The Kansas City Chiefs just released a two-page statement with numerous claims about the benefits of a new stadium, practice facility, and team headquarters in Kansas. There are reasons to be skeptical.

First, the press release includes some findings from an economic impact analysis that was conducted by a consultant the team hired. We don’t have the full report itself—just these selected highlights the Chiefs chose to share.

The consultant, Econsult Solutions, appears to be using standard economic impact methods. My concern isn’t who performed the study; it’s that these models are only as good as the assumptions that go into them, and those assumptions haven’t yet been made public.

The full report should be released so we can see and evaluate the assumptions. For example, I’d like to know how the authors calculated visitor spending, how they calculated multiplier effects, and how much of this projected economic activity is actually new to Kansas.

These studies are often flawed in their analysis and assumptions. Academic economists caution that these studies can overstate the benefits of publicly subsidized projects by measuring gross economic activity rather than net new economic activity. The ongoing debate over the World Cup’s promised economic benefits illustrates why those assumptions deserve careful scrutiny.

A $4.5 billion project will undoubtedly generate billions of dollars in economic activity. The question isn’t whether activity occurs; it’s whether that activity is genuinely new to Kansas and whether it generates tax revenue to justify the public subsidy.

Also, what exactly is included in the $1.2 billion in ancillary development the press release mentions? Hotels? Housing? Entertainment? And how much of that development is expected because of the stadium, rather than development that would have occurred anyway? Recall that the STAR bond district captures all additional tax revenue, regardless of whether it is due to the Chiefs’ developments.

As a result, this selected summary of the report doesn’t tell us if the deal is worthwhile for taxpayers.

There are some things in the report that should be of note to taxpayers. For example, the release has the capital investment increased by about 12% from what we were told in December, but the projected construction impact increased by nearly 90%. That raises an obvious question about what changed between the two projections.

One answer may be that the press release measures impacts across the greater Kansas City region, not just Kansas. Kansas taxpayers, who are paying for this thing, should ask about the benefits to them specifically.

A skeptic might wonder if the authors included areas outside Kansas to inflate the economic impact number.

The press release tells us about new tax revenue—but not how much it will cost taxpayers to get that revenue. Every salesman wants to focus on the benefits of what they are selling. Kansans need to be mindful of the costs.

Regarding costs, in the December 2025 announcement, Kansas leaders were adamant that the Chiefs deal paid for itself through future revenues, required no funds from the state budget, and would require no new taxes.

Is that still the case?

We’re still waiting to learn the size of the STAR district—almost 300 square miles in past statements—and the baseline year for determining the amount to be given to the Chiefs. Those details matter because they determine whether the projected tax revenues actually exceed the public commitment. Until those questions are answered, it’s impossible to know whether the project pays for itself.

We just don’t know.

And again, this is all based on a two-page statement from the Chiefs about an economic impact study they haven’t released. The team owes taxpayers more information and more transparency.

The post More Noise than Signal from Latest Chiefs Release appeared first on Show-Me Institute.

Listen to the full show: www.kcmotalkradio.com/

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Interview Transcript

Patrick Tuohey (00:00)
Good morning, Kansas City. This is Patrick Tuohey, Kansas City’s second favorite Patrick, sitting in on the Pete Mundo Show for the whole morning. If you have read anything in the Kansas City papers about either the Royals Stadium or the Chiefs Stadium, the chances are that you are familiar with my next guest. J.C. Bradbury, a professor of economics at Kennesaw State University, has been studying the economic impacts of building stadiums, tearing down stadiums, getting teams, and losing teams. He’s got a book coming out at the end of next month called This One Will Be Different. I’ll get to the book in a second, JC, but my first question is: why do you hate baseball?

J.C. Bradbury (00:43)
Hi Patrick, thanks for having me on. I get that question a lot because I bring a lot of bad news, or uncomfortable truths, let’s say, about baseball. But I study these things because I love baseball. I’m a huge fan. I grew up an Atlanta Braves fan, but I follow baseball generally and all sorts of sports. I was an Atlanta United season ticket holder for many years. That’s why I do this — because I enjoy it.

Patrick Tuohey (01:09)
It’s funny — years ago somebody recommended Moneyball. It’s a fantastic book. The movie is just as good. I rewatched it the other day, and if you haven’t seen it or haven’t seen it in years, it really holds up. I think of that because baseball claims to be so statistics driven that you’d think fans would be more amenable to the kind of economic analysis you’re doing. But maybe it’s just love of the game and fandom that clouds their reason.

J.C. Bradbury (01:44)
There’s some of that. There are many people who are baseball fans, sports fans, who understand what I’m arguing — and I’d argue it’s more than you’d realize. But most of the people vocally speaking out about stadium issues and public finance are largely blinded by their own fandom. I deal with people on social media all the time who respond to things I say about stadiums and tell me I don’t understand the public finance — and they’re just totally incorrect. They don’t even bother to check it. It’s religion to some people. I say most people would give up their religion before they’d give up their subsidies to their sports teams.

Patrick Tuohey (02:27)
If you don’t already follow J.C. Bradbury on Twitter, I recommend it — JC underscore Bradbury. If you’re a fan of baseball, economics, or The Simpsons, you’ll love his account. So JC, tell me about your book, This One Will Be Different, which comes out at the end of July.

