And the owners of Mall of America would like taxpayers to pay for parking.

That detail surfaced Wednesday as the House Taxes Committee held a wide-ranging hearing into the costs and benefits of tax breaks sought by the Bloomington mall and an Eagan publishing firm.

The mall and the Thomson West company say they need breaks to proceed with large expansion plans that promise long-term tax revenue and jobs. But one economist challenged the notion that tax subsidies are needed to make the expansions possible.

"If that mall expansion is a good private investment, it will get done," Arthur Rolnick, senior vice president and director of research at the Federal Reserve Bank of Minneapolis, told legislators. "If it's not, why exactly would we subsidize it?"

The argument for the Thomson West expansion that Art makes is quite sound: You get into a bidding war with other states when you start using tax breaks to attract or keep firms in your state. The Minneapolis Fed has written several papers on this collected here. And yet the Minnesota Senate has already passed these tax breaks and the House might follow. As I argued before, the idea that more out-of-state visitors would come to a larger MOA and generate enough additional sales tax revenue to offset this is ludicrous. And the Mall, unlike Thomson, can't move.

Labels: economics, legislature, Mall of America, Minnesota