Nevada taxpayers could be on the hook in monorail bankruptcy
An absolutely must-read article in the Sun today on the Las Vegas monorail's bankruptcy and how taxpayers could be stuck with $1 billion in debt.
After all the promises, will taxpayers be stuck with the monorail's bills?There are so many salient points here it's hard to know where to begin.
Since the inception of the Las Vegas Monorail, Nevadans have been repeatedly reassured that they will not wind up on the hook for its bills.
Nevermind the high salaries monorail executives and board members are getting, that won't ever wind up coming out of the public's pockets.
The Nevada Business and Industry Department's issuance of $650 million in tax-exempt bonds to construct the transit system? Not to worry, no liability there.
Granting state sales tax and county property tax exemptions to the monorail? Yes, it helped the monorail system avoid putting millions of dollars in the public coffers, but it was the right thing to do.
Clark County's approval of the monorail's exclusive franchise agreement? Just a formality.
Having a five-member board appointed by the governor to oversee the operation? That's just to protect taxpayers' interests.
Now that the monorail's long predicted bankruptcy is in front of a federal judge, however, the cozy relationship between the system and state and local governments has become a crucial issue and is again raising the question of whether taxpayers will wind up on the hook for any or all of the monorail's $500 million to $1 billion in debt.
First, remember this when politicians or businesses looking for government handouts start talking up the Desert Express or a maglev train between Las Vegas and California. Government should not be financially involved in any business - especially one that's a consistent money loser. If individuals or a business think a train would be valuable or profitable, they need to build it with their private money and financing and pay their taxes just like everyone else.
Second, we shouldn't believe the promises politicians or rent-seeking businesses make when they are trying to get taxpayer dollars or financing. Remember the headline from this story: "After all the promises, will taxpayers be stuck with the monorail's bills?"
Third, if government simply fulfilled the core functions that only it can (of which the private monorail is not an example), taxpayers wouldn't be on the hook here. It's not the government's job to create jobs or use tax-increment financing to try to redevelop certain areas.
Fourth, aside from being an improper role of government to try to create jobs or diversify the economy, government isn't good at picking the winners and losers in an economy. Even if you don't agree with limited government philosophically, you should still agree with it from a pragmatic point of view.
The take away is this: Let businesses succeed or fail on their merits, not their political acumen. Applying this principle will benefit both taxpayers and the economy.