A Wild Idea: Kansas City Votes Nov. 8 On Proposed Zoo Tax

Posted on by Patrick Ishmael

When I was a kid, I often visited the Kansas City Zoo with my family; after all, we were members of the Friends of the Zoo program, the private booster organization that now runs the park. Thus, participation in zoo-related activities wasn’t uncommon, and even after seeing the more robustly-funded Saint Louis and Omaha zoos in my youth, I never really felt like I was being short-changed with my hometown facility.

No doubt, the Kansas City Zoo’s funding pales in comparison to some other parks. For example, in 2006, the Saint Louis Zoo’s budget topped $46 million, with nearly half of its funding coming from the Metropolitan Zoological Park and Museum District (ZMD), which Saint Louis City and County property tax dollars fund. For perspective, the Kansas City Zoo’s budget last year was roughly a quarter that size, at $11.6 million — $3.4 million of which came directly from the city.

Is there a funding disparity here? Has Kansas City, to date, placed a different priority on its zoological park compared to other metropolitan needs? Sure, on both counts. But according to a report in the Kansas City Star that may be changing, and soon:

The zoo on Nov. 8 will ask voters in Jackson and Clay counties to create a new zoo district by approving a 1/8-cent sales tax. It would give the animal park an assured stream of money safe from the uncertainties of the Kansas City municipal budget.

Supporters say it would vault Kansas City into the ranks of the truly great regional and national zoos.

“We’re looking at this as one chance in a lifetime,” said Randy Wisthoff, the zoo’s director. “It could be the most important thing to happen at the zoo in its 100-year history, or in the next 100-year history.”

When every big government project is marketed as a “one chance in a lifetime” opportunity to taxpayers, I have to say, the buzz of the suggestion wears off pretty quickly for me. Phraseology like this, of course, is intended to engender urgency for a cause, but while that’s a fine marketing strategy, it can facilitate really bad, and oftentimes silly, public policy decisions.

How much would a fully-implemented Kansas City zoo tax generate? Quite a bit, actually.

If approved in both counties — it must at least pass in Jackson to take effect — the zoo district could generate $14.2 million a year. That is more than the zoo’s entire budget now and would allow it to accelerate a master plan that calls for a $15 million penguin exhibit, an orangutan jungle and a new display for big cats. Plans also include a water play area for kids and a giraffe feeding station.

Another Kansas City Star report notes that “zoo officials say they need a regional tax base to compete with better-funded zoos,” but, is the market for zoos so lucrative that Kansas City really needs to raise its zoo game with a special tax? As someone who had the opportunity to appreciate and enjoy the zoo as a child two decades ago, I would love to see Kansas City expand its zoo, but I’m not convinced that (1) it’s needed, (2) the taxpayers need to pay for it, or (3) that the economic effect of the zoo justifies special taxpayer attention.

It’s the prerogative of Kansas City area residents to determine their tax burdens, so if they see a benefit from the tax, it shall be. But as someone from a family of zoo supporters, I’m not convinced it’s necessary.

Note: Platte County and Cass County, both of which contain parts of Kansas City, will not vote on the zoo tax next week. Residents in those counties might vote on the issue sometime in 2012.

Manufacturing Mania (That We All Pay For)

Posted on by Audrey Spalding

Missouri Gov. Jay Nixon announced yesterday that more than 1,600 jobs will be created at a new manufacturing plant in Wentzville. The jobs promised are associated with $360 million in planned investment by General Motors to build a manufacturing plant in Wentzville.

I hope that the job and investment numbers touted will hold up as promised. The St. Louis area could certainly use some more economic activity.

However, given the track record of similar job estimates, we should all be skeptical of such claims. It is very easy to issue a press release touting job estimates. Indeed, politicians do this all the time. It is a way to tell voters that something is being done to address the economic recession, even if no economic activity has actually occurred. It is much more difficult to follow a project through completion and track the actual number of jobs created and the actual amount invested.

Regarding the Wentzville plant, we should all watch carefully. A great deal of state and local taxpayer dollars will go to the project. The St. Louis Post-Dispatch reports that GM has been approved for $36.8 million in tax credits over a 10-year period, and that the company has applied for an unspecified amount of tax credits through the state’s Quality Jobs program.

GM will also get to keep 100 percent of employee withholding taxes for a 10-year period. Additionally, the city of Wentzville has approved the plant property for partial tax abatement, meaning that GM will get a nice break on its property taxes (which aren’t all that high).

