The Mayor, the County Executive, and the RCGA All Likely Have Vested Interests in the ‘Aerotropolis’ Legislation: It Could Enhance Their Power

Posted on by Audrey Spalding

If the Missouri legislature calls a special session and passes the so-called “Aerotropolis” legislation, it will award a great deal of power to the Saint Louis mayor and the nearby county executives. It should come as small surprise that some of the strongest voices arguing for the Aerotropolis legislation come from the very individuals who stand to benefit from it.

The Aerotropolis bill would give to the mayor of Saint Louis or the executive officers of nearby counties the authority to designate “gateway zones.” While this power sounds innocuous, it has important ramifications.

First, those chief executives would become gatekeepers in the distribution of millions of taxpayer dollars. The Aerotropolis legislation would create $300 million in tax credits that would subsidize warehouse construction. That tax credit money could only be awarded to warehouses built in gateway zones.

Even if motives are pure, the ability to determine which areas are eligible for hundreds of millions in tax credits would be an incredible power. The legislation does not say anything about monitoring such designations. Nothing in the legislation would prevent one of these chief executives from using such power as an indirect way to acquire campaign contributions or other untoward benefits.

A simple way to stop any such abuse of power would be to take the city and county chief executives out of the equation. If the state — despite a lack of substantive empirical evidence that these tax credits will do any economic good — really wants to subsidize warehouse construction, at least let all vacant land owners compete equally for tax credits. There is no need to give special powers to city and county executives to achieve this (questionable) goal.

Second, this legislation would allow city and county executives to appoint a three-person board to oversee millions in special tax revenues.

That board could impose a special tax on the warehouses receiving the Aerotropolis subsidies, and then would oversee how those tax revenues are spent. Of those special tax revenues, 50 percent would go to the Saint Louis airport. But the other 50 percent would be given to a “tax exempt regional economic development association or associations …” The three-person board would select which associations would receive the money.

This, too, represents increased political power. The chief executives of Saint Louis and nearby counties will be in a position to appoint the people to determine what agency gets part of those special tax revenues. Nothing will prevent them from appointing individuals who have a vested interest in where those special tax revenues go.

Interestingly, it seems that the Saint Louis Regional Chamber and Growth Association (RCGA) — the organization that pushed hard for the Aerotropolis tax credits — is a “tax exempt regional economic development association.” There are others, such as the Saint Louis County Economic Council. It appears that these organizations could qualify for the Aerotropolis special tax revenues. Awarding a steady stream of tax revenue to organizations that argued for the legislation that created that tax revenue is exceptionally poor public policy.

There’s a simple answer to all of these problems. Remove the possibility, however remote, of using the Aerotropolis subsidies and tax revenue as a political tool. There doesn’t seem to be a practical reason to include these mechanisms in the Aerotropolis legislation. They do, however, invite corruption into the process. The economic merits of the Aerotropolis tax credits are questionable as it is, but if the legislature insists on enacting them, they should not allow that money to be controlled by political figures.

A “How To” Guide for Brentwood Residents

Posted on by Charles Carson

The Post-Dispatch revealed this weekend that after an embezzlement investigation into Brentwood City Administrator Chris Seemayer, police discovered that Brentwood firefighters were allegedly paid “sham overtime” for 24 years.

Would it surprise you to learn that the State Auditor does not have the jurisdiction to audit the Brentwood Fire Protection District?

According to the State Auditor’s website:

The State Auditor’s office does not have original jurisdiction over most local governmental entities except school districts or counties with no county auditor. Therefore, the only way the State Auditor’s office can obtain jurisdiction to perform an audit in these areas is either through the petition process, or through a governor’s request.

This year, the Brentwood Fire Department has been allotted $2,190,664 from the city budget. The Post-Dispatch alleges that anywhere between $12,000 and $28,000 was misused every year.  The city could hire an independent auditing firm to investigate, but various firms have missed this is in the past.

If Brentwood residents want the State Auditor to review how their taxpayer dollars are spent, residents must petition for an audit. According to Ch. 29.230 of the Missouri Revised Statutes, the petition requires a minimum number of signatures. In Brentwood’s case, the petition would need 15 percent of the total number of ballots cast for a gubernatorial candidate in the most recent election.

