Hundreds of millions of dollars in public money is pledged toward private economic development projects in the St. Louis region. But the public purposes of these projects, to say nothing of their costs and benefits, are poorly understood.

One basic problem: The two states, dozen counties and hundreds of municipalities in the St. Louis area have no agreed-upon standards or vocabulary to clarify the situation.

The East-West Gateway Council of Governments — at the suggestion of St. Charles County Executive Steve Ehlmann — is moving to measure the effectiveness of local development incentives. Amazingly, even this modest first step at clarification is causing some concern. St. Louis County Municipal League — an organization representing the county’s 91 municipalities, is worried about its implications.

The East-West Gateway study is aimed at determining:

• What economic activity was created by projects financed through local incentives?

• How have local-development incentives affected “the ability of local governments to finance essential public services?”

• Has the extensive use of incentives contributed “to economic and racial disparities in the region?”

And then there’s the issue of “competitive equity,” what happens to smaller, established businesses when public subsidies come along to help out larger competitors.

Mr. Ehlmann points to a locally owned hardware store in his native St. Charles County — one built over many years by a husband and wife who created jobs, paid taxes, sponsored softball teams and did all the things that communities desire from good business citizens.
Their reward? A big-box competitor located down the street, subsidized with public funds by city hall.

The Municipal League complains the study’s focus is too narrow and incomplete. It views the use of local incentives as defensive in nature — one of the few ways older suburbs can combat the effects of billions of dollars in transportation “subsidies” (i.e., interstate highways and bridges) that its says contributed to the outward migration of people and businesses.

The municipalities’ angst is understandable, but it only reinforces the need and urgency of the East-West Gateway study — a study that should include a full range of local and state subsidies of private development.

Take Centene Corporation’s proposed new $211 million headquarters in Clayton. Nearly a third of the cost would be subsidized with public resources. The subsidy is supposed to retain jobs that Centene has threatened to pack up and move.

The region also may gain 500 jobs that Centene hopes to create — jobs with an average annual wage of $71,267.

It would be a straightforward quid pro quo: subsides in return for jobs. But the purpose and effects of other subsidies, both state and local, are less clear. Apples start being compared to oranges and gooseberries to pomegranates.

St. Louis Mayor Francis Slay complained loudly about a proposed $8 million state subsidy for the Centene project that might, directly or indirectly, lead to the exodus of a major St. Louis law from downtown — shifting jobs to one of the region’s most affluent areas.

That drew criticism from the St. Louis Business Journal, which wrote that the “argument … is beneath him,” noting the use of “state tax credits in the Cupples building downtown” which “will house ad firms Adamson and Osborn and Barr, both of which will move from … you guessed it, Clayton.”

Taxpayers should demand discipline in how public development incentives are defined and insist that they not create cross purposes. The St. Louis region, with nearly flat population and economic growth, has to be exceedingly smart in how it invests economic development dollars. Projects that benefit one city at the expense of others should be avoided.

Moreover, taxpayers have an absolute right to understand what they’re getting in return for public subsidies.

The East-West Gateway study could cause temporary embarrassment to some local governments. But done right, it only can help the entire region to work smarter and promote the common interests of all taxpayers.

(Pictured: Artist’s rendering of the Phase 2 of the proposed Centene project in Clayton.)