Almost certainly. (And I’m only adding the “almost” because it is being litigated over and you never know how it will turn out.)

This isn’t the first time grocery stores have been targeted by special taxing districts simply because developers want the significant money they generate. In Wentzville, a Schnucks store was forcibly included in a CID that was used to help fund a Walmart development. If that sounds insane, it is. One grocery company, Schnucks, was forced to levy a special tax against its will to benefit one of its main competitors.

In St. Louis, an existing CID board tried to expand the CID’s boundaries to include another  Schnucks, primarily to get access to all of the money it generated. Schnucks opposed that one, too, and good for the company. As the company explained in a letter to elected officials:

It is our position that addressing the problem goes beyond additional cleaning, and we would encourage the City to tap into funds available to address these issues, rather than institute an additional tax on citizens who are buying their needed groceries for their families.

Grocery stores are not large ATMs with food in them that special taxing districts can extort whenever they feel like it. Good for Hy-Vee for fighting back in Lee’s Summit, and good for Schnucks to have opposed these ideas previously. Special taxing districts like CIDs and TDDs are, in the vast majority of cases, nothing more than vehicles for corporate welfare. They are bad enough even when all the property owners agree. But compelling grocery chains to participate in them against the will of the stores is just the sour cherry on top.

The post Hy-Vee Wants to Give the Heave-Ho to a CID appeared first on Show-Me Institute.

I’m skeptical, and you should be too.

This is a claim that cities and states like because it makes their leaders look financially responsible. But it’s often just a result of bookkeeping sleight of hand. Governor Mike Parson made the same claim in January, and it wasn’t true then, either.

The accounting trick consists of merely looking at the cash you have on hand and not considering your long term-debts. Truth in Accounting (TIA), the indefatigable men and women who pore through annual reports, issued its State of the Cities report in February 2024. St. Louis ranked 64th in financial health out of the top 75 cities examined. The authors wrote:

St. Louis’ financial condition appeared to improve due in part to increased tax collections and federal COVID relief funds. Despite the good news, it still had a Taxpayer Burden™ of $11,100, earning it a “D” grade from Truth in Accounting. But the improvement is deceiving, because the city used outdated pension data.

On pages 150 and 151 of the report, available online here, TIA lists St. Louis’s assets and liabilities. The report must use 2022 data because St. Louis is not a stickler about releasing its financial data in a timely manner. Despite being in the red, St. Louis’s cash-basis accounting allows it to consider the money it has on hand without considering its long-term debts. It’s akin to getting a cash advance on your credit card and pretending you’re richer as a result.

If the comptroller wants to make such claims, she should release a complete and to-date copy of the city’s books. Until then, I am going to assume that if it sounds too good to be true, it probably is.

The good news is that we here at the Show-Me Institute, and the fine folks at Truth In Accounting, are dedicated to making sure people understand the truth about city and state finances.

The post Be Skeptical of Claims St. Louis is Running A Surplus appeared first on Show-Me Institute.

The playbook highlights how excessive occupational licensing, convoluted permitting processes, and outdated zoning laws create significant hurdles for small business owners. For instance, starting a barbershop often involves not only obtaining city permits but also navigating state-mandated requirements such as barbering school and licensing fees, adding unnecessary time and cost. Punitive late fees, illogical license renewal cycles, and restrictive home-based business rules further complicate the landscape for aspiring entrepreneurs.

One major recommendation is the establishment of one-stop shops for business registration, such as KC BizCare, which can streamline the process by allowing entrepreneurs to complete all necessary steps in one place. This approach reduces confusion and inefficiencies, helping business owners navigate regulatory requirements more easily. Additionally, the playbook suggests cities adopt more flexible licensing terms and graduated fee schedules to lower initial costs for new businesses, particularly those started by lower-income residents.

A separate policy report written exclusively for Kansas City, Missouri, included conversations with a number of local entrepreneurs to determine the most significant barriers facing business start-ups. The report made several recommendations—including improving the KC BizCare program—and the IJ Cities Work team pledged to remain involved in Kansas City’s efforts, including collecting feedback on the success of reforms and even drafting ordinances.

The playbook underscores the importance of reducing regulatory barriers to foster a thriving entrepreneurial ecosystem. By adopting its recommendations, cities in Missouri and elsewhere can create more dynamic environments for small businesses to flourish, ultimately contributing to stronger local and state economies.

The post How Missouri and Other States Can Foster Entrepreneurship by Reforming Local Regulations appeared first on Show-Me Institute.

