Depressing News From Ellisville

Posted on by David Stokes

The vote of the five members of the Ellisville City Council in favor of Tax Increment Financing (TIF) is just atrocious. You had to be there to feel how passionately opposed to the TIF the strong majority of people were during the public forum. Later, you could sense how angry they were after the vote. I was there, and I certainly felt it. The residents had every right to be livid.

I do not recall ever seeing such a brazen example of an elected body ignoring the will of the people. Combined with the terrible economic policy they are now instituting, the choice of the Ellisville City Council to enact this TIF is one of the worst decisions I have ever seen a government make.

Now more than ever, we need the state legislature to pass major TIF reform for Saint Louis County and all of Missouri. The ability of cities to override a county TIF commission must be removed. Furthermore, TIF districts should be required to make other taxing districts whole through alternate tax dollar arrangements. In other words, cities should share the sales tax dollars placed into the PILOT (Payments In Lieu Of Taxes) fund.

We still have many more TIFs to fight in Shrewsbury, Saint Ann, and Richmond Heights; and that is just Saint Louis County. Add in the Enhanced Enterprise Zone (EEZ) in Columbia, the Transportation Development District (TDD)/Community Improvement District (CID)  in Chesterfield, the incessant use of subsidies for every project in Kansas City and Saint Louis, and I can assure you we will be very busy. When it comes to pointing out the economic flaws in the terrible arguments for local development subsidies, the Show-Me Institute has only just begun to fight.

Now I am going to get some lunch. (Go to the 2:04 mark.)

When Is a Transparency Bill Not a Transparency Bill?

Posted on by Audrey Spalding

When it’s used to hide unpopular legislation.

On Wednesday, the Missouri House took an otherwise laudable government transparency bill and used it to hide legislation that would create a government land bank in Kansas City. The transparency bill, S.B. 467, ballooned from just two pages to about 40 pages with the unwieldy amendment.

Some legislators continue to push the Kansas City land bank bill forward, despite the fact that a similar land bank in St. Louis City has failed spectacularly. The Saint Louis City land bank has a history of rejecting would-be buyers, and allowing area aldermen to have outsize influence over who is allowed to purchase vacant city property.

If Missouri legislators want to throw the land bank dice again in Kansas City, they’re free to do so, even in the face of St. Louis’ failure. But, perhaps they should do that in a more transparent way.

The irony of using a transparency bill to hide another bill 20 times its size would be funny, if it weren’t so sad.

Big Night For Ellisville

Posted on by David Stokes

So, what is it going to be, Ellisville? TIF or no TIF?

Tonight is the scheduled final vote on the use of Tax Increment Financing (TIF) for a proposed development at Manchester and Clarkson Roads in Ellisville. We know why Show-Me Institute thinks this is a bad idea for Ellisville. If this TIF can be defeated, as far as I know, it would mark the first rejection of such a proposal by a point-of-sale city. Combined with Florissant’s rejection of a TIF recently, we would be making real progress toward stopping the constant use of subsidies around Saint Louis.

Stay tuned, and follow me on twitter (@DavidCStokes) for results of tonight’s vote.

Voter ID Matters

Posted on by Patrick Ishmael

We do not often wade into the waters of election policy, but frankly, election policy is intimately related to the free-market objectives we promote. Although voters are one step removed from the chambers that decide most policy issues, the only way elected representatives can fairly represent the will of the people is if the representatives themselves have been fairly elected. Debasement of the electoral process through fraudulent voting subverts the will of voters and disenfranchises voters themselves. And yet on Monday, Mother Jones called the states’ moves to get their arms around the problem and implement stronger ID requirements “loathsome.“

Let’s be clear: Voter fraud is real. Especially in recent weeks, the push has been on to paint “voter fraud” as some sort of manufactured controversy, but as someone who has worked in this field, I can assure you, it is not. From county officials telling poll workers that people can vote with a credit card as their ID — they cannot — to the use of absentee ballots fueling fraud, there is not only ample room for voter fraud to take place through the very structure of the voting process, but there have been cases of voter fraud suspected and prosecuted in the state just in the past few years.

Voter fraud can swing elections, especially close ones. If voter fraud constitutes 2 percent, or 1 percent, or even 1/2 percent of the vote total, how many races does that affect? How many statewide and local races have you seen decided by a point or less, and how likely is it that none of those races turned on fraudulent votes?

Every vote should count, every vote should be protected, and every attempt to distort the will of the electorate with the casting of illegal ballots should be turned back. Preventing voter fraud through reasonable identification measures that we already accept to drive cars, board airplanes, and enter some government buildings is not an undue burden on voters’ rights to vote. Rather, it is a burden on voters’ rights to allow the floodgates of voter fraud and abuse to remain open.

