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« More Space Access | Main | Another Reason I'm Not A Conservative »

Poor Subsizing The Rich

John Miller has some comments on the New Mexico Spaceport:

On the one hand, it sounds like a great opportunity for a rural area. On the other hand, why does an "all commercial" venture need a taxpayer subsidy? Isn't that doubly true if private spaceports really are, as advocates say, "an idea whose time has finally come"? Private space travel is attracing big-time venture capitalists, such as Richard Branson and Jeff Bezos. Should the residents of "one of the poorest regions in the nation" subsidize their highly speculative businesses?

At least sports stadiums have a sure market. Even in Detroit.

Posted by Rand Simberg at March 26, 2007 07:04 AM
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A new airport has to at least have the backing of the government, knowing that they'll be able to tax the activities there.

Any firm data on how many airports get some government 'seed money' as well?

It's likely that the location has more to do with its relative isolation than the wealth of nearby people.

Posted by Tom at March 26, 2007 07:33 AM

Any firm data on how many airports get some government 'seed money' as well?

I don't know about "seed money," but all airports are eligible for infrastructure improvement funds from the FAA. But that's federal money, not county sales tax in a poor county.

It's likely that the location has more to do with its relative isolation than the wealth of nearby people.It's likely that the location has more to do with its relative isolation than the wealth of nearby people.

It's not just "likely," it's certain. That still doesn't mean that the people living in the county should have to pay for it.

Posted by Rand Simberg at March 26, 2007 07:38 AM

What seems worse to me is that the spaceport is being based around a specific market.

Also, I thought with the HTHL vehicles there wasn't supposed to be the need for any expensive infrastructure, much less the amount bandied about for the "spaceport," which is going to eat more money than five of the suborbital ventures I vaguely remember the development costs of, although not together.

Posted by Phil Fraering at March 26, 2007 07:49 AM

But that's federal money, not county sales tax in a poor county.

Federal money is the best of all worlds, because no one ever has to pay for it. All you have to do is cut federal taxes rates; revenue will go up from economic expansion.

Posted by at March 26, 2007 07:49 AM

On the other hand, no one complains about poor people pooling their money to create a new business venture - that's how 99% of all businesses get started!

So this can be seen as that writ large. One can question the ethics of forcing people to invest, but to me that is one of the few valid reasons for government.

This is going to make the state money, right? It would only be immoral if there was an expected net drain of cash.

Posted by David Summers at March 26, 2007 10:23 AM

On the other hand, no one complains about poor people pooling their money to create a new business venture - that's how 99% of all businesses get started!

So this can be seen as that writ large.

No. One situation has people making decisions about their own money. This one has people making decisions about others' money.

This is going to make the state money, right?

Who knows? If so, it should be born by the state, not the county.

Posted by Rand Simberg at March 26, 2007 10:50 AM

Airports receive 9 to 1 federal (FAA) funding for runways and other infrastructure. That is for every local dollar spent the federal government gives them 9 dollars. There have been attempts for several years to et the FAA to fund local spaceports with the same formal. Unfortunately most of the space advocate groups are so focused on what NASA does and getting NASA funding for their pet alt.space ventures they dont seem to have time to work real space commerce issues like this one which leaves it up to the states to raise funds form local communities for projects like Spaceport America.

Posted by Thomas Matula at March 26, 2007 11:33 AM

Our coutny aiport, SCK, is a center of a harebrained scheme to make it international right now. The county "invests" a few million (not many, I remember it was less than 20) into facilities. If they are brought to an acceptable standard, feds agree to man a customs post there. Once airport is international, Aeromexico might be willing to fly there from Guadalahara or whatnot. The county is planning to recoup the "investment" many, many, many years down the road from getting a cut of landing fees. There are not insolent enough to claim business development and taxes, thank heavens.

Permanent passenger service at SCK died in 1980s, when it became clear to everyone that it's far cheaper to drive to Oakland or Sacramento than to pay for an extra hop. At the break of a century, America West attempted to fix the equation by running a spoke line to PHX. Their idea was that since San Jose and Oakland are end points for them anyway, running an RJ to the main hub in Phoenix would eliminate the extra hop and extra expense. They pulled out after struggling for about two years. It was a pleasant service (as much as AW was able to provide -- after all they won the worst customer service award a couple of years in the raw) and I took it whenever possible, but it wasn't economical for them due to competition with nearby airports served by Southwest.