J.C. Bradbury (02:44)
I’ve been studying stadium subsidies and publicly funded stadiums for a very long time. I fell into it accidentally because the Atlanta Braves Stadium opened in Cobb County, a few miles from where I live — just outside Atlanta, where my family has been for generations. I had a lot of interest in how the stadium was built and funded, with three hundred million dollars in subsidies. I was familiar with a lot of the economics behind stadiums, and when I tried to share this research with other people, I was heavily rebuffed. So I began to study the issue more, and before I knew it, I had a very long book about the economics of stadiums. My idea was to explain public finance issues in stadiums using simpler methods. I use sound research methods, but I try to explain it through the narrative story of the Braves coming to Cobb County — here’s what happened, here’s what people argued, here’s what actually happened, let’s look at some of the financial numbers, and let’s understand the general intuition of why stadiums get built even though economists say they’re a bad deal. I look at the politics of it too. And one of the things I find is that these stadiums are mostly built by insider coalitions — chamber of commerce types, folks who are going to sit in the owner’s box and enjoy cocktails, or people with season tickets. They’re the large beneficiaries of the subsidy. They push these advocacy campaigns and try to get them passed as quickly as possible without going to voters if they can. That’s why we get these deals.

Patrick Tuohey (04:35)
One of the things that frustrates me about this whole issue — and I’d be curious if you agree, though I hate when TV and radio hosts make a statement and then ask the guest if they agree, and here I am — is that when St. Louis was considering funding a Major League Soccer stadium, or here in Kansas City with the Royals or the Chiefs, what I wish they would do is just say, “Hey everybody, we are a sports town. We think it’s important to have a sports team here, so we’re going to spend hundreds of millions of dollars to build something.” And just leave it at that. It would be a defensible argument. You could argue whether it’s worth the expenditure, but at least everybody would be honest. But they don’t do that. They go the extra step and say, “And we’re going to make money doing it.” That’s where they mess everything up. That’s where they get the numbers wrong. Is it as simple as that, or am I missing something?

J.C. Bradbury (05:31)
Absolutely. I wish there was some honesty in these debates. The reality is that a lot of people who argue these things don’t actually believe the phony economic impact studies they put out. They do it for a couple of reasons. Number one, politically, it’s a winning issue — if you tell someone it’s good for them economically, they’re more likely to support it. But also, if you just argue it’s good for the community and we’re a sports town — okay, how much does it cost? A billion dollars. How much does that increase taxes? Three hundred dollars. Well, hold on, we’re not that much of a sports town. Think about how you make your own decisions. What kind of car do you want to drive? I want a Ferrari. Great. But to drive a Ferrari, you’d need to move into a two-bedroom apartment, never travel again, and eat ramen noodles. You know what — I’ll get the base model sedan. People make those kinds of decisions, and that’s one of the reasons they use false economic benefits — because once you start talking about social benefits, people look at the costs more closely, and it makes a lot less sense.

Patrick Tuohey (06:40)
I had your colleague Victor Matheson on a few weeks ago and we talked about this, specifically with the World Cup. I’ve also asked Neil Damas this question. In your experience, how good are journalists at reaching out to you and your colleagues to vet the numbers they’re being told by chambers of commerce or the city? Where are we now, and are we getting better?

J.C. Bradbury (07:14)
I think the situation is getting worse, and a lot of it is accidental. Newsrooms have gotten smaller and younger, so there’s less institutional knowledge. People don’t remember the last stadium being built, and they’re told to go cover this stadium story. They call a few local sources — who of course are members of the local chamber — and those people say it’s great. At best, they call a local economist who says it’s bad, and it ends up being a tie. But often they don’t even call the economist. That’s part of the nature of the news business, which is one of the reasons I think it’s so important to use social media and other mediums to get the word out. Even journalists trying to do their best often fall short. And journalists deserve some blame here — when I reach out to try to help them, they often get very defensive, and I think that needs to stop. I’m not just angry at journalists. Both my parents were journalists, and my first job was in a newsroom. I understand what’s going on.

Patrick Tuohey (08:19)
The previous segment, I talked about World Cup reporting. Local people put out outrageous economic development claims a year and a half ago, nobody questioned them, and journalists just repeated them — even though past experience hadn’t lived up to those claims. So what can we do to encourage journalists to reach out, or maybe just give them a primer on what economic impact studies look like and where the flaws are? Whether I’m looking in St. Louis, Kansas City, or around the country, they are all flawed in the same way.

J.C. Bradbury (08:56)
It’s important to always speak up. It’s easy to get tired and think you can’t keep doing it. When someone asks me to look through one of these studies, I tell them it’s not a real study — it’s a fake study. I try to spread that message. Part of the problem is that the big number is the story, and that’s what they want out there. The fact that it’s wrong later doesn’t matter. And sometimes people get mad at me because I’ll call out bad reporting. I do it not because I dislike journalists, but every time I’ve tried to be nice about it, I get told I don’t know what I’m talking about or that they don’t want to tell their boss they need a correction. I think it’s important for journalists to know that if they get it wrong, they’re going to get called on it — not to be mean, but to set the standard.

Patrick Tuohey (09:54)
And do a better job because policymakers and business owners are making decisions based on the numbers you’re putting out there. We see this with the World Cup — people were expecting much bigger crowds than they got. It’s not just a matter of being right. It’s a matter of being right so that people make decisions based on real information, not just projections. JC, I’m grateful for your time this morning. Thank you so much. We’ve been talking to J.C. Bradbury of Kennesaw State University. His book, This One Will Be Different, comes out at the end of July. We’ll be right back.

