Kansas City Star Worried over “Bullying” from Uber, Lyft

The Missouri legislature is currently considering statewide regulation for ridesharing companies, like Uber and Lyft, which would pre-empt local regulations in cities like Saint Louis and Kansas City. Most states now have these state regulations, including all of Missouri’s neighbors save Iowa. But for some local policymakers, and media outlets like the Kansas City Star, these regulations are bullying from Uber and Lyft that rob cities of tax revenue. These criticisms miss the mark entirely.

Let’s consider the charge of bullying. Companies like Uber and Lyft have bargained hard with local regulators, trying to get rules changed to fit their business model. But let’s not forget how for-hire vehicles were regulated in Kansas City and St. Louis before these companies came along. Regulatory bodies (often representing existing taxi companies) capped the supply of cabs, fixed pricing, limited business practices, and stifled innovation. When Uber and Lyft tried to enter these markets a couple of years ago, regulators and taxi representatives fought over every inch of regulation, and the fight continues in Saint Louis. That foot-dragging is what prompted efforts to regulate these companies at the state (rather than the local) level. So who are the bullies? The regulators who micromanaged the entire taxi market for generations, or Uber and Lyft?

Now let’s talk about tax revenue. Under the current regulations, ridesharing drivers would not have to pay local earnings taxes in Kansas City and Saint Louis simply for picking up passengers there. According to one Kanas City Star author, Uber will be using city streets but not paying for them. First of all, provisions in these bills don’t specifically target the earnings tax; they prohibit municipalities from charging any kind of special tax on ridesharing companies, which happens. And second, the idea that streets would be starved of funding because of earnings-tax losses just isn’t credible. Kansas City has long treated street maintenance as the red-headed stepchild of the budget-making process, with only 3% of the city’s funding going to streets. In fact, in the upcoming budget, the tax-incentive budget is equivalent to the streets’ capital budget. When we consider that this includes both federal and state fuel tax support, and that many Uber and Lyft drivers are Kansas City residents who pay other taxes, the idea that we need to kill regulatory reform to give Kansas City a larger cut seems a bit much. Any increased tax revenue would be more likely to go the Kansas City Area Transportation Authority than to streets.

Companies like Uber and Lyft are pushing for long-overdue reform in cities across the country. And unlike their opponents, they aren’t seeking to outlaw their competition—only to run their businesses their way. They only have political clout because residents in Missouri see the great benefit of these services and want to use them. If newspaper columnists or policymakers don’t like Uber’s business model, they don’t have to drive for Uber and they don’t have to ride Uber. But they shouldn’t be allowed to make that decision for the rest of us, or empower those who would. 

Hail to the Chiefs? City Includes Arrowhead on List of Urban Core Successes

After a recent KCPT documentary on urban neglect made waves across the region, supporters of the earnings tax are eager to counter claims that the city's east side neighborhood has been, well, neglected over the years. Kansas City Mayor Sly James is no exception. In a recent blog post, the Mayor stressed that
 
Since 2011, over $2.5 billion in major developments, ranging from housing and commercial real estate to infrastructure and capital improvements have been approved, broken ground or been completed just in the area east of Troost, south of the river, and north of 63rd Street.
 
Attached to the post is a document listing projects that have taken place in the region the mayor defined. Some of the projects listed dealing with infrastructure were at least arguably meritorious. Others, including the boondoggle Citadel project, clearly weren't . . . but were nonetheless included in the city's strange parade of apparent economic successes. 
 
Yet the single largest spending item on the list overshadowed all the rest, punctuated by its $375 million price tag. That item: the Arrowhead Stadium upgrades. 
 
We first have to highlight the dubious argument that publicly underwriting professional sports is good economic policy. It's not. But beyond that, is Kansas City actually arguing that giving piles of money to wealthy professional sports team owners is a win for long-neglected communities in the urban core? Is the Truman Sports complex even inside the commonly understood boundaries that define the urban East Side neighborhood and its struggles? City officials might point to the minority-owned business hiring targets of the project and the indirect impact they could have had on the corridor around Troost, but the argument that Arrowhead's corporate welfare trickled down to East Side residents is very thin gruel for this long-suffering community.
 
