Please Convince Me: The Pros and Cons to Raising Property Taxes in Columbia

Posted on by Michael Rathbone

As first appearing in the Columbia Daily Tribune:

This November, many Columbia residents will be concerned about whether the football Tigers will finish off their SEC schedule in a winning fashion. They might not give much thought to the looming decision of whether to increase their own property taxes by 30 cents per $100 of assessed value over the next five years. If passed, after the fifth year the average Columbia homeowner would see an $88 increase in their property taxes. The money from this tax increase would further fund public safety.

Public safety is clearly a major public good, and it should have sufficient funds to deliver adequate services to the residents of Columbia. However, there are good reasons to believe that a 73 percent increase in property taxes, not 4 percent as one proponent has claimed, is not necessary at this time. Below are some pros and cons to this proposed tax increase.

PRO:

Proponents of the tax increase correctly state that the number of police officers per 1,000 residents has declined over the past several years. Coupled with this decrease in the ratio of police to residents, the inflation-adjusted budget for the police department has declined as well. This means that a decreasing number of police have fewer financial resources while serving an increasing population.

CON:

These decreases in funding and personnel, detractors argue, have not led to an increase in crime. According to the FBI, in Columbia total crime per 100,000 residents has declined slightly since 2009. There has been a much larger drop in violent crime since 2009. More officers might make crime decrease even further, but that is no guarantee. Many cities in Missouri have more police per 1,000 residents and more crime as well.

PRO:

Columbia has fewer firefighters than comparable Midwest towns. Also, firefighter response times are increasing as more Columbia residents have moved farther away from fire stations.

CON:

With the exception of 2012, the number of fires in Columbia has been on a steady decline. This decrease in the number of fires is coupled to a budget that continues to increase, even when adjusted for inflation.

There are other options for Columbia residents to consider if the November measure fails. For instance, the city could look at the fire expense reimbursement it receives for services performed for the three colleges in town. According to the Columbia budget, these reimbursements are projected to decline in the next few years. Columbia can renegotiate with these colleges in order to get higher reimbursements.

Columbia could privatize its water and electric utilities. The sale of these utilities not only would bring in immediate money, but it also would expand the property tax base, which would generate more funds for the police and fire departments.

Voters in Columbia have a lot to think about when considering whether to raise property taxes this November. There are reasonable points for and against this proposal. Whether the tax increase passes or fails, there still are other methods for raising revenue in the city. City residents should not think their only option going forward is to increase taxes or cut back on public safety services.

Michael Rathbone is a policy researcher at the Show-Me Institute.

How Do You Argue With These School Choice Supporters?

Posted on by James V. Shuls

It is no secret that I’m a big fan of school choice programs. As such, I often try to think of compelling arguments in favor of charter schools and private school choice programs. I found that there is no topping the personal stories of individuals who have benefited from school choice. That is why I’m excited about the new ad campaign launched by Philly School Choice.

The concept is simple—get a bunch of parents who love their charter or private school and let them tell their story.

I mean, how do you argue with this mom?

Luxury-Oriented Development in Clayton

Posted on by Joseph Miller

This week, Clayton proposed granting a 50 percent property tax abatement for 20 years to a $72 million luxury apartment development—The Crossing—in the heart of downtown Clayton, an area which the city council absurdly declared “blighted.” The city argues that the development will bring more economic activity and act as transit-oriented development.

We have written many times before that using tax incentives to lure development either generally diverts development from other areas or, worse, provides tax breaks to development that would have occurred anyway. These abatements put the pressure of funding local services on businesses or areas of the city that are not so favored by the city council. This type of central planning by tax policy creates an uneven playing field that is unfair and ultimately economically damaging. Allowing a luxury property developer and future residents to pay lower property tax rates, when rates were just increased for the rest of Clayton, is questionable policy.

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The Crossing

The argument that this development will boost transit ridership is also flawed. While changing zoning restrictions to allow less parking for a downtown building is not objectionable, using possible transit ridership to justify tax favoritism is bad policy. The relative affluence of Clayton has meant that local MetroLink ridership is far below what planners hoped for before the station opened in 2006. Original projections would have had the Clayton station serve 3,000 riders each weekday shortly after opening. Today, total ridership is 880 per weekday, and only 213 Clayton residents use the MetroLink to get to work. Four times that number walk.