The post Why Stadium Deals Don’t Add Up with J.C. Bradbury appeared first on Show-Me Institute.

For some reason, film tax credits remain popular in Jefferson City. They are much less popular with economists.

Missouri lawmakers are once again debating whether to extend the state’s film tax credit program. Earlier this month, I testified against legislation that would continue the subsidy. For those who don’t remember, this is a debate the state has already had.

Missouri operated a film tax credit program before ending it more than a decade ago. In 2010, the state’s Tax Credit Review Commission examined the program and concluded it served too narrow an industry to justify its cost to taxpayers. Lawmakers shut it down soon after. The idea never fully disappeared, though, and in 2023 the subsidy returned, this time with the promise of better results. The current program allows up to $16 million per year in credits for film and television productions.

So far, there is little evidence that anything has changed. Supporters point to production spending as proof that the program works. The Missouri Film Office reports that productions spent more than $40 million in the state in 2025 while receiving roughly $15.7 million in credits. But production spending is not the same as fiscal return. Much of that activity consists of temporary wages, lodging, equipment rentals, and other short-term expenses tied to a shoot. When filming ends, much of that spending leaves with it. What matters for taxpayers is how much tax revenue actually makes its way back to the state.

On that measure, film subsidies perform poorly almost everywhere they have been tried. Research summarized by the Tax Foundation estimates governments recapture between eight and twenty-eight cents in new tax revenue for every dollar of credit issued. Even Georgia, often cited as the model for film incentives, struggles to demonstrate that the program pays for itself. A 2020 performance audit by the Georgia Department of Audits and Accounts found that tax revenue generated by film production activity fell well short of the credits the state awarded.

There is also a basic budget reality lawmakers should keep in mind. Film tax credits are sometimes treated as something different than spending because the state only grants them after a production films in Missouri. But the fiscal effect is the same. Each credit issued is a commitment to collect less revenue in the future.

Meanwhile, the productions most closely associated with Missouri often film somewhere else entirely. A new HBO series set in St. Louis, DTF St. Louis, was filmed in Georgia. The Netflix series Ozark, which was set at Missouri’s Lake of the Ozarks, was also largely filmed in Georgia.

Though it should go without saying, Missouri’s lawmakers should be focused on using state tax dollars as effectively as possible. And there’s no disputing that film tax credits have repeatedly failed that test. Extending the credit today would mean ignoring the state’s past experience and choosing to repeat it.

The post Missouri’s Film Tax Credits Still Don’t Add Up appeared first on Show-Me Institute.

In a column for The Kansas City Star, I challenged the rosy claims of the alleged economic windfall from hosting the World Cup. Every group I contacted indicated they got the number from someone else. When I finally found the organization that generated the number, it did not respond.

That seems to be the standard procedure.

The Kansas City Business Journal tried to dig into how Kansas City’s tourism bureau concluded that 650,000 visitors would descend on the region. Thomas Friestad wrote: “Visit KC declined to share its specific methodology for estimating visitors, saying it is proprietary information.”

Blaise Mesa, writing for The Beacon, examined the economic impact claims being made by proponents of a new Chiefs stadium in Kansas. He ran into the same wall, writing, “The Beacon contacted the firm that calculated economic development data on the stadium, but they didn’t reply to requests for comment.”

It should be a red flag for even the most diehard supporters of these deals that those who promote the claims refuse to answer basic questions.

The post Extraordinary Economic Claims Require Extraordinary Evidence—Sports Edition appeared first on Show-Me Institute.

In this episode, Susan Pendergrass speaks with Patrick Tuohey, senior fellow at the Show-Me Institute, about Missouri’s upcoming special legislative session, slated to begin on June 2, and the debate over taxpayer subsidies for stadiums. They discuss why stadium subsidies often fail to deliver promised economic benefits, how billionaire sports team owners leverage public funds for private gain, and the potential impact of a $50 million annual giveaway to the Kansas City Chiefs and Royals. Tuohey explains the flawed logic behind the argument that Missouri must compete with Kansas in a “race to the bottom” and argues that the state should instead focus on core services like public safety, education, and infrastructure. They also cover the broader implications of using taxpayer dollars to benefit wealthy team owners, the political dynamics driving these proposals, and what citizens and lawmakers should consider as the special session begins.

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Download a Transcript of the Episode

Timestamps: 

00:00 Introduction to the Special Session
01:59 Stadium Subsidies: The Chiefs and Royals
05:35 Economic Impact of Stadium Subsidies
09:43 Political Dynamics of the Special Session
12:34 Public Sentiment and Legislative Challenges
16:29 Conclusion and Future Implications

Produced by Show-Me Opportunity

The post Missouri’s Special Session and Giveaways to Billionaires with Patrick Tuohey appeared first on Show-Me Institute.

A 2003 Clemson University study by economists Robert Baade and Victor Matheson puts this into stark perspective. They looked at the 1994 World Cup, hosted in the United States, and found something shocking: Instead of the $4 billion economic boost that event advocates promised, host cities actually lost between $5.5 billion and $9.3 billion. Let that sink in. Instead of making money, these cities were left holding the bag for billions in losses.

