A Lesson in Government Folly

 A Lesson in Government Folly

By Paul Gable

(Ed. Note: While the specifics in this article deal with Horry County, the same type of folly goes on everyday in every local and state agency across South Carolina. The only way it can  be stopped is if the citizens of this state stand up to stop it.)

It was interesting to note, earlier this week, a media story that passenger arrivals at Myrtle Beach International Airport were down approximately 13 percent for the current year. The downturn in passenger numbers occurs while the airport is in the midst of an approximately $120 million expansion of its terminal facilities.

Horry County Council member Carl Schwartzkopf called me up to ask if I had read the story and asked my reaction.

I told him my reaction was limited to four words, “I told you so.”

The reason for the conversation is Schwartzkopf was elected to council in a special election in district 8 in late 2003 to fill the unexpired term of member Liz Gilland after Gilland was elected council chairman in a special election earlier in the year.

Schwartzkopf was sworn into office in January 2004, just as terminal expansion at Myrtle Beach International became a hot topic.

At that time, the expansion was to include a brand new passenger terminal on the west side of the current runway and the addition of two more runways. The airport expansion was based on a consultant study that predicted nearly exponential growth in the number of passengers flying into Myrtle Beach in the coming years.

For example, Myrtle Beach International was supposed to have 1.5 million arriving passengers in 2012, according to the study. We’ll discuss the accuracy of that prediction later.

The expansion was first introduced in Fall 2003 with an estimated cost of $130 million for the new terminal. By Spring 2004, that cost estimate had jumped to $190 million. We were told the increase was caused by ‘getting a better handle on the cost of construction.’

What we were not told and I did not find out until several years of digging into the facts of the project was that the land that was to be used for the terminal was almost completely based in gumbo. The cost of site preparation for the terminal building had jumped from an estimated $6 million to $66 million after the first core samples were taken from the ground. That fact was kept hidden by the county officials involved in planning the project.

Over the next three years, the cost of the project continued rising, hitting nearly $280 million by late 2006. That number did not include interest costs on the bonds that would have been sold to finance construction. Ultimately the total cost, including interest, would have been over one-half billion dollars.

Despite ever spiraling costs, a small majority of council kept moving the project forward in small steps. Politicians hate to admit they are wrong, it might not help re-election chances.

Fortunately final approval of the project had not been voted by council, so construction never started. The county spent approximately $17 million in project manager, architects and other fees for the proposed new terminal project.

The political fights to make the project happen despite the ever rising costs were, at times, extremely vicious. I was a constant critic of the project, writing many articles in the years 2003-2007 detailing the absolute lack of need for a new terminal.

That didn’t make me popular among many county elected and appointed officials, a position I still hold proudly today.

After enough public uproar about the spiraling costs, the project was cancelled in July 2007. Immediately, a new, smaller expansion was proposed on the east side of the airport runway. That proposal was essentially to ease the bruised egos of the council members who fought so hard to build the west side terminal and wasted $17 million in the fight. (Soothing political egos is much more important than wasting public money.}

The east side project, which was rushed through before enough opposition could be mounted against it, is the current $120 million expansion project at the airport. Including interest costs, the total cost will be about $200 million – only 40 percent of the west side project, but still way too much when actual need is taken into account.

The problem remains that it is not needed, never was needed, and will not be needed in the future until dramatic changes are made in the way the airport is operated and marketed. Maybe not even then because less than four percent of tourists fly to Myrtle Beach, over 96 percent of them drive.

In 2000, passenger arrivals at Myrtle Beach International totaled 792,000. That number has been exceeded in only three of the intervening 11 years.

Passenger arrivals have averaged 800,000 in the seven years from 2005-2011 inclusive. A miniscule one percent increase over the number of passengers we had 12 years ago.

And this year, it will probably dip back below the 792,000 passengers in 2000. Since the tourism tax became law in 2009, the Chamber has spent millions of dollars promoting Myrtle Beach as a destination and coordinating marketing efforts with new airline routes, all to no avail.

The real story is not that the airport is down in passenger traffic this year. The real story is that the airport has not increased passenger traffic in the last 12 years, but Horry County officials saw a need to spend $200 million in public money to expand airport facilities anyway.

The county is spending $200 million for construction and interest costs for a new terminal building and the Chamber is throwing millions more in advertising tax dollars into marketing flights. But, airport passenger traffic remains stagnant over the last 12 years!

Therein lies the rub of government folly. Politicians love to build new buildings that have plaques with their names on them. It makes it seem like there is progress, they are doing something important and it feeds their egos.

And, they are not spending their money! They are spending public money whether it comes in the form of taxes, fees, government grants or whatever.

Furthermore, it helps the businesses who are politically active in supporting re-election campaigns. Gilland said in 2009 that it was good for the local economy to build a new terminal because it would help unemployment in the construction industry. Isn’t that Keynesian economics in a county that prides itself in its “conservative” philosophy?

When it’s not their money, most politicians don’t care about how it’s spent. All the grandiose schemes, plans and pronouncements are just so much bull____.

Horry County is in the middle of a huge pile of bull____ in the form of its $200 million airport expansion that is not needed.

I only hope that citizens will begin to take interest in what their respective governments are doing, how they are wasting money and what can be done to stop it – you know, vote most of these clowns out of office. That’s the only way this type of folly can be stopped.