Saint Louis Agency May Be Hindering Development by Hoarding Vacant Land

Posted on by Brenda Talent

A new study by the Show-Me Institute trains a spotlight on the largest Saint Louis landholder. This is not any one individual or developer, but the Land Reutilization Authority (LRA), a joint creation of the city of Saint Louis and the state of Missouri, which was set up in 1971 for the purpose of putting abandoned, tax-delinquent properties back into productive use.

The problem is, the LRA seems to have done more to thwart development than to encourage it. During the past four decades, the LRA has accumulated a larger and larger inventory of vacant properties in Saint Louis, while rejecting many offers from private individuals and small businesses to purchase selected properties from the agency.

The agency’s most frequently stated reason for turning down so many offers has been that the property in question is “being held for future development” — as if some unknown savior will come along at a future date to undertake a massive development that will require scores of vacant parcels in a single swoop.

In acting in this way, the agency has ignored a basic rule of thumb: When you are in a hole, stop digging. The LRA’s holdings of vacant properties have climbed from 2,000 in the early 1970s to more than 9,000 today. It has turned the derelict status of much of the city’s housing stock into an unchanging and seemingly permanent condition. Remarkably, more than half of the parcels that are now owned by the LRA have been in the agency’s possession for well over a decade.

If you want to know the full story of how this happened, I urge you to visit showmeinstitute.org and read our study of the LRA, “Standstill: Is St. Louis Hindering Development by Waiting for Large-Scale Miracles?” It illustrates the fallacy that a public agency can work miracles by substituting its judgment for the far more detailed knowledge of the marketplace.

The LRA now works in relative obscurity, seldom attracting much attention. Still, though, it wields the same extraordinary powers originally granted to it by the Missouri legislature 40 years ago. We believe that a review of both the practices of the LRA and the authorizing statute are in order.

The LRA’s actions spring from the same impulse that has led to the abuse of eminent domain laws: a lack of regard for the rights and interests of small landowners, and the assumption that government officials know better than private citizens how best to use or dispose of their property. Action by the Legislature is needed to help address this problem, with a view toward reversing the LRA’s longstanding practice of hoarding land and toward establishing standards for disposal of property that will ensure its availability for private use.

To better serve the public interest, the LRA should stop trying to pick winners and losers in the market for vacant land. It should accelerate the sale of tax-delinquent properties to private individuals and businesses who are willing to purchase it.

By making it more difficult for people to buy land in the city, the government discourages city living. It is little wonder that the city is still hemorrhaging residents.

Brenda Talent is the executive director for the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.

Tough Choices Coming

Posted on by Rick Edlund

That was the message Tuesday from Brian Riedl on KWMU’s radio program “St. Louis On The Air.” Riedl, the Heritage Foundation’s lead budget analyst, talked about the country’s financial problems with host Don Marsh and Amy Blouin of the Missouri Budget Project.

Riedl will appear in Saint Louis on May 3 as part of the Show-Me Institute’s Speaker Series on Economic Policy, cosponsored by Saint Louis University and the Sinquefield Charitable Foundation. His speech is titled “What Washington Won’t Tell You About the Next Economic Crisis.” If you’d like to attend, be sure to visit the registration page and click on the “Register” button at the top of the page. Meanwhile, listen to what Brian Riedl had to say on KWMU about America’s financial crisis.

Indoctrinating, Not Educating, on the Taxpayers’ Dime

Posted on by Patrick Ishmael

“Violence is a tactic, and it’s to be used when it’s the appropriate tactic.”

That’s a quote from a video published Monday that captures two University of Missouri–St. Louis professors, identified as Judy Ancel and David Giljam, teaching a publicly funded course about labor negotiations. In the video, both Ancel and Giljam seem to advocate in favor of violence, physical intimidation, and industrial sabotage as tactics to be used during labor negotiations.

It’s a stunning video that I encourage you to watch for yourself. If these tapes accurately reflect what’s being taught in those classes, UMSL and UMKC — the two universities teaching the course — have a lot explaining to do. It appears that, at least as far as UMSL is concerned, they’re taking the matter very seriously.

Obviously, the public should not be funding, or be forced to fund, classes that advocate violent and illegal behavior against its citizens. Such instruction is precisely the opposite of what a publicly financed education is about.

But the episode raises another, arguably more important, concern: Is the University of Missouri system really in control of its labor negotiations program, or are labor unions effectively running the show on the taxpayers’ dime?

