Thomas Friestad at the Kansas City Business Journal wrote recently that an engineering firm (Gannett Fleming TranSystems, formerly GFT) is moving its offices to the H&R Block building in downtown Kansas City.

Longtime Show-Me Institute readers will recognize H&R Block as a poster child for the false claims that economic development subsidies drive job creation. But this latest news only makes the point more relevant.

The TIF project was adopted in July 2006 and will last for 23 years, through 2029. For the duration of that time, all the additional property taxes and half the increase in sales and income (earnings) tax generated at the site are returned to the developer to offset the costs of developing the site. According to the latest report from the Missouri Auditor’s office, as of April 2023, this subsidy has redirected $23.5 million in property taxes and another $73.4 million in sales and earnings taxes away from the basic services they would have otherwise supported (schools, roads, libraries, etc.), instead sending the money back to the developer.

GFT moving into the H&R Block building means that a portion of the taxes it pays, most notably the 1% earnings taxes levied on each employee, will now also be redirected away from basic services to the developer to pay down the cost of the H&R Block building.

A lot of time is spent talking about how Kansas City loses revenue when businesses leave the city. We need to remember that due to our generous subsidy culture, we often lose revenue even when companies remain.

Side note: One can immediately imagine a scenario wherein developer landlords in TIF districts lower their rents because they know they will capture the additional tax revenue, thus undercutting properties that actually pay taxes. These deals are no way to run a city.

The post The TIF that Keeps Taking appeared first on Show-Me Institute.

This is just the latest example over the years of City Hall favoring wealthy, connected corporations with taxpayer subsidies and special treatment.

Port KC CEO Jon Stephens framed the incentives as a “small, supportive element” aimed at ensuring Kansas City retains high-quality jobs. The project promises to add 150 jobs with an average salary of $126,000 while retaining 600 current employees. Yet no precise value for the tax exemptions was disclosed. Its not clear if PortKC attached performance requirements to the deal, but Friestad indicates there was no such discussion of it among the commissioners when the subsidies were approved.

Readers may recall Stephens backed subsidies for an independent baseball team in Kansas back when the team couldn’t pay its utilities. If nothing else, he is consistent in his apparent desire to redirect taxpayer money to private corporate interests

Such a deal is nothing new for JE Dunn. The company received a lucrative incentive package when building its headquarters in 2009. That project fell under the East Village tax-increment financing plan, redirecting $19 million in public funds for a parking garage, demolitions, and blight removal.

This latest deal follows a familiar script in which major corporations, including Cerner, H&R Block, Burns & McDonnell, and Commerce Bank have secured public funding for their private office projects. Research has indicated for years that such incentives do not significantly impact corporate decisions on location.

Port KC has repeatedly played a central role in funneling public dollars into private hands. Its recent involvement with JE Dunn reflects a long history of negotiating deals that often leave taxpayers holding the bag, such as the millions each year taxpayers must fork over to cover bond payments on the Power & Light District owned and operated by Cordish Company. (Stephens is a former manager of that project.)

As Kansas City grapples with persistent infrastructure needs, ballooning public debt, and limited funding for essential services, its continued reliance on subsidies for corporate renovations raises questions about priorities. For now, Kansas Citians can only watch as the city’s public funds are diverted to underwrite private gains.

The post KC’s Corporate Welfare: JE Dunn’s HQ Renovation Gets Public Support appeared first on Show-Me Institute.

But even if these inflated jobs claims were accurate, would they be worth celebrating?

The state of Missouri publishes an annual report cataloging every existing TIF project. While the job projection numbers are squishy (as mentioned above), we can still compare the promised benefits with reported reality.

The spike in the graph at the top of this post could be attributed to a larger number of projects granted TIF benefits in 2015. The Missouri Department of Revenue has not responded for comment on how the numbers are calculated. However, even without that blip, the highest number of claimed jobs in any of the six years has not reached the lowest number of promised jobs.

Even though some projects meet or exceed projections, most do not. In all, the job shortfall from these six years is over half a million jobs, counting promised new and retained jobs.

Further, taxpayers are on the hook for almost a quarter of the total costs for these projects:

Source: Missouri Department of Revenue Tax Increment Financing in Missouri reports, 2013-2018. Table created by author.

If these projects routinely produce fewer jobs than expected at a large expense to the taxpayer, what is the public benefit? We have reported several cases of companies using TIF for private benefit, and this appears to be a consistent trend. In many cases, for up to 23 years, developers in a TIF district receive a refund of some portion of the local sales taxes, utility taxes, and earnings taxes (if applicable)  generated by the project and only pay property taxes on the value of their property before the improvement was made.

