Lee’s Summit EEZ: A Solution In Search Of A Problem

As published in Lee’s Summit Journal:

In 2006 and again in 2010, Money Magazine cited Lee’s Summit as one of the 100 Best Cities in the United States. The Lee’s Summit Chamber of Commerce boasts on its website: “Lee’s Summit is an ideal place to live and work, providing a desirable lifestyle that everyone can enjoy — high-quality, affordable housing in safe neighborhoods endowed with fine schools and excellent health care facilities.”

So why in the world is the Lee’s Summit City Council rushing to adopt an economic development program aimed at blighting large swaths of the city?

There is only one possible answer: The city council has been bitten by the same parasitical EEZ bug (Enhanced Enterprise Zone) that has attached itself to other cities and counties across Missouri.

In fact, almost a third of our state has been officially declared “blighted” as a result of the widespread use of EEZs, TIFs (Tax Increment Financing), TDDs (Transportation Development Districts), and other such programs that combine local subsidies for commercial development with the use of eminent domain — enabling developers to force residents out of their homes and small business owners out of their shops and offices.

On April 11, we presented testimony to the city council on the efficacy — or, more accurately, the inefficacy — of Enterprise Zones in Missouri. The Show-Me Institute had recently conducted a study comparing the economic performance of two groups: (1) eight Missouri counties that employed Enterprise Zones, and (2) 12 neighboring and economically similar counties that did not. We found that economic growth in the two groups was almost identical.

In other words, there was no evidence that Enterprise Zones had any positive impact on economic growth or employment. They seemed to be a waste of time and money.

Our statements to the Lee’s Summit City Council made this perfectly clear, and none of the economic development officials, city staff, or consultants at the meeting made an effort to argue otherwise.

Yet it was a clear that most members of the city council, along with the consultants and development staff, had already made up their minds: They wanted to move ahead as quickly as possible in setting up an EEZ.

One reason for the rush is the fear that the 2010 Census numbers, which are still being finalized, will show that poverty and unemployment rates in Lee’s Summit have dropped since the previous Census — which could have the effect of making Lee’s Summit ineligible for the subsidies from the Missouri Department of Economic Development (DED).

Not that Lee’s Summit was any kind of an economic basket case 10 years earlier. Based on the 2000 Census, the median income for a family in Lee’s Summit was $70,702, or close to double the median family income for the state as a whole.

Nor does Lee’s Summit suffer from a lack of growth. Between 2000 and 2010, the population of Lee’s Summit grew from 70,700 people to 91,364 — an increase of 29 percent.

But neither prosperity nor rapid growth has dampened the enthusiasm of some city council members at the thought of spending some easy money.

On the night that we testified, one member of the city council argued that because the DED is giving the money away, Lee’s Summit might just as well take it. The proposed EEZ for Lee’s Summit is a particularly egregious example of throwing away taxpayer money for no good cause — in promoting a solution for a problem that does not exist.

Patrick Tuohey is the western Missouri field manager and David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.