No Fee For Photographers

Posted on by Kacie Barnes (Galbraith)

When photographers saw a sign in Faust Park in Saint Louis County this spring banning professional photography without a permit, complaints began immediately. The sign was removed quickly, but photographers still worried about the potential cost of a permit to use Saint Louis County parks. County officials stated that the policy would be under review, and a rule change requiring a permit could go into effect.

Engaged citizens continued to speak out against the permit and news stories documented the issue. The Show-Me Institute contributed to the opposition with testimony we submitted to the county and a conversation about the issue on the Big 550 KTRS. I am happy to report that last week, the Saint Louis County Parks Department announced the policy has been completely dropped.

Photographers don’t impose a higher cost to the county than other park-goers and already contribute taxes to use the parks as area residents and business owners. A user fee would have been unnecessary, and I’m glad the county chose not to impose it.

Woe Is Me – Kansas City School District

Posted on by James V. Shuls

Joe Robertson, of the Kansas City Star, recently had a piece explaining that the property tax levy in the Kansas City Public School District has remained flat at $4.95 per $100 of assessed valuation for years. Meanwhile, surrounding school districts in Jackson County have been steadily increasing their taxes for education.

The article notes that the district has several expensive renovation projects in the works. Will the district attempt to increase taxes or a bond levy? According to Robertson, “The district isn’t asking for it — yet. But the trial balloons are definitely in the air.”

Well, while the “trial balloons” are in the air, we better get all the facts. It is true that the property tax levy for the Kansas City district has remained flat and comparatively low, but that does not mean that Kansas City is spending less than the other area school districts.

The graph below displays the total expenditure per pupil in Kansas City and an average of the other 11 districts in Jackson County. Even though Kansas City’s levy has remained unchanged and is lower than the surrounding areas, Kansas City spends more per pupil. This occurs because the Kansas City district has a much higher assessed valuation per pupil than the surrounding areas. Think of all the office buildings in downtown Kansas City that contribute tax revenue, but do not add students to the district.

Total expenditures per pupil for jackson co

The tax levy for the Kansas City district is lower than the surrounding school districts in Jackson County because it can be. The Kansas City district has had a consistent tax rate because it is the only taxing district in Missouri exempt from adjusting its tax rate as assessments increase. It did not have to reduce its tax rate as assessments increased during the prior decade’s housing boom. (To the Kansas City district’s credit, it appears that officials did not raise taxes during the decline, either.)

Despite having a consistent lower tax rate, Kansas City collects more revenue per pupil and remains one of highest spending districts in the Kansas City area and the state.

Jackson County Assessment Facts, Part 2

Posted on by David Stokes

If Jackson County assessments went up at approximately the same rate as Saint Louis County assessments during the boom real estate years, what has led to the current troubles in Jackson County’s real estate valuations? Is there even a problem? Yes, there is. Huge home assessment increases this year, during a period where everyone knows real estate values are basically holding steady (or, at best, increasing slightly), is evidence of a problem. But is it a 2013 problem, or a longer-term issue?

I think it is a long-term issue, one going back to the beginning of the current assessment system in 1985. But let’s start with the most recent, completed assessment in 2011. Jackson County had a 2010 census population of 674,158; Saint Louis County’s was 998,954. But the 2011 residential valuation in Jackson County was $5,256,120,571. Saint Louis County’s was $13,437,507,980. Thus, Jackson County has 67 percent of the population of Saint Louis County but just 39 percent of the residential real estate valuation. That is strange, and I have to believe, wrong.

And it appears to have always been this way, which means either it’s correct, funny as it may be, or that it was wrong from the beginning. In 1985, the first modern Missouri reassessment, Jackson County had a residential value of $1,478,895,251. Saint Louis County had a 1985 valuation of $4,023,318,297. Jackson County then was only 37 percent of the total. (All totals from the State Tax Commission.)

The poorer areas of Kansas City are included in the Jackson County assessment in a way that the poorer areas of Saint Louis City are not included in the Saint Louis County assessment. (Saint Louis City is not in Saint Louis County, for you Kansas City-area readers.) That would explain some of the discrepancy, but not all of it.

Jackson County and Saint Louis County are the only two large counties in the state. I cannot believe that one of them has just 39 percent of the total residential value of the other. Long-term under-assessment has to be the reason.

These low assessments have not been a good thing for most county taxpayers. The low assessments would generally have been made up with higher tax rates than in Saint Louis. Indeed, the average school district tax rate in Kansas City is higher than in Saint Louis, to give just one example. The average rate is $5.84 in Jackson County vs. $4.77  in Saint Louis County. To be fair, the existence of the Special School District in Saint Louis accounts for the bulk of that difference. Another example is that the two counties themselves have almost the exact same tax rate, even though Saint Louis County has about 300,000 unincorporated residents but Jackson County has only about 20,000. Jackson County’s rate should be lower.

For people with substantial property under-assessments, this trade-off would still have them come out ahead. For people with more accurate assessments, they would have come out behind.

Accurate assessments are not important because they lead to more money for government. I don’t care about that – I don’t even want that. Accurate assessments are important because, first, that is the law, and second, an accurate assessment system leads to a more fair property tax system for everyone.

Jackson County Assessment Facts, Part 1

Posted on by David Stokes

Is Jackson County property poorly assessed? If so, is it systematically under-assessed, or just inaccurate all the way around? If many properties are under-assessed, resulting in them paying lower taxes than they should have and others paying more, how did that happen? Is it a new problem or an old one? One reasonable hypothesis is that the county did not accurately assess property at market rates during the real estate boom of the previous decade. Anyway, does the data back up that hypothesis?

