The city of Herculaneum in Jefferson County is showing how use taxes can be properly added into the municipal revenue mix. A use tax is simply a sales tax on goods you purchase online (or through catalogs) and have delivered to your home. Many cities and counties have added them in recent years as online shopping has grown. Voters often approve them, but sometimes they say “no, thank you.”

Supporters of use taxes say they level the playing field between online purchases and actual stores from a cost perspective, along with raising revenue for local services. That is true, and I have generally been supportive of use tax expansion in recent years. Broadening the sales tax base is a good thing.

However, I have also called for cities and counties to offset the increased revenues from use taxes with cuts to other taxes (at least partly). That approach gives you the benefits of expanding the tax base, equalizing competition between types of retailers, and some increased tax revenues without giving local governments a windfall in tax money. Unfortunately, most local governments have shared my enthusiasm for the first three parts, but not the last one.

But Herculaneum is doing it the right way. Herculaneum has included in the ballot language for its use tax vote on April 7 that, if the use tax is passed, the city will reduce property taxes by ten percent to partly offset the new revenue collections. Regular readers will know that I support making property taxes the foundation of local government revenue, but that doesn’t mean I want high property taxes. If Herculaneum can expand its sales tax base while lowering its property tax rate for everyone, that is a reasonable trade-off for taxpayers and residents.

The post Herculaneum Is Doing Use Taxes Right appeared first on Show-Me Institute.

One thing I noticed about all the cities that I listed is that they contain lots of “U’s” and “L’s,” so I guess we know who the patron saint of this blog post is.

A use tax is simply a sales tax imposed on goods you purchase online or via catalogue and have delivered to your home. Municipal use taxes in Missouri actually predate the internet, but not surprisingly, most cities didn’t pass them until online shopping took off over the past fifteen years or so.

I am generally unsympathetic to the idea that these cities need a tax increase. If Creve Coeur needs more tax revenue, why did it just pass an enormous tax abatement in a very prosperous area that absolutely does not need tax subsidies to encourage development? If Festus needs more tax revenue, why did it put the fix in to sell its water system to another public entity without going out for bids as good government principles require? I don’t have any specific criticisms of Ladue, but I highly doubt the city is in financial trouble. This famous doggerel about Boston Brahmins could easily have been written about Ladue:

And this is good old Boston,
The home of the bean and the cod,
Where the Lowells speak only to Cabots,
And the Cabots speak only to God.

My view is that use taxes are a good way to expand the tax base, level the playing field for businesses, and raise local revenues. However, this last point is key. They should not be used simply as a way for cities to get more revenue. Cutting other taxes after the use tax is imposed (should voters pass it)—especially if you have a particularly harmful tax — is a great way to achieve the above benefits without a tax windfall for the city. Cities can lower their property tax rates, reduce their utility tax rates, or adjust other sales taxes (altering sales tax rates is much trickier than other types of taxes).

I don’t know if any of these cities have pledged to reduce other taxes if the use tax passes. Without such a pledge, the use tax would likely be a significant revenue gain for the city. If you think your city, town, or village actually needs that revenue, then so be it. But I’d be hard-pressed to buy that for the cities listed above, especially Ladue, Creve Coeur, and Festus.

The post Use Taxes on the Ballot in Missouri This November appeared first on Show-Me Institute.

Rush Island is not the first coal plant to be shuttered, and it will not be the last. At the end of 2022, the 827-megawatt Meramec Power Plant was shut down, and according to Ameren, it plans to phase coal out completely by 2045.

Below is a summary of Ameren’s 2023 Integrated Resource Plan:

Note: “Other Zero Carbon” is expected to include a combination of renewables, energy storage, nuclear energy, and new technologies.

The continued shuttering of reliable coal plants presents concerns for energy reliability and affordability.

Is there reason to be concerned with affordability?

North Carolina is another state on the path of shutting down all coal plants and inserting renewables largely in their place. In response to these state plans, the John Locke Foundation and Center of the American Experiment released an in-depth analysis of the state’s proposed paths forward. The analysis finds that North Carolina’s proposed plan would cost more than a more nuclear-focused one. This is largely attributed to the “build and rebuild” treadmill that wind and solar assets need due to their short lifespan (roughly 20 years), whereas nuclear plans have a lifespan of 80 years (and maybe more).

Utilities, like Ameren, are allowed to charge enough for electricity to cover the cost of providing the service to everyone in their territory, plus a government-approved profit, often set at 5–-10 percent, on their capital investments. As long as the expenses are approved by the regulator in their state, utilities make a profit on every dollar they spend on new builds such as wind turbines, solar panels, natural gas plants, or even renovating corporate offices. The more money utilities spend, the more money they make.