In the 2008 General Election, 4,805 of the 5,738 registered voters in Brentwood cast ballots, according to information provided by the St. Louis County Board of Election Commissioners.  Some of those ballots may not have included votes for a gubernatorial candidate, but, assuming that they did, 721 registered voters must sign the petition to trigger an audit under state law.

For additional information regarding an audit request, please visit the State Auditor’s website by clicking here.

The Undue Burden

Posted on by Charles Carson

Hundreds of St. Charles County residents received a surprise letter from the Department of Revenue (DOR) this week — requiring them to pay several hundred dollars in sales tax on vehicles purchased one, two, or even three years ago.

In a recent audit, the city of O’Fallon discovered that the license office had undercharged residents for the sales tax due on their motor vehicles. Now, DOR has billed many residents for the difference in what they paid and what they should have paid in taxes. (Even three years later, the DOR may legally assess these taxes under Chapter 144 of the Missouri Revised Statutes.)

This case is an example of how inefficient government bureaucracy results in undue burdens on citizens.

To a family hit hard by the recession, several hundred dollars can be difficult to come up with on short notice. This isn’t a case of citizens paying their fair share; it’s a case where a relatively minor governmental mistake can have unexpected and burdensome consequences on individuals.

Sales tax rates in Missouri differ from municipality to municipality because the total is comprised of special, local, and state sales taxes. While there is a general state rate of 4.225 percent, each municipality may charge its own additional rate. On top of that, special taxing districts within a municipality may impose relatively small sales taxes for specific purposes, causing sales tax rates to differ block by block in some areas.

In this case, the multiple layers of taxing authorities did not properly communicate and failed to charge residents the correct amount.

It is unclear who exactly made the error, but it likely occurred because of outdated maps that did not reflect O’Fallon’s recent annexations. Many vehicle owners were charged sales tax rates for unincorporated St. Charles County, when, in fact, they lived within O’Fallon’s city limits. When they paid the sales tax on their vehicles, the licensing office apparently acted on incorrect information.

According to Tom Drabelle, O’Fallon’s Director of Public Relations:

“It is very possible some of the maps being used by the local office, maybe even the state, weren’t updated as they should have been with all the annexations that took place and the changes that occurred literally on the fly sometimes.”

Because of confusion at different levels of government, hundreds of Missouri taxpayers are forced to bear an immediate burden. For more information, please see the article on KSDK’s website.

Should Teachers Get Grades, Too?

Posted on by Turner Trapp

Tennessee has recently taken an important step toward ensuring that its public schools provide a quality education by setting up a system for grading teachers. Missouri should follow suit and go one step further, streamlining teacher termination policies.

Starting this fall, all public school teachers in the state of Tennessee will be receiving yearly grades, which will play a role in decisions for termination as well as tenure attainment.  Half of the evaluation will come from principal observations, with the remainder based on student academic performance and other factors.  The new system will also require that all teachers, tenured or not, be evaluated each and every year.

Collecting more detailed data on teachers, and therefore school performance, will help to bring much needed competition to the public school system.  Given access to this information, concerned parents will be able to make better decisions as to where their children should attend school.  With renewed pressure to perform, however, schools and districts will need to be able to remove teachers found to be ineffective.

Here in Missouri, even for schools or districts that choose to implement an evaluation system, the removal of bad teachers is a slow and cumbersome process. Missouri law sets out detailed procedures that must be followed in terminating an under-performing teacher.  These include a list of the only acceptable reasons for termination, in addition to a requirement for a thirty-day warning period prior to the hearing. In the event of a successful termination, Missouri teachers can still appeal to the district court, possibly reversing the decision.

Given the power to more easily terminate bad teachers along with an effective evaluation process, principals and superintendents could much more successfully manage their schools and districts.   Furthermore, if school administrators had the ability to fire poor teachers, less education spending would be wasted on prolonging the careers of bad teachers held within the schools by the promises of pension plans and tenure agreements.