And, of course, let’s not forget about all of the federal tax money GM  has received in recent years.

I wonder just how much the final bill to Missouri taxpayers will be.

Nixon and others claim that the state incentives have spurred the promised investment. But how do we know? Given the findings of academic studies of tax credit effectiveness, it is certainly possible that the plant would have located here without the incentives. It is also possible that the plant would have located somewhere else in the United States. In either case, the plant would have been built and cars would be made.

I also wonder what we aren’t seeing. When the state awards this much in tax incentives, it is a tacit acknowledgment that the tax rate everyone else pays is too high. How many small businesses are failing because of a burdensome tax rate? How many companies already located in Missouri are harmed when the state hands millions of dollars to their competitors?

I think one person who commented on a Show-Me Daily blog post hit on the tax incentive problem we face. He wrote: “The problem is that abandoning tax credit legislation means abandoning a lot of campaign donors — and legislators hate doing that.”

Tax dollars should be used responsibly, instead of helping elected officials gain political favors or favorable news coverage. It sounds like the state will be facing some tough budgetary problems next year. Shouldn’t we be focusing on encouraging authentic job creation and funding needed programs instead of pinning our hopes (and millions in taxpayer money) on promises?

St. Charles Collecting Business License Fees It Is Not Authorized To Collect

Posted on by David Stokes

While researching Tax Increment Financing, I visited the St. Charles city website. While there (it is a very good municipal website), I noticed the business license link. So, I clicked on it (as I am want to do) and was greeted with this page:

Business Licenses

Per City Ordinance (Chapter 110), anyone doing business in the City of St. Charles must have a business license issued by the City of St. Charles. This includes:

  • All businesses with a St. Charles address

  • Residents working from their homes

  • Out-of-city businesses such as contractors, sub-contractors, delivery businesses, etc.

  • All professionals

There is just one problem with these statements; they aren’t accurate. First, there are several occupations commonly considered “professionals” that state law specifically excludes from local licensing requirements. Lawyers, CPAs, doctors, dentists, and several other professionals are exempt from local business license fee requirements.

Furthermore, there are other types of “out-of-city” businesses that are exempt from licensing fees unless they fit the first example and have a specific city address. While the examples detailed on the website (contractors, etc.) are correct, other businesses, such as insurance brokers and engineers, are exempt from local licensing unless they have an office in St. Charles.

I bet there are a lot of cities requiring the same thing, and attempt to collect business license fees from firms that don’t know they are exempt. Does the typical land surveyor know he or she is exempt from having a business license? Perhaps. I bet it is less that cities attempt to collect the license fee from exempt businesses as much as they allow people from firms that don’t know better to pay for the license without telling them otherwise.

Is it possible that city officials tell those who are exempt from local licenses that they are so exempt when they arrive to pay for the license? Sure, but that is putting a lot of faith in individual employees to correct the misstatements on the website.  

The city of Saint Louis does a good job of displaying a link to the exemptions on the website of the license collector. St. Charles, and probably many other cities, could stand to take a (web)page from that. I am a big fan of the new mayor of St. Charles. Hopefully, her new administation can correct this soon.

Show-Me Institute Accepting Applications For Winter/Spring Internship Opportunities

Posted on by Show-Me Institute Staff

The Show-Me Institute is pleased to offer internship opportunities for winter/spring 2012.

  • Internships are open to current undergraduate and graduate students, as well as recent graduates.

  • Winter/spring internships will last approximately four months. The exact starting and ending dates are flexible, but we anticipate that each internship will run from January 4 through May 23.

  • Winter/spring interns can work a part- or full-time schedule, 9 a.m.-5 p.m., with attendance strongly suggested at the institute’s book club once a month.

  • Because the Show-Me Institute is a “small shop,” interns will be involved in virtually all aspects of the institute’s operations. Interns work closely with senior staff on a wide variety of projects. They can expect greater responsibility and personal attention than they would receive at larger organizations.

  • Interns will assist staff members with a variety of tasks. These may include researching public policy topics, organizing events, and writing and editing op-eds, newsletters, studies, and other documents. Some administrative and clerical tasks also are required.

  • A Show-Me Institute internship is an excellent opportunity to improve your research and writing skills. Each intern will produce an op-ed on a public policy topic of interest to him or her. Each intern will receive feedback and assistance from the institute’s staff members throughout the process.

  • All internships will occur at the Show-Me Institute’s offices in the Central West End.

