It’s the Thought That Counts(?)

Posted on by Dave Roland

The Post-Dispatch reports today that the city of Valley Park has passed an ordinance that would forbid the use of eminent domain “for economic purposes or private gain.”

While I have not yet read the ordinance at issue, I fear that it says the city may not take property solely for these reasons, as that is almost always the way these things are phrased. If that is, in fact, the case, then Valley Park’s ordinance does absolutely nothing. The Missouri Constitution already forbids the use of eminent domain for these purposes. Cities across the state can simply avoid this prohibition by labeling properties “blighted” (which appears to be specifically permitted under Valley Park’s new ordinance) and claiming that any private profit that might follow the use of eminent domain to clear “blighted” areas is unintentional — and permissible.

Local residents and elected officials who hope to avoid these uses of eminent domain authority are frequently lulled into a false sense of security by ordinances such as these, only to be rudely awakened a couple of years later when the next developer’s plan threatens their homes, businesses, or houses of worship. The key is to draft ordinances with clear, carefully honed standards for determining what properties (if any) can be considered “blighted,” and to what use these properties may be put in the event they must be condemned. I strongly encourage anyone whose city or county is considering an eminent domain ordinance to contact us here at the Show-Me Institute. We will happily help educate elected officials and interested residents about the likely legal effect of changes to their eminent domain laws.

Upcoming Ballot Issues

Posted on by David Stokes

With an election approaching, so I’ve heard, you might be interested in some of the ballot issues that always seem to just appear toward the end. We’re releasing a series of articles coming about these questions, and if you mostly just come to the blog without visiting our main website, you may have missed them.

One of our interns, Calvin Harris, (no, not that Calvin Harris) discussed his thoughts about a proposal before the voters in Saint Louis County to raise the sales tax for youth services, aka Proposition 1. It is a great piece with some creative thinking, and I hope you enjoy it. The passage of Prop. 1 would mean, as a father, I could count on other taxpayers in Saint Louis to pay to care for my son. It was just so stupid of me to think that it was my own responsibility to take care of my child. How reactionary!

And, of course, over in Kansas City, you are voting on light rail. I strongly encourage everyone to read the study Randal O’Toole wrote for the Show-Me Institute about transit in Kansas City, before you make up your minds. It is well worth your time.

While we are on the subject of light rail, former intern and current global traveler Patrick Eckelkamp released an op-ed about the pluses and minuses of the transit tax increase in Saint Louis County. This is a big decision for voters in Missouri’s largest county, and Patrick did a great job of discussing the issue.

More pieces yet to come. …

Subprime Doghouse Mortgage Foreclosures Skyrocket

Posted on by Jacob Voss

It’s always the little four-legged guys who get stepped on in these turbulent economic times. The Kansas City Star reports that the number of pets being abandoned at shelters because of foreclosures has risen drastically in recent months. The costs of food and vet visits were simply too much for families, and they opted to get rid of their beloved animals rather than budget around them.

Now, before dropping off Santa’s Little Helper at the “farm,” consider whether there are ways to avoid this. Taking the Bob Barker approach to this problem, perhaps many families should not have pets to begin with. Having a pet is like having a child; it is a long term affair, and should be planned as such ahead of time. Regardless of what they are doing in Nebraska, pets — much like children — are a heavy financial burden, and should be treated as such.

There are, of course, instances where a family falls on hard times unexpectedly, and a pet is already in its possession. Surely, there is some sort of middle ground in which that pet could stay with the family. It seems quite drastic to progress straight from giving up your house to giving up your dog. There’s no intermediate expense that could be sacrificed instead?

I guess I’m trying to say that abandoning a pet because of economic fears is a drastic, and probably avoidable, situation. Tears can be avoided through patience and smarter financial planning.

No, I Will Not Pay for Your Nuclear Plant

Posted on by Jacob Voss

Did you know AmerenUE isn’t allowed to raise its rates to finance future construction projects? More specifically, if a customer is not gaining utility from a project that is currently in the works, Ameren is not allowed to raise that customer’s rates to pay for the construction work in progress (CWIP). Seems like a fair law to me. I don’t want to have to pay for something I’m not using, and, more importantly, something I don’t necessarily want. And, yet, that is what Ameren is trying to do in Callaway County.

