix or Charlotte,’ Onorato said.

“Do the division. The state/local package breaks down to a little more than $27,000 a job. Meanwhile, the Phoenix offer equates to a subsidy of $60,000 a job.”

[RWC] Here’s some division the Times didn’t do. In the unlikely event we keep the flight operations center, the taxpayer cost to get the incremental 150 jobs will be over $108,000/job. How much do those jobs pay and how much in taxes do those employees pay?

“Granted, jobs are important. But at what price? The conclusion state and local officials have reached is the right one - $27,000.”

[RWC] Here we have the Times’ price. Anything up to $27,000/job is OK.

In addition to division, let’s do multiplication. How many additional jobs do we want and then we multiply that by $27,000. Why not just make an open offer to businesses that if they locate in Beaver County, we’ll pay them $27,000/job?

“US Airways is expected to announce its decision early next month and open the new center by early 2009. If our region lands the facility, that would be great.

“If not, county and state officials shouldn’t be second guessed. At some point, government officials have to say enough is enough when it comes to economic development packages.

“In this case, it was $16.25 million.”

[RWC] Of course county and state officials should be second-guessed. They shouldn’t have made any offer.