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                        Private-Public Partnerships

1930s – 1940s: The Seeds of Change

  • Great Depression: Economic hardships led to federal initiatives aimed at job creation and infrastructure development, laying groundwork for using public funds to stimulate private investment.
  • Federal Programs: Initiatives like the Works Progress Administration (WPA; a governmental entity) are given as examples of how government spending can support private businesses.

1950s – 1960s: Formalization

  • Urban Renewal Programs: Using returning servicemen from WWII, enacted in the late 1940s and 1950s, these programs allowed for the use of public funds to pay for clearing blighted areas, and facilitating private development.
  • Federal Housing Act (1961): Introduced funding for urban renewal, further excusing the using of public tax dollars for private investments.

1970s: Expansion into Economic Development

  • Economic Development Administration (EDA): Established in 1965, as democrat socialism really bloomed, it helped to fund local development efforts through public-private partnerships.
  • Tax Increment Financing (TIF): Gained traction in multiple states following the trend during the 1970s, allowing local governments to claim re-capture of public tax dollars from future increased tax revenues from new private development, a program with limited success and a large number of mixed reviews.
Legislative Changes in Texas and Beyond

1980s: Legislative Framework

  • Texas Economic Development Act (1981): Established a blueprint for local economic development programs, permitting cities to use public funds as incentives for private businesses.

1990s: Widespread Adoption

  • Enterprise Zone Programs: Formulated by the U. S. Department of Commerce, these initiatives were to encouraged investment in economically distressed areas by private firms through financial incentives funded by public tax dollars, including guarantees back by the taxpayers to banks that would make loans to local government-approved developers.

Overall, the movement towards using public tax money for private endeavors evolved over decades, influenced by claims of economic needs and the acceptance by voters of democratic socialism for the growth of federal programs sold as fostering growth and revitalization in communities.

So, the question becomes, “Have such programs, based on costs or money spent, been successful at reducing poverty or homelessness or rebuilding inner-city areas?”

And the answer, of course, is that, despite using trillions of dollars of public funds to support private ventures, these programs have failed with greater numbers of blighted intercity areas, more poverty, more homelessness, and an even greater cost in inflation.

Assessment of Effectiveness

Positive Outcomes for democratic socialism:

  1. Job Creation: Many programs report job creation as a direct outcome, which can have a ripple effect in reducing poverty levels. Supporters claim that increased employment opportunities lead to better living standards. Currently, government is the nation’s largest employer.
  2. Investment in Infrastructure: Public funding has led to some improved infrastructure in a few in-city areas, which is claimed to enhance the appeal for businesses and residents alike, and it certainly increases the value for the owners of the improved property.
  3. Revitalization of Blighted Areas: Some cities have seen physical improvements, including the renovation of housing and commercial spaces, but still have the same problems, plus a higher tax rate.

Mixed or Negative Outcomes

  1. Limited Impact on Poverty: Many studies indicate that while jobs may be created, they often do not pay enough to significantly lift individuals out of poverty. The quality of jobs created is crucial. And not all the jobs are filled with workers from the sponsoring community, and some are filled by local workers simply changing their old job for a new one.
  2. Displacement Risks: Gentrification sometimes does follow revitalization efforts; lower-income residents are displaced as property values rise, and it has seemingly increased homelessness in large cities.
  3. Inequitable Distribution of Benefits: Benefits flow more to the property developers and the businesses than to the communities intended to be uplifted, leaving original residents (those who have paid the taxes for years) with minimal gains.

Evidence and Studies

  • Reports from Research Institutions: Various studies on enterprise zones and similar programs show mixed results, often indicating that while jobs are created, the long-term impacts on poverty and homelessness are less clear; pointing to the trillions of dollars wasted on the War on Poverty..
  • National Studies: Research has found that economic development programs frequently succeed in attracting businesses, but offered incentives are only a consideration after market and location and do not significantly alleviate poverty or homelessness on their own.

Conclusion

While some public-private funding programs have produced some positive results in certain urban areas, their overall effectiveness in significantly reducing poverty and homelessness or rebuilding of communities is limited and context-specific. Sustainable change usually requires comprehensive approaches that integrate economic development with social services and community engagement.

There are growing concerns about public-private partnerships and the negative impacts of using public tax money to fund private endeavors that primarily benefit select individuals or businesses.

A key report by the Paris Texas Chamber of Commerce regarding Private-Public Partnerships make these main points:

Key Concerns:

Mis-allocation of Public Funds

  • Public resources are sometimes used to support private projects that do not provide widespread benefits, leading to questions about accountability and fairness.

Favoritism in Selection

  • The risk of favoritism occurs, where certain businesses or individuals receive preferential treatment over others, creating inequities in economic opportunities.

Limited Community Benefits

  • Many times, the promised benefits, such as job creation and economic growth, may not materialize for the broader community, exacerbating disparities.

Erosion of Trust

  • Such practices can erode public trust in governmental institutions, as citizens become disillusioned with how their tax dollars are used.

Call for Accountability

  • The Paris Texas Chamber of Commerce continuously emphasize the need for transparency and rigorous evaluation of the actual impacts of these partnerships to ensure that public funds are used effectively for community benefit.

For the complete analysis, you can visit this link to read more about these critical perspectives on public-private partnerships. If you need further insights or a discussion on these issues, the Paris Texas Chamber has other website postings on economics and government, as well as local politics.

return to The Paris Texas Chamber

 

Links:

  City of Paris and it’s local partners

 Local Government 

 

Typically, a master planned community (mpc). . .