A Missouri-specific study of Ameren’s energy plans could be beneficial to future policy research. Nevertheless, there is some reason to be skeptical of the affordability of such a massive energy transition and continued research will be needed as technology changes.

What concerns are there with reliability?

Some sources of energy are more reliable than others, and there are numerous ways to measure this: accredited capacity, unforced capacity (UCAP), or capacity value. All three measure the general reliability value to the grid. The figure below displays capacity values for the two main regional energy organizations in Missouri—Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP):

Solar and wind, which are projected to replace much of the energy that retiring coal plants have produced, are intermittent and do not provide consistent streams of electricity, nor are they available at all times of day (although battery storage is improving). As shown in the table above, MISO rates the reliability of solar and wind far lower than coal and other replacement options. Relying so heavily on them may be dangerous.

There is also the task of building out a vast amount of advanced transmission infrastructure. The New York Times reports: “Already, a lack of transmission capacity means that thousands of proposed wind and solar projects are facing multiyear delays and rising costs to connect to the grid.” We should not bank on the ability to break this trend.

Will Ameren be able to replace 66% of its current generation while also meeting the needs of rapidly rising electricity demand? There is reason for concern. In my next post, I will discuss one policy that could help maintain and strengthen the reliability of our grid.

*Note: This post was updated on October 23 to more accurately reflect the circumstances of Rush Island’s closure.

The post Ameren to Shut Down Rush Island appeared first on Show-Me Institute.

If you clicked on this post without reading Part 1, I encourage you to go back and read Part 1. In that post, I defined some of the energy jargon used in this debate. This post will focus on the provisions of SB 757.

Does SB 757 address capacity factor and dispatchability?

The bill does not explicitly mention capacity factor or dispatchability. Here is a passage from the bill text:

The new replacement reliable electric generation shall be equal to or greater than the full nameplate capacity of any existing electric generating power plant and shall be certified as an equal or greater amount of reliable electric generation by the Missouri public service commission and the regional reliability organization in which the electric utility company operates. (emphasis added)

Unless the public service commission comes up with its own system of power accreditation, it seems this bill will hinge on the actions of our regional reliability organizations.

While I will not go into all of the specific details, the two main regional energy organizations in Missouri—Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP)—have outlined their resource accreditation process for rating power sources and individual power plants (you can read MISO’s method here). MISO’s plan “informs long-term investment and retirement decisions by accurately representing the capacity value of a resource in the prompt year.”

What a statement like that means is that MISO (and SPP also) account for capacity factor and value on the grid by examining different yearly, monthly, and daily variables—all with declared intentions to “maintain reliability.”

However, we should still be cautious, as utilities also can miscalculate or serve other agendas. For example, California has dramatically increased its amount of renewable energy sources in the past 10 years, which now account for up to 42% of its net electricity generation. In the same timeframe, California has cut its nuclear supply by over half, down to 8%. As a result, the dispatchability problem has reared its ugly head in recent years, as in 2020 California had power outages due to insufficient energy for the first time in over 20 years. Sadly, 2020 wasn’t the end of California’s power struggles, as problems have continued. California’s regional reliability organization, California Independent System Operator (CAISO), has even at times called for residents to “use less power between 4 and 9 p.m.” Whether it was due to miscalculation or prioritizing other agendas, Californians are struggling because of a lack of dispatchability and reliability.

That brings me to my main questions concerning SB 787. Can Missouri citizens confidently rely on these regional reliability organizations (MISO, SPP) to protect their energy needs? Will these organizations continue to prioritize both capacity and dispatchability? Is there a way to ensure that other agendas are not prioritized over our energy needs?

On its face, this bill appears to add protection for Missourians, but these questions are worth answering. If there is any possible room for interpretation, shouldn’t it be made clear that both nameplate capacity and dispatchability must be taken into account?

The post Show-Me Energy: Decommissioning Power Plants Part 2 appeared first on Show-Me Institute.

As systems evolve and become more complex over time, certain things that used to be commonly provided by cities and counties have moved beyond the realistic capacity of local governments. Two such examples are sewers and hospitals. The last public hospital in St. Louis closed in 1997, and municipal sewer systems in Arnold and Eureka have both been privatized recently. Not all of these changes result in the private sector taking over service provision. For example, in the City of St. Louis and most of St. Louis County, the Metropolitan Sewer District (MSD) is a large, independent public agency with the resources and expertise to manage the sewer system for our region. Local governments in two areas in our region are currently preparing to hand over responsibility for major services to outside providers, and in each instance the prospects for beneficial transformations are being put at risk by a process that is not being managed in the best interest of the public.