Here are some interesting numbers comparing Jackson County assessments to Saint Louis County. When I began this research, I thought the reason for the current assessment controversy would point to not increasing the values as much as they could have during the real estate boom that ended in 2007. That, of course, is not automatically a bad thing, but the point here is to discuss assessment accuracy, not tax levels. The problem, remember, in Saint Louis during the 2000 – 2007 period was more about tax entities not rolling back their tax rates than assessment increases. (Aside from the awful and illegal “drive-by” assessments of 2001, which was indeed an assessment issue.)

From 2000 to 2011, Jackson County residential assessments went up 59.6 percent. Saint Louis County, which we all know was pretty aggressive in reassessment, went up 59.7 percent. But from 2000 to the peak year of 2008, Saint Louis County went up 79.1 percent; Jackson County went up less at 68.8 percent. The difference is that Jackson County assessments decreased less from 2008 to 2011 as the real estate market declined. (Remember, the decline in real estate values began in 2007 but was not reflected in Missouri assessments until 2009.) Those assessment totals are very close to standard real estate indexes for the two areas, by the way, which is strong evidence in both counties’ favor. The key takeaway is that Jackson County was almost as aggressive as Saint Louis County in increasing assessments during the boom, so why is Jackson County so under-assessed now? (If it indeed is, though I do believe the many reports of crazy under-assessment in Jackson County.)

Going back further, from 1985 to 2011, Jackson County residential assessment increased 255 percent while Saint Louis County increased 234 percent. So, if Jackson County is so under-assessed, it has not come from a lack of reassessment increases, either during the go-go years or the total period. So what is the issue, if indeed there is one? I’ll look at it another way in Part 2.

Don’t Bash Tax Cuts, Then Cite Freightquote And Applebee’s As Missouri ‘Wins’

Posted on by Patrick Ishmael

Last week, Kansas City Week in Review had a fascinating segment about the economics and politics of Missouri Gov. Jay Nixon’s tax cut veto. Among other things, the panelists talked a little bit about the “victories” each side of the Kansas-Missouri economic border war had experienced in recent years. Kansas City Star reporter Kevin Collison specifically cited two Missouri “wins” — Freightquote and Applebee’s.

Well, you know, Missouri has gotten a few major wins, too. Freightquote, a major firm, is going to be moving into their new space on the Missouri side of the border. There has certainly been a lot — Applebee’s came over here. Kansas has had an edge…

As we’ve noted here before, both Freightquote ($60-plus million) and Applebee’s ($10-plus million) were promised massive tax incentive packages to get them to move into Missouri. That’s remarkable for one big reason: For all the hand-wringing about how disastrous tax cuts would be, it is ironic and hilarious that the very “wins” Collison and others cite in support of the status quo are themselves . . . extremely targeted tax cuts. What else would you call reducing the tax burden for a few businesses?

A better policy, based in the literature, would be to reduce taxes for everyone. Why Collison and others would support special tax breaks for the favored few, and then deny tax relief for millions of others, is strange, unfortunate, and wrong.

Closed Open Meetings

Posted on by Patrick Tuohey

The Kansas City International Airport (KCI/MCI) terminal advisory group is off to a rocky start.

First, its charge of being an ‘adult discussion’ about building a new $1.5 billion terminal at MCI seems hollow, as the Kansas City mayor and City Council already have urged the Aviation Department to go ahead with its plans anyway.

Second, the first meeting, held two weeks ago at Union Station, was marred when Kansas City police escorted opponents of the plan off the premises. Meanwhile, just a few feet away, group leader Bob Berkebile was telling participants that the meeting was to be open to the public regardless of their view on the matter. Oops.

Now, according to the Kansas City Star, the task force is to meet again on Tuesday, and again in the Stillwell Room at Union Station. Union Station officials issued a statement saying it is a private space — despite receiving millions of dollars in taxpayer subsidies — and so, they say, Union Station officials can set special rules about whether the public can enter the building and under what circumstances . . . even when there’s literally a “public meeting” taking place within its walls.

If the city is serious about listening to the task force, it ought to halt the Aviation Department from spending money on a new terminal pending a committee conclusion. If the task force is serious about its job of involving various views, it ought to seek and receive public assurances from Union Station that it will respect the rights of the public to attend public meetings.

Milkshakes and Handshakes: Brownback Signs Another Kansas Tax Cut

Posted on by Patrick Ishmael

In Missouri, governors veto tax cuts. In Kansas, apparently governors sign tax cuts… annually. (Emphasis mine)

TOPEKA, Kan. (AP) — Proclaiming Kansas “open for business,” Gov. Sam Brownback on Thursday signed into law a measure that makes additional income tax cuts over the next five years while generating new revenue through higher sales taxes and other adjustments. …

Conservative Republicans pushed the initial cuts through last year while acknowledging that the plan was too aggressive and would need refinement in 2013. Those changes in the bill signed by Brownback on Thursday include decreasing income tax deductions over time as overall rates drop, as well as giving a less generous standard deduction for married couples and single parents.

The top in personal income tax rate [sic] will drop to 3.9 percent for 2018, down from 4.9 percent, and promises future rate reductions in years when revenues grow more than 2 percent.

Notably, Kansas’s lowest income tax bracket will also drop, from 3 percent to 2.3 percent. And taken together with last year’s cuts, Kansas’s new cuts put the state on track to return nearly $4 billion to Kansans over the next five years. Huge.

There was a great deal of talk last week about how “progress” had been made to end the Kansas-Missouri economic border war, but the “progress” appears to boil down to Kansas deciding that it will drink Missouri’s milkshake, and Missouri hoping for a handshake in return. That’s a bad, bad deal, and that deal will only get worse the longer Missouri does nothing to lighten the state’s tax load on its families and businesses.

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