The New York Times just reported that Troy Michigan turned down 8.5 million dollars for a “transportation center whose construction would have been fully financed with federal stimulus money”.

It’s their Tea Party Mayor! says their headline¹. The No More Mister Nice Blog goes a step further, and uses the headline Why does the teabag mayor hate capitalism?

Capitalism? The federal government taking taxes and doling it out to businesses is not capitalism. Have we really gone so far into crony capitalism that opposing federal grants is hating un-adjectived capitalism?

Nor is it free. The ongoing costs were going to be at least $31,000 a year. That’s by government estimates, which almost always lowball this sort of thing.

The Troy City Council meetings are online. This issue came up on December 19, and the debate is in web cast 1 and web cast 2. The issue is a lot more complicated than the New York Times presented it.

The planning commission’s recommendation was, literally, “trust us”. That was it. The representatives for the “globally-minded” businesses² said the same thing, and then added that the federal project is the only hope for a transit center, because no private business would be willing to take on such a costly project.

The general argument in favor was that the federal money was going to go somewhere, so Troy ought to take it. Regardless of whether it is wrong for the money to be there, someone’s going to get it. Why not Troy? That was literally their argument. They talked about principle as if it were something that ought to be set aside.³

But when city officials accept federal money, and they later call for the federal government to stop spending as much, they’ll be called hypocrites for having accepted this money.

Some members of the council actually ran against the project, according to M.L. Geiger—one of the people in favor of the project. This means that the community as a whole is in favor of ending the project at least as of the last election.

The first person to speak against the project brought up California’s public transport project. Our project’s estimate has doubled, and it’s not done yet. This is something Troy would be on the hook for, if they keep looking backwards at costs already sunk.

At 31:29 the representative of the nearby shopping center actually spoke against the transit center that would, presumably, bring more people to the shopping center. Bryan Amann claims it was sold as a new light rail project, but has ended up being just another bus station. According to him, that meant more parking issues, more traffic issues, and more crime.⁴ He also claimed that the $31,000 estimated annual cost is completely unrealistic—possibly less than one twelfth of what the real cost would be, using as his example the cost of toilet paper vs. the estimated cost for restrooms. It can’t possibly include the cost of security and maintenance.

Amann asked the council to consider:

• What is the evidence?
• What is probable vs. what is possible?

He was very convincing.⁵

The roads near the transit center, judging from what some people said, would also have to be widened—and that would have to include eminent domain on the houses on those roads.

A lot of the arguments in favor of the project talked about previous costs. Previous costs do not matter unless you want to throw good money after bad. All that matters are the costs and benefits going forward.

I’d like to see projects like this set hard limits on costs. I mean really be willing to cancel a project as soon as it runs over cost, and start over again. They almost always go over estimates, usually by huge amounts, and we keep pretending that this doesn’t happen. And then the money spent on the previous lowball are used to justify throwing more money at the project, because otherwise that previous money would be “wasted”.

Watch the whole thing, because it’s interesting watching how the council came to their decision. This wasn’t the city council revolting against the people. The project was a divisive issue for the community. A lot of people spoke in opposition and a lot of people spoke in support. Both sides got a lot of applause.

Dick Minnick at about 43:00 said something important that should be applied to a lot of high-cost projects: when something is that divisive and that expensive, it shouldn’t pass on a close vote. I’ve said this myself: when you spend money on a close vote, both those in favor and those opposed have to pay that money. And only a slight change in public opinion can mean there’s only a minority in favor of the project, but everyone’s still paying for it.

Troy had just gone through a similar battle to keep their libraries open, and in order to keep it open they increased local property taxes and closed the library one day a week. People in opposition were justifiably worried that the annual costs for the transit project would mean further tax increases.

It sounds like people are getting smarter about “free” federal money. The initial grant might be free, but the upkeep is not—and those lowball estimates are for something that hasn’t even been designed yet, after over ten years. If the council members were voted in to kill this project⁶, it’s not a matter of a rogue council going against the community. It’s a principled council doing what their community wants them to do—for good reason.