First, the sewers. Festus and Crystal City are considering selling their shared municipal sewer system to the Jefferson County Public Sewer District (JCPSD). Like MSD, this larger, regional system has more resources and expertise than the cities do. However, the leadership of both cities have missed an opportunity to get the best deal for their residents. Earlier this summer, both councils approved a plan to consider only JCPSD’s proposal for a $5 million sale of the sewer system—that is, to exclude any other potential applicants from participation—after quietly negotiating only with JCPSD for months. This is despite the fact that representatives from both Missouri-American Water, which has recently purchased systems in Jefferson County, and Central States Water Resources, which operates sewer systems throughout Missouri, expressed interest in making a proposal once the idea become public. Those private utilities have been denied the opportunity to participate thus far.

Leaders in both cities deserve credit for their willingness to consider major changes to their sewer system. JCPSD’s $5 million offer may well be the best overall proposal the cities receive. But how can the cities know it is the best deal for their residents if they don’t even take any other offers?

The hospital example is even more troubling. In Perry County, located between St. Louis and Cape Girardeau, the county hospital board is planning to sell county-owned and operated Perry County Memorial Hospital (PCMH) to Mercy. Such a deal is almost certainly necessary and likely beneficial for the county and its residents, but the manner in which it has been conducted would make former Kansas City political boss Tom Pendergast blush. While they probably don’t have smoke-filled rooms for politicians in Perry County hospital, they might as well have. There are two boards that run the hospital—one elected and one appointed—and the boards have gone so far as to deny vital financial information to elected members of the hospital’s own board who have had the audacity to ask tough questions about the deal. You read that right. Elected members of the hospital board who aren’t falling into lockstep are being shoved aside as the board majority forces the deal through. Things like the Sunshine law and open records requirements are not suggestions; they are the law, and someone needs to inform the Perry County hospital boards of that.

In general, I strongly support local government changes such as outsourcing services to the private sector or other, larger public bodies. Divesting entities like the Perry County hospital and the Festus–Crystal City sewer system could benefit both communities. However, elected officials in both places have a responsibility to go through the process in an open, transparent fashion. They have utterly failed that test in Perry County, and they aren’t off to a good start in Festus and Crystal City. Residents of Perry County, Festus, and Crystal City should demand better from their local leaders.

The post Good Ideas Done Poorly in Jefferson and Perry Counties appeared first on Show-Me Institute.

For some background, Festus and Crystal City—two adjoining cities in Jefferson County—are planning to sell their shared municipal sewer system. That, by itself, is a good thing they deserve credit for. However, the cities never went out for open bids on the project. They negotiated behind the scenes with only one other entity, the Jefferson County Public Sewer District (JCPSD), on the sale. They went public in June with the proposal and have entered into a formal arrangement to continue negotiations with the JCPSD. (Nobody has finalized anything yet, to be clear.)

JCPSD is offering $5 million for the system. While that may be a fair price and while JCPSD seems fully capable of running the sewer system for the community, how do the cities know if it is the best deal if they don’t accept other bids?

I filed a sunshine request with Festus last month for public records regarding the potential sale. I asked for the available records. I received the response last week. The city’s response is utterly worthless. There is nothing in it beyond copies of prior ordinances authorizing the sewer system, recent bills authorizing the city to negotiate with JCPSD, and copies of public notices. There is not one e-mail in the response, which means either no city officials or employees ever sent an e-mail on this topic over the past year—or they are claiming every e-mail is privileged. When we asked why there were no e-mails in the response, this is what they wrote me:

The City has reviewed the records within its custody which would be responsive to the requests. In response to those requests, we have provided those records which are responsive and which are open under the Missouri Sunshine Law. As noted in the City’s letter responding to the requests, certain records of the City were withheld as closed records, pursuant to Section 610.021, RSMo (1), (2), (12), and (17).

In fact, total secrecy was demanded by JCPSD and the two cities right from the beginning, despite the fact that openness, not secrecy, would have likely led to more bids and a better deal for the cities and taxpayers. Here is section eleven from the initial letter from the JCPSD to the cities dated November 17, 2022, but not made public until much later:

Without the prior written approval of the other parties, unless otherwise required by law, neither the JMUC, District, nor Cities will disclose the existence of this letter or any information concerning the transactions contemplated in this letter, to any third party, other than such party’s attorney, accountant, or professional advisor who needs to know such information to perform his or her duties in connection with this letter or intend or the transactions contemplated by this letter and who shall first agree to the confidentiality of this letter.

This has been anything but an open and transparent process. The public hearings on this matter were held shortly after the proposal was first announced, and the two city councils voted to approve the memorandum of understanding with JCPSD the exact same night as the public hearings. (Officials voting the same night is always a red flag that a public hearing is a dog-and-pony show.) The cities took no other bids or proposals, despite being well aware other entities would like to bid on the sewer systems. Now they are hiding behind legal exemptions to not share any records on the deliberations and discussions of the sale.

