Agency request displays Shreveport's business-unfriendliness

The Shreveport metropolitan area recently was named eighth-best mid-sized city for jobs growth by Forbes magazine -- perhaps despite Shreveport's city government as it took Caddo Parish's government to step up earlier this year to help maintain a business-friendly climate.

The Caddo Parish Commission had the wisdom to reject raising fees for certain kinds of planning requests. The Metropolitan Planning Commission, which has jurisdiction over zoning matters within Shreveport and emanating five miles outside its borders into Caddo Parish, recently got Shreveport to approve higher fees. Ordinance #174 of 2008 increased most typical fees $100 and most requests for exceptions $150, passing without discussion or dissent.

But Commissioner Matthew Linn, who unlike Shreveport’s councilors owns and operates a business that has had to pay close attention to zoning matters, objected to the parish following suit over its area (much of the parish) covered by the MPC jurisdiction. He pointed out that many of these requests, which already cost hundreds of dollars without the change, now would be that much more and questioned whether this would discourage business formation. At the very least, he argued there should be a graduated scale of fees by business size, as small business is hit worst by the increases. He persuaded the Commission to table the request meaning, for example, now to apply for a variance to serve alcohol would cost $900 in most of the parish but $1,200 in Shreveport. (And that is an application, not a guarantee that favorable action would be taken.)

The reaction of a representative of the MPC, however, spoke volumes about why economic growth is stagnant at best in Shreveport. “The city basically said [in approving the increase], ‘These are hard economic times. We want to reduce the percentage at which we subsidize these private ownership rights,’” said MPC staffer Rusty Jambor.

The presumptiveness and ignorance of this statement is astonishing on three accounts. For one, a service performed by government should have its fee reasonably related to the actual cost of the activity because if not, it is then government being subsidized by private interests forced by all-powerful government to come to it just to exercise their rights as free citizens. When government arbitrarily decides to squeeze revenue out of its citizens not in any response to the actual cost of services but just because it can, it becomes abusive.

(Nor is this rationale limited just to the western shores of the Red River. A few years back fees were raised on emergency medical services and on water and sewerage users in Bossier City to plug a perceived budget hole, their politicians arguing they shouldn’t dip into reserves and/or interest generated from monies saved from gambling revenues. But the draining of general fund reserves has continued and now the city is committing itself to expenses in the $130 million range to improve water and sewerage – the interest of which additionally must be borne by taxpayers, instead of using the fee hike in the provision of that service to cover it.)

Also, in making such an assertion does anybody stop to think about basic economics? If these are “hard economic times” that somehow force a government to raise fees, did it occur that the same hard times make business more sensitive than ever to higher fees? That these hikes may discourage not only application fees but applications whose successful implementation could lead to higher tax revenues? Not that the city should not already know this, as witness Shreveport Mayor Cedric Glover’s admission in his 2009 budget message that higher recreation fees actually decreased overall revenues in that area.

Finally, it is a total misunderstanding to think that compelling payment for trying to do business has anything to do with “subsidizing” private ownership rights. Government itself is nothing but a leech off the free use of private property, as it never could exist without the taxes from activities involving property, so to think that reducing government’s burden on the exercise of those rights through lower fees translates into an increased subsidization of them is exactly backwards and denies the reality that private property rights precede government power. (You can look it up in the Louisiana Constitution.)

It’s not the amount of money in question – the change may stuff only a few tens of thousands more dollars into Shreveport’s coffers, and many fewer now forgone by the parish – but that attitudes such as this can exist within government. This business-unfriendly attitude appears to pervade Shreveport governance and explains the city’s trouble in keeping population and business activity. The worst thing it can do is begin a death spiral of making business more costly to do within its borders that chokes off and contracts business, and therefore city revenues, even more. No amount of plaudits from the media can change that reality.