The report lays out the problem:

1. Stadium Spending is a Black Hole – FIFA demands that host nations build or upgrade multiple stadiums, often at obscene costs. South Korea and Japan spent $4 billion for the 2002 World Cup. Many of those stadiums are underused today, costing millions just to maintain.
2. The Tourists Don’t Come – One of the biggest myths is that these events bring in a wave of free-spending tourists. In reality, regular tourists stay away to avoid inflated prices and congestion. The net impact is often negative.
3. Jobs? What Jobs? – Yes, major events create work—but mostly low-paying, temporary jobs that vanish once the event is over. Meanwhile, businesses that don’t cater to event-goers—restaurants, retail, theaters—often see a drop in revenue.
4. FIFA (or the IOC, or the NFL) Walks Away with the Money – The real winner? The governing body that runs the event. FIFA collects billions in ticket sales and sponsorships, while host cities are stuck with the bill for security, infrastructure, and maintenance.

The World Cup is far from the only culprit. Cities and nations have been burned time and again. The 2016 Rio Olympics left Brazil with $13 billion in debt, abandoned venues, and zero lasting benefits. The 2014 Sochi Winter Olympics cost $50 billion, much of it wasted on corruption and vanity projects. The Super Bowl, despite constant hype, has been shown in multiple studies to provide a fraction of its promised economic impact.

Politicians and event boosters always paint the same rosy picture. They promise jobs, economic growth, and global prestige. But the reality, as study after study has shown, is that these mega-events rarely—if ever—pay off.

If a city really wants to strengthen its economy, it should focus on investing in infrastructure, public services, and policies that support small businesses and long-term growth. Chasing after one-time spectacles that benefit global organizations far more than local residents is a mistake.

So the next time you hear about a city bending over backward to host the World Cup, the Olympics, or any other mega event, ask the hard question: Who actually benefits? If history is any guide, it’s probably not the taxpayers.

The post Mega Events Fail to Deliver: World Cup Edition appeared first on Show-Me Institute.

The report made a number of claims, according to the graphics presented during the interview. The print version of the story on the website included the following bullet points:

• The construction of CITYPARK and its 32-acre campus created an additional $1.4 billion in economic impact since 2020.
• The direct cost of the privately owned stadium campus—which includes the stadium, team training facility and practice fields, team store, parking garage, and corporate headquarters—was $667 million.
• The overall impact includes approximately $122 million in incremental tax revenue, including $33 million in local and state tax revenue, and $15 million in infrastructure upgrades to lighting, sidewalks, bike paths and streets in the surrounding area.

Those bullet points come directly from the news story.

Kindle said in the interview “We were all very, very, very surprised” by the results of the study. I would be too. The vast research on the impact of professional sports teams indicates they generate no such economic impact. The Journal of Economic Surveys concluded in 2022 that “nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits.”

Kindle added of the research, “We’re very excited, when the time is right, to share it.” When might that be? I emailed CITY SC on May 23 asking for an electronic copy of the report and heard nothing. I emailed again on May 30 and was told the next day, “We haven’t yet released the full study results, just the highlights. It is something we will likely do in the future but timing is TBD.” I asked what event they were waiting on to release the report. It has been over a week and I’ve received no response.

It’s more than fair to wonder if this report contains the flaws of other similar analyses that count only spending at the venue and discount any losses in spending elsewhere. But we don’t know, because CITY SC hasn’t shared it yet.

Does that mean KMOV ran the segment without independently verifying the information?

At the bottom of the KMOV article is an invitation to readers: “For more information on the study, click here.” That link only takes you to a page of news releases for CITY SC, in which the club makes the exact same claims that appeared in the story, word for word. My advice to news outlets is to trust but verify. When it comes to claims of economic impact such as these, the claims are often overblown and based on significantly flawed analyses. Until the full report is available, we won’t know the rest of the story.

The post Trust but Verify: CITY SC’s Claims Deserve Scrutiny appeared first on Show-Me Institute.

What I found gratifying is that a great deal of voters, regardless of their own political views, seemed to understand that the economic impact claims made by the proponents of stadium subsidies were simply not true. Show-Me Institute analysts have been making this point since our founding.

Read Timothy Lee’s post from 18 years ago, Stadium Proposal Unfair to Taxpayers, and you will see the exact same arguments I made in 2024. The basics of good public policy do not change, they may just take a while to catch on.

The post Sometimes, Sanity Wins appeared first on Show-Me Institute.

I wrote previously about Mayor Sly James’s assertion that “there’s more flights all the time” from KCI Airport (there aren’t). There are three more claims that I want to address.

• James referenced a study of the 49ers’ Levi Stadium that concluded the stadium had all sorts of positive economic benefits. Unfortunately for the mayor, this study has already been debunked by journalists and economists who have reviewed it.
• James said that we’d see the community benefits agreement (a contract between developers and community organizations for a project) “tomorrow.” That was on Tuesday, March 19. What was actually produced amounts to a “press release” according to one Kansas City Star As of this writing, March 26, the Royals have still not finalized an actual agreement.
• Sarah Tourville, representing the Royals, denied responsibility for the April 2 vote: “We didn’t put it on the ballot, they [county officials] chose to put it on the ballot.” That’s misleading. Of course county legislators are the only ones who can put a measure before the voters. But recall that the Jackson County Executive initially vetoed the legislation, claiming that the county needed more time to negotiate agreements. Several legislators indicated they would support his veto. But the Royals campaign ran ads urging voters to contact their legislators and urge a veto override. Two legislators then changed their position and the veto was overridden—one of them noted the “escalating political pressure—and the measure was then placed on the April 2 ballot. The April 2 election is premature. Not only do we not have the community benefits agreement in place, we also don’t know the state and city contributions, and we also don’t have rigorous cost estimates or lease agreements. All of this information should be available for voters to make an informed decision.