The blog concludes with the following:
 
To the people I serve who live in our city’s eastern neighborhoods, the city hasn’t forgotten about you. I haven’t forgotten about you. Far from it. We’re going to do a better job of telling you about all things going on in your neighborhoods.
 
Fact is, the residents in the urban core know exactly what is going on in their neighborhoods, and it has nothing to do with the quality of the luxury boxes at Arrowhead. What members of the community need is leadership that huddles with residents and drives policies that deliver basic city services effectively and efficiently to the people who need them every day. Instead, all too often the city throws Hail-Mary policy passes long after the rout is on.
 
By that point it's too little and, unfortunately, too late. Our residents deserve better than to endure that kind of play calling year after year.

Bombardier’s Troubles Continue As Company Lays Off 7000

Back in November we updated readers on the case of Bombardier, a company that in 2008 sought millions in state tax incentives to move some of its Canadian operations to Missouri. In the end the company didn’t make the jump to the Show-Me State but did receive millions in incentives from Canada, Britain, and Quebec. Last year we found out that Bombardier needed a billion dollar bailout to keep the company going; this year, we found out that wasn’t all it needed.

Bombardier, the Canadian transportation company, said on Wednesday that it would lay off about 7,000 employees over the next two years, as it struggles to find buyers for a new series of planes that for the first time put it in direct competition with the aviation giants Boeing and Airbus….

While the Air Canada sale provided important help for the CSeries, sales of the aircraft remain below levels that analysts generally view as assuring the project’s success. Including the 45 planes for Air Canada, Bombardier now has 288 firm orders.

Making money in business is never a certainty, and yet time and again state and local officials seem to think they have a special insight for picking moneymakers when they don’t. Whether you’re talking about developing a hotel, a stadium, an airport, or something else, the incentives of politicans often diverge greatly from the long-term interests of the communities they’re supposed to represent. It’s fun to cut the ribbon at a groundbreaking and get your picture taken with a hard hat on, but who ends up with the bearing the burden when an incentivized business goes belly-up? Taxpayers, that’s who.

Fortunately, it wasn’t Missouri’s taxpayers who paid the price when Bombardier’s incentive-addled business plans crash-landed, and state officials should learn from having dodged that bullet. Rather than riskily cutting deals with a select few, policymakers should invest in every family and business in the state by simply lowering everyone’s taxes

Fueling MoDOT: Higher Gas Taxes?

In Missouri, a small tax increase would have drivers pay a little more for roads, and could head off proposals that would force all Missourians to subsidize driving. Click on the link above to see the video.

For a thorough analysis of the current state of Missouri's highway system and the challenges it faces in the near future, check out Joseph Miller's new Policy Study, Funding the Missouri Department of Transportation and the State Highway System.

Exactly How Many State Senators Plan to Immediately Become Lobbyists?

I ask the question because after listening to last week's State Senate debate on HB 1979, it seems glaringly obvious that there's a contingent of lawmakers planning to jump right back into the influence-peddling business once they leave office—this time for some of the interests lobbying them today. The apparently contentious issue is a reform that would require legislators to wait a period of a year or more before they can turn around and lobby their former colleagues. That reform is reasonable; taxpayers deserve clear assurances that their representative's loyalties are not unduly divided between their taxpayer employer today and a representative's potential lobbyist employer tomorrow. Stopping the revolving door of legislators turned lobbyists isn't about "career barriers" to legislators, as was argued repeatedly last week. It's about good governance.

So: How many Senators, charged with working for the public interest today, intend to seamlessly curry favor with their former colleagues on someone else's behalf immediately after leaving office? The public deserves to know.

Should Saint Louis Raise Property Taxes for Public Schools?

