Arizona Appeals Court Deflates Subsidies for Space Balloons
Government subsidies for sports stadiums are unfortunately common in many states. The practice continues even though it fundamentally involves giving taxpayer money to uberwealthy developers and franchise owners. But a recent court case from Arizona reveals a new spin on the public subsidy problem: passenger balloons to space.
World View Enterprises, a private space technology company based in Tucson, hopes to allow everyday citizens to experience what billionaires like Bezos, Branson, and Musk have achieved: a trip to space. While a ride on a Blue Origin, Virgin Galactic, or SpaceX rocket is still prohibitively expensive for all but the very wealthy, World View hopes to offer high-altitude balloon trips that would lift a pressurized passenger capsule 20 miles into the upper stratosphere to what is called “near space.” One would not experience weightlessness (and the sticker price still runs $50,000 per ticket), but a participant would see stars and the Earth’s curvature against the blackness of space.
But to get passengers to that point, World View needed some help. Enter local government: In January 2016, the Pima County Board of Supervisors approved $15 million in financial incentives for the company to establish its “world headquarters and first launchpad” just outside Tucson. The county would borrow the money through a bank loan, secured by offering several county buildings as collateral.
Per the agreement, the county would fund the construction of facilities, including a 135,000-square-foot manufacturing facility, with office spaces and a launch pad, on property it already owned. World View would then lease the property from the county for 20 years. In return, the company would hire more than 400 employees, with an average salary of over $55,000, and spend $32.3 million on equipment.
Twenty years of lease payments were expected to total around $14 million, estimated to be the property’s value at that time. World View would then have the option to buy the facility for $10.
The Goldwater Institute, a free market think tank based in Arizona, sued to stop the project, which it termed a “balloondoggle.” The filing alleged that the county had not only skirted competitive bidding laws and misrepresented the facts, but it had also violated the state constitution.
According to Timothy Sandefur, vice president of litigation at the Goldwater Institute, 45 state constitutions contain provisions forbidding public funds from being used to finance private projects. As Sandefur tells Reason, Arizona’s constitution’s Gift Clause is uniqu
Article from Reason.com