What we do know is that public funds aren’t necessary for owners to build whatever they want and that stadia don’t drive economic development.

The post Fact Checking That Stadium Tax Event appeared first on Show-Me Institute.

I have not written anything about the Kansas City airport in years, and I doubt I would have ever predicted flight numbers. I responded in the moment that I was writing about the number of gates at the new airport. But after the event Mayor James insisted I had written such a thing. I thanked him for reading the Show-Me Institute blog and didn’t think of it again.

The very next night, I was speaking to a community group in south Kansas City about the stadium tax. In the parking lot after the event, the representative of the Royals also mentioned my KCI flight prediction when I was speaking with him—which had not come up in the meeting.

Why are members of the Royals campaign sharing Show-Me Institute blog posts from 8 years ago? And which posts? There are many. (Here is a summary of the airport debate from 2017.) Were they referring to my post from 2017 pointing out that The Kansas City Star editorial board incorrectly asserted that a new airport will guarantee more flights? Or maybe it was the one from 2016 in which I wrote:

To sum it up, the airlines (and common sense) say that building an expensive new terminal will not increase demand for air travel. Quite the contrary, the higher costs to airlines and passengers may mean fewer flights.

Neither the former mayor nor the Royals representative mentioned a specific post, but it doesn’t matter. According to the Kansas City Aviation Department’s 2023 Annual Report, there were 5,195,871 enplanements (the number of people boarding the plane) in 2023. Compared to 5,951,776 in 2019, that represents about a 14 percent drop.

What about flights? Again, using Kansas City Aviation Department data, in January 2020, right before the beginning of the pandemic, the airport saw 8,606 carrier flights in and out of the old terminals. In January 2024, there were 8,138 carrier flights. That amounts to a 10 percent drop. The change between December 2019 and December 2023 is less dramatic, but still down a half percent. Mind you, this is after the International Air Transport Association (IATA) claimed in October 2023 that air travel demand is back to pre-pandemic levels.

Claiming that flights are up at KCI is incorrect. Even if the number of flights had increased, there is a lot more at play than just a new terminal. But then, these are the same guys who argue downtown baseball has positive economic impacts. It doesn’t.

The post Yes, Mr. Mayor, There Are Fewer Flights from KCI appeared first on Show-Me Institute.

I believe in my gut that the timing is right for the Royals to become residents of the Crossroads and neighbors to Power & Light, 18th & Vine and Hospital Hill, helping to further connect the cultural center for our great city.

What’s important to note is that Sherman plans to include an entertainment district in the construction. Mike Hendricks of The Kansas City Star adds: “The imagined $1 billion-plus ballpark would be bordered on the east by office, retail and residential development, which would be a potential source of revenue for the team.”

No one should doubt that this publicly funded stadium with all the additional accouterments would be good for John Sherman. But will it be good for his neighbors?

Remember that all sorts of research and many economists make it clear that sports stadiums “are really poor public investments.” Part of the reason that the economic impact studies released by proponents of such efforts are flawed is that they count only the new spending at the new location—not the reduction of spending elsewhere. In a 2017 report, the Federal Reserve Bank of St. Louis concluded: “economists generally oppose such subsidies. They often stress that estimations of the economic impact of sports stadiums are exaggerated because they fail to recognize opportunity costs.”

Consider the Power & Light District. According to the Regulated Industries Division of Kansas City, Missouri, the number of liquor licenses (a gauge of how many restaurants and bars are operating) and employee health cards (a proxy for the number of people employed at bars and in food service) remained flat citywide for a decade after subsidies were awarded.

The Power & Light District didn’t create new jobs or businesses. It merely moved them from elsewhere in the city to downtown. And it moved them from places where the city, county, and school districts were collecting property, sales, and income tax revenue to a place where those taxes are diverted back to the developer to offset the cost of construction.

Even if you consider the Power & Light District on its own merits, it has failed to be successful. Thomas Friestad reported last year in the Kansas City Business Journal that Kansas City has had to meet multimillion-dollar debt-service obligations because the district does not generate enough revenue to pay its own debts. Those payments have ranged from $6 million to $17 million, amounting to over $160 million since 2006.

Just as with the Power & Light District, John Sherman’s entertainment district will not create new economic activity. It will only move it from elsewhere in the city. On game day, fans who now stop at grocery and liquor stores on their way to tailgate may instead go to bars at the stadium. That is not new activity—just different activity. Fans who might have gone to Power & Light, or to other places in the Crossroads District, may now go to the bars that Sherman owns. That is not new spending—just different spending. This is exactly what happened when Ballpark Village opened in St. Louis; it cannibalized other existing businesses.

The economic impact studies that will inevitably be produced to tout this new entertainment district will likely only count the new spending in the new location—not the loss of spending elsewhere.

To the degree that the Royals’ new entertainment district leeches spending away from Power & Light—which seems like it may be the intent of Sherman’s gambit—Kansas City taxpayers will face even higher annual debt obligations than now.

A publicly funded downtown stadium and entertainment district will be good for John Sherman. It won’t be good for anyone else.

The post John Sherman’s Proposed Entertainment District Is Bad for Everyone Else appeared first on Show-Me Institute.