Festus and Crystal City selling their sewer system to a larger organization, public or private, with more resources is a great idea. Going about it all in this manner, however, is terrible government. It may be legal, but it is wrong.

The post An Airing of Grievances about Sewer Sales in Festus appeared first on Show-Me Institute.

You have probably heard about all of the large water main breaks throughout the St. Louis region over the past month, leading to boil-water orders, traffic mayhem, and extensive repairs.

Wait, they haven’t been throughout the St. Louis region? They’ve all been in the City of St. Louis? Yes, indeed they have been, but what difference is there?

The difference is twofold. First, the city’s water system is simply older, and in fairness an older system is going to have more problems than a newer one. But the other problem is that the city water division is owned by city government, whereas in most of our region—including all of St. Louis County (with the partial exception of Kirkwood)—the water is provided by a private company (in most cases Missouri-American Water). While water line breaks can and do happen to every water utility, the recent, dramatic trend in the City of St. Louis is not being experienced elsewhere.

The fundamental problem with government utilities is that politics inevitably interferes with the management of the utility. It can do so in ways that may seem beneficial, like holding water rates artificially low because politicians don’t like increasing rates on their own voters. Did you know that the city’s water division has never installed meters in many homes to help allocate billing and prices? That technology is almost a century old, yet it has never been adopted citywide.

In a 2002 study on water utility privatization, the National Research Council stated (emphasis added throughout):

Some studies show that the public is willing to pay for reliability and for high water quality. . . . Yet water managers and city councils often lack the political will to practice cost-based ratemaking. They may want to protect residential customers (who are also voters) from higher rates and use water pricing and availability policies to promote economic development even though there is scant evidence to support the usefulness of this strategy.

Compare those findings with these recent quotes by city officials, as reported by the Post-Dispatch:

The city’s water chief told aldermen Monday he needs two 20% rate increases in the next fiscal year—one in July and one in January—to shore up a division struggling to manage rising costs and aging infrastructure.

The increases . . . would be the largest in nearly three decades.

The system is supposed to pay for itself by charging ratepayers enough to cover the cost of operations and upkeep. When it can’t, the mayor and the board are supposed to step in and adjust rates.

But they don’t like to do it. The last time they obliged was in the late 2000s, another time when staff was telling them they had no choice.

While the proposed water rate hike is absolutely necessary, and the related proposal in the current bill to reduce political influence by automating future price hikes would be beneficial, I have zero faith that future politicians wouldn’t respond to pressure to reduce rates by backtracking as soon as possible. The city’s leaders have a history of ignoring recommendations to deal with the water infrastructure until every decade or so it becomes impossible to ignore it further.

Other communities in our region have privatized their water and sewer systems in recent years. Eureka recently completed the sale of both to Missouri-American Water for $28 million. Florissant and Webster Groves both privatized their water systems 20 years ago, also to Missouri-American. Other utilities are also potential bidders. Voters in Olympia Village in Jefferson County approved the sale of its sewer system to Liberty Utilities in 2021.

I hope city residents reconsider the benefits of cheap, public water the next time they have to boil it before drinking or get home late due to a massive traffic jam. Politics has gotten the St. Louis water division into this mess, and politics isn’t going to get it out. It is time to privatize the entire system as part of an open, transparent process that will hopefully lead to the city’s vital water system being operated by a private, regulated utility. Customers of private water utilities don’t have to think very much about their water supply, and that’s the way it should be.

The post St. Louis Should Privatize Its Water System appeared first on Show-Me Institute.

Special taxing districts are generally defined as public entities that are created to do one thing only, such as a street light district, as opposed to general districts such as cities or counties. Obviously, the latter get much more attention than the former. We discuss Kansas City far more than we discuss the Cape Girardeau–Bollinger County Joint Recreational Lake Authority.

What does this debate in Florida have to do with Missouri? Well, we actually have an enormous number of special taxing districts in Missouri, although none as large and all-encompassing as Reedy Creek in Orlando. Special taxing districts fall into two broad categories in Missouri: ones that perform a single public service, such as fire, ambulance, street light, and road districts, and ones that essentially funnel corporate welfare to various private entities under the guise of public improvements. The latter are primarily Community Improvement Districts (CIDs) and Transportation Development Districts (TDDs).

The latter two are also the ones expanding most rapidly in Missouri. Right now, there is a debate in Jefferson County about the Bear Ridge Community Improvement District, which is essentially a taxing district that, according to my sources in Jefferson County, will fund infrastructure improvements for a new subdivision. What’s wrong with that? Well, until very recently developers would fund these improvements themselves and recoup their investment and profit upon sales of the homes, rental of the office buildings, etc. Now, developers have figured out that they can transfer many of these costs to taxing entities, based on either property or sales taxes, and use these public tax dollars for what are essentially private services.

