Across our state, county and municipal governments are exploiting public trust laws to accomplish ends that would otherwise be impractical and unconstitutional, not to mention immoral and discriminatory.
Consider a few examples. The Oklahoma City Public Property Authority (OCPPA) – a public trust in Oklahoma City that oversees the Cox Center and Chesapeake Arena – recently announced that it was leasing out 254,500 square feet of the Cox Center, to a film production company for the astounding price of one dollar for an entire year. Resigned to dealing with sunk costs or a vacant building, failing to see, or even solicit, viable alternatives, OCPPA believed the film production studio was a godsend that fell from the sky. But is this really in the best interest of the city’s taxpayers? As I’ve argued in a previous blog, simply selling the property, and letting the market decide its most efficient use, could have offered far superior options than essentially gifting the property to a private company. This is a textbook illustration of crony capitalism.
Take another example. In recent weeks, two more trusts have made headlines for abusing their power. First, consider the Central Oklahoma Transportation and Parking Authority, or COTPA. COTPA was created in 1966 to allow Oklahoma City to acquire a public transit system it couldn’t afford. Facing the risk of losing its bus service and fleet, but unable to pay for it, COPTA was created as the solution. It helped the city acquire the needed buses and subsidize public transit through bond sales.
While justification for COTPA’s origin is arguable, the same cannot be said of much of its current activities. Oklahoma City residents recently learned that COTPA has used them to subsidize VIP parking. In a lease agreement with REHCO Downtown Development, Inc., COTPA has agreed to pay $5,125 per day, per pre-season and regular-season game so that the Oklahoma City Thunder can include free VIP parking as a perk for premium seating and suite packages. In total, this amounts to more than $220,000 worth of subsidized parking, not including playoff games. Where COPTA once benefited city residents generally, it has deformed into an entity that abuses public funds to subsidize convenience and entertainment for high-rolling sports fans.
Another example of the epidemic of public trust abuse, the Oklahoma City Airport Trust (OCAT), recently made headlines for granting various incentives to the emerging airline company, Breeze Airways. Breeze began with the mission to bring affordable, non-stop service to underserved cities across the nation. Last month, Breeze announced it will begin offering flights to and from Will Rogers World Airport, including nonstop service to three currently unserved destinations: Tampa, New Orleans, and San Antonio.
The incentives are part of OCAT’s Will Rogers World Airport Air Service Incentive Program, a program intended to lure new air carriers to Oklahoma City and increase the number of nonstop destinations. The program was updated in 2021 to maximize “marketing and incentive funds … to secure new unserved routes.” The need to amend and maximize the incentive program was, at least in part, attributed to the impact of COVID-19 on the airline industry.
The program allows OCAT to offer marketing support, landing fee credits, and departure gate credits, under two scenarios. First, incentives can be granted to any current or new airline that begins nonstop service to a destination that was previously unserved by nonstop flights. Second, the incentives can be granted to a new airline that begins service at the Airport.
According to the resolution adopted by OCAT, Breeze is qualified to dip into both pots. Breeze qualifies as both as a new air carrier and serving to previously unserved destinations. Therefore, through the incentive program, OCAT is granting Breeze marketing incentives in an aggregate amount of $150,000 ($50,000 toward marketing a new carrier, $25,000 toward marketing service to Tampa, $25,000 toward marketing service to San Antonio, and $50,000 toward marketing service to New Orleans).
In addition to subsidizing a private company’s marketing, OCAT is also providing Breeze with a 100% credit for landing and departure gate fees for up to six months following the start of service to each location and a 75% landing fee credit for an additional 18 months thereafter.
As the 1889 Institute has repeatedly written, governments must satisfy specific criteria before spending taxpayer money. It has also instructed government officials on how to identify and eliminate corporate welfare. Unfortunately, as these three trusts show, public trust law allows state, county, and municipal governments to spend taxpayers’ dollars inappropriately, exceed the legitimate scope of government, and engage in blatant, crony corporate welfare. They are robbing the poor to subsidize the entertainment of the rich, supporting otherwise unsustainable businesses, discriminating among similarly situated companies, and performing functions that should be the responsibility of private industry.
The Oklahoma Constitution contains language describing the relationship of trust between the people and the government. The people expressly transferred their power to governmental trustees “to secure and perpetuate the blessing of liberty; to secure just and rightful government; to promote our mutual welfare and happiness.” The Constitution affirms, “All political power is inherent in the people; and government is instituted for their protection, security, and benefit, and to promote their general welfare.”
Despite being created by the people and for the people, governments in the State of Oklahoma create trusts as quasi-governmental entities whose loyalty is to bureaucracy. As governments benefit from trusts, the people are merely presumed to benefit. However, the OCPPA, COTPA, and OCAT show, this is not always the case. The abuse of power and authority must end.
What, then, can be done? A recent 1889 Institute policy analysis provides a path forward. The most straightforward answer is to repeal public trust laws. If there is some function that can only be efficiently performed by government, and that function fits within its narrowly defined scope of power and authority, then the government should be allowed the resources necessary to do its job.
Empowering governments to create trusts with broad authority to circumvent constitutional directives puts us all at risk. While outright repeal of public trusts is the best option, the paper explains steps that can be taken to rein in these “trusts,” realign their loyalties, and force them to be more accountable to the people.