While the public return may be questionable, the private benefit seems clear. TIF-related property values came a little shy of tripling in value between 2013 and 2018. What business would not want its property to increase in value, especially when it has received a 23-year tax abatement?

People with good intentions can differ on economic development policy, but it should be plain to everyone that Missouri’s current TIF policy isn’t working.

The post Theoretical Jobs appeared first on Show-Me Institute.

Businessman John Wannamaker famously quipped, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” The same may be true for Kansas City’s economic development incentives, but when the City Council sought to study their effectiveness, the folks who benefit from the current system had their own ideas.

Kansas City leaders have been enriching politically connected private developers through a seeming endless stream of taxpayer incentives. Politicians and developers alike claim the subsidies are necessary to revitalize downtown Kansas City. This is debatable. Though taxpayers have subsidized new restaurants and bars, data from the city’s Regulated Industries Division indicate that the number of liquor licenses and health cards has been flat citywide. Subsidies didn’t create businesses or jobs, they merely moved them. And thanks to generous incentive deals, they moved to areas where they don’t contribute to the tax base.

Likewise, the city has given generous subsidies to companies to build their headquarters here; this includes H&R Block, which, rather than actually adding jobs just moved them from elsewhere in the region. Kansas Citians recently learned the subsidies to hotels are so big and numerous that the market is overbuilt—causing the city’s convention and visitor’s bureau to fret that hotel room rates may crash! Meanwhile, all these subsidies direct money away from a school district in which 90 percent of children qualified to receive free or reduced-price meals.

Worse, none of these subsidies appear to be helping Kansas City’s economy. A recent report from the Brookings Institution ranked Kansas City 78th out of the top 100 metropolitan areas in economic growth—a score that is likely padded by the growth of Johnson County, Kansas.

In the face of public unrest over Kansas City’s subsidy culture, the city council called for a study of incentives and their impact. As reported in the Star, the city awarded the study contract to a trade group sponsored by developers and their lawyers. The resulting study, if one wants to use that term, contained so many methodological lapses that a reader could be forgiven for thinking they were intentional. When the report was presented to the council, it was clear that it did not deliver on its basic purpose: helping policymakers adopt better policy.

From my own investigation into the study process—using the open records law to examine the proposal and bids received, draft reports, and emails—it is clear that the incentive report relied greatly on individuals and organizations with interests in maintaining the current system. One email from a development financier made explicit that the study needed to politically protect the subsidies against the interference of “citizen petitioners.” That note was dutifully passed on from the head of the organization that vets subsidy applications, to the city employee overseeing the study, to the vendor writing it. And when the Greater Kansas City Chamber of Commerce drafted a statement opposing an effort by those same “citizen petitioners” to cap tax-increment financing incentives, they cited the study’s findings. The report seems to have accomplished its mission.

The way this study was undertaken should outrage everyone in Kansas City, especially the councilmembers who called for it to be written. The council should retract the study, investigate how it was conducted, and act swiftly to hold individuals and organizations accountable. A new, independent study is needed.

Moreover, the system by which Kansas City awards such subsidies is in need of overhaul. Taxpayer funds should be protected against self-interested developers, attorneys, and consultants, as well as the organizations they fund. Taxpayers have sacrificed too much—and seen too little return—for mere half measures.

The post KC’s economic development study parroted exactly what the city wanted appeared first on Show-Me Institute.

The bill in question was SB 859, which was heard by the Senate Economic Development Committee on February 20. A copy of my own testimony is here. The bill is fairly straightforward; it would limit the circumstances under which TIF can be used and would require a third-party analysis of the need for a taxpayer subsidy.

Opponents of the bill included members of the Economic Development Corporation of Kansas City, whose budget is dependent upon fees generated by the TIF projects they oversee. In fact, EDC staff once received bonuses because the group received so much money from TIF fees. The two officials testifying for the EDC offered anecdotal evidence of TIF success, highlighting two or three projects. But there are at least as many projects in which TIF has been abused, including the world headquarters buildings of Burns & McDonnell and H&R Block, along with other failures such as the Power & Light District and the never-actually-built Citadel. In fact, I am confident that in a battle of anecdotes opponents of TIF would win handily.