It’s an open question that needs to be explored, because if unions are essentially writing and teaching the curriculum for these classes and, not only that, violence is being advocated, it’s an outrageous exploitation of regular Missourians.

Unfortunately, there’s reason to believe that some collaboration is going on between the universities and organized labor. For those unfamiliar with the it, the Labor Tribune is a Saint Louis–based newspaper that markets itself as the “OFFICIAL VOICE OF THE AFL-CIO” in the city.

With 110 subscribing unions, the Labor Tribune is the only AFL-CIO endorsed newspaper in the bi-state metropolitan region.

Key word: “VOICE.”

Long before the videos were released, the Tribune promoted the courses that have now been caught on tape as part of a story about UMSL’s Labor Studies Certificate Program. The Tribune’s piece described the certificate program as follows:

The Labor Studies Certificate Program gives current and future union leaders, representatives and activists the background and skills needed to deal with the changing workplace and economy.

With a grounding in history, political science, law and economics, students have the opportunity to develop skills of analysis, leadership and organizing that will provide an equal footing with counterparts in the corporate and political world.

Completion of the program results in 18 credit hours toward a degree and a Certificate in Labor Studies.

Labor Tribune, Apr. 20-26, 2011
Click to enlarge

But was that a news piece, or a press release? The words used in the article are essentially a copy-paste job of the words the university itself uses to describe the program:

The Labor Studies Certificate Program gives current and future union leaders, representatives, and activists the background and skills needed to deal with the changing workplace and economy. With a grounding in history, political science, law, and economics, students have the opportunity to develop skills of analysis, leadership, and organizing that will provide an equal footing with counterparts in the corporate and political world. Completion of the program earns 18 credit hours toward a degree and a Certificate in Labor Studies.

So the AFL-CIO’s “official” newspaper publishes a press release for a program for union “activists,” neutrally describing a program that actually promotes violence and industrial sabotage against Missourians — during, of all things, a recession. Adding insult to not-so-metaphorical injury, the endeavor is supported by Missouri tax dollars.

That’s a big, big problem.

Taxpayers deserve to be adequately assured that their tax dollars are not only being spent wisely, but that those tax dollars won’t be used by special interests as a cudgel — figuratively and literally — against them. Taxpayer-funded education should not be an arm, or a “VOICE,” of special interests, but a neutral arbiter enriching dialogue, not impoverishing it.

Ancel may want to teach a class on irony, too. Note the headline.

More Progress in Fight for Less Government in Missouri

Posted on by David Stokes

This is shaping up to be a good week. Today, Combest again linked to a couple more stories that involve a reduction of government in our lives. First and foremost, I want to strongly commend the leadership of Jefferson County for choosing to ban red light cameras in the unincorporated areas of the county. (Their ability to ban them in the incorporated areas is very limited.) This is an example of leaders placing liberty above tax revenues, and I think it is terrific.

Second, it appears that the state’s business franchise tax will be eliminated. This was a key part of the legislature’s “Fix the Six” agenda, and the governor has indicated that he will sign the legislation phasing out the tax. This is a tax change that will benefit all businesses in the state (at least all large enough to qualify to pay it) — not just those chosen for special tax treatment.

So far this week, we have serious movement on lower taxes, reduced government intrusions, fewer government officials, and municipal disincorporation. Although all of those things may not come through, I’d say this has been a great week.

Who Am I? What Is the Show-Me Institute? And a Thank You to Hot Air

Posted on by Patrick Ishmael

For long-time Show-Me Institute readers and supporters, my name is Patrick Ishmael. This month, I joined the institute as a policy analyst, and I’m very excited to be part of the great team here. Originally from Kansas City, I’m a graduate of Saint Louis University, where I earned honors degrees in finance and political science, after which I graduated from SLU’s law school with a specialization in business transactions. I’ve worked in politics both on the campaign and policy fronts for many years. If you’re of the “not-another lawyer!” persuasion, a reminder: You can always donate to the Show-Me Institute, to help keep me out of your neighborhood and safely sequestered here. Win-win, I think.

For visitors unfamiliar with the Show-Me Institute, first add us to your blog reader. Second, the Show-Me Institute is a free-market think tank based in Missouri, focused on promoting limited-government ideas. I’d check the “About Us” page for a more comprehensive explanation of the institute’s objectives, but I’ll highlight this tidbit in particular:

The work of the institute is rooted in the American tradition of free markets and individual liberty. The institute’s scholars seek to move beyond the 20th-century mindset that every problem has a government solution. Instead, they develop policies that respect the rights of the individual, encourage creativity and hard work, and nurture independence and social cooperation.

