Man plugging ears
Patrick Tuohey

Is Kansas City getting an adequate return on its investment in economic development? We’re skeptical. The research says it is not. But one supporter of subsidized development just doesn’t care. Literally. Steve Rose tells us on KCPT’s Ruckus,I don’t care what the research tells you.” He then misidentifies the author of the study under discussion.

This shouldn’t be surprising. Much of the claims and the reporting on downtown development, the streetcar, TIF subsidies, and the like make the same mistake. They’re based on the assumption that a development that occurred after a subsidy occurred because of the subsidy. It’s a common logical fallacy, post hoc ergo propter hoc, (after therefore because of). And Kansas City is rife with it.

Consider the recent construction of a new Burns & McDonnell world headquarters building at Wornall and Bannister in Kansas City. In order to believe that economic development incentives were responsible for this project being undertaken, you have to believe that without taxpayer subsidies, Burns & Mac would never have developed the land, which sat on property adjacent to their existing headquarters and which their partner, VanTrust, already owned. Yet that is what we’re asked to believe.

Similarly, Rose and others point to the new buildings downtown and talk of a Renaissance. But the Power & Light District has not resulted in a net increase of jobs, businesses or tax revenue. H&R Block, whose building kicked off the downtown development binge, seems to be a study in obfuscation and failure. Not only is the streetcar a drain on resources, but according to Jackson County, the aggregate market value in the area around the streetcar is actually lower today than it was in 2012 and growing more slowly than the County as a whole.

The impacts of these investments are very real, resulting in the diversion of hundreds of millions in property tax revenue over the past decade away from taxing jurisdictions such as schools, libraries, and mental health funds, all of which are denied the money they need to operate. But the promised return on those investments never materializes.

As I told Rose when he said he didn’t care, if you don’t care about the research, we can’t have a discussion. Policies must demonstrate some sort of return: increased tax revenue, more jobs, an increase in population. Otherwise we’re just relying on the word of people who are lining up to take our money—and guess what they’re telling us? They want more, more, more.

About the Author

Patrick Tuohey
Patrick Tuohey

Patrick Tuohey is the western Missouri field manager at the Show-Me Institute.