Other opponents of reform at the hearing included representatives from a few businesses that have benefitted from these taxpayer subsidies. They urged legislators to “be careful” lest reform hinder Missouri’s ability to fight a subsidy border war with Kansas (a border war, incidentally, that is a “financial folly for taxpayers”). If only those same businesses urged local officials to be careful with the TIF subsidies they give out so easily.

But good public policy ought not be based on mere anecdotes. Even if you don’t care what the research indicates, good policymaking is dependent on good information. And the research on TIF is clear: It doesn’t work at spurring investment or creating jobs. If you don’t want to depend on Show-Me Institute research, you can look at a UNC-Chapel Hill study on Chicago, or to the Upjohn Institute for Employment Research for nationwide data analysis. You can even turn to a study conducted for the St. Louis Redevelopment Corporation on the TIF subsidies that the corporation itself recommends and administers! This is the testimony that should matter.

Legislators should be wary of testimony from people with a vested financial interest in a bill’s outcome, or of testimony that amounts to little more than cherry-picked anecdotes. They should seek out broad research from disinterested parties—which, in the case of TIF, tells us that these subsidies are a waste of taxpayer money.

The post What I Saw at the TIF Hearing appeared first on Show-Me Institute.

As I’ve written before, most of these taxpayer subsidies result only in economic diversion. They don’t create anything new; at best they just move development to different areas. The H&R Block headquarters for which taxpayers paid didn’t create the new jobs that were promised; it merely consolidated jobs from across the area to one place. Likewise, as the chart below shows, the Power & Light District didn’t create new jobs or businesses, but instead simply relocated them from elsewhere. 

The number of bars and restaurants (and their accompanying jobs) remained flat in Kansas City for years after the Power & Light District opened. If the Power & Light District had been the success that city leaders claimed, you’d have seen an uptick in employee liquor cards and licenses. But citywide, the numbers were flat at best. This means that any new jobs and businesses downtown merely came at the cost of jobs and businesses elsewhere in the city. Nothing new was created. Only now, as the economy improves, are those numbers going up.

 Focusing on reviving downtown Kansas City might be a worthy goal. As I wrote last year,

Policymakers are free to argue that diverting economic activity from elsewhere in Kansas City to the downtown area is good policy. That would be a welcome policy debate worthy of consideration. But supporting policies that merely move activity around and then pretending something new has been created is not only disingenuous, it is unsustainable.

The rest of Kansas City has needs, including basic infrastructure and greater police presence. Focusing on downtown hasn’t provided any net benefit, and it has cost us dearly.

The post The Power & Light District Still Hasn’t Delivered appeared first on Show-Me Institute.

Anecdotally, it appears that TIF doesn’t really create jobs. As we’ve written about the H&R Block TIF and the Power & Light District, TIF doesn’t really create jobs. At most it just moves them from elsewhere in the area. Byrne wondered,

If the number of jobs created by TIF, as reported by TIF administrators, is a true economic impact, then the number of reported jobs should have a positive impact on county employment as measured by the BLS.

Anyone familiar with research on TIF (and not everyone cares about the research) will not be surprised by the results. Byrne concludes,

This paper’s results indicate that the number of jobs supported by TIF, as reported by local economic development agencies in Missouri, does not have a significant positive effect on county employment as measured by the BLS. The lack of a positive impact of reported jobs on employment suggests that TIF-supported jobs either come at the expense of other areas in the county or would have located in the county regardless of the existence of Missouri’s TIF districts.

TIF diverts a lot of money from municipalities that would otherwise go to support schools and basic services. Research from all over the country tells us that it does not create jobs, does not spur investment, and does not mitigate blight. It’s time for reform or elimination altogether. 

The post TIF Doesn’t Create Jobs appeared first on Show-Me Institute.

The research, if you care about research, says the spending is wasteful. Previous studies in Saint Louis and Kansas City say the same thing. And studies of other cities like Chicago and Indiana, and of the country as a whole, likewise cast doubt on the value of these development subsidies.

As we have written previously, the H&R Block headquarters building downtown, one of the first in the downtown spending spree of the Mayor Barnes administration, has failed to create jobs. At best, the company merely moved jobs that existed from elsewhere in Kansas City to this new location; no new jobs were created.

Consider one of the poster children for streetcar-created economic development, Centric. The company moved two blocks, but it is somehow considered by the city to have created jobs and economic development. It did not create anything; it merely moved locations.

And here is perhaps the most damning evidence: despite all the spending, the economic growth of Kansas City due to downtown subsidies is a myth. We all know that the Power & Light District is the result of taxpayer subsidies—that is undeniable. Where before downtown was decrepit and abandoned, now it appears new and vibrant. But has any new economic development taken place? Has society or the average Kansas City family grown more prosperous because of these subsidies?

