What Will KC Do About Its Budget?

Posted on by David Stokes

The Kansas City Star has a long story about an even longer budget report that deserves at least a short blog post. I have carefully read the article, and the study itself will be my work-related reading assignment over the holiday break.

In the interest of focusing on the key points, I am only going to discuss the consultants’ seven recommendations that were highlighted in the Star. If you are in such a hurry that you can only read one more sentence, then I will tell you this: Four of the recommendations are very good, one is worth consideration, one might be a good idea, and one is absolutely horrible. But on to the details, with each suggestion followed by my comments. The report suggests that Kansas City should:

  • Consider a new trash fee, consistent with what is charged in many cities in the region and nation. Kansas City residents often resist this idea, saying the earnings tax, in place since the 1960s, is supposed to cover those costs.

Definitely worth considering. Moving toward direct fees for direct services is a move in the right direction. However, this should not be done as just an excuse to create a new fee. Rather, it should be at least partly offset by spending cuts elsewhere, as the revenue moves toward the new trash fee.

  • Consider seeking state legislation for mandatory suburban withholding of that earnings tax to make sure people working or living in Kansas City pay the taxes they owe.

This is an absolutely terrible suggestion. Businesses that operate outside of Kansas City should not be forced to collect taxes for the city. If anything, this could serve as an incentive (albeit a minor one) for companies outside of Kansas City to hire fewer KC residents. Just a stupid idea.

  • Consolidate the Police Department with the rest of city government.

Both Kansas City and St. Louis would like to gain control of their police departments from the state. I am friends with some St. Louis city cops, and I have never talked to one who liked this possibility. Control by the state board means that the police department answers to one board and the governor, not to 28 aldermen and 11 citywide elected officials. However, in Kansas City, with its city manager form of government, local control might work better.

  • Hold the line on city hiring, limit wage increases, and contain health-care costs to a greater degree than the city has done in the past.

Now we are on to the good ideas, so I don’t have much to add. Obviously, this suggestion is imperative for any city.

  • Pursue regional funding for civic and cultural assets, as is done in such cities as Denver, St. Louis and Minneapolis-St. Paul.

Now, here is an idea that might raise taxes for some people but which I still support. The zoo-museum district in St. Louis has been an excellent system for some time, and should be expanded for other counties like St. Charles. I think it should definitely be implemented in Kansas City.

  • Prioritize basic, quality-of-life services over “nice-to-have” amenities.

This is a pretty standard, yet important and worthwhile, recommendation.

And, finally, the best part of the whole report:

  • Hold the line on new taxpayer incentives for development and tax abatement to limit negative effects on city revenues. Also, re-evaluate the number of sports and entertainment arenas such as Kemper Arena that are subsidized by the city, “particularly given ongoing maintenance needs.”

We could not have said it better ourselves.

Penny for Your Thoughts

Posted on by Sarah Brodsky

I’m suspicious when the government sends out arbitrary amounts of money to people in hopes of “stimulating” the economy. But what about sending cash for some other reason? I don’t have a problem with this, although the recipient of $5 quoted in the article sounds pretty mad:

The letter claimed to be from the Department of Transportation and said the $5 was an incentive for personal information about driving habits.

And while it looks like a scam, the DOT says it’s not. […]

“When you called me back and told me it wasn’t a scam, I got even angrier. For the government to spend this kind of money on a mailer like this just infuriated me even more,” Held said.

Sending out cash with a survey could be worth it. The five-dollar bill grabs the recipient’s attention and makes him or her feel somewhat obligated to respond. And while this gimmick may sound expensive, mailing a survey that no one replies to would itself be a waste of money. Making decisions without information is costly too.

It would be interesting to find out whether a one-dollar bill is as effective in eliciting responses. If so, switching to the lower denomination might be a way to keep expenses down. Anyone at MoDOT want to give it a try?

Pop Quiz

Posted on by Sarah Brodsky

Some people are interpreting this reported gain in U.S. student math scores as a victory for central planning. The U.S. has improved on an international math test since implementation of No Child Left Behind; therefore, the thinking goes, we need more federal oversight and national standards.

I have two questions about that reasoning:

  1. If central planning improves math performance, why does it have no effect on science?

  2. If the U.S. does better in a subject as a response to competition from other countries, doesn’t that say more in favor of competition than planning? Maybe we should have a contest between states, instead of more federal directives.

You may use a calculator.

A Law Requiring All Ducks to Wear Long Pants

Posted on by Jacob Voss

The Kansas City Star is reporting about a unique law in Missouri — a ban on all yellow margarine. Now, it was only recently that I discovered the difference between butter and margarine, and I couldn’t believe that anyone might actually try to ban margarine in Missouri. Now, imagine my shock in learning that such a law has been on the books since the 19th century.