So, now it's well established that the passenger service at SCK is dead. The county is dumping money into attracting Mexicans, but there's no certainty that they actually will come, and once here will stay. Looks like a perfect model of government investment into airports.

I heard of some pundits lauding how Mojave managed to milk $11 million from the state (not the Kern county). Nice going, people. In some way, I hate them, but on the other hand, the state wastes far more on its own bloated apparatus, and if these money didn't go to Mojave, they'd be just dumped into bureaucrats' pockets in Sacto anyway.

Posted by Pete Zaitcev at March 26, 2007 11:40 AM

I read the Washington Post article...the plan should be not to engage in the "frame" that the guy who was griping about the spending has set forward. That frame is senseless.

the reality is that the people who he is arguing for pay almost no taxes whatsoever and recieve far more in federal and state and local services then they even come close to paying into.

The people who are going to be hit by this are the ranchers etc who actually have serious money to spend.

I wouldnt engage in knocking down this guys argument, it is a "real" strawman.

Robert

Posted by Robert G. Oler at March 26, 2007 11:44 AM

And here they're saying Branson's bringing the money:

http://www.koat.com/southeast/11348264/detail.html

Posted by Frantic Freddie at March 26, 2007 12:01 PM


I'm told that there's a reason why most sports stadia are government-owned and financed these days. Apparently it has to do with a change in Federal tax laws a while back that makes private financing of sports stadia highly undesirable.

On the other hand, NASCAR seems to do it.

The question of public-vs-private financing for spaceports is something would probably require a detailed study by someone who's an expart in tax law.

On the third hand, however, I am not a resident of New Mexico so I do not (and should not) have any say in the matter.

The most important takeaway for space advocates is that we should not be putting all our eggs in one (or a few) spaceport sites. Especially when sites that are "green fields."


Posted by Edward Wright at March 26, 2007 12:47 PM

Robert,

The problem is their vote counts the same in local elections as the rancher and since there are only a few ranchers and many, many lower income individuals they will have an impact on who is elected to local government, which in turn will impact the funding for the faculty.

The Gulf Coast Regional Spaceport was shut down after the recent election brought a new group into power in Brazoria County, even though the bulk of the funding was coming from the state of Texas.

And already the Don Ana county commissioners have placed conditions on spending the tax money, including receiving a license from the FAA by the end of 2008. This may be the killer as groups are already fighting the EIS and could drag it out in court.

Posted by Thomas Matula at March 26, 2007 02:15 PM

Ed,

I too believe the more spaceports the better. However if advocates don't get involved they will likely have none. Or will have to use the existing government launch ranges with all the problems and conflicts that creates for newspace/altspace firms. Ask Elon Musk why he ended up traveling thousnds of miles to the Marshall Islands to launch the Falcon I, and the logistics problems that resulted. A clean sheet spaceport on the Texas coast would had made his life a lot easier.

Posted by Thomas Matula at March 26, 2007 02:22 PM

Posted by Thomas Matula at March 26, 2007 02:15 PM

Hello Tom.

Brazoria (BRAAAZ...ORIA) sorry the AWOS at the Lake Jackson airport mispronounces Brazoria...kind of a hoot, you have to take things in small favors...

Brazoria county has always been a bit wierd...didnt I read somewhere they they are tying to make teh "N" word a criminal offense?

Oh well. to your valid point.

I agree that "Juan" has more votes in the Colonias then the ranchers do...but there are two things at work.

The first is that one will never explain to Juan in the Colonias that a spaceport is a good thing for him. Just isnt going to happen as the saying goes.

The second (and kind of good news) is that these people usually dont turn out in all those large
numbers to vote.


What one can do is two fold. One turn out the people who have half a clue about what is going on and two try and "buy off" with some giveaway the organizers who feed on the loyalties of the "massive poor" into not oppossing it. Read carefullly that is what the guy in the WP article is I think wanting...kind of a tax gratiuity if you will to not oppose the measure.

Otherwise you really dont stand a chance of getting something progressive in terms of infrastructure though a vote like this.

Brazoria is the county after all that shut down its airport and finally built a new (nice) one...and now from West Columbia all the way to the big H they are busily building a four lane highway hoping to get bedroom Houston to "move" there.