 . . . . is on a large plot of land where a developer offers an array of amenities, including golf courses, restaurants, shops, miles of hiking trails, parks, community events, and more;  just about everything you need within a community. The Forestbrook Estates – a City of Paris local partner – claims to be a MPC.

Whether or not it is, as claimed, a mpc, the smell of the selling sizzle covers up the fact that local taxpayers, who have paid the bills for years, are now on the hook for an estimated $20 million to cover the developer’s cost.

Why?

 

There’s no guarantee it will pay . . . .

. . . and $20 million is over one-third of the current city budget. IF its such a good deal, why do the developers need the Paris taxpayers to guarantee them a profit?

The major draw of a master planned community is that you can walk from your home to the gym, shoot a round of golf, grab a drink at the clubhouse, play at the park, take your kids to school, all available for residents and are kept up-to-date by funds collected by a homeowners association (HOA). 

IF there’s no HOA, will taxpayers – who seems to be stuck paying for everything else – be stuck with maintaining the streets, hauling off trash, repairing water and sewer leaks, and other such day-by-day expenses? And surprising us all by getting rid of litter?

The reported first phase of the nearly 200-acres of the Forestbrook development will consist of 87 of the 471 residential lots. This doesn’t seem to leave much room for playgrounds, schools, gyms, golf, clubhouses, parks, and all the promised related retail and commercial development; plus, the rights-of-way for utilities and streets, drainage, etc. 

The Paris Texas Chamber doesn’t know if a HOA is in the plans, nor do we have the least idea about what the proposed development will actually offer or who are the developers. We do know, however, that the endeavor itself is not as important as the centuries-old concept for selling democratic socialism – a private-public partnership, which is an insult to to the American Idea of self-responsibility and the need for accountability of one’s personal actions.

 

Private-public partnerships are not how you limit government.

IF the City of Paris cannot or will not guarantee every citizens’ debt, why is it guaranteeing the debt of a selected few based on Happy Talk promises and the only collateral being the taxpayer’s guarantee?

Where does the city, and government in general, get the right to pick and choose economic winners?

Its so much the key question that we don’t even understand those individuals who believe that robbing Pete to pay Paul is a good idea – unless they’re Paul.

Do banks even make development loans anymore? If not, why not? IF they can’t make community development loans, why are they needed?  (Community development is economic development, and consumer loans only get people deeper into personal debt.) So, what purpose do banks now fill – other than paying a little bit of interest on CDs in order to loan the  money at a higher interest rate to some government-guaranteed “too big to fail” Big Business? 

Isn’t government basically guaranteeing the success of banks?

Why are taxpayers forced to guarantee some developer’s debt?

 

Forced compliance is destroying the 13th Amendment of the Constitution . . . .

. . . . and the bad decisions keep coming: As the Paris Chamber warned years ago, thanks to idiots in the Texas legislature, anything can now be economic development. 

The City of Paris has extended its partnership with Palma Holdings, LLC; subsidizing “a residential 5 in 5 Housing Infill Development program” that the city calls economic development. Basically, its low-income single-family instant-slum housing offered at an estimated $200,000 sales price. Five or more have been built with no reported sales, but ten more were recently approved for construction.

Unfortunately, a $200,000 home is not affordable for most low-income families, but as taxpayer subsidized Section 8 housing, it can become a long-time profit center for a private developer. 

It all makes some wonder about sanity.     

 

 

 

The City of Paris needs a HomeOwners Association

IF Paris, which once was “The North Star of Texas” really wants – as it claims – to ‘clean up Paris’, it should form a Homeowners Association (HOA), which can take rule enforcement to the next level.

A HOA is needed, as the city will not enforce ordinances concerning litter, grass and weeds, boats and RVs, inoperable vehicles, fences, and yards full of unsightly (strange and ugly) junk. The mystery being that if the city will not enforce ordinances, why have them?

If we’re not using the ones we have, why not turn them over to a HOA for enforcement?

Uh … forget about the “strange and ugly” bit – otherwise, the population may be greatly reduced. And one or two of our Paris Chamber’s Directors would be among the first to be forced to vacate not just Paris, but the NE Texas vicinity.

So let that sleeping dog lie . . . But there should be ordinances enforced about bathing; at least, once a month.

Flowerbeds won’t regulate themselves, and we don’t want to get started on those trash cans left out overnight.

IF the city is going to do as it has promised over recent decades, it needs to start a HOA – one that can use military precision, when and if necessary. After these years of unenforced ordinances, Paris needs to aim for a disciplined, picture-perfect community.

Instead of giving taxpayer’s money away, the PEDC ought to fund the HOA effort.

By a big majority, this chamber’s directors voted to recommend asking that HOA employees don fatigues, a utility belt with handcuffs, a bug zapper, a firearm, a ballistic vest, breath mints, bean-o, and an approach to every violation with a “take no prisoners” attitude. (See below poster of enforcer-type and equipment.) To assure a resounding success, this is likely the only road over the next three years.

IF HomeOwners are trembling at just the thought, good – so be it.

In transparency, one of older Directors, voting against the HOA, said he, “can see a time that if I just forgot to mow for a couple of days, I’d be doing push-ups in my front yard, and I cannot do push-ups anymore.”

We assured him that while residents might scramble to comply, praying their grass grows no higher than the regulation three inches, they would be building new muscles saluting their new governmental unit.

Some folks are now saying that instead of having more government, they would rather do the cleanup work themselves.

They’ve paid taxes for 25 to 50-years or longer to allow city councils and management to litter it up.

You really have to appreciate the rate of return when investing in government.

This is, of course, a continuing development of a story that is a half-century in the making.

                                                    Return to the Paris Texas Chamber of Commerce 

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