Even after reinstating fares, the Kansas City Area Transportation Authority (KCATA) is warning of route reductions because the agency says city funding will fall short of maintaining current service levels. KCATA estimates it needs more than $100 million to preserve existing operations, well above the city’s proposed contribution.

The immediate concern is fewer routes and longer waits for riders. But the larger issue is institutional: KCATA is confronting the long-term consequences of policy decisions that weakened its financial position and eroded confidence among regional partners.

Those problems did not emerge overnight. For years, KCATA relied on temporary funding, emergency appropriations, and optimistic revenue assumptions. Pandemic-era federal aid masked those weaknesses but did not resolve the structural imbalance between operating costs and recurring revenue.

The clearest example was KCATA’s heavily promoted fare-free transit initiative. Supporters argued eliminating fares would improve mobility and reduce barriers for low-income riders. But even at the time, research and the experience of other cities suggested the policy was financially unsustainable.

Fare-free transit eliminated one of the system’s few direct revenue streams while increasing dependence on taxpayer subsidies. Transit fares rarely cover operating costs, but they still provide revenue and impose some fiscal discipline. When federal pandemic aid expired, KCATA faced familiar financial pressures with even fewer tools available to address them.

Acknowledging that reality, KCATA recently announced fares will return next month. Restoring fares amounts to an acknowledgment that the model was not sustainable.

The consequences extend beyond Kansas City itself. Regional transit systems depend on trust among local governments—trust that erodes when the central agency faces recurring fiscal problems.

Some regional governments have already moved to retain greater operational control over their own transit services. In 2022, Johnson County, Kansas, ended KCATA management oversight of its transit operations while continuing limited coordination through the RideKC brand. More recently, several suburban municipalities—including Gladstone, Grandview, and Raytown—have reduced or ended participation in RideKC service.

Obviously, public transit serves a purpose. Many Kansas City residents still rely on buses to reach work, school, and appointments. Like transit agencies nationwide, KCATA is operating in a difficult post-pandemic environment shaped by inflation, labor shortages and changing ridership patterns.

But those challenges make competent governance more important, not less. Municipalities are hesitant to rely on an agency caught in recurring fiscal crises driven by its own policy failures. Fare-free transit generated national attention, but reality eventually intervened.

KCATA’s budget problems are not simply the result of this year’s funding gap. They are the cumulative consequence of years of policy decisions that weakened the authority’s financial position and damaged its credibility.

The post KCATA Is Still Paying for the Fare-Free Experiment appeared first on Show-Me Institute.

Now that the champagne corks have popped at Crown Center over the plans to build a ballpark there, it’s worth considering what comes next for Missouri and Kansas.

On the Missouri side, Kansas City ordinance 260339, passed on April 9, instructs the city manager to move ahead on all sorts of things regarding the deal. Section 7 provides for up to $250,000 for, among other things, “professional services, including but not limited to economic advisory services, financial advisory services, bond advisory services, legal services . . .”

That means the city is going to seek professional opinions on the deal’s feasibility. Who the city hires will tell us a lot about how committed it is to protecting taxpayers. As one person told me, “if they hire an architectural firm, we’ll know they’re not serious.”

The city has a history of relying on conflicted organizations to conduct studies, as it recently did with the World Cup. In 2016, the city paid CDFA—a trade group formed “to promote the common interest of Development Finance Agencies with respect to public policies and programs”—to measure the effectiveness of Kansas City’s subsidy culture. The laughable conclusion was “each incentive dollar invested generated $3.83 in additional tax revenue.”

In Kansas, taxpayers are still waiting on two things. First, they don’t know how big the STAR bond district will be. Previous reporting was a 293-square-mile district encompassing Wyandotte County and the western half of Johnson County. But it could be much, much bigger to make the deal pencil out. Once the district is set, the secretary of commerce is empowered to make it larger whenever he would like (see page 1) to capture more tax revenue.

