Since 2005, Jackson County Land Trust Has Sold More Than 1,700 Properties

Posted on by Audrey Spalding

During a hearing of Senate Bill 795, a bill to create a land bank in Kansas City, the sponsor, Missouri Sen. Victor Callahan (D-Dist. 11), told the committee that the Jackson County Land Trust (the entity that currently deals with vacant property in Kansas City) had sold very few properties. Kansas City officials prepared information and distributed it to the committee at the meeting; the information showed that the Land Trust had sold just 97 properties in 2011, 41 properties in 2010, and 31 properties in 2009. These numbers are wrong.

Since 2005, the Land Trust has sold more than 1,700 properties for more than $1.5 million. Due to a data error, Callahan and other legislators were presented with incorrect information that made the Land Trust appear to have sold very few properties in recent years.

The correct sales data, which the Land Trust itself provided, is listed below. You can also download a spreadsheet of all addresses sold (and purchase prices) here:

2011: 200 properties were sold

2010: 137 properties were sold

2009: 154 properties were sold

2008: 181 properties were sold.

A big part of the narrative that is being used to advocate for the land bank legislation in Jefferson City is that the existing Land Trust is not selling enough property.

The truth is that the Land Trust sales rate in recent years is as good as, if not better than, the sales rate of any land bank I have researched — including the longest-standing land banking experiment in the United States, the 40-year-old Saint Louis land bank.

Indeed, the very land bank that proponents hold up as the gold standard of land banking (the Genesee County Land Bank in Michigan) continues to amass property. Where, exactly, is the story of success that land bank proponents hope to replicate in Kansas City?

I will admit it: I just do not understand why legislators are in a rush to create a land bank in Kansas City. Why pass legislation that would create an entity similar to what has a long-term track record of failure in Saint Louis? Why create a land bank that could incur unlimited debt with the power to say “no” to people who want to buy vacant, city property? And, why cast aside the Land Trust, which cannot discriminate when selling property and has a reasonable sales record?

Arch Sales Tax Is An Opportunity For A Regional Bad Idea

Posted on by David Stokes

Too often, the cities and other taxing districts in the greater Saint Louis area act unilaterally in ways that hurt our region. Well, the new sales tax proposal to improve the grounds of the Gateway Arch is a great opportunity for us to do something different. We can do something that hurts our region together, as a region. I guess this is some type of progress.

This new tax is a bad idea for a lot of reasons, many of them that Saint Charles County Executive Steve Ehlmann has explained well here:

He says his constituents shouldn’t pay higher local taxes to help revamp the federally owned monument and the park surrounding it.

I think he is right, and I say this as someone who thinks the residents of Saint Charles County should pay more in other instances. For example, I think the people of Saint Charles and other counties outside of Saint Louis City and County should be given a choice on either imposing the zoo-museum property tax within their areas or have to pay admission fees to visit those attractions.

But this proposal is crazy. It is possible for this tax increase to pass in Saint Louis County and Saint Charles County, but not in Saint Louis City, which would result in tax money being collected only outside of Saint Louis City but spent entirely within the city. The arch may be a wonderful regional asset, but it should be paid for the way other federal properties are – with federal tax dollars, user fees, and in a case like this, charitable donations. If there are not enough federal tax dollars available to pay for it, then user fees and donations can be increased, perhaps creatively — or perhaps the project should just not be done.

Legislators Are Ignoring 40 Years Of Failure

Posted on by Audrey Spalding

The Kansas City Star reports that a bill to create a land bank in Kansas City is one step closer to becoming law. If the bill passes, the land bank would have the power to incur unlimited debt, bid against private buyers at tax auction, and — most disturbingly — be able to say no to private buyers who want to buy vacant city property.

The legislation has out-of-state advocates. Dan Kildee, the head of a nonprofit that has advocated for land bank legislation in numerous states, is quoted in the Star extensively. Kildee told the Star that a land bank could acquire abandoned property in order to keep it out of the hands of private speculators. This statement ignores the fact that if a land bank is acquiring property because it thinks a better buyer will come along in the future, then the land bank itself will be acting as a speculator.

We have seen this model fail in Saint Louis. The Saint Louis land bank, also known as the Land Reutilization Authority, has existed for more than 40 years. In that time, it has amassed about 10,000 parcels of vacant land. My research showed that during the past eight years, the Saint Louis land bank rejected almost half of all formal offers to purchase its property. The most common reason for rejection was that the property was being “held for future development.” Sadly, the hoped-for development rarely materializes.