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) has remained flat since before subsidies were awarded. So while there may be more economic activity in the downtown area, citywide there has been no growth. Our subsidies haven’t created anything—they’ve just diverted activity from elsewhere in the city to downtown.

This shouldn’t come as a surprise. Imagine a new shopping center is built right near your home. There are a few stores and restaurants you’ve never been to, as well as a few outlets familiar to you. If you shop at this new location, you won’t continue to spend the same amount at the previous locations. The new stores haven’t caused you to spend more, they just cause you to spend differently. Yet the politicians in your neighborhood point to the new buildings as evidence of economic growth.

In the smaller incorporated cities in Johnson County, Kansas, this tactic might actually work at a very local level. A store that was generating sales tax income for Prairie Village could be lured to Shawnee with subsidies. That might be a win for Shawnee, but regionally it’s a wash, if not a total waste of public capital. (Writ large, this is the story with the Kansas-Missouri border war—lots of subsidies spent by both side with no real regional growth.) But in a large metropolitan area like Kansas City, there is no benefit. Citywide, there has been no growth in the number of bars, liquor stores or waiters and bartenders as a result of the Power & Light District. We’ve just diverted the economic activity downtown.

Policymakers are free to argue that diverting economic activity from elsewhere in Kansas City to the downtown area is good policy. That would be a welcome policy debate worthy of consideration. But supporting policies that merely move activity around and then pretending something new has been created is not only disingenuous, it is unsustainable.

The post Kansas City’s Economic Diversion appeared first on Show-Me Institute.

The report indicates that the total value of all corporate welfare in Missouri is a whopping $5.8 billion. That makes the Show-Me state the 10th-most subsidized in the union. Missouri subsidizes business to a greater extent than all of its neighboring states except Kentucky. (We even beat out Illinois!)

Of the top five corporations in Missouri that receive corporate welfare money, three are headquartered in Kansas City: Cerner, H&R Block, and DST Systems. They account for $2.3 billion in subsidies, about 40 percent of Missouri’s total.

Little wonder, then, that Kansas City—a high tax city—must borrow money to provide basic services such as dangerous structure teardown or infrastructure maintenance—we’ve given boatloads of our tax revenue away to wealthy corporations. Perhaps it’s time policymakers change direction; after all, for all the business Missouri residents subsidize, we’re still one of the slowest-growing states in the union. 

The post Kansas City, King of Corporate Welfare appeared first on Show-Me Institute.

Back when City leaders referred to themselves as “geniuses,” City Hall was handing out subsidies to everyone. H&R Block kicked off the feeding frenzy with their downtown office building, followed by the financially disastrous Power & Light District deal that has taxpayers footing the bond payments. In recent years taxpayers have chipped in for wealthy corporate headquarters for Burns & McDonnell and Cerner, and subsidized luxury high-rise apartment buildings. Even The Star itself has received a tax abatement. Once taxpayers and parents raised an objection to a subsidy for architectural firm BNIM to build in a hip part of town, the Council considered some reforms. Mayor Sly James would have none of it and complained that “we may as well put up a sign that says Kansas City is once again closed for business.”

Obviously, James is wrong. As Kansas City contemplated subsidizing a Hyatt hotel downtown, Marriott was building two on their own dime a few blocks away. The owners of Ward Parkway Mall are building a restaurant plaza without any subsidies. And now we learn of this proposed 13-story, 257-unit apartment building just west of Country Club Plaza. This is great news, not just because someone wants to invest in Kansas City, but because they are willing to invest their own money rather than seek taxpayer subsidies.

As Show-Me Institute writers have pointed out for years, not only do subsidies starve cities, counties, schools, and libraries of the revenue they need to provide basic services, subsidies also pervert developers’ incentive structure. And all this for projects that research shows likely would have been built anyway.

Real private investment—without taxpayer subsidies—is a true sign of economic health. City leaders need to put the brakes on handing out subsidies and let more private investment come.

The post Development Can Happen without Subsidies appeared first on Show-Me Institute.

Trump has said some traditionally infrastructure-y words when he talks about this. “We’re talking about a very large-scale infrastructure bill,” the president-elect said in a long-ranging interview with the New York Times published Wednesday. “… [a]nd we’re going to make sure it is spent on infrastructure and roads and highways.” A proposal to privatize infrastructure projects released by Trump’s economic advisors describes the “complex network of airports, bridges, highways, ports, tunnels, and waterways” that underpins private sector growth.