Missouri Auditors from both parties have documented the abuses and mismanagement that inevitably come with so many tiny taxing districts with hardly any oversight. Show-Me Institute analysts have covered this issue for years. There is at least one bill before the legislature this session that has needed changes to many special taxing districts. Hopefully, the dispute at Disney World can help shine some light on special taxing districts in Missouri.

Why? Because we need reform, too.

The post Special Taxing District Don’t Stop Coming appeared first on Show-Me Institute.

When?Janus vs. AFSCME?was decided earlier this summer, its immediate effect was on the 22 states that allowed government unions to collect agency fees from workers. Thanks to?Janus, those government workers can no longer be compelled to support a union as a condition of employment. But fortunately, workers in Missouri had those rights already by statute, namely Missouri Revised Statute §105.510. That section makes clear a number of things, but relevant to the agency fee discussion?is this?(emphasis mine): 

For instance, Crystal City in Jefferson County appears to have amended an existing agreement on March 26 of this year to add a provision requiring employees to pay and become union members, to pay the union the amount of union dues but not be a member, or be fired.?Page 13:

Meanwhile in a contract agreed to this past June, the City of Grandview also included in its contract with Grandview Firefighters, Local No. 42, a provision compelling non–union members to support the union’s activities through a “modified agency shop.” Page 2 of the agreement: 

The post Agency Fees in Government Aren’t Allowed in Missouri, But That Didn’t Stop Some Local Governments appeared first on Show-Me Institute.

According to a report issued by MDNR, upgrading the state’s wastewater treatment plants to meet strict federal standards will cost between $430 million on the low end and $1.2 billion on the high end. However, most municipalities did not set high enough utility fees to cover the cost of regular improvement projects when regulation was more lenient. With the cost of needed upgrades now looming, localities will be forced to find more funds, which means wastewater utility rates, or other forms of local taxation, are likely to increase statewide in the near future.

Conforming to higher water quality standards in the most economical manner possible has pushed many municipalities across the nation and in Missouri to privatize their water utilities. Cities usually receive an upfront payment for leasing these systems, and while the private owners often raise rates, the increase is usually less than what the public utilities planned to do absent of privatization.

The city of Arnold in Jefferson County is considering just such a privatization plan partially in response to these types of costs. We have written before how this deal can benefit Arnold financially, and should it succeed, the privatization plan could become a model for other municipalities as they decide how to deal with increasing regulatory burdens for water treatment.

The post Cost of Compliance to Rise for Missouri Wastewater Treatment appeared first on Show-Me Institute.

Pevely, a small (but not tiny) town in Jefferson County, is having trouble on a number of fronts. It cannot pay for its employees’ health insurance, it cut fluoride from its water to save money, and it is staring down the barrel of a substantial judgment against it from a lawsuit. I am confident the troubles run even deeper.

Many small cities in Missouri, and especially in Saint Louis County, are having trouble providing a base level of services. For most of these situations, the county is better suited to provide local services in a cost-effective manner. Generally, this can be accomplished without raising overall county costs much, due to transferable taxes such as utility taxes, business licenses, state road funds, court fees, etc. (I am defining a transferable tax or fee as one where the tax is not layered. The city gets it if it is incorporated, and the county gets it if it is not.) This is especially true in Saint Louis County, where the sales tax pool comes into play.

Jefferson County has a solid county government system and it should take over services within the community of Pevely. Hopefully, Pevely can become another example of successful disincorporation in Missouri.

The post Pevely Should Disincorporate appeared first on Show-Me Institute.

The simplest and most obvious difference between the 111 counties without a charter and the three that have one is the setup of the legislative and executive branches of government. In the 111 counties without a charter, the two branches are combined into a county commission, which always consists of one presiding commissioner elected countywide and two associate commissioners elected by district — each representing half of the county — which is easy enough to figure. The three counties with a charter all have a county executive elected countywide and a county council elected by district. Saint Louis and Saint Charles each have a seven-member council, while Jackson has a nine-member council. Of those nine, three are actually elected countywide, while the other six are elected by district.

In these formats, the council votes on legislation, the executive signs or vetoes it, and the council can then override a veto. There are more checks and balances in the charter format than in the county commission format, and that is probably the point — when a county reaches a certain size, those checks and balances become more important. It’s not a coincidence that the state’s two largest counties by population have adopted a charter, with Saint Charles being in the top five. Many of the 111 counties with a county commission are so small that their system works just fine, and enough of a balance is provided by other elected officials, such as sheriff, plus the circuit courts.