Second, taxpayers are also waiting on Kansas to determine the base year, which is the year in which the state sales tax revenue is fixed, diverting every additional dollar within the district to the Chiefs’ developments. You might expect the base year to be 2026, when the legislature endorsed the measure, or whenever the project breaks ground. Or perhaps 2025, when the deal was agreed to.

But the deal actually allows the secretary of commerce to set the base year whenever he wants (see page 22). It could be set at 2015, meaning every state sales tax dollar generated over the amount collected in 2015 would go to the Chiefs.

In a deal this expensive for Kansas, the size of the district and the base year are likely to reignite howls of protest from all quarters.

As elected leaders in Topeka and Kansas City throw themselves self-congratulatory parties, the rest of us are faced with the bar tab. And the hangover.

The post Next Up on Chiefs and Royals Stadium Saga 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 author of the Brookings Institution study referenced above does not know about Kansas City proper, or more specifically about downtown Kansas City. The Downtown Council itself apparently can’t provide worthwhile numbers either. Trying to piece together the data requires investing a lot of time and resources going through Census data at the county level. Until someone does that in 2019, we can rely on a 2016 paper for the Show-Me Institute by Wendell Cox, “Kansas City—Genuinely World Class.”

In Figure 3 on page 6, Cox offers us the chart at the top of this post. As you can see, populations have not grown in the urban parts of the Kansas City but rather in the areas outside the city proper. In fact, the urban and near-in suburbs are shrinking. This is expected to continue. Cox writes:

According to the Mid-America Regional Council, population growth will continue to be concentrated in the suburban counties. Between 2010 and 2040, it is projected that approximately 45 percent of the population growth will be in Johnson County, which will make up the bulk of the 55 percent of metropolitan area growth that is projected to occur in the Kansas suburbs. The Missouri counties are projected to constitute 45 percent of the metropolitan area growth, with Cass County accounting for 18 percent and Jackson County for 11 percent (Figure 4).

Lots of organizations spend a lot of money trying to attract people and jobs to Kansas City. All them have an incentive to show that all that money—in many cases tax dollars—is well spent so that their budgets will be expanded. Successes seem rare and the data aren’t promising. But if city leaders are serious about attracting residents and jobs, we need to have a serious conversation about what is working and what is not.

The post Follow-up on Kansas City Population Trends appeared first on Show-Me Institute.

“There is still work to do because even one homicide is too many,” [Mayor] James said. “But I have faith in the collaborative and strategic approach of KC NoVa. This year’s data tells us that so far we are making great strides in the right direction.”

Fast forward to today—after years of a nation-leading spike in homicides (currently #5 in the nation with 108 in 2018 as of this writing)—and those same people seem to want to deny any affiliation with policing. The mayor, whose role as a member of the police board was highlighted in 2014, seems to shrug off any role in policing today. In a KCPT panel discussion about the 50th anniversary of the Kansas City Race Riots, moderator Nick Haines raises a question about minority hiring in the police department, “Mayor, you’re on the police commission.” James responds, “Yes . . . and…?” to laughs from the audience. (Starts at 35:32.)

In a more recent press conference, Mayor James complained bitterly about lack of gun control legislation and political ideology in the state legislature. But as a recent KSHB report on homicides made clear, there is no evidence that Jackson County, Missouri, has significantly more gun ownership than, say, Johnson County, Kansas, or that gun ownership in Kansas City has increased over the same time frame that homicides have spiked. It’s not the guns.

There is research, however, that indicates that increasing the number of police officers does reduce crime. KSHB’s Andy Alcock makes that point in his report, too. In fact, according to FBI statistics, Kansas City has fewer police officers per capita than all other cities with high homicide rates. What’s worse, since 2011, the number of uniformed police officers in Kansas City has declined.

As I laid out in a Kansas City Star guest column, no one in Missouri has more power over policing in Kansas City than the mayor’s office. What is lacking is not power, but will. And until Kansas City leaders get serious about adopting policies and policing methods that actually contribute to reductions in violent crime, we are figuratively whistling past an ever-growing graveyard.

