KC Spending Still Doesn’t Add Up

Posted on by Patrick Tuohey

We were delighted to see the Kansas City Star step forward recently to decry the fast growth of city spending:

Kansas City taxpayers often hear that City Hall is strapped for cash.

No, it’s not. Residents and businesses are shouldering a much larger burden than ever in financing public safety, street maintenance and water service improvements.

City spending has gone up far faster than the rate of inflation, even after accounting for small population growth.

To their credit, this is not the first time Star editorialists have sounded the alarm over city spending on maintenance and basic services.

  • February 18, 1990: An editorial titled, “Sales Tax Money Still Is Misspent,” details how a capital improvement sales tax passed in 1988 was misspent on other items;

  • May 18, 2006: Yael Abouhalkah wrote, “[Mayor Kay] Barnes and the City Council—without much attention—have reduced the amount of general city funds (separate from the bonds) that are supposed to be used for deferred maintenance.”

  • December 25, 2008: Abouhalkah wrote of an effort to consider a new trash pick up fee, “The earnings tax passed by voters in 1970 still brings in more than enough revenue to pay for weekly trash service.”

Their most recent editorial ends with this:

City Hall is not in the poorhouse. Taxpayers provide plenty of funds for public services. City officials must be extra vigilant in making sure that money is used efficiently before requesting even more taxes or fees from residents.

Indeed, City Hall is not in the poorhouse. So when Mayor James says that another tax increase may be necessary to pay for basic city services, the Show-Me Institute looks forward to a vigorous public debate about city priorities and spending. We even imagine that we may be on the same side as the Star.

Read more here: http://www.kansascity.com/opinion/editorials/article12880127.html#storylink=cpy

Read more here: http://www.kansascity.com/opinion/editorials/article12880127.html#storylink=cpy

Paying for the Privilege . . . to Stay in Bridgeton

Posted on by Michael Rathbone

After staying overnight in Jefferson City last week, I awoke to find my hotel bill laying on the floor in front of the door. For those who travel frequently, this is not an unusual sight. It also isn’t unusual to spot a line item that tells you how much you have to pay because of the city or county’s hotel tax. Sometimes that amount is relatively miniscule, other times it can be quite large. If the Bridgeton City Council gets its way, for guests of Bridgeton, it will be the latter.

Hotel ExteriorHotel taxes are not an uncommon occurrence in Missouri. In fact, the Show-Me Institute’s Sales Tax Fast Facts pamphlet has 17 entries for cities/counties with a hotel/occupancy tax, and that list is by no means exhaustive. As you can see, hotel tax rates can range from 3 percent in Hermann to 12.25 percent in Hazelwood. In most cases, visitors to Saint Louis County pay the same hotel tax rate (7.25 percent) because of the countywide pool which, among other things, goes to pay off construction costs for the Edward Jones Dome.

The Bridgeton City Council, however, wants more hotel taxes to go directly to them. The council placed a proposal on the April ballot that will raise its hotel tax from 85 cents a night to three dollars a night. I can see why this would be an attractive option. Many people who stay in hotels are not residents of the city/county where the tax is imposed. For politicians and residents alike, getting others to pay for city services sounds like a good idea. However, just because a city can extract revenue from visitors, doesn’t mean it should.

Hotels already pay commercial property taxes and the Saint Louis County property tax surcharge (the highest in the state). They have to pay business licensing fees, and guests already have to pay the city and county sales tax. Why does Bridgeton need to levy even more taxes? Is it because it keeps relying on TIFs? Maybe Bridgeton should stop giving away special handouts and broaden their tax base instead of shrinking it and relying on higher rates to make up for lost revenue.

I highly doubt I will ever stay in a Bridgeton hotel, so when I wake up in the morning, the effects of this proposal won’t be staring me in the face. However, city residents should ask themselves whether they want to approve a tax increase, no matter who it may hurt.

Study Slams Missouri for Lack of Transparency Regarding Release Time

Posted on by John Wright

It’s no secret that public agencies in Missouri routinely allow for “release time,” which is paid time off from official duties to allow a government employee to perform union business. However, a recent study by the Competitive Enterprise Institute (CEI) found that Missouri public agencies often fail to track or disclose release time records, making the amount of release time actually used in Missouri impossible to calculate.