Bliss worries that Trump will be more inclined toward “major new property development,” rather than infrastructure. She even cites Paul Krugman’s column, where such spending is often boosted, in The New York Times where he writes,

And we already know enough about [Trump’s] infrastructure plan to suggest, strongly, that it’s basically fraudulent, that it would enrich a few well-connected people at taxpayers’ expense while doing very little to cure our investment shortfall. Progressives should not associate themselves with this exercise in crony capitalism.

The President Elect’s infrastructure plan may or may not amount to crony capitalism. As my colleague Patrick Ishmael recently wrote, the Carrier deal in Indiana invites the accusation. Yet this is exactly the sort of crony capitalism that progressives seem to love in Kansas City and St. Louis. Recall that we’ve redirected hundreds of millions of tax revenue into property developments for wealthy corporations such as Cordish, Burns & McDonnell, Cerner, and H&R Block.

Meanwhile, important infrastructure spending (read: roads, bridges, sewers, etc.) is squeezed, because the city cannot afford it. We’ve heard that the city wants to borrow $800 million for such spending—but we have as much detail about where that money will go as Trump has given on his plans. Hopefully, those funds won’t go toward  “fraudulent” infrastructure projects instead of those truly necessary for the public good.

Policy debate on infrastructure is welcome, as is skepticism toward government spending. But if you want to be critical of fraudulent public programs that appear only to enrich the well-connected, you don’t need to travel to Washington to find it—or even leave Kansas City.

The post Kansas City and “Fraudulent” Crony Capitalism appeared first on Show-Me Institute.

popularized the early-aughts idea that faded cities could revitalize themselves by attracting the talented, intellectual types who made up what he called the "creative class." Lure some hip coffeeshops, create an "arts district," play up your gay friendliness, and watch the laptopping masses pour in.

Unfortunately for Kansas City, our leaders bit hard on the bait and haven’t yet let go. Witness the millions of dollars poured into failed downtown economic development schemes such as the Power & Light District and the H&R Block building. Note the rhetoric around the streetcar or the Smart Cities proposals. Note the Mayor’s focus on Kansas City’s startup mirage. We’re chasing a creative class dream spun by Florida. Show-Me Institute writers pointed out flaws in his ideas for years, and now, at last, Florida himself admits he was wrong:

I got wrong that the creative class could magically restore our cities, become a new middle class like my father's, and we were going to live happily forever after," he said. "I could not have anticipated among all this urban growth and revival that there was a dark side to the urban creative revolution, a very deep dark side.

For Kansas Citians, the dark side we are being saddled with now is an ever-more hollowed out tax base, a city that struggles to deliver basic services, and an east side made even more unattractive to developers due to the flow of subsidies to other neighborhoods that were already economically sound. Regular readers of this blog know we’ve argued against Florida for years.

Florida has admitted his error. Will those in Kansas City who followed his advice do the same?

The post Kansas City’s Development Guru Admits He Was Wrong appeared first on Show-Me Institute.

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.

This shouldn’t be surprising. Much of the claims and the reporting on downtown development, the streetcar, TIF subsidies, and the like make the same mistake. They’re based on the assumption that a development that occurred after a subsidy occurred because of the subsidy. It’s a common logical fallacy, post hoc ergo propter hoc, (after therefore because of). And Kansas City is rife with it.

Consider the recent construction of a new Burns & McDonnell world headquarters building at Wornall and Bannister in Kansas City. In order to believe that economic development incentives were responsible for this project being undertaken, you have to believe that without taxpayer subsidies, Burns & Mac would never have developed the land, which sat on property adjacent to their existing headquarters and which their partner, VanTrust, already owned. Yet that is what we’re asked to believe.

Similarly, Rose and others point to the new buildings downtown and talk of a Renaissance. But the Power & Light District has not resulted in a net increase of jobs, businesses or tax revenue. H&R Block, whose building kicked off the downtown development binge, seems to be a study in obfuscation and failure. Not only is the streetcar a drain on resources, but according to Jackson County, the aggregate market value in the area around the streetcar is actually lower today than it was in 2012 and growing more slowly than the County as a whole.

The impacts of these investments are very real, resulting in the diversion of hundreds of millions in property tax revenue over the past decade away from taxing jurisdictions such as schools, libraries, and mental health funds, all of which are denied the money they need to operate. But the promised return on those investments never materializes.