That is just the prime example of the benefits a charter can bring, though. There are many other ways in which adopting a charter gives a county more freedom — such as in planning and zoning, or setting the salaries of elected officials. I testified before the Jefferson County charter commission earlier this year with my thoughts about the charter. And now, having read the final document that the voters will be considering, I pronounce it … pretty darn good, but by no means perfect. It is not my role to tell people whether they should vote for it. But I will say that, in theory, if I lived in the county, I would almost certainly vote in favor of it. But the choice is yours, people of Jeff Co.

And, with that in mind, here is my analysis of the proposed charter:

Let’s start with the weaknesses, because it’s more fun to write criticism than praise. There are two major faults with the charter, and possibly three. First, Article 1 (section 1.6.6) requires that any contract Jefferson County enters into must pay the prevailing wage. Now, I understand that Jeff Co is a strong union county, but this is terrible. It is one thing to make this a county ordinance, which can be altered during emergencies or in the appropriate circumstances, but this is really going to tie the hands of elected officials who look to save taxpayer money by using outside contracts. That is probably the point of the provision, but it is a horrible idea.

Another major fault of the charter is that too many elected officials are maintained. There may well be necessary compromises at work here, but my concern is with the policy — not the politics. I think Saint Louis and Jackson have probably gone too far in reducing the number of elected countywide officials they have — two and three, respectively — but I think Jeff Co does not go far enough. The charter maintains 10 elected county officials other than the new county executive, and seven councilmembers. Jeff Co voters will still elect the sheriff, prosecutor, county clerk, assessor, treasurer, auditor, recorder (of deeds), collector, circuit clerk, and public administrator. Continuing to elect the last four of those positions is completely unnecessary. They make almost no policy decisions, and do not serve as a check on other offices. The auditor is probably an unnecessary position, too, considering that the charter requires an annual outside audit of government finances. I am well acquainted with research showing that there is a danger in having either too many or too few elected officials. I think this charter will leave Jefferson County with too many.

The charter’s final fault is less clear, from my reading, so take that into consideration. From what I can tell, the county council as established does not have the resources to operate effectively. It appears that council employees and staff will operate under the office of the county clerk, rather than the council. If that is so, then the council’s own employees would be reporting to another elected official, which could lead to some obvious problems. I deduce that it will work this way because: the charter does not list under council powers the ability to hire staff in order to conduct its operations; the county clerk is listed as the manager of council proceedings and records; and, there is no exception under the merit system for close council staff. If my reading is correct, then the seven councilmembers are not going to have the resources to operate as an independent body. They won’t be able to have staff around that they can trust, in the event of a dispute between the council and other elected officials. I hope I am wrong about this, but it could be a serious fault, if the goal is to create checks and balances. The part-time council would just get steamrolled by full-time officials who control the staffing and employees.

Now, let’s go to the good parts. I like the creation of a merit system (section 8), although it should have a few more exceptions. I really like giving the county authority to enter into contracts with other government entities, to share services (found in sections 3.4.22, 3.4.23, and 13.1). The authors of this document seem to have emphasized that officials should be able to make those contracts as easily as possible. I like the strong conflict-of-interest rules in section 9. Some of the officials being maintained in elected positions deserve to be so chosen — especially sheriff, prosecutor, assessor, and treasurer.

It is a good thing that officials will still run in partisan races. (I understand that Franklin County is planning, under its charter proposal, to have non-partisan races. That would be a serious mistake, which I will discuss in my review of its final document.) The requirements for holding office all seem reasonable. The length of time required for a bill to pass is very fair — this was one of the points of debate I brought up in my testimony. Frankly, I like most of this proposed charter. I like the balanced budget requirement (4.4.1.16), but all counties are required to do that, so it’s not really a big deal. It’s a 55-page document, and I’ve summed up the parts I disliked comprehensively — but the rest is very well done.

Now, before I get to one final issue, I’ll discuss the quirks of the document. They’re neither good nor bad — just unusual. I think it is funny that the charter pledges not to discriminate on the basis of union membership, or the lack thereof. Earlier, I said that this is a strong union county. It reminds me of the part in the Saint Louis County charter (still in there) that forbids the hiring of members of the Communist Party. It is also strange that the charter specifies documents up to two pages have to be read in their entirety at least once. Two pages can take a long time to read. … I think it is strange that the county executive votes to break ties only on resolutions, but for no other type of legislation. So, if someone is absent and the council splits 3-3 on whether to honor a winning high school football team, or a couple on its 35th anniversary, it is good to know that the county executive gets to break that tie!