Release time is controversial. It allows unionized government workers, such as teachers or firefighters, to perform union duties while on the job. A government union, despite often being referred to as a “public union” or a “public-sector union,” is actually a private organization. The CEI study argues that release time constitutes a public subsidy to a private organization that confers no benefit to the public. When public employees use release time, they are being paid by the taxpayer to perform duties that benefit their union, rather than the public at large.

MoneyThe CEI study, despite only grazing the surface, found thousands of dollars worth of release time used to engage in partisan political activity and to attend union meetings and conferences. The study suggested that this use of release time might be an unconstitutional gift of public funds under the Missouri Constitution.

I can’t speak to the constitutional argument, but at the very least, I find the lack of transparency upsetting. How much time and money are government agencies using on release time? What impact does release time have on state and local politics? How often do employees use release time? I want to know the answers to these questions. A fact-based discussion about the value of release time depends on it.

Kansas City Transit Ridership Showing Little Progress

Posted on by Joseph Miller

The conventional wisdom in Kansas City is that the city is becoming a hub for urban millennials. To keep the new city dwellers and attract more, the city supposedly needs to expand transit options, which young people prefer.

However, while Kansas City has had some success revitalizing its downtown, the most recent transit data does not suggest any contemporaneous surge in transit usage.

Ridership Graph (2)

As the chart above demonstrates, despite the fact that total employment has now exceeded prerecession levels in the Kansas City metropolitan area, Kansas City Area Transit Authority (KCATA) ridership has yet to recover. In fact, the most recent data shows total passenger trips are still fewer than they were before the recession by about 800,000 annual riders. Interestingly, transit passenger trips recovered relatively quickly until early 2012, since which time transit usage has actually fallen.

Proponents of transit expansion might argue that Kansas City simply has substandard public transportation options, and that the addition of bus rapid transit, light rail, and streetcars will greatly increase passenger trips. While some net new trips are likely given better service, KCATA’s recent experience should cast doubt on just how much needs to be done to attract new riders. KCATA opened new bus rapid transit lines, a.k.a. MAX routes, in 2005, 2011, and 2013. Since that time, increases in MAX ridership have been met with decreased use in regular bus passenger trips. It is possible to see MAX trips (which are generally longer) as more valuable than the lost bus trips, but there is no evidence that MAX drew significant new riders to KCATA; it is most likely the case that existing transit riders diverted to the better service.

The postrecession performance of KCATA is a bit of a puzzle, and I encourage anyone with reasonable explanations to give them in the comments. However, Kansas City’s employment growth and the increasing numbers of millennials living downtown has not spurred large transit passenger growth. Instead of pushing expensive rail transit plans, perhaps regional planners should ask how Kansas City, with no rail transit and some of the most highway miles per capita of any major city, was able to become to a millennial destination in the first place.

In Praise of So-Called Leaderless Drift

Posted on by Patrick Tuohey

Dave Helling of the Kansas City Star writes in a column on the upcoming elections titled, “Springtime KC Voters Still Stuck in a Drift,”

the lack of a serious mayoral campaign also illustrates an ongoing issue in Kansas City politics. Voters are uninterested in the mayor’s race because the mayor’s job is, essentially, uninteresting.

For all the changes to the city’s charter over the years, the mayor remains primarily a 13th vote on the council. He or she makes some appointments and gets his or her name in the news, but day-to-day operations remain in the hands of the city manager.

More importantly, though, the council itself is relatively powerless. It doesn’t have the power to tax. And much of the city’s spending is off-limits, leading to fierce disputes over relatively small amounts of money.

Helling concludes, “More fundamentally, though, Kansas City seems locked in a leaderless drift—not because it lacks leaders, but because its government is built that way.”

Indeed, the government here was built that way with protections such as term limits and the Hancock Amendment. “Leaderless drift” suggests that without a strong leader cities are doomed. Often the opposite is true; take Chicago, where for 22 years Mayor Richard M. Daley spent and spent and spent on fruitless economic development schemes. Taxpayers in Kansas City are already on the hook for the ill-considered whims of self-styled geniuses. Do they want a government where the people are not a check on new airports, streetcars, convention hotels, and the like?