Robert

Posted by Robert G. Oler at March 26, 2007 02:45 PM

Richardson and New Mexico certainly have the appearance of investing in a desperate get-rich-quick scheme. Would you rather that they try to compete with Vegas casin0s? If New Mexico is going to tax, better that they spend on aerospace jobs than most other government ideas for business development. Just about every government infrastructure or business investment benefits the rich more than the poor.

Posted by Sam Dinkin at March 28, 2007 08:47 AM

As a New Mexican, I am reasonably happy with the spaceport. But not because I think it's a purely wonderful thing.

I actually can't decide if it was a good idea or not--my immediate "way cool" reaction doesn't square with my philosophical leaning for reduced government size.

If you had offered me a tax break or the spaceport, I would have taken the tax break. Nobody asked me.

The state government had a "surplus." That should have been refunded to us the taxpayers.

However, from what I can tell, the spaceport is at least less damaging than dozens of other things the government likes to do with our money. I don't think they started some huge beauracray that will live forever--in fact, I think the spaceport would be much more likely to lose its funding in the face of budget deficits than any other government program I can think of. At least that's not money their trying to use to force a three year old into government schools or hire animal enforcement agents to come by and make sure my dogs have enough toys. (Believe it or not, that is part of a law the city of Albuquerque passed recently.)

Posted by Jeff Mauldin at March 28, 2007 02:33 PM

Hi Robert,

Politics are different in Las Cruces then in Houston. I have lived in both places and saw the differences. Individuals with lower incomes are much better organized politically in Las Cruces.

Also note my prediction has already come true with one Commissioner switching her position already. This makes two for the spaceport, two opposed, and one undecided.


http://www.lcsun-news.com/news/ci_5528152
Questions push Perez against spaceport tax
By Diana M. Alba Sun-News reporter
Article Launched: 03/27/2007 01:00:00 AM MDT

LAS CRUCES A Doa Ana County commissioner who previously hadn't taken a position on a spaceport tax released a statement Monday opposing it.

Tom

Posted by Thomas Matula at March 29, 2007 09:51 AM

Hi Sam,

The spaceport effort in New Mexico started in 1990, just after the first licensed commercial launch in the U.S. from White Sands Missile Range - which I was fortunate enough to witness. It was clear then that schedule/security conflicts with the range made a clean sheet commercial facility desirable. As a Ph.D. student at the business school at NMSU at the time I was involved in these early efforts and was even able to persuade my graduate committee to let me do my dissertation in marketing on commercial spaceports.

The site in Upham was selected following a USAF/WSMR study of the most suitable sites in the southwest for a commercial facility. The first plan was derailed when KPMG business plan came in with a $600 million dollar price tag (sticker shock) and on their advice, and against the advice of the many of WSMR veterans who started the project, started chasing the VentureStar. It was good to see the project get back on track as a sub-orbital facility after the CATS/SSTO bubble burst in the early part of this decade.

All told the state probably spent several million doing studies on it during the 1990s. So given this, I would hardly call it a get rich quick scheme. The reality is that site is ideal for sub-orbital vehicle development, both for expendable and reusable.

The only reservation I have over their current plan is their dependence on the Newspace/Altspace Space tourism industry. To me it has all the appearances of the CATS/SSTO bubble of the late 1990s. I just hope the firms involved actually get the industry off the ground although I am not hopeful given how the firms are ignoring far more attractive near-term sub-orbital markets in favor of tourism. Still when the newspace/atlspace space tourism bubble bursts in a few years there should be some good salvage to build a viable sub-orbital industry on. My goal is to work with the local/state officials make sure that Spaceport America will be there to serve this new market.

Tom


Posted by Thomas Matula at March 29, 2007 09:51 AM

I was trying to make an example of Stockton airport in California, referring to someone commenting how governments pay for airports. Guess what... Yesterday, the county commissioners voted against dumping money into SCK. I think what broke them was how the original estimate by project pushers of 2 million balloned into 5.9 million. At least they haven't started building yet. So all is well that ends well.

I'm not saying if NM spaceport ought to be funded by tax increases or not. But making connections with airports is probably an iffy business. You may find examples supporting any position you wish.

Posted by Pete Zaitcev at March 29, 2007 07:11 PM


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