As I told Rose when he said he didn’t care, if you don’t care about the research, we can’t have a discussion. Policies must demonstrate some sort of return: increased tax revenue, more jobs, an increase in population. Otherwise we’re just relying on the word of people who are lining up to take our money—and guess what they’re telling us? They want more, more, more.

The post “I Don’t Care What the Research Tells You” appeared first on Show-Me Institute.

According to Missouri’s Department of Revenue, in 2015 H&R Block reported 2,211”new jobs” created at their Kansas City World Headquarters as a result of their TIF deal. A reasonable person might conclude that this means that there are 2,211 new jobs in addition to those that already existed, and those new jobs are the result of the taxpayer-subsidized construction. That does not appear to be the case. An April story in The Kansas City Star reports,

A year ago at this time, the company reported 90 staff cuts, mostly at its Kansas City headquarters, a result of business being down early in that year’s tax season. It had 2,200 full-time employees at the end of tax season a year ago. This round of layoffs leaves it with 1,735 full-time employees.

Block doesn’t have 2,211 “new jobs,” it has (or rather, had) 2,200 total jobs. It also claims to have retained none of the 1,493 jobs it projected it would retain. How these jobs are counted is a mystery. According to a Missouri Department of Economic Development official, the job numbers are, “self defined and self reported.” The Department of Revenue does not audit the claims. We don’t know how Block came up with their numbers. 

We looked around for other ways to measure job growth. HOK, the group that designed the Block building, report on their website that,

H&R Block’s headquarters consolidates 1,600 employees from six locations into a 17-story high-rise in downtown Kansas City.

From about 2006 through 2016 Block went from 1,600 employees to 1,735; a net gain of 135 “new jobs.” It’s likely that modest job growth would have happened without the shiny new building. Remember, taxpayers are forgoing 23 years of tax revenue, “covering 95 percent of the H&R Block headquarters project’s $308 million cost.”

That’s a lot of money to spend for a net gain of 135 jobs. Defenders of the Block deal may respond that the country has undergone a Great Recession and online tax filings have likely impacted Block’s business performance. This only underscores the reason why municipalities—led by elected officials who may have no background in investing—should not be betting taxpayer dollars in speculative developments.

Ten years after making a huge commitment of public funds, Kansas City is left with an underutilized building housing a business with anemic job growth. There are rumors that H&R Block may soon be sold to another company that could move it out of the city altogether, as happened with other subsidized companies Applebees and Freightquote. That is not an economic development track record of which anyone should be proud.

The post Counting Economic Development Jobs appeared first on Show-Me Institute.

According to the IRS’s own numbers, most taxpayers have to spend an average of 16 hours to collect their records, do their tax planning, and fill out their actual forms. For businesses, that number jumps up to an average of 23 hours. Taken together, taxpayers spend a total of 6.1 billion hours doing their taxes. Talk about a lot of time that could be spent doing more productive things.

However, that is not the whole story. If you think April 15 is the end of your tax nightmare, think again. According to the Tax Foundation, Americans will have to work until April 18 to earn enough money to pay their tax bills. So even after they file their tax returns, the American people will have to work an extra three days to pay their share to the government.

The government needs money to function, but 3 1/2 months of income is a bit much (to put it lightly) and there is no reason why doing one’s taxes should take more than 16 minutes, never mind 16 hours. To save us time, money, and the prospect of even more inane commercials, policymakers should give us a break and fix the tax code.

The post Happy Tax Day!!! appeared first on Show-Me Institute.

I have always done my own taxes, even when I had a small business in the ’90s, but that will end in 2010 because my wife and I decided to go with an accountant for the first time. Our taxes are not particularly complicated, but they are not particularly easy, either, and that is as much detail as I’ll bore you with. I always liked fighting through the details as a matter of pride, but now the benefits of that hard work are losing out to the time costs as the returns get more complicated.

More disturbing in the article is this ugly nugget:

The IRS this month announced it will be scrutinizing the tax preparer industry. Shulman said the IRS is looking to set “a minimal level of competence in the preparer community.”

Terrific. Now we get federal licensing rules for one more profession. That will raise the costs of using H & R Block, etc. I’ll admit that this is one field where more people doing their own work (as in their own tax preparation) might bring the great side benefit of leading more people to be upset about the tax code, but I still don’t want that benefit caused by higher costs imposed by the IRS.

The simple fact is that a lot of people can and should be doing their own taxes. If you have one job where taxes are withheld, you can work through it without too many headaches. The head of the IRS should be one of those people.

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