Unfortunately, Exeter’s response to our request didn’t live up to the cheery atmosphere of its Facebook account, which has the city’s brightly colored logo of a cartoon tree as its profile picture. Two days after we sent our initial request, city attorney Darwin Groomer responded with this:

“Before the City will comply with your records request, you must tell me who you are and why you believe you need the information. No one has ever heard of you. Your request/demand is denied, until you comply with our demands, and until we deem it necessary to comply.”

Obviously, there are some real problems with Mr. Groomer’s response. I’m not a lawyer, but it was just as clear to me as to the attorney on our checkbook request team that there’s no loophole in the Sunshine Law requiring the government in question to have heard of the person making the request. The law is intended to make government documents accessible to anyone who wants to see them, not just those who city officials decide meet their personal criteria. After we informed the Attorney General’s office of Exeter’s violation, we received a second email in which Mr. Groomer told us that at some point he would provide an estimate. We received the estimate, $15, almost 2 weeks later.

Of all the cities in this year’s municipal checkbook project, Exeter’s initial flat-out refusal to comply unless we met a standard set not by a democratic process, but arbitrarily by a single attorney, showed the least interest in transparency. Even though the city eventually complied with our request at a fair price, I believe Exeter residents deserve better than a government that may decide to invent exceptions to a law that protects citizens’ right to know how city officials make important decisions and spend public money.

The post In Denial: Municipal Checkbook Hall of Shame appeared first on Show-Me Institute.

St. Louis City officials, who have a serious bad habit to kick in the form of development subsidy giveaways, plan to study how they can reform their use of these subsidies as part of an overall, city-wide development plan. The half-million-dollar study will come after years of pressure to change (read: provide some rhyme or reason to) how the City awards tax subsidies.

A report released in 2016 showed that the City gave away more than $700 million through programs like tax-increment financing (TIF) and tax abatement from 2000 to 2014. (In just the 2016–2017 fiscal year, the City and school district lost nearly $30 million due to these incentives.) That same report concluded (p. 6) development subsidies generally fail to accomplish their goals of spurring economic growth and eliminating blight.

While I’d like to celebrate the City’s commitment to reshaping its development policies, I’m skeptical much will come of the exercise. Taxpayer-funded studies—even fancy half-million-dollar ones—are no substitute for the willpower to do what’s right.

It ought to frustrate taxpayers that, with numerous studies and reports replete with reforms on hand, the City has decided to—in St. Louis fashion—study incentive policies once again. Not only will the study itself be costly, but the longer reform takes, the more projects will receive taxpayer-funded subsidies. If officials are serious about reform, they should put subsidy requests on hold until new policies are in place.

More importantly, officials have not shown much interest in limiting their own power to award incentives. Indeed, they have little political or financial incentive to do so. (The City even reportedly lobbied against TIF reform this legislative session.) For example, even though the City has a policy of limiting TIF incentives to 15% of a project’s total costs, it frequently awards much larger subsidies, and often to developments with numerous other subsidies in hand (see, for example, here and here). When a luxury high-rise in the Central West End gets a 15-year abatement, it’s reasonable to question whether the City has no intention of taking its foot off the gas even though it clearly could.

St. Louis (like Kansas City) desperately needs incentive reform. Taxpayers, schools, libraries, and other jurisdictions need incentive reform. If St. Louis is serious about reshaping how it awards subsidies, officials should show that now by enacting policy changes. No more studies, no more plans, no more wasting of taxpayer dollars.

The post Another Study Is Just What St. Louis Doesn’t Need appeared first on Show-Me Institute.

One reason is the City’s deserved reputation as a crime center. As recently as 2016, the city was ranked the most violent city in America by the Federal Bureau of Investigation, and property crime remains a major issue for residents and visitors alike. What drives the crime is subject to interpretation and analysis; poverty and the region’s long-simmering racial tensions are factors. But whatever its source, crime affects whether people stay in the city—or for that matter, whether they come to the city in the first place.

Taxes are also an enormously important piece of the puzzle. The negative impact of income and earnings taxes on economic growth appears in the academic literature again and again, and yet St. Louis policymakers and others have refused to change course. In a paper written for the Show-Me Institute in 2014, economist Howard Wall found that half of the population loss that took place in the city between 2000 and 2010 could be attributed to the earnings tax. Even if the effect were only half as big, it would still be a massive problem.

Additional research, including a host of Show-Me Institute papers, have demonstrated similar growth issues related to the City’s earnings tax. Still, establishment political interests continue to rally around it. Whether that’s out of stubbornness or fear, the negative impact the tax has on the City and its future remains the same.

Capital and labor are mobile, and because they are, leaving the city is very easy. Factor in that the city gives away millions in tax dollars to a cavalcade of long-entrenched special interests, and it becomes clear that an economic system that robs Peter Taxpayer to pay Paul only works if Peter sticks around. And Peter hasn’t.

