In this video, Show-Me Institute Policy Analyst David Stokes recaps the findings of a recent Show-Me Institute case study examining the effects of property tax rates and school quality on house prices in Richmond Heights, Mo.
The State Constitutional Question: Are the Aerotropolis Tax Credits Even Legal?
It’s a question that now is cropping up among some who have looked closely at the Aerotropolis legislation. Ron Calzone was on Jamie Allman’s show (97.1 in St. Louis) yesterday and talked at length about the issue, citing specific sections of the Missouri Constitution in support of his position. Segment is below:
To Calzone, the context behind Missouri’s Constitutional language is of particular interest with the Aerotropolis bill, and he says the state’s concerns about the subsidization of railroads in the 1800s were a motivating factor behind how the text of the state’s Constitution was drafted. Calzone questions the constitutionality of the Aerotropolis tax credits because he says the legislature would be exceeding its authority in granting the credits. He notes explicitly these sections of the Constitution in support of his argument: Article I, Section 2; Article III, Section 36; Article III, Section 38(a); Article III, Section 39; and Article III, Section 40.
The state Constitutional argument seems to be gaining steam, too; Missouri Sen. Jim Lembke (R-Dist. 1) spoke on the floor of the Senate yesterday about the Constitutional problems with the state government picking winners and losers. (You can find the full text of the Missouri Constitution here.)
I’ll be checking out the case law and may follow this post up with an exploration of any court cases that may have dealt with these sections of the Constitution. In the meantime, I invite our readers to check out the Constitution themselves, using the links above, and leave your thoughts in the comments. Should be a very interesting conversation.
Property Tax Rates Being Set Across Missouri
This is the time of year when a multitude of local elected officials across Missouri are setting property tax rates. Because 2011 was a resassessment year, those rates are generally changing. (In non-reassessment years, the rates generally don’t change or change only slightly unless voters have approved a tax increase.) Cities, counties, school boards, fire districts, library districts, and many other types of tax authorities will be setting their rates this month. The new reassessment that property owners received earlier this year will be combined with the new tax rates to result in the bill property owners will receive in late October/early November and must pay by Dec. 31.
Just in time for this process, the Show-Me Institute has released a series of pieces on property taxation. We have a new policy study that details exactly how property taxes are implemented in Missouri, including a literature review considering the economics of property taxation and the ideas of Charles Tiebout.
There is a case study that details the manner in which public services and property taxes are capitalized into housing prices in Richmond Heights, Mo. We have two videos: one describing the myriad of tax districts that implement property taxes in Missouri, from the common to the little-known, and one which also focuses on Richmond Heights.
The policy and case studies share the briefing paper, and there is an op-ed that has already run in the Saint Louis Beacon on this topic. These pieces were all written by Christine Harbin and myself. Josh Smith helped out with the research and the videos. A number of interns helped out as well, and proud we are of all of them. If you are interested in the questions and debates that involve property taxation, we hope you find these studies and videos interesting.
Will the Missouri House “Ram” $300 Million of Aerotropolis Cash Back Into the Bill?
As Yogi Berra says, “It ain’t over til it’s over!” Via KMOX, (Emphasis mine)
Republicans are scaling back a plan offering tax breaks to spur international trade at the St. Louis airport. But it isn’t over yet.
KMOX Jefferson City Bureau Chief Phil Brooks says House leadership is expected to try to re-insert the $300 million cut by the Senate and then attempt to ram the bill through the Senate.
More undoubtedly to come. Stay tuned.
Senate Removes $300 Million in Warehouse Construction Tax Credits From Aerotropolis Bill
Missouri Sen. Rob Mayer (R-Dist. 25) announced today that $300 million in tax credits for the construction of warehouses had been removed from the Aerotropolis legislation, part of a contentious economic development bill that the Missouri Legislature is considering in a special session.
Regular Show-Me Daily readers are, I am sure, nearly sick of hearing about Patrick Ishmael’s and my questions regarding that $300 million.
We wondered: Why was the state considering subsidizing warehouse construction in the St. Louis area if there was more than 18 million square feet in vacant warehouse space already available? Why did versions of the legislation give the mayor of St. Louis City and area county executives the power to restrict who could receive hundreds of millions in tax benefits? Why were the construction tax credits limited to individuals and companies who owned more than 100 acres of land? Where was a substantive cost-benefit analysis?
We would have stopped asking those questions if someone had provided substantive answers. And yet, there really were none.
It is brazen to ask for $300 million, in the public or private sector, without substantive evidence that the money is necessary and would be put to good, productive use. As such, the removal of warehouse and facility construction tax credits from the legislation is good news for Missouri taxpayers.
But, things could easily change. There is a chance that the $300 million could be reinserted at the last moment. CBS reports that the Missouri House may attempt to re-insert construction tax credits in the legislation and “ram the bill through the Senate.”
So, perhaps, this may be more about politics than good policy. I hope that isn’t the case.
Video: Senate President Pro Tem Discusses Changes to Aerotropolis Bill
Via Capitol Calling, Sen. Rob Mayer (R-Dexter) talks about the “erosion” of support for the Aerotropolis bill since the Senate first passed legislation containing the tax credits during the regular session. Fascinating turn of events. We’ll keep you posted.
Facebook and Twitter Users Can Comment Directly at Show-Me Daily
A note that if you’re interested in commenting at Show-Me Daily or Show-Me Sunshine, we just upgraded our commenting section with Disqus to allow readers to instantly share their comments with friends on their social networks, if they so choose.
Commenting is easy:
- Type a comment into the Disqus box below a blog post.
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Voila! The conversation continues.
Also, a big thanks to all of our Show-Me readers. Site traffic this year has greatly increased over previous years. You’ve been fantastic.
Talking Aerotropolis: Audrey Spalding with Greg Knapp on KCMO, Patrick Ishmael with Mark Reardon on KMOX
Busy days in these parts, as you might imagine. Audrey Spalding was on with KCMO’s Greg Knapp on Tuesday morning in Kansas City talking about the bill. The segment is below:
Wednedsay, Patrick Ishmael was on with Mark Reardon on St. Louis’ KMOX in a 5-minute radio hit. That segment follows:
Hot New Argument for Tax Breaks in Kansas City: Abate My Taxes, Or I Just Might Build a QuikTrip
Taxpayer-subsidized apartments or $1 buffalo chicken hot dogs? How will I ever decide? (Emphasis mine.)
Read what David Martin wrote in The Pitch:
The project, which has neighborhood support, sounds worthwhile. But there’s a catch. The public has to provide assistance. The developer is asking for a tax break worth $2.76 million.
The Kansas City City Council will be told that the project won’t work without the incentives. Yes, West 39th Street is vibrant with restaurants. Across the state line, the University of Kansas Hospital is expanding.
The developer concedes that the failed Qdoba sits on a valuable piece of land. But here’s where the proposal begins to look like blackmail.
“Sure, it’s an attractive piece of property for development for lots of different uses,” Aaron March, an attorney working for Price Development, tells The Pitch. “But if we were just in it for the money, we would sell it to McDonald’s or QuikTrip. But we’re not.”
[…]
So what will you have, Kansas City, a spiffy new apartment building or a McFlurry? “If you’d rather have a convenience store or a gas station or a fast-food restaurant,” March says, “then don’t give the incentives.”
This is the view from the property’s doorstep.
It takes real je ne sais pas quoi to go to the government, concede that your property’s valuable, and then claim that if you don’t get a tax abatement, your only option would be to build a gas station or a fast food joint. That may be business as usual these days when it comes to the private sector’s interactions with the government, but it’s bad business, and bad policy.