Kansas City still manages to excel at crony capitalism for the benefit of big business and developers, but at a much smaller scale than its leaders would prefer. And that is a good thing.

Read more here: http://www.kansascity.com/news/local/news-columns-blogs/local-columnists/article16927700.html#storylink=cpy

Bag Ban Ban-Not a Tongue Twister, a Proposed Law

Posted on by Brittany Wagner

rrrI like plastic bags. I use them for groceries, crafts, wet swimsuits, small trash can liners, and more. As far as the “reuse” part of the triple-R-cycle goes, I’m covered. Still, cities across the country are pushing to reduce plastic bag use by instituting bans.

In March, the Columbia City Council withdrew a plan to ban plastic bags at “groceries, convenient stores, and pharmacies.” The proposal would have mandated that stores charge 10 cents per plastic bag. While supporters said the new policy would reduce waste and benefit the environment, it took a lot of heat from constituents and was withdrawn a month later.

A legislator said we are likely to see more municipalities pursuing plastic bag bans as they have become more popular nationwide, which is why lawmakers are considering legislation that would ban plastic bag bans. House Bill 722 would allow businesses a choice on what type of bag they provide customers.

Bag bans are meant to incentivize the use of other types of shopping bags such as reusable bags, but research regarding the use of reusable bags over plastic bags is mixed. In cities that have instituted plastic bag bans, people began to use more paper bags. Unlike plastic bags, paper bags are not often recycled or reused and come with their own set of environmental consequences.

While I believe that Missouri should promote environmentally responsible behavior, it’s unclear whether or not policies like the one Columbia proposed would actually help the environment. Though some might argue that a statewide ban on bans limits the power of local governments, the proposed legislation actually protects the rights of individuals.

Show-Me Now! Transparency for Government Unions

Posted on by John Wright

Did you know that government union employees get taxpayer funded leave which can be used for partisan activities? While union release time is often to attend conferences or other activities, a recent report from the Competitive Enterprise Institute highlights how unionized government workers in Missouri have misused the practice. They conclude that greater transparency is needed.

 

The 411 on a CID in the B70

Posted on by Michael Rathbone

Some business leaders in Columbia want more attention for their slice of town. To do that they are getting together to create a new community improvement district (CID) for the Business 70 Loop. This sounds innocent enough. However, CIDs are just another example of the alphabet-soup taxing districts that increase tax rates to fund new services for a questionable public purpose.

CIDs are independent taxing districts created to collect sales and property taxes and spend money to improve an area in a variety of ways, including beautification and infrastructure. There are two primary problems with CIDs. The first problem is transparency. The auditor’s office has consistently found deficiencies in reporting and documentation for these districts.

The other issue with CIDs is their lack of a cap on property taxes. Under the current proposal, the CID would levy an additional 47 cents per $100 of assessed value of property taxes on top of what people/businesses already pay. However, there is no statutory language preventing the CID from increasing property taxes further. An extreme example is when a CID in the Lake of the Ozarks levied an additional $4 per $100 of assessed value. I’m not saying this proposed CID will have taxes go up that high, but there is nothing stopping such an increase from happening except the restraint of the CID board.

Given these problems, what is the compelling reason for establishing a CID, especially since the area is already seeing redevelopment? As the Columbia Tribune states:

He also cited Miller’s 2012 purchase of the old Commerce Bank building at 500 Business Loop 70 W., Head Motor Company’s recent upgrades and his own redevelopment of the Parkade Center as examples of the type of redevelopment he would like to see along the corridor. Further east, Business Loop 70 boasts a newly remodeled Burger King and renovated McDonald’s.

“We’re starting to see redevelopment occur, and we want to make sure we have pro-redevelopment policies in place,” Burnam said.

If this article tells us anything, it appears that legal restrictions on renovating existing lots are the problem. Maybe proponents should work on fixing the regulatory environment instead of raising taxes.

CIDs have serious issues and should only be undertaken without serious safeguards in place, if at all. The Business Loop in Columbia might not be a paradise, but is it so blighted that the only thing left to do is establish a CID? Color me skeptical.

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