The city hasn’t just beggared taxpayers through the earnings tax and its tax subsidies; it has also beggared some of the very public services that lure young families to a city. I will leave the heavy lifting on education policy to my colleagues at the Show-Me Institute, but I will observe that a city steering $30 million per year from basic city services like education does so at its own peril. Yet, that’s exactly what the St. Louis does.

There is a charm to the urban environment that attracts many. That charm can be enough to compensate for the negative effect of somewhat higher taxes, or somewhat greater risk, or somewhat poorer services.

But there is a limit. If you were 30, married, and had children or were planning to, would you put down roots in a place bedeviled by St. Louis’s problems? Or would you go someplace where safety, educational opportunity, and tax stewardship were high priorities? When fundamental public needs are left unmet, it isn’t fleeing residents who are at fault; it’s the city that is.

Regional power is moving to the north and west of the city, through St. Louis County and toward St. Charles County. Lest we forget, St. Charles County is now larger than St. Louis City—and it’s positioned to widen that population gap for the foreseeable future.

The City’s greatest issue isn’t whether it will be the economic center of the region. Its greatest issue, the one that will determine its long-term viability, is whether it will be a competent steward of public money and the public’s trust—whether the City will address the policy questions that ultimately underpin and promote long-term development and population growth. Doing so will require a meticulous commitment to getting the fundamentals of governance right and eschewing the rest.

It’s said that the best time to plant a tree was twenty years ago, and the next best time is to plant a tree is today. For the sake of its future, now is the right time for St. Louis to address its fundamental and widely recognized issues of governance in a serious and research-driven manner. Until the city gets serious about regaining public trust by getting back to the basics of governance—above all, a full commitment to security, education, and the stewardship of the public checkbook—no one should be surprised when more St. Louisans follow their predecessors out the door.

The post St. Louis Is Failing, and It Has Only Its Government to Blame appeared first on Show-Me Institute.

On January 17, Kansas City’s City Council will again consider an ordinance regulating STRs such as Airbnb and VRBO (Vacation Rentals by Owner). Some neighborhoods are fearful of change, but there are great opportunities for all homeowners. Failure to think anew could create an uneven and potentially unconstitutional patchwork of regulations that harm consumers and property owners.

STRs have been illegal in Kansas City since 2011, but the City has chosen to overlook infractions and instead work on regulations allowing for STRs. STRs themselves are nothing new. What is new is the ease of finding and booking them thanks to Internet platforms such as Airbnb and VRBO. In the view of some homeowners, STRs amount to boarding houses and would irrevocably change the character of their communities from owner-occupied neighborhoods to more transient rental tracts. But research does not support that fear.

Protecting neighborhood character may sound good, but it is too broad to be a meaningful standard for regulation. As for fear of crime, there is no research that shows a causal relationship between criminal activity and STRs. In fact, studies have found that an increase in STRs increases property values in the surrounding areas. This shouldn’t be a surprise. People who seek to make a living off their homes have every reason to maintain the property and keep it attractive—and the income they receive from STRs helps them do so.

Cities like ours have plenty of housing codes to address issues that might arise from STRs. But there appear to be few actual problems. A public records request of the City Planning and Development Department uncovered only 68 complaints going back to 2014. Fifty-four of them simply noted that the location is being used for Airbnb or a STR, as opposed to specific complaints about noise or crime.

Meanwhile, Kansas City is host to hundreds if not thousands of long-term rental properties. Those homes do not require substantially different regulation—owners are not required to get permission from neighbors or pay additional fees or taxes. What’s more, once a unit is rented, there is little incentive to maintain the property—think of the stereotypical negligent landlord. STRs have the opposite impact by maintaining an incentive to be a good host and neighbor.

Those incentives are important. It is in the interest of every STR owner and every online platform to make sure that the experience is positive for everyone. Airbnb wants happy and safe customers; owners want respectful and well-behaved guests. Neighbors should see the opportunity for better-maintained and higher-valued neighborhoods.

The big problem with an outright ban, at least according to Jamila Jefferson-Jones of the UMKC School of Law, is that it amounts to an unconstitutional restriction on an individual’s property rights. Cities may be able to regulate the industry, but they may not be able to stop it.

Some regulation may be welcomed by STR owners. Airbnb recently announced it would collect and remit state and local taxes on behalf of their owners. Perhaps a nominal registration fee is warranted as well. People living in apartments or condominiums may want assurances that common areas remain secure. But using the power of government to stamp out a new aspect of the sharing economy is unwise and likely unworkable.

