Wednesday, June 6, 2018

WyoFlot: How Politocrats Grab Your Money

ENDOW and its empty WyoFlot jets will soon come landing in a tax bill near you and grab some of your money. They have nine destinations in mind around the state, all in cities and counties that will be repeating the pattern now established here in Laramie County. An organization called CRAPT - Cheyenne Regional Airservice Pickpocketing Taxpayers - is leading the charge to get taxpayers permanently on the hook for three pies in the sky per day in and out of Cheyenne. KGAB has the story:
The head of a non-profit group working to bring a new air carrier to the Cheyenne Regional Airport said Tuesday the idea of not subsidizing an airline to serve the airport is "not an option." Wendy Volk is President of the Cheyenne Regional Air Focus Team (CRAFT). In an interview on KGAB-AM, Volk said any air carrier will need a minimum revenue guarantee before agreeing to serve Cheyenne Regional Airport. "This is how the aviation business is established with new (new agreements with air carriers) communities," Volk said of the guarantee. The subsidy would assure the air carrier of a certain minimum income. 
That income will have to be enough to get every scheduled plane off the ground even if it is empty. If there is a minimum ticket sales requirement attached to the "assurance" of a "certain minimum income", then you end up with passengers buying tickets for a flight that won't take place. Anyone who has ever worked even in the remote vicinity of a private business knows that this is not an option: you don't make empty promises to customers and then expect to stay in business. 

Since the subsidy will have to be big enough to guarantee every flight, and since ENDOW's WyoFlot program envisions 21 weekly round trips between Denver and each of its serviced Wyoming airports, the "minimum income guarantee" will have to be big enough to keep that very number of empty jets coming and going out of Cheyenne.

Can you see your tax dollars flying into the air? 

Apparently, the good folks over at CRAPT seem to be aware that taxpayers might not be all that happy about such a big, open-ended commitment to corporate welfare. Or, as the KGAB story explains: 
If enough passengers use the planes to push revenues beyond a certain level, the subsidy would not be needed. 
But will they still be flowing into the WyoFlot pockets? However, this is not the important question. The important question is what happens if there are not enough passengers on the planes "to push revenues beyond a certain level". 

The answer to this question is easy: we the taxpayers are supposed to continue indefinitely to throw money after these passenger jets. There are two reasons for this, which we will get back to in just a moment. First, let us listen to the last part of the KGAB story:
So far, the Cheyenne City Council has pledged $600,000 to help subsidize a new air carrier and the Laramie County Commission on Tuesday voted for another $600,000 for the revenue guarantee. CRAFT has privately raised a little over $103,000, and other federal and state money is expected to push the total amount available over $2.2 million. 
So the businesses behind CRAPT have only been able to raise $103,000? That is not even ten percent of what they want local taxpayers to throw after the project, not to mention the taxpayers across the rest of the state. What does that tell us? The people behind this organization obviously do not have much faith in the commercial viability of WyoFlot, not even here in Cheyenne, the largest city in the state. 

If they do not believe in it, why should taxpayers?

The sad truth is that if there were any commercial case to be made for air service out of Cheyenne, the planes would be flying right now. Since they don't, we are supposed to fuel up the planes, pull them to the runway and give them a big kick in the rear to get them airborne. Which brings us back to the two reasons why such a taxpayer commitment is indefinite:

1. The WyoFlot program discourages profitability already by design. It is a capacity purchase agreement, which means taxpayers are supposed to provide money to get the plains off ground regardless of how many people fly. If you were guaranteed to have the tank filled in your car, would you go out and work for gas money? 

2. The Concorde effect. Once WyoFlot gets off the ground, courtesy of your money, we will be told that with so much money already invested, we just can't back out now. In fact, we are already being told exactly that, and this point is reinforced by Wendy Volk's comment as quoted above: the only sunset clause on taxpayers' contributions is if there are "enough" passengers buying tickets - a rubber clause in a contract where the interpretative privilege appears to be placed in the hands of those who are on the receiving end of taxpayers' money.

The entire WyoFlot project is an oil-pipeline size drainage at the bottom of taxpayers' coffers. Once this thing gets going, there is just no way to turn back the clock. We cannot afford it, and there are many other, much better ways to get the economy in Laramie County and in Wyoming up in gears again. Let us start with deregulation and spending rollback that opens for tax cuts.

If the proponents of WyoFlot do not explain their case to taxpayers, there is a considerable risk that taxpayers will vote in state and local elections in November, based in good part on where individual candidates stand on this state-run airline project. After all, as things look now it seems like voting is the only way taxpayers can shield themselves from this politocratic money grab. 

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