Instead of taking heed of the 40-year-old failure in our own state, legislators are willing to bet Kansas City’s future on glorified accounts of a land bank’s operations in Michigan. That land bank, the Genesee County Land Bank, has been trying to sell vacant property for less than a decade. When I have testified about the failure in Saint Louis, legislators and lobbyists quickly state that Saint Louis is “different” than Kansas City. Why, exactly, is the short-term record of a land bank that is more than 500 miles away more relevant than the long-term failure of a land bank in our own state?

Kudos to Missouri Senate for Blocking Health Exchange

Posted on by Patrick Ishmael

Earlier this year, the Missouri Senate approved a measure blocking Missouri Gov. Jay Nixon’s ability to create a health insurance exchange — a key component of President Barack Obama’s health law — unless the legislature or voters approve it first.

Supporters of the exchange claim they will lose their chance to create a Missouri-centric mechanism to provide affordable health coverage to the uninsured. But Missouri lost that chance nearly two years ago, when the federal health bill was signed into law.

The theory of a state-run exchange, designed to navigate and subsidize the purchase of health insurance, is simply that — a theory. Rules that officials in Washington issued to implement the law say that every detail of Missouri’s exchange must have the approval of federal bureaucrats.

And because federal grants and subsidies will flow through state-based exchanges, Washington will always be able to control Missouri’s exchange through ongoing regulation. This “my house, my rules” scenario underscores the new parent-child dynamic occurring between Washington, D.C., and the states, and the Missouri Senate was right to reject the governor’s ability to implement an exchange.

But if Missouri does not set up its own exchange, won’t the federal government do it for the state? The law says yes, but in reality, it is unclear. The Department of Health and Human Services (HHS) is still grappling with recent findings that the law does not technically provide any money to set up a federal exchange, nor does it offer subsidies to people buying insurance in the federal exchange.

Even if the glitches get worked out, it is doubtful that a federal exchange will be up and running by the 2014 deadline. To date, HHS has only doled out $150 million in contracts to build a federal exchange — a system tasked with coordinating the eligibility, subsidies, premiums, and benefits for tens of millions of people who will be forced to purchase health insurance thanks to the individual mandate. That is a tall order.

Meanwhile, we do not know just how much a state-based exchange will actually cost Missouri. The federal government is awarding grants to set up state exchanges, but that money runs out in 2014. Oregon has imposed new taxes on health insurance premiums to fund its exchange once the federal money dries up, and other states are considering similar measures. Indeed, research from the Mercatus Center suggests that every dollar of temporary federal grants leads to 40 cents of state and local tax increases.

Besides, federal money is not free — everyone pays federal, state, and local taxes, and increased federal spending on exchanges means more out of taxpayers’ pockets. In December, the New Hampshire House announced that it will return $333,000 in federal exchange funds to “pay down our national debt, which is a far better use of these funds than building healthcare bureaucracies here.”

Missouri has time to figure out how, or if, it wants to set up a health insurance exchange. Nationally, only 17 states have acted to establish exchanges — and many of those states have made only nominal progress in setting them up. In response, the federal government has delayed implementation timelines, extended grant deadlines, and even offered a “hybrid” model through which states and the federal government can share in exchange governance.

A lot can happen in the next year, with the upcoming Supreme Court decision on the federal health law, the 2012 elections, and the still-unfinished exchange regulations from HHS. Kudos to the Missouri Senate for blocking Gov. Nixon’s rush to act.

Patrick Ishmael is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

Christie Herrera is director of the Health and Human Services Task Force at the American Legislative Exchange Council, a nonpartisan association of conservative state lawmakers.

Three Strikes?

Posted on by Michael Rathbone

Major League Baseball’s Opening Day is approaching so let me start with a baseball analogy. In the Triple Crown of economic indicators (state Gross Domestic Product-GDP, state GDP per capita, and total employment), Missouri is nowhere close to being an All-Star. In fact, it is struggling to just stay in The Show.

In all three indicators, Missouri compares poorly to other states and the country. According to data from the Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics (BLS), Missouri under-performs when compared to the U.S. as a whole in all three categories. Missouri ranks 48th out of 50 states in state GDP growth, 45th in per-capita real GDP growth, and 45th in total employment growth. In fact, when one compares Missouri with the three best and three worst performing states for each indicator, Missouri’s performance nearly mirrors that of the bottom three states (and in the case of state GDP, Missouri IS one of the bottom three performing states). Missouri’s troubles also cannot be blamed on the most recent economic troubles. Over a period spanning from1997 to 2010, Missouri consistently under-performed the national average and was close to the bottom in all three indicators.

Considering how Missouri is ranked relative to the rest of the country, the question should be asked, “How about a new line-up?” The Show-Me Institute has conducted research on ways Missouri can improve its economic standing. Given Missouri’s current situation, how much worse can the state do if it considers implementing some of these suggestions?

