I Rise in Defense of the Congressman …

Posted on by David Stokes

Channel Five did an investigative report last night on the assessed valuation of Congressman Todd Akin’s property in West St. Louis County.  According to the St. Louis County assessor’s office, the congressman’s five acres are categorized as three acres of residential property and two acres of agricultural. This is important, because the taxes on agricultural property are dramatically lower then residential or commercial. 

Overall, the report was pretty fair. It made it clear that:

According to state law, it’s not the Akins’ job to inform the county. It’s the appraiser’s job to inspect the area physically.

No property owner in Missouri is responsible for informing the assessor if they believe their property is assessed to low. And with the high (and probably accurate) assessments on the three acres of residential property Akin owns, I am sure the congressman has long felt he paid his fair share of taxes. I just checked what they are paying each year in property taxes, and it is indeed very high, even with the benefits of two acres being agricultural. I am not going to post their personal tax info here, public info though it may be, but it is easy enough for anyone to do at the St. Louis County website if you don’t believe me.

This may be an interesting story, but the congressman has done absolutely nothing wrong. It may have been a scandal if the congressman or his family had appealed the valuation to get the designation changed to agricultural and claimed non-existing agricultural uses, but by all accounts that never happened. You might be surprised to know that there is no hard and fast rule as to what constitutes agricultural versus residential property on larger estates of more than one acre. The first acre, where the home is, will always be residential, but beyond that it is really up to the assessors.

This is not the first time I have heard complaints from people who live on smaller lots next to multi-acre estates about the agricultural designation and resulting tax benefits. I can’t recall the address, but when I worked for Kurt Odenwald on the County Council I remember getting calls about some 40-acre plot in far west county that had about 39 acres agricultural and 1 acre residential, with a very modest house. The neighbors, in their new McMansions on one-acre lots, were paying more in taxes for one acre than this person was for 40. There was nothing the assessor’s office could do about it, as the owner of the 40 acres kept a few horses on the land; agricultural seemed to be the correct designation.

Far from benefiting from his power as a congressman, Akin will almost certainly suffer for it as, because of his position, he may have to bow to public pressure and allow the assessor’s office to change the designation next year to residential without a fight. He would be well within his rights to fight to keep the agricultual designation, and something as simple as letting a pony roam the two acres, or planting a few tomato plants on them, would likely guarantee his success in that dispute. The St. Louis County assessor has over 300,000 properties it must assess every two years. There are going to be mistakes, oversights and confusion with so many lots. This one falls into the last category, sort of on the line between the two property classifications. However, just because the ball fell onto the right side of the line for Akin does not mean he did anything at all wrong or should be forced to give up his appeal rights because of media or political pressure.

Surpluses + Legislature = A Bad Mix

Posted on by Maurice Harris

According to Gov. Blunt’s budget office, the state of Missouri now has an extra $320 million in the state treasury, the Jefferson City News-Tribune stated today. This can be attributed to extra tax revenue that was added to the $200 million already saved from the last fiscal year. Some members of the Legislature are already planning to spend it:

Some of that extra money also
could be spent on Missouri’s revamped Medicaid program, which has been
renamed MO HealthNet. The bill Blunt signed into law authorizes dental
and optical coverage for adult Medicaid recipients and creates a new
women’s health initiative, but the budget lawmakers passed included no
money for those services.

Before our legislators spend the surplus that a strong economy gave them, they should consider a couple of other options. One: Put it into a rainy day fund, where the money will be available for any emergency. Two: Give it to the taxpayers, who would use the money in a more responsible way than the Legislature would. Sure, it’s fun to spend money — you know, like buying season three of "Arrested Development" or a new car — but when it’s not your money to begin with, and taxpayers expect you to spend it wisely, then it’s wise to show some restraint.

 

Justice for Seniors

Posted on by Maurice Harris

In a Daily Dunklin Democrat article (via Combest), seniors cheer the Senior Tax Justice Act, recently signed into law by Gov. Matt Blunt. This legislation removes Missouri from the list of states that taxed non-private retirement benefits. A senior named Betty Bradley comments:

"The state taxes were just eating us alive," she said. "We are really
thankful for what the state has done regarding this matter."

This act will help to keep people in Missouri, now that their retirement funds are exempt from taxation. It’s a great first step to protect workers’ retirement funds from being raided for government coffers. A good next step would be to save other citizens’ retirement funds from taxation as well — for instance, the state taxes my father’s pension check every month.

Hopefully, this is the first step of many in protecting older Missourians from the grabbing hands of government.

Waiting for Their Handout

Posted on by Maurice Harris

David Nicklaus reports in the St. Louis Post Dispatch the angst that some companies have about setting up shop in Missouri after Matt Blunt vetoed HB 327:

A lot of jobs are at stake — (Steve) Johnson says a couple of prospects are in
the 1,000-employee range — and Missouri isn’t exactly putting its best
foot forward. "If they called and said we have to make the final choice
tomorrow, then we’re in trouble," Johnson said. "They will not decide
on something based on uncertainty."

Businesses like Advantage Capital are now said to be looking in other places, like Mississippi, because Missouri does not have any incentives in place to match federal tax credits and other credits for businesses to move here. Now, of course, I do not like to see jobs redirected elsewhere, but rather than reauthorizing tax credits every two years there should be a push for broad-based reform that will attract all kinds of businesses. Maybe that should be the major discussion in the next session, rather than picking tax credit recipients.