Public school districts’ primary concern should be providing a quality education to students. In fact, this quotation is found in many district’s policies:

“Because the school district exists for the students, and the main obligation of the Board of Education is to provide an education for the district’s students, and not to provide employment, the Board will, through procedures carried out by the administration, determine which employees can best serve the needs of the students.”

Employing ineffective teachers until they reach retirement age hurts every student the teacher fails to teach. Tennessee has given us a strong example to follow, but to see true success here in Missouri, school administrators should be given the power to more easily remove bad teachers for the sake of both our tax dollars and the students’ education. The legislature cannot possibly foresee every situation and prepare for it accordingly.  Control over the system should be decentralized and placed in the hands of those that live and work within it every day.

On Aerotropolis and High-Speed Rail

Posted on by Patrick Ishmael

Over the weekend the St. Louis Post-Dispatch published a commentary written by Ripley Rasmus of the consulting firm HOK. In his piece, Rasmus sketches out a not-so-distant future that includes a bustling Saint Louis Aerotropolis and a high speed rail line from Chicago, telling readers that “[f]ortunately there are visionary leaders in our community who fully understand that these scenarios are not just a dream.” Rasmus’s nod to the “flight of fancy” argument is, for obvious reasons, much appreciated.

That said, it’s worth reiterating the manifest problems with the Aerotropolis project. It’s also fair to describe Rasmus’ high-speed rail dream as a billion-dollar boondoggle, based on the Show-Me Institute’s own research in the area. As Randal O’Toole observed, the cost of the system envisioned to connect just Saint Louis and Kansas City would be enormous:

Upgrading the 250 miles of Missouri tracks in the FRA plan to run trains at 110 mph would cost taxpayers at least $875 million, or nearly $150 for every Missouri man, woman and child. Subsidizing passenger trains over those routes would cost millions more per year, yet the typical Missourian would take a round trip on such trains only once every six years.

It is exceedingly important to emphasize that these “dreams” cost real money, and Rasmus does not reference a single price tag for any of the ideas these “visionary leaders” have put forward anyplace in his commentary. Visions can be as amorphous as they please; budgets and good sense cannot.

One other interesting thing: Rasmus cites back to the RCGA for his jobs numbers on Aerotropolis, saying that the project will “directly employ more than 5,000 people, and create an additional 5,000 jobs in secondary businesses serving the trade hub” — added together, that’s 10,000 jobs.  I’ve taken issue with the job mad libs of the RCGA and others before, with particular criticism for the two different figures offered by the RCGA and cited in the media. I’ll leave it to readers to determine whether Rasmus’ assessment clarifies or further muddles the Aerotropolis jobs forecast(s).

“Felt Like Winning the Lottery!”

Posted on by Bruce Stahl

It’s the stuff every ticket owner dreams of — winning a heap of cash. And that’s exactly how co-director Joe Anderson felt when he was awarded Missouri film production incentives. This is what Anderson said in a published interview:

One of those investors also went a bit further and loaned us funds against a film incentive program from Missouri that allowed a 50% tax credit for every dime we spent in their State. It worked out quite well and I would love to do that again! Felt like winning the lottery!

The movie, Albino Farm, received over $193,000 in tax credits. Enjoy the trailer — your tax dollars helped pay for it.

Opting Out of the TSA

Posted on by Charles Carson

The Transportation Security Administration (TSA) has once again changed its policy regarding private airport screeners — this time allowing airports across the country to apply to opt out of using the TSA and hire private security firms instead. We followed this before, when in February, the TSA announced that it would not allow any additional airports to opt out. Springfield-Branson Airport was one of the airports denied the use of private screeners under the old policy.

Springfield-Branson has been invited to reapply for permission to use private screeners and join Kansas City International Airport as one of the current 16 airports that contract private security firms.

The new application process has more requirements than it did before February, but hey, it’s a good start. Having private security firms provides competition for the TSA and that’s good because it boosts efficiency and cuts costs.

My colleague David Stokes put it best in a blog post earlier this year:

“The very existence of competition brings a greater degree of efficiency to the TSA, even if it continues to do the screening in the vast majority of American airports . . . but if the presence of competition in a small number of airports serves to reduce the TSA’s complacency, that benefits all of us.”

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