Not much to add beyond that. Like I said, bookmark us and come back often. We’d love to hear about what’s important to you and what you think of our work.

Finally, I’d like to send a quick thank you to Hot Air, a place where much of my work and research has appeared during the last couple of years. It’s one thing to explore the patterns and intersections of politics and policy in a vacuum; it’s another to pursue those interests in full view of Hot Air’s gigantic audience, gaining not only feedback from those who read the site, but also feedback from the consummate professionals who run it. To Ed, Allahpundit, and everyone that made and makes the site “go,” thank you for the invitation and opportunity to contribute at Hot Air. To Hot Air’s readers, thanks for the feedback — and for not (always) separating my head from my neck each time you disagreed with me.

So, to old friends, welcome. To new friends, glad to make your acquaintance! And I’ll see you all again soon, back here in the same space.

Progress in Fight for Less Government in Missouri

Posted on by David Stokes

On Friday, Combest linked to several stories that involve less government in our state. First, the state Senate has approved a proposal to allow voters to decide on reducing our number of state reps. Granted, it is a lot easier for the Senate to do this than for the House itself to agree to reduce its numbers, but I believe this is the first time in decades that the proposal got through at least one of the chambers. (Feel free to correct me if I am wrong.)

Reducing our number of state reps will save money on legislative salaries and benefits. It will reduce the number of people who can introduce new laws to dictate how Missourians live their lives. For more information about why this change would benefit Missouri, check out these prior posts.

Affecting far fewer people — but equally exciting — is the upcoming meeting about the disincorporation of Saint George, a small suburb in Saint Louis County that has long been a speeding ticket revenue hotspot. A group of newly elected city leaders campaigned for the idea of disincorporation, and now the chickens get to come home and roost. I have long felt that disincorporation was an overlooked option for small Missouri towns and villages, especially in Saint Louis County towns like Saint George.

However, the article certainly makes it seem that the newly elected leadership has quickly started acting like politicians. They appear to have taken a liking to being in office instead of moving ahead with their campaign promises. If your real goal were to disincorporate the city, why would you appoint political allies to fill all the positions? I know that to the victor goes the spoils, but not if the city no longer exists:

[Mayor Carmen] Wilkerson nominated [Susan] Preis to be a full-time city clerk for about $40,000 a year with no benefits to replace Marilyn Schneider, who works part time and earns $14,000 with benefits.

City Treasurer Dave Pozzo was replaced with Cathy Heins. John Malec, the city’s attorney and prosecutor, resigned before the meeting and was replaced by Paul Martin, who had led Wilkerson’s steering committee to look at dissolving the city.

I hope they prove me wrong and are serious about returning to disincorporated status within the county.

Herbert Hoover the Interventionist

Posted on by John Payne

One of the projects I have been working on lately is a unit about the Great Depression for junior high age students. It is designed to correct a number of popular myths associated with the worst economic disaster in our nation’s history. These myths are legion (the idea that the free market caused the crash, that the New Deal brought the country out of the Depression, etc.), but perhaps the most popular is the notion that President Herbert Hoover (1929–33) instituted a do-nothing policy in response the crisis. In fact, Hoover intervened in the economy more than any president up to that point.

Nevertheless, economist Robert Murphy catches several writers — who should know better — repeating this hoary old myth. For instance, Nobel laureate economist Paul Krugman recently compared the current Republican position on federal spending to Hoover’s during the Depression:

“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” That, according to Herbert Hoover, was the advice he received from Andrew Mellon, the Treasury secretary, as America plunged into depression. To be fair, there’s some question about whether Mellon actually said that; all we have is Hoover’s version, written many years later.

But one thing is clear: Mellon-style liquidationism is now the official doctrine of the G.O.P.

To which Murphy responds:

To his credit, Krugman acknowledges that this quote comes from Hoover’s own memoirs, written well after the fact. But to his discredit, Krugman fails to notify us that on the very next page of Hoover’s memoirs, after he explains the liquidationist advice he got from his treasury secretary, Hoover wrote,

“But other members of the Administration, also having economic responsibilities — Under Secretary of the Treasury Mills, Governor Young of the Reserve Board, Secretary of Commerce Lamont and Secretary of Agriculture Hyde — believed with me that we should use the powers of government to cushion the situation.“[2]

If you read Hoover’s memoirs in context, you see that his whole point in bringing up the Mellon doctrine was to tell his readers that he rejected the advice. Hoover was trying to show people (and of course I’m paraphrasing here), “Hey, I did everything I could to get us out of that awful downturn! You should have seen the crazy laissez-faire stuff my treasury secretary was recommending.”