Luckily, this law has never been enforced. Even so, a Kansas City lawmaker is trying to have the law repealed, giving Missourians the smooth yellowy freedom they deserve. And yet, I ponder, who really cares? I mean, the law hasn’t been enforced and yet this lawmaker is taking the time to have it repealed. Is the inert I-Can’t-Believe-It’s-Not-Butter ban causing so much damage as to warrant such attention? Are there not more urgent issues to deal with? So, which is worse: having a useless uniformed law on the books, or having an elected official waste time and money to repeal it?

This seems like the kind of thing they deal with down in Springfield.

She Blinded Ethanol With Science

Posted on by Jacob Voss

Frequent visitors to this blog know that I have a thing or two to say about renewable energy, specifically ethanol. I don’t care for ethanol, even if my friend Willie Nelson loves. It drives up the costs of gasoline and food and makes our cars less efficient. It attracts large government subsidies, and those new corn commercials are starting to get very annoying.

I figured it was only a matter of time until some sort of scientist would muster proof that ethanol = bad. Finally, the Royal Society of Chemistry’s Energy & Environmental Science journal has published a study ranking alternative energy sources in terms of their relative abilities to address problems with “global warming, air pollution mortality, and energy security,” and “other impacts of the proposed solutions, such as on water supply, land use, wildlife, resource availability, thermal pollution, water chemical pollution, nuclear proliferation, and undernutrition.”

Surprise, surprise — ethanol finished dead last.

Hopefully, these findings will not fall on deaf ears. And, if you haven’t read it by now, here is the Show-Me Institute’s ethanol study. Still looking for more ethanol fun? Why not try searching for “ethanol” on Policy Pulse and seeing what pops up?

Oh, and if you didn’t already know, today’s blog title comes from Thomas Dolby’s classic ’80s hit “She Blinded Me With Science.”

Assessment Declines May Not Lead to Tax Cuts (In Case You Thought They Might)

Posted on by David Stokes

The Post-Dispatch has a front-page story today with tremendous statewide applications. It corrects assumptions about next year’s reassessment process that many people, according to the story, might have. First, the Saint Louis–area assessors that were interviewed don’t seem to think the assessment declines will be that substantial, but the article’s second point makes this moot — taxing districts are protected (a poor choice of words, I admit) from revenue decreases that result from lower property assessments. Any taxing district can increase its rates to make up the difference.

The part about assessments declining only 3 percent, according to most of the assessors the Post spoke with, is probably going to frustrate and upset many people, but in the end it does not mean much. What difference does it make if your assessment declines by 3 percent or 15 percent (on average for a community) if taxing districts increase rates by the same amount, to make up the difference? The answer is that it will make no difference, and your best hope in the assessment lottery is to see your property value decrease more than average. In that case you may actually see a lower tax rate.

I have written many times about how the Saint Louis County assessor actually does a good job on aggregate, but with so many parcels, there is almost no way to avoid the element of chance that comes with the process when you look at one individual home’s assessment. It is that element of chance that infuriates so many people. My own thoughts about how to change the system include eliminating the individual assessment and averaging everything. There are other reasons that people so viscerally dislike the property tax when compared to others taxes, the two main reasons are the fact that the process feels like a lottery, and the fact that this tax is the only one for which most people sit down and write a check to the government.

In conclusion — and to you young bloggers out there, it is poor form to end blog posts with “in conclusion” — the most that average Missourians should expect from reassessment next year is that their property taxes probably will not rise. After the increases that many have seen during the past decade, a leveling-off for a couple of years might not be so bad.

Supply and Demand … What a Novel Idea!

Posted on by Calvin Harris II

According to Sports Illustrated:

Next season, San Francisco Giants fans buying single-game tickets for an April game against Milwaukee might pay half as much as they would for a weekend game with the rival Los Angeles Dodgers later in the year.

The club is trying something new with ticket sales in a few tough-to-sell upper-deck outfield sections of its waterfront ballpark for 2009: cost based on demand.

The walk-up sales price for up to about 2,000 seats could even go up or down on game day.

Granted, this is only an experiment in San Francisco, but what if the St. Louis Cardinals decided to do this as well? I would love for you to comment.

Merry Christmas, Attorneys!

Posted on by Calvin Harris II

In a new report, The American Tort Reform Foundation has placed St. Louis and St. Louis County on the “legal hellhole watch list.” I think Philip Corboy Jr., the head of the Illinois Trial Lawyers Association, stated it best: “The report is just a Christmas gift for the insurance industry and the big business lobby.”

Although we are only on the watch list, this report still indicates that we have a lot of work to do in Missouri to achieve meaningful tort and lawsuit reform. It would be a nightmare if our region went back to the days when Madison County was unanimously ranked #1 on the list. If things get any worse, we might have to refer to my colleague’s previous blog post.

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