The final issue for discussion is section 1.6.7, on eminent domain. What they have done is very interesting. I don’t think it goes far enough, but it goes further than the current law, and further than other counties. As such, it is a solid step in the right direction. The new charter forbids taking private property solely to enhance tax revenues, but it does allow such takings for economic development. While that is an enormous distinction, at least it requires a supermajority vote for takings that involve an economic development rationale, which is better than the provisions anywhere else in the state. The other nice thing it does is make clear the requirements for reasonable compensation and moving expenses that the county owes people in these cases. Again, this section could go farther, but a step forward is still a step forward. With the charter’s veto override requirements for a supermajority vote (six out of seven councilmembers), if the people of Jeff Co elect a county executive opposed to eminent domain for private use, it is almost certain that it would never happen there in the future.

So, that’s my wrap. I think they did a good job, outside of the previously discussed exceptions, and I think this charter would benefit the people of Jefferson County. I hope it gets the serious discussion that it deserves.

The post Thoughts on the Home Rule Charter of Jefferson County appeared first on Show-Me Institute.

I should be clear that this particular airport is not being sold specifically so a private company can operate it as a for-profit business. That could happen, but they also might sell it to neighboring companies who would stop using the land for an airport entirely. I certainly hope the private operators who buy it will keep it in use as an airport, but that is my heart talking. My head says Festus should do whatever is best for the citizens of Festus, which is exactly what they are doing. Anyway, airport privatization is an interesting issue, and one that the city of St. Louis might have to consider for Lambert in the long run as a potential move.

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A 2007 change to state law granting more authority to county tax increment financing (TIF) commissions within the Saint Louis-area, at the expense of municipal TIF commissions, has led cities within Saint Louis County to initiate a lawsuit attempting to overturn the change. The suit was filed on Feb. 15 by six cities along with their umbrella organization, the Saint Louis County Municipal League. Municipalities within Saint Louis and Saint Charles counties have been enacting tax incentives, particularly TIF, with much greater frequency — and much less fiscal prudence — than the counties themselves. Unfortunately, if this lawsuit succeeds, the detrimental impact of these tax giveaways will continue unimpeded.

In fairness to the cities, the changes to the law are indeed unclear. An open reading makes one wonder whether any future TIF projects must be passed by both a municipal and county TIF commission, or just one of the two. According to lawyers familiar with the issue, bonds for upcoming projects will not be issued until these questions are settled. While I have no personal objection to seeing our area’s latest strip mall proposal face bonding problems, the General Assembly should nonetheless return to the statute language (RSMo 99.820) to rectify these issues. It should clarify the statute in the direction of more authority at the county level, though, and less at the municipal level.

Which level of government should really be making these decisions about tax increment financing or other types of tax incentives? The debate tends to weigh two sides: cities that presumably know what is best for their city and their residents, or higher levels of authority that can hopefully consider the larger picture — which generally affects much more than just the cities. I believe the county level works best here. After all, county government is local government by every measure. I trust that the powers that be in Saint Louis County are not so far removed in their Clayton skyscrapers that they have no idea what is best for the people of Saint Ann.

Counties are also large enough to put proposed tax incentives into perspective, making decisions outside of a municipal vacuum. If these incentive decisions were made at the county level, cities would no longer face the fear and pressure to “remain competitive” with surrounding cities by issuing generous incentives. Cities would certainly maintain a voice in the process, along with school districts, through rotating appointments on the county TIF commission that would be determined by the locations of future proposals.

In their lawsuit, the cities claim that the new statute is unconstitutional because it treats Saint Charles, Saint Louis, and Jefferson counties differently from the state’s other counties.  This claim strikes me as absurd. Our statutes contain numerous laws written especially for one county or another. Because the lawsuit involves six cities from Saint Louis County, I’ll give two — out of many — examples where Saint Louis County is treated differently from the rest of the state. The legal process for municipal annexations and incorporations is different, and more controlled, in Saint Louis County than elsewhere, and only taxing districts in Saint Louis County are allowed to declare varying tax rates for multiple property classifications. Are these laws, and the many others like them involving cities and counties throughout the state, all also unconstitutional?

If judges and elected officials ultimately determine the commission power rests at the county level, we could expect an end to TIFs and similar giveaways in Saint Charles, and a reduction in their use in Saint Louis and Jefferson counties. The tremendous fiscal discipline shown by Saint Charles, while still experiencing great economic growth, demonstrates why these decisions should be made at the county level. And while it has not been quite as sagacious as Saint Charles, Saint Louis County has been more discriminating in its use of incentives than have many of the municipalities within its borders.

All of the prominent abuses of TIF in Saint Louis County — most famously at the West County Mall — have occurred within municipalities, rather than in the unincorporated areas. Similarly, the ugly case of tax incentives and eminent domain abuse that was recently heard by the state Supreme Court occurred in the city of Arnold — not unincorporated Jefferson County. I believe the residents of all three counties would be better served by having countywide commissions and elected county officials responsible for tax incentive determinations.