The idea that luxury apartment dwellers will greatly boost this ridership is unlikely, because the affluent typically own vehicles and are much less likely to use transit than those with lower income. Even if all the residents of The Crossing did use public transportation, is it not enough that city, county, and federal government spent hundreds of millions building a light rail line to Clayton, and they continue to provide subsidized tickets that cover less than a third of that rail’s operating costs? Do we need to subsidize their luxury apartments next to the station as well?

Chances are some of the new residents will use transit, more will walk, and most will drive to their destinations. As for the local economy, the effects of diverting development and rearranging tax burdens will go unseen. But the good news is (for those with the means), new luxury apartments are coming on the market! And just wait until you see the location …

Streetcars Aren’t Good Economics or Transit

Posted on by Patrick Tuohey

Back in October 2013, Kansas City Councilman Russ Johnson said that the whole point of streetcars was to spur economic development, not transportation. He was quoted by the Kansas City Business Journal:

“The stated goal of this project is economic development. That’s the dominant goal,” [Russ] Johnson said. “The dominant goal is not to have a lot of people ride it. The dominant goal is to develop the city.”

The Show-Me Institute has argued repeatedly, and apparently successfully, that streetcars do not contribute to economic development or provide reliable transit. More people are waking up to this fact.

CityLab, formerly The Atlantic Cities, just published a column titled, “Overall, U.S. Streetcars Just Aren’t Meeting the Standards of Good Transit,” and it is worth the read. The author offers the following:

  • The most commonly cited problem with new streetcars—Matt Yglesias calls it the “original sin“—is that they tend to run in mixed traffic alongside cars. The resulting slow speeds, combined with the relatively short length of the lines (often just a mile or two), means many potential riders could sooner reach their destination by foot.

  • Very few next-generation streetcar lines run with the sort of frequency that might counterbalance slow speeds or short distances.

  • As streetcar skepticism grows louder, even among traditional transit advocates, there’s some confusion about its source. Some mistake it for an anti-rail sentiment (a misperception perpetuated when critical pieces quote actual rail opponents, as the Economist recently did). In fact, the true spirit of the concern is not anti-rail or anti-transit but anti-bad rail transit.

These three items appeared in the most recent campaigns for a streetcar: they ran along commercial thoroughfares; they were to run slowly and infrequently; and opponents were accused of just being anti-transit. The CityLab piece saves the best part for last. The author concludes that the reason streetcars fail to meet standards of good transit is because of boosters like Johnson:

“[The problem is] the way too many new streetcars are being deployed—as economic engines first and mobility tools second (if at all), even after being constructed with painfully limited transportation funding—that’s inspiring much of the criticism.”

Not only were Johnson and others who promoted economic development wrong on the facts, but transit supporters also are beginning to realize that streetcars don’t even provide worthwhile transportation.

Are Outdated Projections Driving I-70 Rebuild Plans?

Posted on by Joseph Miller

With the defeat of Amendment 7, the transportation sales tax, the issue of how to fund Missouri’s statewide road system remains up in the air. Part of the reason that the Missouri Department of Transportation (MoDOT) needs more money is to fund the rebuilding of I-70, a multibillion-dollar mega-project. However, it is possible that MoDOT’s plan to rebuild and expand I-70 is excessive and based upon erroneous projections of increasing traffic.

MoDOT has exposed the need to rebuild I-70 for years. Its oldest sections are more than 55 years old, and much of the highway requires rebuilding from the ground up. But MoDOT is not just looking to rebuild I-70, they are also planning to expand it. MoDOT’s preferred plan would replace the pavement, expand the highway to at least three lanes on each side, construct a wide median, and replace interchanges. The plan is estimated to cost $3 billion. If Amendment 7 had passed, more than $1 billion (a quarter of all sales tax dollars going to the state road system) would have gone to improve I-70. Of that, $500 million would have gone to expanding the highway to three lanes from Wentzville to Independence.