The post Some Thoughts on Regulating Airbnb appeared first on Show-Me Institute.

Unfortunately, many of the reforms proposed by officials (which local activist and TIF critic Glenn Burleigh rightly notes are nonbinding) are unlikely to have much effect on the use of incentives or their detrimental effects. Two reforms—the reduction in the percentage of projects’ costs and the shortening of the terms of TIFs and abatements in economically better-off parts of the city—sound like significant steps in the right direction. However, similar reforms enacted in Kansas City last year have proved ineffective.

So, what reforms could genuinely curb incentive abuse? The surest and most effective reform is repeal—the legislature should completely eliminate these misguided programs from state law. California, the state that created TIF, repealed TIF nearly a decade ago.

But, short of repeal, what can be done? Here, and in a series of blogs in the coming weeks, I’ll discuss a cabinet of reforms policymakers should consider to make real progress in reforming incentives. Some policies will be austere, others more mild, but all, I believe, will offer creative and meaningful alternatives to Saint Louis’s misguided incentive policies.

1.      Adopt an Incentive Budget

I live on a budget. You live on a budget. Policymakers in City Hall pass and ‘live’ on a budget. If we can do it, so can economic development agencies, developers, and their investors.

Policymakers could adopt a hard cap regarding how much they award annually through TIF and abatement. Think of this as an “Incentive Budget.” Just as the City budgets a certain amount for a program or service, it would allocate a certain dollar amount for TIF and abatement. The only difference would be that City officials couldn’t go beyond a certain amount—say $50 million annually. (For context, the TIF Commission awarded nearly $51 million in TIF subsidies in a single meeting earlier this year.) Many state tax credit programs have annual or cumulative caps like this.  

This reform has several strengths. For one, it strictly limits how much revenue the city can give away. Policymakers have little political or financial incentive to tell developers “no,” but a strict cap could force them to do so. This could control the bleeding of city revenues and force development officials to think harder about which projects should get the limited number of subsidies available.

Second, it could help the City avoid budget gaps and manage future revenue losses. If policymakers and development officials are kept on a budget, the long-term financial impacts from incentive programs could be accounted for in advance. This would make the lives of folks in the Budget Division much easier, and help schools, libraries, and other jurisdictions deal with future lost revenue. 

Urban planners, policymakers, and development officials may claim that such a reform would restrict their powers unduly, and show the world that Saint Louis is “closed for business.”  (One might argue that the regulatory and tax environments are bigger problems than a scarcity of development subsidies, but those are topics for another day.) We have seen what happens without restrictions on the awarding of TIF, and it isn’t pretty. A hard cap may be the only way, short of repealing TIF and abatement, to stop the abuse. And if some game-changing project comes along that would bust the City’s incentive budget, place the decision-making power in the voters’ hands, like some state representatives have proposed. That way those affected by incentives—ordinary taxpayers receiving fewer and fewer city services—have more say in how they’re used.

An incentive budget is just one of many reforms that officials could explore. Others—about which I’ll be writing soon—include:

• Eliminating TIF and abatement for projects that already receive other state/local incentives: Prevent a single project from receiving every incentive on the books.
• Tying incentives to land uses: Ensure that incentives go to projects with real public benefits.
• Form a City-County incentive pact: Stop the race to the bottom. 

The post Real Incentive Reforms for Saint Louis appeared first on Show-Me Institute.

CFRG points to Detroit as a model. According to the Detroit Free Press,  creditors left in the lurch by the city’s 2013 bankruptcy negotiated to take over city owned property to settle debts. General obligation bonds issued in Kansas City tax property to raise the money needed to repay the bond debt. But even in the worst-case scenario, no one is going to be driving up and down Ward Parkway picking out homes to seize.

GO Bonds are backed by the “full faith and credit” of the City. According to a statement from the City (emphasis added):

The security for the bonds is the City’s ability to tax real and personal property, not the property itself. Bondholders have no direct connection to property owners and do not have the right or authority to seize property in lieu of general obligation bond payments. 

In the extremely unlikely event the City did not make its debt payment from property taxes collected, the City could use other legally available funds of the City to make the payment.

The city may use a property tax to raise the funds, but even in the very unlikely event of a city default, creditors would sue to recoup their investment. A judge could then order the city to raise taxes. The City might also try to sell assets to generate the funds. Or, as in Detroit, the city would negotiate to settle the debt by giving creditors city property such as City Hall itself, assuming it isn’t being used as collateral for the convention hotel. Again, this is not the same as creditors taking privately owned property.

That the GO Bonds are necessary in the first place is the result of years of poor policy and financial management. And the bond plan is itself bad policy. Those two items are serious enough considerations without the fanciful notion that creditors will seize individual taxpayer assets.

