These policies have been implemented successfully in many states, but in this post I’ll address some objections to these policies and see if they hold water.

Objection: We shouldn’t toll commercial trucks because the trucking companies will pass those costs along to the people buying their products.

Part of the price of a product is the cost it takes to transport the product somewhere. If trucks carrying products are causing more damage than they’re paying to repair, then underpaying for the products’ transport is in effect subsidizing it. Any tolling costs passed on to customers would be less overcharging for a product and more reflecting its true price.

Objection: Tolling is unfair to local communities near interstates that depend on highway traffic for their customers.

As my colleague Graham Renz has said before, this is another way of saying that communities near toll roads will not be subsidized. Not paying the true cost of driving means that some businesses benefit from more drivers due to an artificially low cost of driving.

Tolling may mean that traffic on these routes decreases, but adequately charging drivers for the damage they do to the roads can hardly be described as unfair. Moreover, the current situation of Missourians who do not live near interstates subsidizing the travel that benefits communities near interstates hardly seems like a fair proposition.

Ultimately, while these two objections may initially seem like they raise serious problems for tolling proposals, they only tell half the story. The benefits of tolling still outweigh the costs, so tolling should be on the table as an option for funding road maintenance needs.

The post Objections to Tolling Only Tell Half the Story appeared first on Show-Me Institute.

SDs are political subdivisions of the state established to provide very specific services and improvements, such as sewer infrastructure, fire protection, and neighborhood security. Their narrow, singular purpose is why they are known as “special.” In Missouri, SDs can be established to impose and collect tax revenue for a wide variety of purposes. In addition to CIDs there are drainage and levee districts, sewer districts, port improvement districts, nursing home districts, and fire protection districts, to name just a few.

As the auditor notes in his announcement, there are currently 74 CIDs in Kansas City and their use “is growing, and our past audits noted CIDs did not consistently submit required reports to the city, and also identified accountability and transparency issues.”

One problem with CIDs is that they may be created and impose taxes without a vote of the people. CIDs may be formed by nonresidential voters such as commercial landowners and developers. These districts need only a single constituent to be created. As a result, a single landowner can (1) propose a district, (2) cast the single vote to establish the district and approve its revenue sources and projects, and (3) appoint or elect the district’s board of directors, which oversees district business. In short, CID laws allow a single landowner or developer to completely control all aspects of the district.

Given the huge opportunity for abuse, it is important that Kansas City ensure that this important power to tax is respected. In our 2019 paper on these districts, Graham Renz and I suggested a number of reforms for the state legislature—one recommendation requiring the approval of the voters of the entire municipality was passed out of this legislative session. Municipalities may not be able to enact many restrictions on these districts, but they are required to approve their creation in the first place. This effort in Kansas City to shed light on city oversight is welcome and necessary, even if not sufficient by itself.

The post Kansas City Auditor to Investigate Oversight of Community Improvement Districts appeared first on Show-Me Institute.

Listen to the segment here.

The post Graham Renz on the Marc Cox Morning Show appeared first on Show-Me Institute.

CIDs are designed to meet local needs by giving businesses and individuals and opportunity to band together to collect an additional sales or property tax to fund specific projects. However, the statutory requirements are lax and oversight is wanting.

According to the August 22 news release,

“Taxpayers are on the hook for billions in project costs they did not approve and have little to no say in,” Auditor Galloway said. “Meanwhile, there is no law to ensure developers are accountable for the public dollars they receive and there are few requirements of the municipalities that approve these districts. State laws must be reformed to ensure taxpayers get the protection they deserve.”

The complete Auditor’s report is available here. We welcome the Auditor’s contribution and look forward to joining this important policy discussion with our own policy recommendations soon.

The post State Auditor Calls for CID Reform appeared first on Show-Me Institute.

The post Testimony: Sales Tax Extension to Subsidize Chesterfield Ice Complex appeared first on Show-Me Institute.

The post On the Extension of the Chesterfield Valley TDD Sales Tax for the Purpose of Subsidizing an Ice Complex appeared first on Show-Me Institute.

Click on the link below to read the full testimony.

The post Testimony: Public Approval of Tax-Increment Financing Plans appeared first on Show-Me Institute.

The post Testimony–Senate Bill 185: State Regulations for Transportation Network Companies appeared first on Show-Me Institute.

The post Testimony: The Introduction of State Regulations Concerning Transportation Network Companies appeared first on Show-Me Institute.

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Such an analysis, if done correctly, will take some time to complete, however, we will be working to complete it as soon as possible. The report will provide the sort of data and facts that can lead to reasonable and responsible improvements to our economic development policy.

It’s been three months since that piece, and no study is forthcoming. A subsequent Star story, however, suggests that the City’s effort may be more interested in highlighting incentives than in assessing them.

Mayor Sly James said at a recent meeting of KCStat — a data-crunching initiative of the city’s meant to improve its effectiveness — that City Hall doesn’t do a good enough job of promoting how economic development benefits the city.

Will the proposed $350,000 study aim to assess policy or “promote” successes? Existing research into the city's economic development policies does not paint a pretty picture. The Show-Me Institute conducted its own examination of TIF abuse in Kansas City broadly as well as individual analyses of questionable tax abatement (TA) projects such as for H&R Block and Burns & McDonnell. We’ve also highlighted independent university research that shows that subsidies like TIF have no impact. Still, some pundits in Kansas City simply “don’t care.”

While we wait for the Kansas City report, let’s consider a similar report recently completed in St. Louis. My colleagues Graham Renz and Michael Highsmith are releasing a series of pieces (the first of which is available here) examining that report. In short, the study found that:

• Development incentives have little to no positive economic development benefits. The $709 million the city has spent on TIF and TA has not created jobs, revitalized neighborhoods, or increased long-term tax revenues. 
• Rather than TIF and TA being used in economically depressed areas, they are used mostly in neighborhoods with strong housing markets. In fact, nearly two thirds are used in just three neighborhoods in the central corridor.
• The level and quality of reporting on incentives is so poor that officials and the public “cannot readily determine what may or may not be deemed a project worthy of consideration for a City tax incentive.”

The sheer amount of money being diverted away from important city services makes this an important area for the city to examine. While Kansas City works to analyze the data, the honest examination from St. Louis should serve as a model—and a warning.

The post What an Honest Economic Development Study in Kansas City Might Conclude appeared first on Show-Me Institute.