MoDOT is so concerned with expanding I-70 because they projected traffic would almost double from 2007 to 2030. If I-70 does not add lanes, it would mean stop-and-go traffic across the state. Here is a chart of MoDOT’s projections:

1

MoDOT expected average daily traffic to increase roughly 2.5 percent per year from 2007 to 2030. If the growth in I-70 traffic follows the trend above, MoDOT is more than justified in its drive for more lanes. However, these increases are failing to materialize. For instance, in 2013, traffic should have been around 16 percent higher than it was in 2007. However, at most points along I-70, traffic was down. And lest one think this is a trend of the recession, 2007 traffic was around the same as 2000 traffic.

2

The idea that people are driving less, or at least not driving much more, should not surprise MoDOT. After all, they repeatedly say just that when requesting more dollars to spend on expanding rail and transit projects. If traffic on I-70 is not growing much now, and MoDOT expects people to drive less in the future, why hasn’t MoDOT updated its projections and plans for I-70? Claiming to need more money because people are driving less, while simultaneously needing money to handle traffic growth, seems like trying to have it both ways.

A more economical solution to the I-70 problem may be to rebuild the two-lane structure while addressing bottlenecks around places like Columbia. That might fit the needs of Missourians, while lessening some of MoDOT’s financial strain.

Common Core Doesn’t Put the CCSS in Success

Posted on by Brittany Wagner

success

In previous posts on the Common Core State Standards (CCSS), I’ve written about the consequences of federal overreach, which, in itself, is a strong argument against the nationally imposed standards. Unfortunately, this argument is unconvincing for teachers, who have been led to believe these standards will give them more instructional flexibility and ultimately will help students make academic gains.

The following two quotes about CCSS reflect these widely held beliefs.

They are not a curriculum; it’s up to school districts to choose curricula that comply with the standards.
—Kathleen Porter-Magee and Sol Stern

Not exactly. Though it’s true that Common Core is just a set of standards, curriculum is informed by assessment. If the assessment is Common Core, the curriculum is Common Core. School districts buy curriculum sets (textbooks, workbooks, reading materials, etc.) that reflect the standards and prepare students for assessments. This ultimately gives teachers less instructional flexibility.

The promise of these high standards for all students is extraordinary.
—Former NEA President Dennis Van Roekel

If only. As a teacher, I would have loved to set the same high bar for ALL of my students. But the truth is, not every student has the same readiness for learning. Last year, one of my 13-year-old students scored a 30 on the ACT. Would I set the same high bar for this student and a student who had just tested at a fourth-grade reading level? No, I would differentiate instruction, meaning I would assign a project with varying degrees of difficulty and interest-based learning.

The problem is not “setting the bar high enough,” it’s the challenge of scaffolding instruction to fill in the gaps where there is missed learning. Sure, setting a high bar for every child sounds great, but without instructional flexibility, how will teachers make decisions that best suit the needs of their students?

They won’t. Even if setting a high bar for all students did increase academic achievement, there is still some debate about whether the Common Core even does that. If Missouri really wants to see students make academic gains, we should trust teachers to do their job well, and reward the ones that do.

 

Ditch the Tax Incentives and Pursue General Tax Cuts Next Year

Posted on by Patrick Ishmael

The Missouri Legislature’s 2014 veto session begins this week, and the chambers are set to reconsider dozens of bills rejected by the governor earlier this summer. While a handful appear to have enough support for an override, most sit in legislative limbo, fates to be determined. Among those bills hanging in the balance are a package of tax incentives I’ve talked about many times before.

These incentives are bad policy in general, but to create these handouts well outside of the legislature’s normal budgeting protocol is inexcusable. The budget must balance, and this late-breaking special interest goody bag throws the state’s budget out the window. Missourians deserve better than to be treated like a cash spigot for the well-connected.

There’s also a larger picture that needs to be understood here. Some of the most vocal tax cutters are also big boosters of tax incentives, but by creating, expanding, and sustaining tax handouts like these, our state is making the enactment of future tax cuts much more difficult. We should all be paying for the cost of our government, but increasingly, well-connected special interests are being exempted from that burden. That’s wrongheaded policy. As a general rule, if taxes are going to fall for anyone, they should fall for everyone. It’s time to kick the tax incentive circus out of Jefferson City.

The legislature should come back next year and pass broad and responsible tax cuts for Missourians. The first step is rejecting this year’s incentives.

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