The post The GO Bond Doesn’t Risk Your Home-Just Your Wallet appeared first on Show-Me Institute.

For a household with a $140,000 home and a $15,000 car, the property tax would average an additional $8 in the first year, rising to an [sic] $160 average additional payment in year 20, the final year of the bond program.

The Kansas City Star described the machinations at City Hall thusly:

The council is trying to craft a plan that can win voter approval to borrow $800 million over the next 20 years to address the city’s huge infrastructure needs.

This suggests that what is before voters is a 20-year effort. It isn’t.

The city is suggesting not a single 20-year bond for $800, but a series of twenty 20-year bonds for $40 million each, with the last one being issued in 2036 and paid off over the subsequent 20 years. The first bond would be issued in FY 2017 and the last one in FY2036. Property owners would not finish paying off the final bond until FY 2055.

If City leaders want voter support for a 40-year tax increase, the best way to get it is to make clear to the public exactly what they’re asking for. This is a multi-decade commitment!

The post Bombshell: The GO Bonds Will Last Until 2055 appeared first on Show-Me Institute.

Things are no different when assessing the city’s massively expensive economic development programs.

A report released last year turned an objective and critical eye toward the city’s incentive practices and found that “[w]hile there may be disagreement about the value of some [incentive] packages, it is clear that the city gains no net benefit from an extremely costly program with no real economic development impact” (pg. 6). That’s about as damning as any finding could be. But, remember: framing is everything.

Otis Williams, Director of the city agency which administers development subsidies, wrote that the “study was conducted to show us what we’re doing well and where we can improve.” When framed this way, things don’t sound so grim.

But don’t be fooled. When the bigger picture shows that the city spends hundreds of millions of dollars—more than $700 million from 2000 to 2014—for naught, a bleak reality emerges. Incentive policies don’t need to be improved; they need to be jettisoned or comprehensively reformed.

When we look beyond the ribbon cuttings, temporary construction jobs, and consultant reports, we see that development subsidies like tax increment financing and tax abatement do not strengthen our economy. If they did, St. Louis would have a thriving downtown and there wouldn’t be a growing operating budget deficit. At worst, these subsidies are a flat-out waste of taxpayer dollars. At best, they meddle with the market, getting developers hooked on taxpayer handouts. When we see prime property at the busiest intersection in the Delmar Loop declared “blighted,” can’t we agree that our policies are missing the mark?

At their core, St. Louis’s incentive policies suffer from two fatal flaws. First, they assume politicians and bureaucrats know which investments are better than others. Second, the pols act as if they are spending “free money.” when in fact a dollar spent on quixotic economic development projects becomes one less dollar that is available for public safety and other purposes.

But how will St. Louis stay competitive when surrounding jurisdictions use incentives? Well, before policymakers worry about how to lure companies from just over the county line—which is about all that incentives accomplish—they might do well to focus on, say, improving schools and basic infrastructure, maybe even retiring the City’s debt and thereby improving its credit rating?

And if policymakers really want to attract business, why not incentivize everything—i.e., cut everyone’s taxes—instead of just the projects of politically-connected developers? If city officials and staff are right, and incentives truly grow the economy and boost tax revenue in the long run, just imagine what a broad-based tax cut for all residents would do!

From 2009 to 2016, the tax revenue annually handed back to developers has more than doubled from $17.9 million to $38.1 million. Yet, today, most of our economic, social, and governmental woes persist. The answer is not more of the same. It’s time to reframe the discussion on incentives.

The post A Sober Look at Development Subsidies appeared first on Show-Me Institute.

So far, Mayor Slay has mentioned raising the city’s parking fees to fund the expansion. While this suggestion may appeal to transit activists, parking fees won’t be nearly enough to pay for 31 miles of new MetroLink track. The city’s entire parking division collected just over $16 million in revenue last fiscal year. But the City and County dish out more than $120 million a year just to keep MetroLink running. Even if parking division revenues doubled (or tripled, or quadrupled), expanding MetroLink would still be far out of reach.

The math on parking fees is indisputable, and points to the possibility that the city will be counting on the rest of the region to make the MetroLink expansion happen. The city is looking to Saint Louis County taxpayers, and perhaps others around the region and state, to help pay for the expansion. In fact, the expansion likely cannot move forward unless county taxpayers pay more. But much of the north–south route is far from many county residents, and the county already contributes roughly four times [see p. 67] what the city does in terms of transit funding.