Finally, A Bill That Promotes Growth: Reducing Missouri’s Corporate Income Tax

Posted on by Patrick Ishmael

Here at the Show-Me Institute we review a lot of bad proposed and enacted legislation, but every once in a while, we find something that could be a gem. I think such a bill may be Senate Bill 661, which in just three pages sows the seeds for a massive realignment of Missouri’s development schema. The bill, introduced by Missouri Sen. Eric Schmitt (R-Dist. 15), is now on its way to a full vote in the Senate. Among other things, the bill would cut Missouri’s 6.25 percent corporate income tax by half within five years to:

  • 5.625 percent for 2012;

  • 5 percent for 2013;

  • 4.375 percent for 2014;

  • 3.75 percent for 2015; and

  • 3.125 percent for 2016 and beyond.

Show-Me Institute Policy Researcher Michael Rathbone and I have talked again and again and again (and again!) about reducing the corporate income tax, which is one of the most destructive taxes in terms of economic growth. As we have argued, eliminating wasteful economic development tax credits would make up for much of the cost of a corporate income tax elimination, assuming legislators are seeking to make the tax cut revenue neutral. SB 661 does not go quite that far — focusing only on tax reduction and not on development tax expenditures — and admittedly, the draw-down is slower than I would like, but it is a great idea and the right direction for Missouri policy.

Who knows? If Missouri starts phasing out its corporate income tax, perhaps the wastefulness of the state’s economic development tax credit system will become clearer.

Status Quo 1 – Kids 0

Posted on by Audrey Spalding

In a sad move, a Saint Louis Circuit Court judge has ruled that Saint Louis Public Schools (SLPS) does not have to pay for students to transfer to a better district, despite the fact that the district has been unaccredited for years.

The ruling is heartless. In essence, Judge David Lee Vincent III argues that it would be too costly to allow Saint Louis City students to choose where to go to school, because too many want to leave. So, instead of allowing those students to escape to a potentially better school, they have to stay to help perpetuate a failing system.

As Robbyn Wahby, executive assistant to the mayor of Saint Louis City aptly tweeted: “Status Quo 1-Kids 0.”

The Circuit Court’s ruling goes directly against a Missouri law that states: “[Unaccredited districts] shall pay the tuition of and transportation . . . for each pupil resident therein who attends an accredited school in another district of the same or adjoining county.”

The judge was able to sidestep that law by citing a 2011 study that estimated that more than 15,000 students who live in Saint Louis City would transfer to a school in a neighboring county if given the chance. The survey estimated that about 8,000 of those students would come directly from SLPS, with the remainder coming from a mix of charter schools and students participating in a voluntary transfer program.

That study estimated that the total cost of paying for transportation and education for those 15,000 students would be nearly $224 million each year. With that amount coming out of SLPS’ budget, SLPS officials testified that losing that much money would put the district at such a financial disadvantage that it could not serve the students who choose to stay.

In light of that evidence, Judge Vincent views the Missouri statute requiring a district to pay tuition and transportation of students who transfer out of an unaccredited district and to an accredited one as an unfunded mandate.

Though I have some questions about the math (15,740 students at $224 million comes to $14,231 per student, which appears to be cheaper than SLPS’ per-student expenditures of $15,861), the estimated cost is a symptom of a bigger problem.

The very fact that 15,000 students in Saint Louis City want to leave for a better school should be evidence enough that severe educational reform is needed. This is not a problem we should push aside because it will take some work to solve.

It is time to prioritize the education of students over the funding of districts. If public education dollars could follow any Missouri student to any school they choose (public, charter, private, parochial, virtual, etc.), then we would not be at this impasse. A wider variety of schools could take on the students from Saint Louis City who want to leave, and ease the potential burden of new students on the public school districts refusing to let city students in.

Frankly, closing bad schools is one option worth considering. If that is what is needed to ensure Missouri students have access to a quality education, then it is the right move.

Episode III: Revenge Of The Rams

Posted on by Michael Rathbone

Officials for the St. Louis Rams football team must submit their counter-proposal for upgrading the Edward Jones Dome to the St. Louis Convention & Visitors Commission (CVC) by tomorrow. It will be interesting to see the Rams’ proposal; however, CVC officials will not release the plan — unless the Rams give them permission (I would not bet on that).

This proposal is integral in determining whether the Rams stay or leave Saint Louis. But what really matters is that the CVC will not let the public review the proposal, which if accepted, could cost the taxpayers millions on top of the $24 million per year that the state, city, and county already pay for the Dome’s construction. The Rams already rejected a proposal from the CVC that would have left the public on the hook for $60 million, so it is reasonable to guess that the public’s portion of the bill in the Rams’ counter-proposal will be much higher.

CVC officials maintain that they are complying with a provision in the lease with the Rams that some information can be kept confidential. However, considering that (a lot) of public money is potentially on the line with this deal, NO decision should be made until the public has a chance to review it.

The Show-Me Institute has a long record of opposing such government “investment.” However, even if the CVC accepts the Rams’ counter-proposal, it should do so only after the people who would actually pay for the project are allowed to see the costs.

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