David Stokes is a policy analyst at the Show-Me Institute, a Missouri-based think tank.

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In January of 2004, the city of Arnold unveiled a plan to re-develop a large chunk of Arnold commonly referred to as the Arnold Triangle. The plan envisioned 250,000 square feet of retail space, a Dierbergs Market and a Lowe’s store. Unfortunately, there were 52 homes and businesses already occupying the area. They don’t pay as much in taxes as the city expects to get from the big box retailers, and the city has decided to remove them in favor of wealthier businesses.

One of the property owners the city wants to displace is dentist Homer Tourkakis. He and his wife Julie have put down roots in Arnold. They’ve been in the city since 1985, when they started the practice in the Arnold Triangle. They’ve spent the last 21 years forging friendships and attracting clients from all over Jefferson County. They also raised two daughters, both of whom are now in Missouri colleges.

“When I heard about the city’s plans, I had a lot of concern and consternation,” Tourkakis said. “I was ignorant about eminent domain and all the ramifications, and the power that was available to the city. I still looked at the world through rose colored glasses. I thought the city council would be there to defend me. It didn’t take long for me and other business owners to realize that like it or not, this thing was going to happen.”

Business owner Homer Tourkakis in front of his “blighted” dental office.

On September 16th, 2005 the city voted in favor of giving Overland-based developer THF Realty $24 million in tax breaks and the authority to condemn the homes and businesses of property owners who refused to sell.

Tourkakis and his neighbors protested the plan. “I didn’t want to be part of this development program,” said Tourkakis, “I didn’t want to have to dip into my savings and start all over again.”

In response to those protests, some influential property owners were spared. The city promised to give the Veterans of Foreign Wars land within the development area and build a new VFW hall. A UMB bank was also guaranteed a place in the new plans. And Norman Moss, who sits on the city’s Board of Adjustments, managed to get his business, Arnold Stove and Fireplace, spared from forced relocation outside of the development area.

But no such concessions were offered to small business owners like Tourkakis. Tourkakis thinks that the city is playing favorites. “It just seems really arbitrary,” said Tourkakis, “why do some get red-carpet treatment, while I get my life turned upside down so the city can pick up a few bucks?” Tourkakis says that the city council members of his ward, Phil Amato and Joyce Deckman, refused his requests for help.

Board of Adjusts member Norman Moss’s business, Arnold Stove and Fireplace, will not be forced to relocate outside the development area.

Tourkakis’ property, along with about 12 others, was declared blighted by the firm of Peckham, Guyton, Albers and Viets (PGAV), the same consulting company that made the blight determination in the infamous Sunset Hills redevelopment project. In one instance, PGAV cited broken pavement as evidence of blight–never mind that maintaining roads is a city responsibility.

“They say they offer fair market value, but my business has been established in this area for years. I’ll have costs that ‘fair market value’ simply won’t cover. What about my loss of highway traffic? What about the risks I incur?” Tourkakis asked. “The appraisals were a joke. They looked at property that was miles away from mine. Everybody knows they lowball you.”

The developer, THF, did go through the motions of negotiations. THF principal Allen Bornstein visited Tourkakis on three occasions. But Tourkakis charges that the relocation offers made to him were vague and inadequate. “They just wouldn’t talk seriously about a plan,” said Tourkakis. “At one point, Bornstein said to my attorney, ‘Look, I’m not in the dental building business.’ They all seemed pretty convinced that they could push me where they pleased. They were pretty arrogant.”

A “blighted” home a block away from Tourkakis’ dental practice.

The Tourkakis dental practice isn’t as large as Dierbergs or Lowe’s. He employs a staff of three full-time, fully health-insured persons, two of whom are Arnold residents. His practice is one of a handful which treats Medicaid patients, including the elderly and the developmentally disabled. Treating Medicaid patients who can’t pay their bills means operating at a loss. The government only reimburses Tourkakis ten cents for every dollar he spends treating those patients. “I see doing it as part of being a member of the community,” says Tourkakis, “helping out the community makes for a stronger community.” Tourkakis’s practice has treated Medicaid patients for 21 years.

In the coming weeks, the developer must make a final buyout offer to the remaining property owners, who number about 15. If they can’t get the contracts, they’ll ask the city to file a condemnation lasuit against the property owners.

“It kind of makes you wonder why you work so hard to build something,” said Tourkakis. “If they’re just going to take it away from you, why bother?”

Timothy B. Lee is an editor at the Show-Me Institute. Jonathon Burns is a student at Truman State University.

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