What will it take to expand MetroLink? Assuming Metro, Saint Louis’s transit agency, issues 30-year bonds at current interest rates, expanding MetroLink will require roughly $60 million each year (not including increased operating expenses). To come up with that much money, the city would need to increase parking fees, and both the city and the county would need to impose an additional sales tax, likely of 0.5%. Such an increase would put many local sales tax rates far above 10%. While the mayor and rail proponents may not want to mention such large taxes increases, it’s difficult to see how Metrolink expansion can move forward without them.

As the City pushes big transit plans, taxpayers throughout the region should ask themselves if expanding MetroLink is really worth the cost. Despite the unfounded claims of transit activists, MetroLink has failed to spur development, create jobs, or turn our region into a magnet for the “creative class.” Can we really afford another $1.4 billion?

The post Parking Fees Alone Cannot Fund MetroLink Expansion appeared first on Show-Me Institute.

You might think so, but some city officials don’t see it that way. The Saint Louis City Tax-Increment Financing Commission, a public body that awards tax subsidies, recently granted $19.4 million to the developers of a mixed-use project in midtown St. Louis. The development, dubbed the “City Foundry”, would include office and retail space, residential buildings, and a food court. The Foundry would be a welcome addition to the area, but why should tax dollars go to fund it over, say, schools and basic infrastructure?

Officials haven’t addressed that question. And what’s worse is that even without the TIF subsidy, over 41% of the costs of the $134 million project will be shouldered by taxpayers. The chart below depicts the proposed funding sources for the project. Is the $19.4 million in tax increment financing, which represents forgone tax revenue, really necessary when so many other subsides are funding the project? Especially when the developers are also seeking tax abatement on top of all these other handouts!

Source: City Foundry Application for Tax Increment Financing, assembled by author.

When our communities have so many needs but limited resources, leaders have an obligation to make every dollar count. Before the City signs off on this incentive package, they should think hard about whether this plan constitutes the most prudent use of public funds.

The post Funding the Foundry: Why Are Taxpayers Continually on the Hook? appeared first on Show-Me Institute.

But the AND approach isn’t a simple matter of uniting the region for a common goal. Where MetroLink is concerned, the AND approach will benefit some at the expense of others. In more concrete terms: the City needs the County’s tax revenue if MetroLink expansion—in any direction—is going to be feasible. But the County has made clear it isn’t enthusiastic about funding the city’s favored north–south expansion. (Note: the County’s transit sales tax revenue is triple that of the City’s. See p. 67)

So, should the County and City just take their toys and go home? Of course not—the AND approach isn’t the problem. The problem is the goal the AND approach is supposed to achieve: a costly $2.2 billion expansion of the inefficient and underused MetroLink, which would mostly lie within City limits.

Recognizing this fact lifts the shroud of mystery surrounding regional infighting. MetroLink expansion is so expensive it would force the County to fund the bulk of a project that will primarily benefit the City. It’s so expensive that it creates an either/or approach to regional transit planning.

But what if, instead of an immensely expensive light-rail expansion that would require every tax dollar it could get its hands on, regional leaders invested in a system of bus-rapid-transit lines that could be constructed and operated at a fraction of the cost. That is, imagine a project that wouldn’t gobble up every last dollar the region has to offer, would actually serve regional transportation needs, and didn’t pit County against City.

If the region’s transit priorities were more in line with its resources, there might not be an either/or approach to transit in St. Louis. Messenger got things backwards: MetroLink expansion isn’t the victim of regionalism—it’s the cause of it.

So long as a costly MetroLink expansion is the goal, it doesn’t matter how well the region’s leaders get along. With the north–south expansion in particular, the City can win only at the expense of the County. That is an either/or approach. If leaders are to unite behind a transit plan, that plan will need to effectively serve all of the region’s residents at a price they are all willing to pay. 

The post Unite the Region with a Sensible, Effective Transit Vision appeared first on Show-Me Institute.

The NGA is vital to our City’s economic health, and its relocation to North St. Louis will reinvigorate a significant urban area of our community. Conversely, losing the NGA would be a devastating blow to our City’s economy. The many benefits to the future of both St. Louis and NGA are immeasurable, promising and exciting.

With the NGA as the new centerpiece of the Northside Redevelopment Project (which has failed to achieve anything thus far), the city hopes to turn around a significant section of North Saint Louis City. The loss of the facility would, supposedly, be devastating.

You might be forgiven for thinking that the NGA is choosing between sites in Saint Louis and far away cities in Texas or Maryland. But that’s not the case. The NGA is choosing between sites inside the Saint Louis region, including sites in Saint Louis County and near Scott Air Force Base. If the NGA moves from its current location in South City to either location outside the city, it will change commuting patterns for current employees. However, the effects on the regional economy and regional jobs should be nil. The NGA’s move out of the city will not be a devastating blow to the city’s economy (which is ensconced in a larger region), but rather a blow to the city’s tax rolls, which depend on earnings taxes (more than $2 million a year) that the facility provides.