Sen. Matt Bartle – A Legislator With Common Sense

Posted on by Maurice Harris

In the Springfield News-Leader today, Sen. Matt Bartle discusses in an op-ed piece the veto of HB 327 (aka The Quality Jobs Act). He mentions the effects of tax credits on the legislative process in Jefferson City:

Time and again the lobbyists for special interest groups tell the
legislature that if only their particular industry could be granted an
exemption from state taxes that it would be a great boon to Missouri’s
public coffers — a few dollars investment up front and there will be
light at the end of the economic tunnel. This sales pitch is repeated
so often that it is almost a cliché in Jefferson City.

It has become such a cliché that there are now over $500 million worth of tax credits in the Missouri statutes. If HB 327 had been signed into law, it would have added an extra $100 million in tax credits. This bill would have been akin to spending like a drunken sailor, for all the increased marginal tax rates that other taxpayers would have had to cover in the name of economic development. True economic development, as I, and many others, have stated in the past, is about having lower taxes and fewer regulations. Sen. Bartle also says it well:

Are you the recipient of a Missouri tax credit? If not, you are
actually paying for someone else’s tax credit. Wouldn’t it be better to
reduce the number of tax credits so we could lower everyone’s taxes?
Tax credits have the state picking winners and losers in the
marketplace — something government is ill-equipped to do.

The U.S Postal Service is Privatizing

Posted on by Maurice Harris

An article in the Kansas City Star today discusses the move by the U.S Postal Service to privatize some of it’s mail routes in the KC area:

They are contract mail carriers, a phenomenon that is starting to take
root in the Kansas City area. It has union members and politicians
squawking, but Postal Service accountants are smiling.

Because of rising costs and lower revenues at the U.S. Postal Service, the move toward private mail carriers is a great way to reduce costs, especially for a government-run service that hasn’t produced a profit in the past few years. Yet, as always, unions and politicians see a problem in saving taxpayers some money:

Sen. Tom Harkin, an Iowa Democrat, has introduced a bill to stop
contracting mail carriers except in the most sparsely populated rural
areas. Sen. Claire McCaskill, a Missouri Democrat, is a co-sponsor.

The primary complaint that the politicians and unions have made is that mail carriers handle sensitive documents that should only be delivered by postal employees. Well, last time I checked, many delivery services other than the USPS handle sensitive documents, and they deliver them to their destinations on time. It’s not like the USPS delivers classified documents from CIA headquarters to the White House.

Overall, what the USPS is doing is the first smart move in ages that will facilitate cutting costs and saveing money for millions of Americans. Maybe, for once, I will receive the mail I really need on time — if it ever gets to St. Louis.

Veto, Don’t Fail Me Now

Posted on by Eric D. Dixon

There were plenty of good reasons for Gov. Blunt to veto HB 327, as he did on Friday. As Show-Me Institute scholars Joe Haslag and Mike Podgursky, and intern Steve Bernstetter, wrote in their June 14 op-ed critizing the bill:

Government economic planners do not know what the next “big idea” will be, and any effort to find that idea through central intervention is likely to fail. The best way for Missouri to ensure future economic prosperity is to provide businesses with a climate favorable to developing those ideas, whatever they may be. State officials should step back from the belief that they can fix weak economic growth through central planning. Creating another layer of bureaucracy, no matter how well-intentioned, will only obstruct those developments and, like kudzu to southeast horticulture, choke off Missouri’s economic growth.

It’s also worth noting that the governor’s office issued a press release quoting several prominent Missouri residents’ opinions about the veto. One of the quotes is from Show-Me Institute President Rex Sinquefield:

“House Bill 327 gets in the way of keeping Missouri on a pro-growth path.”
Rex Sinquefield
President, Show-Me Institute

Gov. Blunt has said that he wants to call a special session for legislators “to pass a more restrained bill,” but picking economic favorites even on a smaller scale would be a mistake. If the Legislature wants to make a real stand in favor of economic growth, it would do well to heed the advice of Show-Me Institute scholars:

A better economic development bill would reduce these corporate giveaways, simplify the tax system, and reduce marginal tax rates. Missouri households and businesses can create their own “quality jobs” without the help of state government.

Stuff Happens; Fix It and Move On …

Posted on by David Stokes

The Post-Dispatch is reporting that Metro is facing repair issues with the original leg of the MetroLink system because of the use of lower quality material in constructing the first line:

"And the hand-me-down rail has worn down on curves."

It was probably thought to be a smart decision to buy used rail in order to save money at the time and, you know what, it was a good decision. Too often, people without any institutional memory find it easy to criticize, but I’d bet the use of more affordable ties was a selling point back in the debate and construction period of the first line. Governments have to live within budgets, at least in theory, and if everything they built had to be done perfectly nothing would ever get done.

Metro, or Bi-State as it was known at the time, clearly cut some corners on cost, not safety, in order to bring the project in on budget. Once you promise the public something will be done within a budget, and then the public passes a tax increase to pay for it, it is important to do all you can to stay to that budget. I look forward to Metro making the necessary fixes to the system, and I see nothing wrong with the decisions made long ago, as reported in this article. 

It’s True, Ethanol Is Exaggerated

Posted on by Maurice Harris

A letter to the editor in the Jefferson City News-Tribune discusses corn ethanol, pointing out that it’s not a cure-all for our energy problems, because the United States can’t produce enough of it to match our current oil usage:

Therefore, all our corn equals about 34 billion gallons (gasoline
equivalent) of the 150 billion gallons we consume each year.

Also, there’s the fact that we use corn for other uses besides fuel. The letter continues:

But, if we convert all our corn
to fuel what happens to the poultry and livestock industries that
require the carbohydrate removed from corn when it’s converted to
ethanol?

In the rush to make ethanol the solution to our energy problems, with all the subsidies and tax breaks that includes, many officials are ignoring the market system that would determine the true value of ethanol. If ethanol is actually a cost-effective replacement for oil, there would be little need for subsidies to produce it.

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