Callaway County is the home to one Ameren nuclear plant, and could possibly be the home of a second. If Ameren gets its way, the current law that prohibiting it from charging for CWIPs would be repealed, and current customers would have to finance the second Callaway County nuclear plant. Already, Ameren is trying to pass the $46 million filing fee price tag onto customers. That’s right: $46 million. For a filing fee.

Now, this isn’t the first time these shenanigans have popped up. Ameren tried to get rid of this law back in ’82, but was unsuccessful. Isn’t this the type of law that keeps Ameren a nice, friendly monopoly rather than the scary, bags-o-money, monocle-wearing Mr. Monopoly?

Ameren claims that unless it is allowed to charge customers for construction as it goes, it will not be able to afford the plant and meet the demand for electricity.

What really bugs me is this: If Ameren is claiming it will have to charge us for plants not even in operation, how is it going to finance 15-percent renewable energy by 2021 if Proposition C passes? Perhaps in this current volatile economy, a multibillion dollar nuclear plant — or, for that matter, a massive renewable energy standard — isn’t in the state’s best interest.

Red-Light Camera Haters Unite

Posted on by David Stokes

A benefit concert will be held this Saturday in south Saint Louis city, for people opposed to the use of red-light cameras. As our regular readers know, there are few things that incense me, and some others here at the Show-Me Institute, more than red-light cameras. They are a blatant violation of our constitutional rights. Even if they did achieve their ostensible goal — greater safety and a reduction in accidents — they would still be violating our rights. The fact that they do not increase safety, but merely raise revenue for local governments (their true purpose), is all the more reason to oppose them.

This concert will benefit efforts to eliminate red light cameras. The newly created effort is bipartisan, informational, and interested in enabling liberty, and as such I can safely link to it from this blog. My family and I will be attending. If you have never been to the Royale, it is a great place, owned and operated by the man who got me into competitive boxing. (One fight, lost on decision. My opponent won fair and square, but he was bleeding more than I was. And, yes, he also has a great restaurant that you should visit.)

Both a Democrat, state Rep. T.D. El-Amin, and a Republican, state Rep. Jim Lembke, will be addressing the gathering. It is organized by Ed Martin and Jesse Irwin. These are two elected officials and two citizens who care deeply about individual liberties. Please consider supporting the cause. Now I shall return to long-winded blog posts about zoning. …

Tax Incentive Goose, Meet Subsidy Gander

Posted on by David Stokes

The insantiy of Missouri’s tax incentive system is slowly becoming more apparent, though I have no confidence that, in this case, realization will lead to corrections. According to an article in Missouri Lawyer’s Weekly, the city of Saint Louis recently raised the issue of tax incentives at a board meeting of the East-West Gateway Council of Governments. (Unfortunately, we can’t link to the article, because it is subsciption-based — so you’ll have to trust us on the language.) From the article:

Slay spoke about the decision and questioned whether tax breaks and credits should be given for projects that end up attracting jobs from another Missouri city in the same region at a July 30 meeting of the East-West Gateway Council of Governments board.

The exact cause of the discussion was the move by the Armstrong Teasdale law firm from downtown to Clayton, to a development project being built with enormous subsidies by the state, county, and Clayton. But the issue is much bigger than one corporate relocation, as troubling as the move is for the downtown area. Examples in which tax money is used to help companies move from one Missouri city to another are numerous. Clayton, itself, was victimized by this game a few years ago when tax incentives helped Smutfit-Stone move its headquarters to Creve Coeur. And it seems peculiar for the city of Saint Louis to be complaining about tax incentives offered by Clayton when Saint Louis recently came very close to luring Centene to move downtown, thereby leaving Clayton, by offering significant tax incentives.

The solution is to stop handing out tax incentives entirely — no exceptions. “But, David, that would put Missouri at a disadvantage when competing with other states,” say the economic development officials. Perhaps, but if we created an overall business environment better than other states, then we would offset that. We could lower the state corporate income tax, eliminate the payroll tax in Saint Louis city, reduce occupational licensing even further, and more. We already passed tort reform, and that has been a great success. The key is to stop allowing tax dollars to be used when a government decides it wants a certain business in a certain place, rather than allowing markets to make those decisions. We have written extensively about this here at the Show-Me Institute.

Not every local government plays this game, but most do. If the city of Saint Louis really wanted to, they could follow the lead of Saint Charles County and refuse to use TIFs and other tax abatements. It is indeed insane that Sunset Hills gives tax incentives for businesses to leave Crestwood, but it happens all the time — and the city of Saint Louis has done it, too. You need to be against it when it favors you, as well as when it hurts you.