The city’s apocalyptic attitude towards losing tax revenue underscores Saint Louis City’s love-hate relationship with regionalism. When it comes to funding improvements in—and for the benefit of—Saint Louis City (and usually downtown), city leaders call for everyone to chip in for the Arch grounds and convention centers and stadiums and the light rail. Any refusal by outlying areas to throw in their money is treated as myopic, and a deep regional problem. But now that an important source of revenue might move out of the confines of the city, leadership is treating other parts of the region like they’re the surface of the moon.

The message city leadership sends when they speak this way is that regionalism means coming together to build up the city, not the outlying communities. That is hardly going to inspire residents who do not live or work in Saint Louis City (read: most metro residents).

Finally, just as an aside, would anyone have approved the massive tax subsidies to Paul McKee’s Northside Redevelopment project if they had known its success hinged on relocating a large Department of Defense instillation to the Northside? Wasn’t that project supposed to draw new jobs and residents to the city?

The post Regionalism for Thee, But Not for Me appeared first on Show-Me Institute.

Here’s the kicker though. It only wants to raise the property tax rate on commercial property, not residents! What’s worse is that Edmundson currently does not levy a property tax on residential property, not one cent.

The “justification” Edmundson uses for this proposal is that “the commercial businesses within the City require a greater level of service than the residential areas” and that “the Board believes that the residents should not be unfairly burdened with the cost of City services provided to the commercial areas.”

I haven’t seen any evidence that it costs more (on a percentage basis) for Edmundson, or any city for that matter, to deliver services to a commercial property compared to a residential property. Even if that were the case, commercial properties already pay more via assessments! That’s right, commercial properties are assessed at 32 percent of their value. Residential property is assessed at 19 percent. That means if a property tax rate of let’s say $1 per $100 in assessed value is levied against two properties (one commercial and one residential) valued at $500,000 a piece, the property tax bill for the commercial property would be $1,600 while the residential property would owe $950.

Apparently, that arrangement isn’t good enough for Edmundson, which seems to have a phobia against having its residents pay for any of the services they receive. This is wrong-headed.

If this is the way cities are going to respond to not being able to rely on ticket revenues to fund government services, they might as well disincorporate. If they don’t, there needs to be a change at the state level so that property tax rates (not assessments) are the same no matter the property type.

It was bad policy for cities to rely so heavily on fines and tickets to fund services. Thankfully, SB 5 fixed that problem. However, this proposal would replace one bad policy with another. I hope it never becomes law.

The post The Egregious Antics of Edmundson appeared first on Show-Me Institute.

In 2002, residents of Kansas City were told that if they did not approve a measure to build a 130,000-square-foot addition to Bartle Hall the city would lose millions in convention business. The campaign featured statements from convention managers who said they may have to leave Kansas City. One mailer, available here, included two such statements:

“Ace Hardware will no longer be able to host conventions in Kansas City until the Convention Center is expanded . . .” —Ace Hardware Conventions Manager

Taxpayers did vote to expand Bartle Hall, but Ace Hardware’s convention never returned to Kansas City. A second quote in the mailer makes the same point:

“We understand that a 40,000 sq. foot ballroom is being considered—the city needs to solidify its plans and begin construction as soon as possible to continue meeting our needs. Our continued commitment to Kansas City depends on the City’s plans for expansion . . .” —Associate Executive Director, Vocational Industrial Clubs of America (VICA)

A representative for VICA, also known as SkillsUSA, recently told Amy Hawley at KSHB that it left Kansas City last year because of insufficient “hotel space and convention space.” Building a convention hotel now will not meet its needs; the company won’t be back regardless of what the city does with a hotel.

In fact, the 2002 mailer starts off with a statement that is almost identical to the argument being made today:

Current bookings for future conventions is the best indicator of convention and tourism business in Kansas City five to ten years from now. Our future bookings are down dramatically and the reason is clear—without a new ballroom/general assembly meeting room, companies and organizations will continue to pass over Kansas City.

Replace “ballroom/general assembly meeting room” with “convention hotel” and nothing has changed in 13 years. The Bartle Hall expansion failed to be the boon that was hoped for. There is no real reason to expect that a new hotel will increase convention business in Kansas City, especially when it likely will make us one of the most expensive convention cities in the country.

The post It’s Groundhog Day for the KC Convention Center appeared first on Show-Me Institute.