What do you call nearly $15,000 per pupil? If you’re the Saint Louis Public School System, you call it “not enough.” In April, the school district will ask voters to approve a 75-cent property tax increase. According to the St. Louis Post-Dispatch, the increase would generate an additional $27.8 million for the school district.

I wanted to take a moment to put this tax increase into perspective. According to data from the Department of Elementary and Secondary Education, the average tax rate ceiling for school districts in Missouri was $3.70 per $100 of assessed valuation in 2015. Regionally, however, property tax rates are considerably higher. The average tax rate for Saint Louis County school districts is $4.528. On top of that, county residents pay an additional $1.2609 per $100 of assessed valuation for the special school district. This brings the county average up to $5.788.

The table that follows shows how Saint Louis’ school property tax rate would stack up to Saint Louis County school districts. For county districts, I combine both district and special school district rates.

 

School District

Property Tax Rate Ceiling

Affton

6.6905

Webster Groves

6.6637

Jennings

6.6438

Ferguson-Florissant

6.6089

Hazelwood

6.6076

Pattonville

6.5654

Normandy

5.9209

Valley Park

5.9109

Brentwood

5.9087

University City

5.812

Maplewood-Richmond Heights

5.6831

Hancock Place

5.6704

Bayless

5.618

Ritenour

5.6173

Riverview Gardens

5.5677

Kirkwood

5.4831

Parkway

5.3671

Rockwood

5.3049

Lindbergh

5.0709

Clayton

5.0331

Mehlville

5.0108

Ladue

4.5933

St. Louis

4.5000

 

As has been written on this blog before, Saint Louis could do other proactive things to address the budget crisis, such as selling vacant school buildings. And as Joseph Miller has pointed out, the city could help the district out a little by ending its flagrant TIF and tax abatement policies.  Nevertheless, it is certainly within the right of the school district to seek a property tax increase. If this one passes, Saint Louis will still have the lowest school taxes in the area. 

Kansas City Star: Do As We Say, Not As We Do

The Kansas City Star has a fever, and the only cure is more anti-tax cut blogs. This time the Star's editorial board takes aim at a proposal that would extend 2014's tax cuts and, among other things, would decrease Missouri's top income tax rate from 5.5% to 5%. The reform package would be a modest but essential update to the tax code. Missouri has been stranded on first base on tax policy for decades now; it's long past time state legislators got the line moving again on economic growth. 

What makes the Star's prolific blogging against tax cuts so unseemly is that the newspaper is already a tax cut beneficiary—it's just that their cuts have been made only for them. Notably, the newspaper enjoys a tax abatement at its printing facility—one that should have expired last year. Instead, after playing nice with City Hall, the Star now gets hundreds of thousands of dollars each year in what the paper self-described as "tax relief."

Yes, the editorialists at the Star should feel a twinge of shame every time they bash tax cuts in Kansas City, and attempt to deny tax relief to others.

Meet the Teacher Who Gets Paid Like a Pro Athlete

Education blogger Joanne Jacobs flagged a fascinating story on Udemy, an online course provider that offers classes on subjects ranging from playing the guitar to web development. Just this month, they announced their 10 millionth user. Classes are generally inexpensive (less than $250) and are uploaded to the platform by instructors who then get a cut of the revenue.

The eye-popping fact is that the creator of the most popular course has earned $6.8 million for his efforts. Yep, you read that right: $6.8 million. His name is Rob Percival, and he is a British former high school teacher. As TIME points out, he is the exception, not the rule, but he does show the opportunity available for people to take advantage of this new platform.

How often have you heard that we should pay teachers like professional athletes or movie stars? Well, it turns out that we can, if we break down the barriers that have prevented teachers from reaching as many students as possible. Sure, it’s not for everyone. But for the creative course developer, or the working professional rounding out her skill set to make herself more marketable, or the college student looking to learn material without getting up to his eyeballs in debt, it is an incredible opportunity, and one we should celebrate.

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