That said, I should make and reiterate a few points about the Royals’ stadium issue, now that it’s back in the news.

• The stadium renderings are cool. It’s easy to poo-poo big-dollar construction proposals as being sales jobs of dubious eventual reality, but that doesn’t make the prospect of something new any less interesting. The eventual financing plan for the stadium will likely be bad policy, but it’s understandable why people might get excited at what a future ballpark might look like. That’s obviously why they had the press conference this week: to stoke support and excitement.
• But cool renderings don’t change the fact that taxpayers shouldn’t pay for professional sports stadia. The renderings for these stadia could have put a helicopter port on the roof, a rocket ship in the parking lot, and a theme park in center field, but a cool drawing doesn’t make giving tax dollars to rich baseball tycoons an appropriate “investment” by the public. Developments like this generally do not expand the pie of disposable income in a region; instead, they tend to redirect spending that was previously being spent by consumers at other restaurants and entertainment options in the region. Ask bar owners in Westport what they think the immediate impact of the Power & Light District was on their traffic and you’ll get a sense of the potential risks of subsidizing new competition to existing businesses this time around.
• The “$2.8 billion” construction impact figure presented by the Royals is not a game changer. As I told KMBC 9, I believe that the Royals believe their numbers and that stadium construction would create “$2.8 billion” in economic activity in and around the ballpark. But what’s that really mean, other than to repeat the obvious? When the team is promising $1 billion in private financing to go along with $1 billion in public support, yeah, those are two giant wheelbarrows of cash being dumped into one spot that get you pretty close to the headline number. But that doesn’t change the fact that half of the spending would be coming from the public to create a district that would compete with other entertainment districts, including Westport and the Power & Light District.
• And speaking of the taxpayer-subsidized Power & Light District, it hasn’t and won’t ever pay for itself. One of the biggest public spending projects in the last couple of decades was the Power & Light District in Kansas City’s downtown. From the beginning, the city was on the hook to pay off the bonds for the property if tax revenue from the district wasn’t high enough. The result? Over the last 16 years, Kansas City taxpayers paid the nearly $170 million gap between what the district costs and what the district generates in tax revenue to pay the bonds. It’s easy to make promises of success when the cost of failure is borne by someone else, and there’s no guarantee taxpayers—whether in Jackson County or Clay County—won’t get soaked this go-around, too.

There is a bit of deja vu here, of course; about this time in 2022, I was talking about a potential move for the Chiefs, whose lease at the Truman Sports Complex ends when the Royals does. But the takeaway now with the Royals is the same as it was with the Chiefs—sports teams should pay for their playthings themselves. The Royals may be the kings of Kauffman, but when it comes to sovereign action in the real world, public officials should reject spending tax dollars on anything but legitimate responsibilities of government. Subsidizing sports teams isn’t one of those responsibilities.

The post Hey! Hey! Hey! Hey! Pay for Your Own Stadium appeared first on Show-Me Institute.

I had the opportunity to sit down with Jackson Kurtz at KMBC Channel 9 in Kansas City after the Royals finished their press conference and give him my views on the situation. I’ll have more to say on the Royals tomorrow, but in the meantime, here’s the story we were a part of that ran earlier this week.

The post Show-Me Talks Royals Stadium Move on KMBC appeared first on Show-Me Institute.

Patrick Ishmael joined The Heidi Glaus Show with Josh Gilbert on The BIG 550 KTRS to discuss the Kansas City Chiefs looking to perhaps move out of the state of Missouri and into Kansas, how would this affect the state of Missouri financially, and much more.

The post LISTEN: Are The Chiefs on the Move? appeared first on Show-Me Institute.

I’ve previously written about the Mercatus Center’s State RegData project, which calculates how many times each state tells its citizens what they can and cannot do. Using a similar program, researchers examined the impact that federal regulations have on individual states using the federal regulation and state enterprise (FRASE) index. Though federal regulations apply to all states, each state’s economy is made of different industries, so regulations targeted at specific industries will affect states differently.

The authors find that “[the] impact of federal regulations from 1997 to 2015 on the Missouri economy is associated with the following regressive effects:

• 93,411 people living in poverty
• 2.7 percent higher income inequality
• 180 fewer businesses annually
• 2,406 lost jobs annually
• 7.35 percent higher prices”

I’ll admit that it’s difficult to quantify these things and find direct links between regulations and these effects; there’s no specific regulation that led to one of these specific consequences. However, this novel program counts phrases that usually translate to regulatory requirements (like “shall” and “must”) to track changes over time. The authors then use this data along with data for other economic indicators to find the regressive effects. Given what we know about regulations generally, these numbers make sense and are pretty staggering.

From 1997 to 2015, the effective federal regulatory burden on Missouri increased by 54 percent. Researchers have found that an increase in the effective federal regulatory burden on a state is associated with an increase in the poverty rate in that state. This helps to explain why federal regulations have led to more people living in poverty and higher income inequality. Regulations reduce entrepreneurship because they increase the red tape one must cut through to be successful, which impacts the number of businesses in a state. Regulations also increase the compliance costs for businesses, which they then transfer to consumers by increasing prices.

These regulations are not just affecting the industries or groups to which they are targeted. They can affect Missouri workers, small businesses, and consumers. As we continue through this legislative session in Missouri, we should remember the unintended consequences of legislation and regulations.

The post Do Federal Regulations Impact Missourians? appeared first on Show-Me Institute.