It appears that, unlike most TIF projects, the developers want 100 percent of incremental economic activity taxes, including sales taxes and the earnings tax. Page 11 of the MOU states,

The City will . . . redirect through its annual budget the City’s portion of the Project TIF for a period of 23 years and Super TIF for a period of 30 years generated from the Project’s tax revenue sources . . .

In  other words, they want the half that they get from the TIFs directly, and then they want the city to give them the rest through the appropriations process. Here is the tax revenue the developers want to keep:

• Tax Increment Financing (TIF): as mentioned above, all economic activity taxes collected by and for the county, school district, library district, and the zoo will be redirected back to the project for 23 years.
• A Super TIF that collects for 30 years the tax not captured in the TIF above, including the convention and visitors tax, and redirects it to the developers.
• A 100 percent exemption on sales taxes on construction materials and real/personal property taxes.
• The creation of a 1 percent Community Improvement District (CID) tax that will then be redirected back to the developers.

Here are some extra freebies the developers want:

• A cash contribution of $35 million.
• The city’s portion of the land, valued at $13 million.
• Fees generated by zoning, permits, inspections, etc., capped at $800,000.
• A management fee to the hotel for catering amounting to $62,363,816 over 15 years. Should the event fees be insufficient to cover this, the city will pay, “from any legally available city funds,” just like we do with the Power & Light District.

Here are some possible problems for the city, based on past issues:

• The “City will maintain the existing Convention Center to its current standards. . . .” Isn’t this exactly what the city failed to do with Kemper Arena?
• The MOU says that the city won’t be responsible for cost overruns, “except to the extent intentionally caused by the City without Good cause.” I’m guessing there will be an attorney whose full-time job it is to find ways to sue the city over this, just like Cordish sued Jackson County over its assessment.

Not mentioned in the MOU is any exemption from the streetcar Transportation Development District (TDD). Apparently, funding the downtown streetcar is more important than funding the city, county, schools, libraries, and zoo. What does that say about the City Council’s view of the rest of Kansas City?

The post The Convention Hotel’s Tax Breaks and Gimmes appeared first on Show-Me Institute.

Adding new payment options and modernizing parking fee collection is a step forward for the city. Even better, the city commissioned a study to find where demand was highest and where meters were making so little money they could be removed. However, in addition to identifying where and when parking meters should be replaced, the report also scrutinized the city’s existing parking policies. Specifically, the city is allowing government employees to improperly obtain free parking.

According to the report, the city allows any individual employed by the city or county, regardless of their position, to park for free at any metered spot. They only need to display an approved parking permit, and they can park long-term. While some jobs require the ability to quickly access a vehicle (such as police officers), most do not. When city employees take some of the most demanded spots in the city, they hurt local businesses, make it more difficult for residents to park, and reduce the city’s income.

To make matters worse, the city apparently has had no policy for issuing parking permits, nor does it even know how many permits exist. As the report puts it:

In St. Louis, the problem of employees parking in the most convenient on-street parking spaces and not paying is exacerbated by the fact that there is no comprehensive list of authorized and outstanding City issued permits, or a specific set of rules governing which departments are permitted parking permits and why they qualify. This makes it nearly impossible to determine which vehicles displaying permits are parked for legitimate City business and which are not.

The obvious solution is for the city to come up with guidelines that decide which positions require parking permits and only issue permits necessary for these employees. The city should also track who has permits and for what reason. These common-sense fixes will improve parking downtown, to the benefit of Saint Louisans and the city’s bottom line.

The post Report on Parking in Saint Louis Finds Employees Take Best Spots, Don’t Pay appeared first on Show-Me Institute.

[Fees] that are generated at the airport stay in the airport, to take care of the needs of the airport. . . . The money from the airport can’t be used for streets and sewers and none of that. . . . Airport money stays with the airport. If you don’t spend it on the airport, it doesn’t get spent.

He repeated it in his State of the City address in 2014 and again when his Airport Terminal Advisory Group issued their report. In that report, the advisory group repeated the claim, asserting on page 15,

Another common misperception was that funds or profits from the Aviation Department (legally organized and maintained as a Kansas City Enterprise Fund) could be used by the City of Kansas City to fund other municipal purposes unrelated to Airport operation.

The problem is that none of this is true. The city borrowed money from the airport in 2010. Then, during this mayor’s tenure, the city renegotiated the debt to extend the life of the loan to 2016.

Need more? Look no further than page 179 of the mayor’s own Submitted Budget for FY 2015-16, which includes $500,001 for “Aviation Loan Repayment.”

The mayor may have his own opinion on the airport, but he cannot have his own facts, much less two sets of facts.

The post Kansas City Repays Money It Says It Cannot Take appeared first on Show-Me Institute.