  • Interns are paid on an hourly basis.

Those wishing to be considered for an internship should submit the internship application and the requested supporting materials (click on "2012 Winter/Spring Internship Application" at bottom of page).

The deadline for consideration is December 2, 2011. Applicants can expect a decision in mid- to late December.

Where Will Nannies And Chimney Sweeps Sing Songs And Fly Kites If St. Louis County Closes Parks?

Posted on by David Stokes

Saint Louis County Executive Charlie Dooley has proposed cuts to the county park system in response to budget shortfalls. Park advocates are outraged:

“I don’t think it’s up to those guys to make that decision,” said Walter Crawford, executive director of the World Bird Sanctuary, which borders Lone Elk Park. “That park belongs to you and me.”

If it is not up to county officials to determine how to raise and spend tax dollars, whose job is it? Not surprisingly, the hipster urbanists are all a-twitter:

Parks represent a community’s shared aspirations and values. Our St. Louis County Park system is a national treasure.

No, it isn’t. It is a wonderful local park system, but “national treasure” is a fair bit of hyperbole.

I think the real opportunity is for cities to take over some of the parks that are within their borders. Many of the parks in question were county parks before these cities, such as Wildwood, incorporated. County government officials are correct to propose changing that model now. Residents in the newly-formed cities gain the benefits of the local park without the marginal tax burden. The St. Louis Post-Dispatch explains further:

The possible transfers: Lone Elk Park to the Missouri Department of Conservation; Greensfelder to the city of Wildwood; George Winter to Fenton; and Bon Oak to Dellwood.

Officials said that they had not yet contacted the state or municipalities to discuss that prospect.

However, Wildwood Mayor Tim Woerther said on Tuesday that he would be open to the idea of taking over the 1,734-acre Greensfelder.

“We would certainly be receptive,” he said. “But obviously, the devil is in the details.”

I commend Mayor Woerther for his openness to the idea. I would add Tilles Park in Ladue to the list; perhaps the cities of Ladue, Brentwood, and Rock Hill could take over the park in a cost-sharing arrangement. (Tilles is in Ladue, but on the border of Brentwood and Rock Hill, and residents of all three cities use the park extensively.)

Another possibility for some of these parks is to deed them to neighboring subdivisions as common ground. This is an option for the smaller, neighborhood parks on the list, such as Mathilda-Welmering. Maybe they would be well-maintained in that situation and maybe they wouldn’t, but the choice, and cost, would be up to the local residents who use the park. 

And, not surprisingly to regular readers, I think privatization should be considered for some of these parks. The Reason Foundation has covered the issue of park privatization at length. The conservancy model of non-profit public-private partnerships operating a park has been used successfully in some Saint Louis city parks, such as Tower Grove Park. Private supporters also have played a role in the success of some destination parks in the area, including Forest Park and Faust Park. (Nextstl.com has good detail on this in its story.)

The privatization model will, in my opinion, work better for destination parks. But, I think Lone Elk is such a destination park, and because it is one of the parks without a deed restriction on its sale, I hope the county gives that option strong consideration if a private operator can be found to manage it.

I don’t agree with every idea that the county executive proposes here, but I don’t think he deserves the criticism from all sides that he is receiving. Some of these cuts are tough choices that have to be made. I believe that the government is too large and too costly at every level. So, my axiom to that rule is that I don’t criticize elected officials — of either party — when they propose budget cuts, especially in tough economic times. (I think the closest I came to breaking that principle was in defense of Parents As Teachers. But, I only argued against its elimination; I supported cutting its budget.)  

If cities can take control of some of these parks, if privatization (including non-profit control) can be applied to the facilities where it may be best suited, if the more obvious cuts and changes can be applied (like closing minimally-used pools and expensive community centers), then I believe these changes can be implemented and, in the end, most St. Louisans would barely notice.

Digital Learning Day, February 1, 2012

Posted on by The Alliance for Excellent Education

As a state, Missouri has had some forms of digital learning for more than a decade. Rural schools, for example, share courses via interactive television as a way to offer courses (like foreign language and upper level math courses) they otherwise might not be able to offer students.

But there’s much more that can be improved. According to Digital Learning Now’s Report Card for Missouri, state law does not stipulate that student achievement data be used to evaluate the quality of individual online courses, nor does state law require that failing individual course providers be closed.

In this video, Bob Wise, president of the Alliance for Excellent Education, explains how digital learning in the classroom helps students receive more personalized attention and high-quality content.