And Hoover was not exaggerating when it came to his expansion of the government. It’s relatively well-known that Hoover endorsed and signed the Smoot-Hawley Tariff into law, causing American exports and imports to decrease by more than 60 percent by the end of his term. However, Hoover’s meddling was hardly limited to the sphere of international trade. He increased federal spending by almost 50 percent and dramatically increased taxes, including raising the top income tax rate from 25 to 63 percent. Perhaps most disastrously, Hoover urged businessmen to keep wages up, which they did even amid serious deflation. These artificially inflated wages forced businesses to lay off workers. Soon, the country experienced the greatest mass unemployment in history, with a quarter of the labor force out of work.

It was Hoover’s dramatic interventions into the economy that turned what would have been a severe recession into the Great Depression. In a 2009 article, UCLA economist Lee Ohanian estimated that Hoover’s high-wage policies accounted for two thirds of the 27-percent drop in GDP from 1929 to 1931. Unfortunately, Franklin Roosevelt built on Hoover’s mistakes instead of learning from them. Rexford Tugwell, a leading member of FDR’s brain trust, later remarked that “[t]he ideas embodied in the New Deal legislation were a compilation of those which had come to maturity under Hoover’s aegis.” Not surprisingly, the continuation of bad policy did nothing to remedy the economic situation, and the country stayed mired in depression until after World War II.

Saint Louis County Sales Tax Pool Under Fire Again

Posted on by David Stokes

The annual debate about the Saint Louis County sales tax pool is being treated more seriously this year in the legislature, according to reports I have read and heard. In short, the proposal to abolish the sales tax pool and allow any city that chooses to become a point-of-sale city has a real chance of passing.

In Saint Louis County, any point-of-sale cities that had local sales taxes predating the county’s general tax are allowed to continue to keep the majority of the sales taxes collected within the city, and are required to share a portion of the taxes with the pool. Cities that did not have local sales taxes predating the county tax, or which voluntarily chose in the early 1990s to become part of the tax pool, must now add all of their sales tax collections to the pool, along with the contributions from point-of-sale cities, and distribute the taxes to the various cities based on population. Eliminating the sales tax pool (or just destroying it by allowing cities to join and leave anytime they want) would be a poor policy choice for Saint Louis County. We need to expand the sales tax pool, not eliminate it.

Bear this in mind when considering the issue: All of the major eminent domain controversies in Saint Louis County have occurred in point-of-sale cities. The large majority of retail-based use of tax-increment financing (TIF) in Saint Louis County occurs within point-of-sale cities. As the East-West Gateway Council of Governments has documented, this use of TIF has not led to real economic growth in our region, just the proverbial rearranging of deck chairs.

So, if we know that point-of-sale cities abuse eminent domain more, and wastefully use TIF more, wouldn’t we want fewer point-of-sale cities, rather than more?

The sales tax pool is not “socialism,” as some of its detractors have called it. This is all about what happens to money once it goes to the government. The debate is strictly about which government gets it. I could go on and on about this, frankly, and will be happy to do so in the comment section if anyone should desire. Until then, please check out the op-ed I wrote four years ago, which still applies perfectly.

We need to expand the sales tax pool, not rescind it. The system in which cities keep all of the sales taxes generated within their boundaries incentivizes the abuse of property rights, over-emphasizes retail at the expense of other business groups, and perpetuates the idea that governments and their faulty plans for interventionist “economic development” are good for our society.

Audrey Spalding and Christine Harbin Talk Aerotropolis With Mike Ferguson on the Eagle 93.3 FM This Afternoon

Posted on by Christine Harbin

Tune in or listen online!

Show-Me Institute Policy Analysts Audrey Spalding and Christine Harbin will be on the Mike Ferguson show on Columbia’s 93.9 FM “The Eagle” around 4:30 p.m. today. We will talk about the testimony that we delivered before the Missouri Senate Jobs, Economic Development and Local Government Committee on Wednesday, about the Aerotropolis proposal.

The written version of our testimony is available on our website. This is a topic that we have discussed frequently lately here on the blog.

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