Category: Miscellaneous outrages

Increasing value of taxi medallions

Today’s Tribune asserts that Chicago taxi medallions — a requirement if you want to operate a taxicab in the City– now cost $77,000 each (“Chicago hails two driven cabbies” Tribune, 2/8/07) . That’s up from “over $40,000” in 2004 (“City says cab agent misused $100,000, Tribune, 4/25/04) and $28,000 in 1991 (“Metro Briefings”, Sun-Times, 7/17/91),

Of course, fares were raised 11.7% in 2005 (“Cab riders turned off by rooftop ‘not for hire’ light: Survey finds most favor old off-on signal”, Sun-Times, 12/9/05; “Increased taxi fares quietly take effect,” Tribune, 5/12/05), 16% in 2000 (“FOR TAXI DRIVERS, FARE HIKE IS NOT WITHOUT A PRICE,”Tribune 12/1/00), about 15% in 1997 (“Taxi fares get a boost”, Sun-Times, 1/14/97), and about 9% in 1994 (“City Cab Fares Go Up Today, Sun-Times, 1/18/94).

Let’s do a little math here. Looks like since 1991, fares are up 48%, and the price of a medallion is up 175%. So medallion owners seem to be taking an increased share of revenue produced by the cabbies. For reference, the Bureau of Labor Statistics says consumer prices rose 48% between 1991 and 2006.

Meanwhile, in New York, medallions are going for over half a million dollars and there has been an effort to set up a working medallion exchange, where medallions can be traded on margin.

Misdirection of Development Incentives

This is not really news, but it does seem to be an additional example. Washington-based “Good Jobs First” has released a Ford-funded study showing that subsidies for “job creation” tend to go to communities that have low unemployment. Of course, dummy! It’s easier to create jobs there.

Now the only reason I found this was that I was looking for the study released yesterday by “Broadway in Chicago,” asserting that their operations have an “annual economic impact” of $635 million in Illinois. I haven’t seen the details of how this is measured, but most likely it assumes that, if there were no BIC operation, then the theatres would remain dark, nothing else would be built in their place, and nobody who came to Chicago and saw one of their productions would have found any other reason to come. Furthermore, none of the people who serve these visitors, or the theaters, would have found any other work. Crains says that “Mayor Daley’s administration has invested about $60 million into the downtown theater district,” but doesn’t indicate how much went to BIC and what other subsidies they may have received. The Tribune assigned a theater critic, not a business or economic reporter, to the story.

Another sweet deal for farmland owners…

…and somehow the Tribune can’t see it. Today’s edition carries Jason George’s article Cashing in on the Hunt, noting that a lot of farmland is valuable for hunting. OK, it’s tough to make a living as a farmer, so farmers are getting from $25 to $50 per acre (in Pike County) for allowing hunters to use their land. So far, so good, this probably isn’t the best farmland anyhow. (George doesn’t clearly explain whether the same land can be farmed during the summer, then used for hunting in the late fall, but I believe that it can.)

A local farmer, who’s also a real estate agent, says that the revenue “really helps pay those real estate taxes.” It would make you think that real estate taxes are more than the hunting revenue. Not so. Correlating 2003 data from the Illinois Department of Revenue and the 2002 U S Census of Agriculture, Pike County farms pay less than $12/acre in real estate taxes, an effective rate of about 2/3 of 1% on value ($1840/acre). I bet Chicago-area homeowners, who pay two to three times this percentage of value (see this report), would love to have such a deal.

The Tribune, who in the past have done a good job of explaining how farmland owners profit from political favors, missed a chance to point it out.

Unfortunately, it is the custom of the Tribune to hide most of their articles behind a paid-subscriber screen after a week or so. I can’t find any other publications who carried this article, but it contains the phrase “whirring wings of pheasants” which might be useful in a future search.

Update on December 6: The Tribune link (above) still works!