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City Says “No!” to Multi-Million Dollar Handout from Uncle Sam
Posted By Mike Brownfield On February 28, 2012 @ 3:36 pm In Featured,Ongoing Priorities | 10 Comments
The city of Troy, Michigan, prides itself as being “The City of Tomorrow … Today,” but now it has another slogan to affix to its city hall: “Stimulus Dollars Not Welcome Here.”
What’s this all about, you ask? Why would a city say “no” to free money?
As The New York Times reports , Troy — a northern suburb of Detroit — was in line to receive an $8.5 million grant from the federal government in order to finance a transportation center that would be part of the Detroit to Chicago Amtrak network. The trouble is, though the money would have helped finance a brand new development, officials say it would create an ongoing financial liability for the cash-strapped city. In other words, it might have gotten the cow for free, but it would be stuck paying the cost of upkeep years down the road.
Of course, this logic is confounding to critics who say that the annual maintenance cost is only $31,000 per year — chump change in comparison to the city’s $50 million budget. But for taxpayers who are being nickled-and-dimed to death, even pocket change can add up to real money — especially when government projects see their costs keep going up and up.
Take the case of California’s Los Angeles to San Francisco high-speed rail system. President Barack Obama granted the state $300 million for a new system that at one time was projected to cost $43 billion. Those estimates soared — with one independent analysis  pegging the price tag at $81.4 billion, and other estimates pointing to a $98 billion . Ultimately, one independent group recommended  that the state ditch the program since the federal government wouldn’t assure future funding.
New Jersey, too, has a similar story. In 2010, Governor Chris Christie canceled a rail tunnel  under the Hudson River connecting New Jersey to New York. His concern? The cost of the project was feared to be $14 billion, and there were no guarantees that New Jersey taxpayers would not pay more than $2.7 billion for the completed project.
All of three of these cases point to one common conclusion. ”Free money” isn’t so free. Or, if you prefer, “beware of Uncle Sam bearing gifts.” The promise of untold economic development is a bright and shiny one until reality sets in. And with local and state governments more cash strapped than ever, the reality of unknown fiscal liabilities is one that responsible leaders can’t stomach.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2012/02/28/city-says-no-to-multi-million-dollar-handout-from-uncle-sam/
URLs in this post:
 Image: http://blog.heritage.org/wp-content/uploads/capitol-cash.jpg
 The New York Times reports: http://www.nytimes.com/2011/12/23/us/michigan-city-of-troy-led-by-tea-party-mayor-rejects-federal-dollars.html
 independent analysis: http://www.heritage.org/research/reports/2010/03/america-s-coming-high-speed-rail-financial-disaster
 $98 billion: http://online.wsj.com/article/SB10001424052970204368104577139061262749358.html
 recommended: http://blog.heritage.org/2012/01/10/falsehoods-abound-in-case-of-california-high-speed-rail/
 canceled a rail tunnel: http://blog.heritage.org/2010/10/27/chris-christie-stops-dumping-money-into-a-giant-hole/
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