Show-Me On The Radio Tomorrow

I will be talking with Chad and Josh on the Morning Newswatch on Joplin’s KZRG 102.9 FM at 7:10 a.m. tomorrow morning. We will be discussing the Joplin Tax Increment Financing (TIF) proposals. Please listen in if you can.

I will also have my regular weekly appearance with Manny Haley on the Morning Magazine on KRMS Lake Ozarks 97.1 FM at 10:15 a.m. We are discussing the Dierbergs Transportation Development District (TDD). Join us for Show-Me at the Lake.

VIDEO: Bieber Fans Want Freedom

Have you heard about Ticketmaster’s new “paperless ticketing” for events? I talked to Justin Bieber fans to find out how they would feel about the switch to restrictive ticketing.

My previous post prompted some questions about whether I support government action to prevent paperless ticketing. I do not think the government needs to get involved here. However, I do believe event-goers should have a voice in the matter. (Watch the video to learn more about the issue.)

Ticketmaster, as I am sure everyone knows, is practically a monopoly. Because of their strong market power and lack of competition, Ticketmaster has freedom to enact unpopular policies. They are able to do this without suffering a huge loss in business because fans do not have the option to buy tickets from a different company. It is like Ticketmaster is saying, “My way or the highway, fools!”

But that is not what fans want. They want choice, and they do not want to be told what to do with their tickets once they buy them. There is value in customers telling companies what they want, not the other way around. Watch the video to see what Bieber fans have to say (the kids were so cute with their posters and costumes).

An Agenda That Makes Sense

Major changes to the tax code appear to be top priority on the agenda for the 2013 session of the Missouri Senate. According to one report, Sen. Tom Dempsey (R-Saint Charles), who is expected to be elected as the presiding officer of the Senate when it convenes, was quoted as saying the Senate will move quickly to provide “income tax relief.” Specifics have yet to be finalized, but corporate and small business (i.e. pass-through entities) tax cuts are on the table. Another objective for the Senate is overhauling the state’s tax credit programs.

The above items are worthy goals. Patrick Ishmael and I have pointed out the benefits of business tax reform. It would be great if the state capped and/or eliminated certain tax credit programs such as the Quality Jobs program and used the extra revenue to eliminate the state’s corporate income tax. We have also pointed out the strategic necessity of following other states’ leads and eliminating the tax on pass-through entities such as LLCs.

I hope that the Senate can follow through on these stated objectives and help enact some meaningful changes in the tax code. Legislating is not easy, but the opportunity is present for legislators to accomplish a lot.

Joplin School District Right To Be Concerned About Super TIF

Officials for the Joplin School District are admirably asking some tough questions about a proposed Tax Increment Financing (TIF) district. The boundaries of the proposed TIF district will encompass a substantial portion of the redevelopment area so severely damaged by the 2011 tornado. This subject is, obviously, difficult because we all want to help Joplin move forward any way we can. But, as the school district officials point out, how is freezing all the property taxes within the redevelopment area at a low post-tornado level for 23 years going to help Joplin move forward?

According to the Joplin Globe, the destruction from the tornado resulted in a decrease of $34 million in assessed valuation for the school district (and a similar number for the city, counties, etc.). According to the rules of TIF, a new TIF would freeze the property taxes paid to all districts at that number for 23 years. In the long run, that could be very damaging to public services. Fifteen years from now, how is the school district going to fund its services when a substantial part of the district has its taxes frozen at a 2012 post-tornado level? One way they will do it is by having very high taxes on the areas outside of the redevelopment zone. If this TIF passes, I could see tax differences between the areas in and out of the zone so large that people start making decisions to move based on that, and that will start to affect property values. (See pages 33-36 here for how this can happen in such situations.) It is one thing to pay more to live in a better school district. It is another thing to pay more for a house with lower taxes than other, similar homes within the same school district.

My general objections to TIF are laid out here. There are, no doubt, different circumstances in Joplin than just moving around big box stores in Saint Louis County.

The Joplin Globe editorial board is correct in stating that the community should step back before making such an enormous decision. Once the properties within the proposed district are redeveloped, they should be required to pay, at a minimum, the pre-tornado tax levels to partly reduce the discrepancy in future property taxes between property in and out of the TIF district. (Obviously, before and during the period they are being redeveloped, the much lower tax levels should be paid.)

No Vote on Prop B, A Blessing in Disguise?

Anyone who believed the ads in favor of Proposition B might expect the “no” vote to be devastating for Missouri schools. As Peter Venkman might say, it will lead to “human sacrifice, cats and dogs living together … mass hysteria;” or in education terms: staff reductions and increased class sizes. Despite nearly every education agency in the state supporting the measure and copious amounts of ink filling opinion pages with support, Missourians voted to not increase tobacco taxes. So that begs the question, why do Missouri voters hate children?

The truth is, Missouri voters do not hate children, or even taxation for education. Take, for example, the results of Proposition S in Saint Louis County. Even though the property taxes for schools in the county are 50 percent higher than the average school property tax rate in the state, voters approved the 19 percent property tax increase with 59 percent of the vote.

Many Missourians simply did not believe that the increased revenue from the tobacco tax would actually go to education, and for good reason. Though the drafters of the legislation said the funds would be “in addition to” funds generated by the funding formula, they inserted a provision that allowed those funds to replace general revenue when the state could not fully fund their obligations to K-12 schools. As it turns out, that is exactly the position we are in right now. Missourians simply do not do not like taxes that unfairly target one population with dubious claims that they will benefit schools.

Proponents of Prop B claim big tobacco used scare tactics to garner opposition to the measure. In fact, the opposite was true, as advocates for the tax increase suggested the revenue generated would prevent teacher layoffs and increased class sizes. Those claims, of course, are not likely to come to fruition. However, if the state continues to underfund its obligations, the result is a massive lawsuit. Unless legislators want the courts to settle the issue of education funding, they need to have some serious discussions when they return to Jefferson City.

The debate about education funding will certainly be contentious and will pit rural, urban, and suburban legislators and school districts against each other. It could also be highly productive, allowing lawmakers to tackle some of the most pressing issues in K-12 education.

For instance, legislators could work out the kinks in the intradistrict transfer bill so more students have access to high-quality schools.

They could improve transparency by ensuring the money follows the child to their school, not just to their district. This would ensure money designated for high-poverty or special needs students is actually spent on those kids and not at wealthier schools in the district.

Or, lawmakers could consider tax-credit scholarships or education savings accounts as a way to save money and ensure parents have more educational options for their kids.

To many, taxing smokers to fund education sounded like a good idea. In reality, Prop B would have done little to build a strong, sustainable education system, but it would have provided cover for legislators to avoid the tough discussions that are needed. It is possible the “no” vote was actually a blessing for education funding; it may force legislators to go to the state capital and do the difficult job that they have been elected to do.

James V. Shuls is the education policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

McGraw Milhaven – David Stokes on KTRS

David Stokes has a recurring spot on McGraw Milhaven’s KTRS radio program. In this appearance, Stokes and the host discuss how they spent their Thanksgiving, the current state of the proposed Richmond Heights TIF, the effect of TIF on small businesses and communities, the current state of the McKee/Northside TIF, the pervasive flaws in TIF proposals generally, and whether Stokes thinks that a TIF would be justified in an are that is actually economically depressed.

 

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