Hope Yet On TIF

Posted on by David Stokes

A developer is proposing a new project in Florissant for a Walmart that will not involve a TIF or a CID. And they said it could not be done. This is very exciting, and it would be awesome to have a recent example of a major development like this in Saint Louis done without a tax subsidy. Remember, whether you subsidize retail or not, people are still going to want to buy stuff. (I want to cover myself and say that just because they will not go for a TIF, it does not automatically mean that there will not be another type of subsidy, such as a TDD. But, because TIF is the worst available here, this would still be a victory.)

It is absolutely NOT a coincidence that this development without TIF is being done in a pool sales tax city. Cities in the sales tax cities gain from development wherever it occurs. Because they share their sales tax collections with the pool – which is then redistributed back based on population – they have no incentive to kick out their own people and give away the store (pun intended) with tax subsidies. A point-of-sale city (which keeps the bulk of its own tax collections) would have given away their first-born mall as soon as the developer mentioned the idea in passing.

What Cannot Be Blighted?

Posted on by Bruce Stahl

Last month, half of Columbia was declared blighted. This produced concerns of impeding eminent domain, even leading to the creation of a citizen group, CiViC, composed of residents who rightly fear casual use of blight. Their fears are not without reason: we  have seen blighted properties seized before. Here are some great photos of ordinary homes from around the state declared blighted and taken.

Last week, the Columbia City Council attempted to assuage fears of eminent domain. An advisory board:

recommended an ordinance that would safeguard against the use of eminent domain as part of the program by preventing the EEZ-related blight designation from being used to meet blight requirements for other laws.

Unfortunately, the recommendation does not provide full protection for Columbia residents. Other definitions of blight are exactly the same as the one the board used to blight half the city. What is to stop the city from blighting areas using statutes that expressly permit eminent domain?

The real problem Columbia residents face is the unconstrained use of blight. As long as the definitions of blight remain so broad, any property can be blighted and seized (except farmland). No residential or commercial property is safe. The definition of blight must be reformed.

Good Deal, Bad Deal

Posted on by David Stokes

In Saint Louis County, the TIF council recently rejected a TIF
proposal from an Ellisville Walmart, but now the City of Ellisville is
attempting to approve the subsidy proposal anyway.

As David Stokes
briefly mentions in this vlog, the sales tax status of Ellisville in Saint Louis County encourages this kind of tax-incentive competition.

Tax, Trolley and Folly: Kansas City Proposal Trundles Ahead Despite Opposition from Local Businesses

Posted on by Patrick Ishmael

Last year I wrote about a proposal to build a new streetcar that would travel along Main Street in Kansas City. At the time, I was highly skeptical of the fiscal prudence of the plan. What has happened since then? Well, another city-subsidized transit line that serves many of the same areas that the trolley would serve has fallen behind on its loan payments due to lack of ridership. Furthermore, the businesses that the proposed train would serve do not want to get stuck with the bill for it.

A government project that will not make money and its presumed customers do not want to subsidize? Over to you, City Council.

Council members late Thursday unanimously approved three measures that establish a streetcar zone for two blocks on either side of Main Street {…}. The measures … also remove a requirement that private development within the zone provide off-street parking, a move aimed at encouraging use of the streetcar and other public transit.

The rezoning is considered a necessary step as the city races to meet a March 19 deadline to apply for as much as $25 million in federal grants to help pay for the estimated $100 million project.

In short, the city’s rushing the project through to get federal dollars, with the balance of the bill coming from new taxes. It is worth noting that the residents in the trolley district who would be voting on the proposed property and sales tax increases for the project will not necessarily be the ones paying the tax, because the business owners do not necessarily live where their businesses are located. That has some entrepreneurs pretty irked. Says one property owner, “My biggest concern is taxation without representation.”

“The people who vote on it live in the apartments and lofts,” Nicholson said. “The people who pay don’t have a say. I’ve always been a supporter of streetcars, but it’s a community asset, and having business owners pay for it is problematic.”

In any case, when the people who presumably stand to benefit from the trolley do not want to pay for it, should anybody be paying for it? And if the tax is implemented as planned, how will local businesses respond? It seems the city is out of sync with even its own projects and objectives; after all, why would the city plan to build a new hotel downtown — and then turn around and raise downtown hotel taxes to the second-highest in the country to fund the trolley? Wouldn’t these initiatives be working against each other, and even if they did not, isn’t one bad idea enough for the city to take on at one time?

The trolley did not make sense in September, and it still does not make sense.

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