The post Kansas City’s Unrelenting and Unaddressed Homicide Problem appeared first on Show-Me Institute.

The 25-million-visitor claim comes from the 2016 Tourism Economics report prepared for VisitKC by Longwoods International and the U.S. Travel Association. A copy of the report is available at the link at the bottom of this post. The study defines Kansas City as “a five county region in Kansas and Missouri—Johnson and Wyandotte in Kansas; Clay, Jackson, and Platte in Missouri.”

This means the 25 million visitors visited not only Kansas City, Missouri, but Kansas City, Kansas; Overland Park; Olathe; and Independence. It includes the Cabela’s at the Legends Outlet, which for a while was the number one tourism attraction in the entire state of Kansas, and since then has only added attractions such as Sporting KC’s stadium.

The report divides visitor spending by the five different counties, with Jackson County, the home of Kansas City (and Independence) receiving just under half. It is reasonable to conclude that only half of the 25 million visitors are coming to Jackson County—and even fewer may be visiting Kansas City proper. After all, the five-county area has a population of 1.8 million, while Kansas City has only 480,000.

For an administration that talks about dealing only in facts, the 25 million visitors claim is misleading at best. People are right to be skeptical of such big claims, and city leaders should do a better job of ensuring their accuracy.

The post Tourism: When Kansas City Is Not Kansas City 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 Royal is a Kansas City institution, one whose fall catalog of rodeos, barbeque, and livestock competitions herald the start of winter and the region’s holiday season. Thanks to tens of millions in sales tax revenue STAR Bonds, those traditions will soon move away from the Royal’s current digs in Kansas City, Missouri, to nearby Kansas City, Kansas. Kansas’s $80 million contribution to the project is about double what American Royal was publicly trying to get out of Kansas City, Missouri, officials just two years ago to keep the Royal in the city’s West Bottoms.

But did Kansas even have to “build it” with taxpayer money to entice the American Royal to move? The Royal’s brand is defined by its history in the Kansas City area—even Kansas City’s baseball team is named after the organization—so it’s safe to say that American Royal wasn’t going to move its operations to Texas or Florida.

But setting aside for now the important question of whether this is an appropriate role of government (it isn’t), Wyandotte County has been seeing significant economic growth that would have made it an attractive landing spot for the Royal anyway. More families are moving there today than were coming 10 years ago. In 2004, 1,871 tax filers—bringing more than $57.6 million dollars of income—moved to Wyandotte; fast-forward to 2014, and tax filers were pouring in 25% faster, bringing in around $74 million with them.

Wyandotte County was “building it”—a functioning economy that has, in contrast to its basket-case reputation, attracted investments from Google, Amazon and others in recent years—before Kansas’s $80 million incentive was ever put on the table.

But Wyandotte’s recent successes don’t justify Kansas’s decision to subsidize the American Royal move. Indeed, the state’s $80 million giveaway has all the hallmarks of bad policy and poor judgement from Kansas’s political class. The American Royal was already getting cheaper land and a prime location close to its support bases in Johnson County, Kansas, and Kansas City, Missouri. The tens of millions in taxpayer support is just the KC Strip on top of this gravy train sundae.

Kansas? Sure, it gets a talking point in the battle for the economic soul of the region, but it’s a point that is likely to be eclipsed by the next round of billion-dollar business-poaching that’s certain to come.

While the Royal’s decision could be seen as a slap in the face of its historical roots, Kansas City, Missouri isn’t exactly a victim in the matter, either. The city has a terrible track record of poaching Kansas businesses in precisely the same way and is an equally bad actor in the billion-dollar tax-incentive border war that has bedeviled the region, creating no strategic advantages on either side of the border.

To put it delicately, the bull manure is blowing onto taxpayers from both sides of State Line Road. It’s time to end this tax incentive rodeo and finally pursue a mature economic development policy—one that doesn’t force taxpayers to build the fields of their politicians’ dreams.