According to the most recent data from 2011, roughly $711 billion worth of freight crosses Missouri each year, and this is projected to increase to $1.2 trillion by 2030. More than 83,500 Missourians work transportation and warehousing jobs, and more than half of Missouri’s economy is affected through freight movement or systems.

However, according to a new study by the Missouri Chamber of Commerce, this vital part of Missouri’s economy is in danger of falling into disrepair. Missouri’s transportation infrastructure, specifically roads and bridges, is aging rapidly. Traditional methods of funding are inadequate to maintain current systems, let alone provide enhancements.

Missouri’s fuel tax of 17.4 cents per gallon has not been raised since 1996. Due to inflation, 17 cents then are worth 8 cents now. Additionally, vehicle registration fees were last increased in 1980, and a dollar in 1980 is worth about 30 cents today. Together, these two revenue sources make up nearly 40 percent of the Missouri Department of Transportation’s total road budget (and 65 percent of in-state revenue, once federal reimbursement is considered). As a result, $745 million in high-priority road needs go unfunded each year.

According to the Chamber of Commerce report, this funding crisis “is the biggest roadblock preventing the state from reaching our logistics potential.”

To start closing the gap in Missouri’s road funding, the Chamber of Commerce report recommends exploring tolling and also indexing the state fuel tax and registration fees to inflation. These measures would help keep funding sources up to date in terms of purchasing power and start to close the funding gap as well as keep a “user pays” principle.

While these methods are not always the best ways to match road damage to payment for upkeep, they are the type voters were most inclined to consider. Public opinion surveys of Missouri voters conducted for the report revealed that 57 percent support highway express lanes, akin to tolling individual lanes, although tolling proper received lower (40 percent) support. Fifty-one percent of voters support increasing the fuel tax, while 47 percent support raising registration fees. Mileage-based user fees can be effective, but only 24 percent supported the idea. Despite the different levels of support for different funding methods, 85 percent of Missouri voters agreed that Missouri needs more funding for transportation infrastructure.

Missouri’s roads are an economic asset that support jobs across the state. Making sure we have the money to keep them in good shape—while ensuring those who use them pay for them—is something policymakers need to address.

The post New Report Highlights Dangers of Kicking Missouri’s Infrastructure Funding Can Down the Road appeared first on Show-Me Institute.

But don’t take my word for it. Look at the research. An economic impact study was conducted by the Center for Economic Information at the Department of Economics at the University of Missouri-Kansas City that indicates between $15 and $17 million will be generated from the Zero Fare initiative. For those living paycheck to paycheck, as most Americans are, the cost of a monthly bus pass or cumulative single fares can make the difference in deciding which bills to pay. Tax revenue alone is expected to increase about $700,000 from the increased spending, and 100 jobs would be created.

UMKC’s Center for Economic Information (CEI) has no such study on its website. And the public information officer at KCATA responded that the CEI had not yet presented the final version of its paper. So I asked for a copy of whatever the KCATA CEO had used to make his claim. I was sent a four-page “draft mini report” dated December 5, 2019. (A PDF copy of this mini-report can be found at the bottom of this page.) The report does not list an author. But it didn’t require a degree in economics to see serious flaws in the analysis.

First, the study does not contemplate the net effect of a fare-free bus system—it simply adds up the costs saved by passengers and ignores any additional cost occurring elsewhere. It does not consider any additional tax, reduction on city spending in other programs or additional costs to the KCATA due to increased demand and wear and tear. Like a child arguing in favor of getting a family dog, the report counts all the benefits and none of the cost. For this reason alone this mini-report ought to be dismissed immediately.

I shared the draft report with some university economists for their comments. Each of them pointed out the failure to account for additional spending to cover the lost fare revenue.

Dr. Howard Wall at Lindenwood University in St. Louis pointed out that the authors misapplied the model they used to calculate the benefit. Understood correctly, the model, called IMPLAN, calculates the impact of additional money injected into an economy from outside—such as the local impact of a large federal grant. But this is not the case with fare-free buses in Kansas City. The policy would only move money already within the local economy by shifting the burden of bus fare. The UMKC mini-report argues, in effect, that one can fill a bathtub by moving water from one side of the tub to the other.

Dr. Byron Schlomach at Oklahoma State University was dismayed by the speciousness of the claims of growth in regional gross domestic product (GDP).  The only way regional GDP could rise by the amount claimed in the analysis is if free buses attracted huge numbers of people (or made workers more productive) and added money or physical capital such as buildings and machines. As you can guess, there is no evidence for this anywhere. It’s hard to imagine any scenario in which eliminating bus fare in Kansas City attracts significant residents, jobs, or capital.

Dr. Schlomach also offered another compelling point. He wrote by email, “Pricing plays an important role even in 90% subsidized, publicly-owned enterprises like bus transit. It can provide information for where and when the service is most highly valued and serve as an indicator for where resources should be allocated.” How would KCATA collect information on the popularity of routes if not through the farebox? Perhaps it could install people-counting sensors on every bus entrance, but then that too is an additional expense not considered in this analysis.

But the giveaway from UMKC is on the last page. The draft mini-report spends one-fifth of its total content discussing the ideas of Henri Lefebvre, a 20th-century French Marxist philosopher and sociologist. Why this is included in a memo claiming to be an “economic impact” analysis is a mystery. But it indicates that this was not an attempt to understand the impact of a significant change in public policy—it does none of that.