On Feb. 1, 2012, the Alliance for Excellent Education and its partners host the first-ever national Digital Learning Day. That day will celebrate innovative teaching practices that make learning more personalized and engaging. The learning day also will encourage exploration of how digital learning can provide more students with more opportunities to acquire the skills they need to succeed in college, a career, and life.

Now, Show-Me Your iPhone: SMI Smartphone App Live

Posted on by Patrick Ishmael

Two weeks ago, we debuted Show-Me Daily’s first-ever Android phone app, and today it is my pleasure to introduce Show-Me Daily’s all-new iPhone application for our Apple users. Both platforms have the latest version of our application, including access to Show-Me Daily and YouTube content as well as News — a continuously updated roundup of new Show-Me Institute commentaries and reports — and Show-Me Sunshine’s latest public document postings.

Stay up-to-date on Missouri free-market issues wherever you are, and please contact us — from your phone or on this blog — with your questions and comments.

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What Do Academic Studies Say About Tax Credits?

Posted on by Audrey Spalding

During the recently-completed not-so-special Missouri legislative session, some lawmakers continued to push for a new set of tax credit programs, arguing that tax credits can encourage economic growth.

Today, the Show-Me Institute is releasing a new policy study on the effectiveness of tax credits: “Tax Credits as a Tool of State Economic Development Policy.” This study, by Howard J. Wall, director of the Institute for the Study of Economics and the Environment at Lindenwood University, reviews academic studies of tax credit programs in other states and discusses some of the broad arguments made in favor of tax credits.

One of the most striking findings in Wall’s study is the following: “State tax credits do not tend to lead to higher levels of employment for local residents, nor, by extension, do they lead to higher levels of employment for state residents.”

Consider the academic evidence:

  • There have been three prominent surveys of tax credit research in recent years. None of the surveys concluded that tax credits are an across-the-board, effective tool. In fact, one concluded that legislators should abandon tax credits altogether.

Most academic research on tax credit programs across the U.S. has shown that tax credits don’t work. Why do some legislators think that the situation in Missouri is any different?

Laws of Supply and Demand At Work in Game 7 Ticket Pricing

Posted on by Patrick Ishmael

First, a hearty congratulations to the St. Louis Cardinals. The team’s late-season and post-season play has been the stuff of sports legend, and I’ll be watching the game closely tonight.

If you visited the Cardinals’ official website today to buy tickets, you’ve probably seen this page:

soldout

Now for the good news: Tickets to the game are still available! The bad-ish news? It’s going to be expensive if you want into Busch Stadium tonight. The lowest price going on StubHub right now is $489, for standing room only.

489ticket

The most expensive ticket for the game: more than $12,000. David Stokes, a Show-Me Institute policy analyst, wrote Wednesday about the effect of legalizing scalping on the cost of after-market ticket purchases. From the article he quotes:

The ante rises during the playoffs, when a box seat can fetch more than $1,000 and even the price of standing through a nine-inning ballgame can run as high as $300.

We are well beyond that point today. But simply put, secondary markets – whether on the street or online – usually do a fine job of reducing product inventories by matching willing sellers with willing buyers. Those that value a ticket literally as much as a house payment can buy one; those seeking to unload their ticket can sell it; and those making the market receive their own cut for the service they provide. Everybody wins.

(By the way, originally I was going to write that “thousands of tickets are still available,” but that’s rapidly becoming untrue. During the 20 or so minutes it took to write this post this afternoon, the available number of tickets dropped from approximately 2,100 to 1,800. Prices are high, but they’re obviously not too high.)

This all naturally flows into David’s other post on the World Series regarding parking prices. Websites like StubHub (which is, not surprisingly, owned by eBay) are great because the market is pretty clearly informing what sellers are charging. World Series tickets, while they may have some collectible value after the fact, are ultimately perishable: they’re used for a game, or they’re not. That’s why if you want to go to a regular-season game and don’t mind missing the first inning or two, you can get better deals, as scalpers try to avoid getting stuck with tickets when the music stops. That “wait and buy” opportunity will, for the most part, be non-existent tonight (I think) but the moral of the story is that people place different values on different products, services, and conveniences. Parking lots around the stadium wouldn’t raise their prices if they didn’t think those spaces were valuable to parking customers. World Series ticket prices are very similar in that regard.

In any case, enough economics. Here’s to you, Cards. May the rally squirrel be with you.

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