Charitable Tax Credits Provide Constructive Alternative to Prop. 1

Posted on by Calvin Harris II

 

This November, Saint Louis County constituents will vote on a new annual tax of one-quarter of a cent (1 cent on every $4.00) to fund programs supporting the mental health and well-being of area youth. The estimated $40 million that would be collected after the passing of Proposition 1 would create a steady stream of funding for emergency shelters, transitional living programs for older youth, outpatient substance abuse treatment, and services to teen mothers. A Saint Louis County needs assessment concluded that the availability and funding of children’s programs should be increased, and while taxation may seem like a logical means to reach this end, there are other options.

Many surrounding counties, such as Lincoln, Saint Charles, and Jefferson — not to mention Saint Louis city — have already passed such measures to fund child and youth programs. Although Saint Louis County has more than three times the youth population of those adjacent counties, this would be the perfect time for the state to exercise other options to solve the issues at hand. Missouri could follow the lead of Michigan, Arizona, and North Carolina — states that have expanded tax credits to non-profit organizations and allowed communities to invest in their children by increasing charitable tax credits. These types of tax credits would revive volunteerism by reminding people that providing for the mental health and well-being of children is the responsibility of individuals in their local communities.

Charitable tax credit programs usually share three goals: increased charitable giving; letting taxpayers determine the effectiveness of charitable services; and supporting programs that address local community needs. Currently, individual taxpayers who itemize deductions on their federal income tax returns are entitled to reduce their taxable incomes by the amount of charitable contributions they’ve made, up to a certain limit. Additionally, at least a dozen states offer tax credits for contributions to certain qualifying charitable organizations that perform public functions. For example, Michigan offers tax credits for homeless shelters, food banks, and contributions to community foundations. Although only a small fraction of the Michigan population claims them, the total value of these credits exceeds $40 million annually.

Back in 2006, Gov. Matt Blunt announced that two Saint Louis not-for-profit organizations — The National Council on Alcoholism and Drug Abuse, and Voices for Children — would be eligible to receive state tax credits to help fund programs aimed at preventing substance abuse and violence among at-risk youth. In this circumstance, private-sector donors could receive tax credits valued at up to 50 percent of contributions to approved projects.  Furthermore, those credits could be applied to the donors’ Missouri tax bills. Also during 2006, Gov. Blunt announced that Kansas City taxpayers could potentially receive tax savings of up to 50 percent of their charitable contributions to the Big Brothers Big Sisters program — which did, in fact, see a sharp rise in donations and charitable giving.  There is no reason why this could not work for other programs in Saint Louis County and across the state.

Another drawback of Proposition 1 is that it would increase government bureaucracy in order to distribute money to existing programs. This makes the giving process less direct and less efficient. Missouri should instead give private-sector charities a chance, by giving taxpayers a choice. Expanding charitable tax credits would give citizens the ability to fund groups that they think are effective. Harnessing this distributed knowledge is a more efficient way to identify organizations that do good work, and shift resources in their direction.

At the end of the day, the question is, “If the government taxes less, will you give more?” Studies have shown that when government spending increases, charitable giving declines. Instead of leaving worthwhile groups to be limited by inadequate funding, charitable tax credits provide an alternative, establishing positive incentives and cultivating a culture of giving. This would expose even more people to the intangible rewards that come from giving to and supporting their own neighborhoods. It really does take a community to raise a child, and no government bureaucracy can substitute for that.

Calvin Harris II is an intern at the Show-Me Institute, a Missouri-based think tank. He is currently pursuing a master’s degree in public policy at the Heller School for Social Policy and Management at Brandeis University.

 

Hatfields and McCoys

Posted on by Calvin Harris II

Here’s a quick question: Does St. Louis city honor St. Louis County licenses?

Under Missouri law, each county must impose its own business or occupational licenses. In other words, business licenses issued by one political subdivision are not recognized within another political subdivision. According to the the City of St. Louis License Collector Office FAQ, the only license issued in one county that is recognized by the other 113 counties in Missouri is an auctioneer’s license. The only reciprocal agreement between St. Louis city and St. Louis County involves taxicab and tow truck licensing.

This is not my idea of a free market. Let’s play fair, you guys. Wow, maybe we should use tax dollars to build a big fence between St. Louis city and the rest of St. Louis County.

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