Rather, it seems that advocates of fare-free buses, aware that the research and experiences of others who have considered fare-free buses, sought out someone willing to make dubious claims of a positive economic impact. That UMKC lent its name to this is a shame.

The post About That “Economic Impact Study” Conducted on Free Bus Service in Kansas City . . . appeared first on Show-Me Institute.

Mind you, a new baseball stadium funded by taxpayers might be great for the owners of the Royals. But what evidence is there for any benefit to taxpayers?

The St. Louis Federal Reserve pointed out that stadiums fail to drive economic development in a 2017 report, concluding:

Building sports stadiums has an impact on local economies. For that reason, many people support the use of government subsidies to help pay for stadiums. However, economists generally oppose such subsidies. They often stress that estimations of the economic impact of sports stadiums are exaggerated because they fail to recognize opportunity costs. Consumers who spend money on sporting events would likely spend the money on other forms of entertainment, which has a similar economic impact. Rather than subsidizing sports stadiums, governments could finance other projects such as infrastructure or education that have the potential to increase productivity and promote economic growth.

A 2019 piece in The Berkeley Economic Review, a publication of the University of California–Berkeley economic program, also failed to find any economic benefit from sports stadiums:

Over the last thirty years, building sports stadiums has served as a profitable undertaking for large sports teams, at the expense of the general public. While there are some short-term benefits, the inescapable truth is that the economic impact of these projects on their communities is minimal, while they can be an obstacle to real development in local neighborhoods.

The owners of the Royals are welcome to build a stadium wherever they like. But if they want to take tax dollars away from schools, public safety, and infrastructure to help build the stadium, they should share any evidence they have that such a plan presents a good return on investment for taxpayers—not just themselves.

The post Downtown Baseball? Show Us the Research appeared first on Show-Me Institute.

These struck me as very large increases in such a short period of time. The last census report on biking to work was published in May 2019 and only includes data up to 2017. It indicated that only 0.6 percent of U.S. workers commute to work by bike. In Kansas City, the 2017 census data indicated that the number was 0.3 percent in the city and only 0.2 percent in the broader metro area. Where is the data that bike commuting has jumped 130 percent since 2016?

After Rogers stated those percentages, Shanin asked him what the numbers of commuters were [starts 3:39]. Rogers declined to answer, suggesting instead that viewers could do the math on their own. But they can’t from what Rogers provided; a percentage increase does not indicate the actual numbers. In fact, the high percentage increases may be a function of low actual bike commuting numbers. If two people in Kansas City biked to work in 2016, and three more joined them in 2018, that would represent a 150 percent increase—but it’s still hardly impressive.

Rogers has yet to respond to several requests for the data underlying his claim.

Incidentally, Rogers still has a blog post on BikeWalkKC that makes demonstrably false claims. In an April 1 (!) post titled, New Bike Plan Will Save Lives and Boost the Local Economy, he writes, “Economic Impact Analysis shows new bike master plan will save 36 lives every year, add $500 million to the regional economy, and create 12,000 jobs.” My colleague Kelvey Vander Hart addressed the claim about saving lives earlier this year.

But the jobs claim is just flatly wrong. The summary of findings upon which the Bike KC Master Plan claims are based states on page 6 that “this increase in economic activity leads to 12,600 additional jobs (measured in job years) over the period.” The period is 30 years, 2020 through 2050. Dividing 12,600 “job years” by 30 years gets 420 actual jobs. (Frankly even that seems high, but it’s not 12,600!)

Contorting data to justify dubious claims about job creation doesn’t help anyone. It only gives Kansas Citians even more reason to be skeptical as advocates ask taxpayers to spend hundreds of millions of dollars for something in which some neighborhoods see little value.

The post Bike Walk KC’s Fuzzy Math and Incorrect Claims appeared first on Show-Me Institute.

There are innumerable instances where a city’s expenditures far exceed the tax revenues brought in by a publicly funded stadium (the Edwards Jones Dome in St Louis and Yankee Stadium in New York to name a few). It makes no sense (or cents) to promote the financing of a stadium for tax revenues when spending exceeds income.

Not only does public funding of a stadium severely hamstring city government, but a quick analysis reveals that the gains promised to the city’s economy rarely materialize. According to a 2008 study conducted by professors at Holy Cross, professional sports facilities, and even teams themselves “have little or no significant positive impacts, or even negative impacts on the local economy.” Why? Because the vast majority of fans who attend these stadium events are area residents who would likely be spending their money in the city regardless of the existence or location of the stadium. The same idea holds true for job creation. The thousands of jobs required to build a stadium are only temporary and often just taken from other projects occurring around the city.

This is not to say that professional sports franchises and their stadiums offer no benefit to cities. Sports teams promote civic pride and can unify city residents. If the Royals want to build a downtown stadium with their own resources, that’s fine. But the idea that a publicly-financed stadium will pay for itself by catalyzing economic growth is a tired, disproven argument.

In fact, Kansas City should have already learned this lesson. Almost two years ago, Patrick Tuohey detailed concerns about Wyandotte County funding a similar project for the semi-professional Kansas City T-Bones. Taxpayer subsidies could not overcome a lack of demand. The T-Bones’ failure continued and the owners are looking to sell. When it comes to subsidizing stadiums, policymakers should heed Breaking Bad’s Gustavo Fring and never make the same mistake twice.

The post New Downtown Royals Stadium Would Cost City a King’s Ransom appeared first on Show-Me Institute.