The post Creating a Field of Dreams for the American Royal appeared first on Show-Me Institute.

This is, for all intents and purposes, the deal that Judge Russell Clark offered to those who wanted to reform the Kansas City, Missouri, School District starting in the mid-1980s. He implemented policy recommendations by fiat. He raised the property taxes of the residents of the school district without allowing them to vote on it. He required the state to contribute hundreds of millions of dollars to fund new programming. What the plaintiffs in Missouri v. Jenkins, wanted, they got.

Well, except for one thing: a school district that met the needs of their children.

As Joshua Dunn points out in Complex Justice, an engrossing history of the court case, Judge Clark was hemmed in. Kansas City’s geographic peculiarities have it spread across two states, and families of means have always been able to move to the green, suburban pastures of Johnson County, Kansas. At the same time, the U.S. Supreme Court had handed down the Milliken decision, which forbade judges from requiring actions from suburban districts to alleviate segregation, essentially boxing in the district and those hoping to reform it.

So Judge Clark started cutting checks. Experts were called in, surveys were administered, and program after program popped up. Slavic studies? Can do. A model UN with simultaneous translation? Sounds great. An Olympic-quality swimming and diving facility? Whatever you think will make the school district work.

Kansas City in the early 1990s was the apogee of what Rick Hess and I describe in our new volume, Educational Entrepreneurship Today, as the “system” approach to school reform. It is marked by careful planning, alignment, and coordination, all driven by the wisdom of experts and implemented by clear-eyed technocrats—or at least that’s how it is supposed to work. Kansas City shows, even with a boatload of money and a judge who can implement programs with the stroke of a pen, just how hard it is to pull that off.

What were the results? When Judge Dean Whipple eventually dismissed the case, 20 years after it began and after Clark himself had retired, he summed it up well, writing, “Despite the expenditure of vast sums, the prolonged oversight of a federal court and its appointees, the efforts of multiple parties, and the passage of forty years since the end of official de jure segregation in Kansas City, Missouri, the KCMSD still struggles to provide an adequate education to its pupils.”

I grew up in Kansas City during this time, so it’s no surprise that I have a different view of how to improve the education system. Rather than looking for the grand solution or trying to impose “best practices” on every school and classroom, I favor a more decentralized approach marked by experimentation, trial and error, and smaller entrepreneurial organizations working to solve the problems that are right in front of them.

Fortunately for residents of Crown Town (sorry—we’re still basking in the glow of last year’s World Series win and will be for some time now), this more decentralized approach has been adopted to a large degree, and some seeds for future success have been planted. As the court case wound down, Kansas City opened its doors to charter schools.

Today, according to the National Alliance for Public Charter Schools, the Kansas City Missouri, School District has the 5th-highest percentage of its students in charter schools, at 41%. And it appears that the market share will only grow in the future.

It has not been all roses. Several charter schools have failed, and some have failed spectacularly. However, a loosely aligned network of schools is gradually emerging in Kansas City and meeting with success. Recently, the public policy research firm Mathematica released an evaluation of the Ewing Marion Kaufmann School that showed incredible gains from its students. French language immersion school Academie Lafayette has a waiting list over a hundred students long. The Crossroads Academy, a popular urban charter school that was bursting at the seams, is opening new campuses, and the Citizens of the World network is coming to Kansas City after a group of enterprising parents issued their own RFP to charter organizations to attract a school operator.

Is change happening fast enough? Of course not. Will all of these schools meet with success? Maybe not. But given the backdrop they are working against, they are beating the odds. What’s more, if one school fails, the damage can be contained. If a whole district falls into disarray, it can take a city down with it.

The lesson from Kansas City for the rest of the nation is one of humility. We often don’t know what we don’t know, and are overconfident that our one great idea is the silver bullet can turn things around if embraced by every teacher or every school. We think that we can impose our views and shape the behaviors of people by administrative diktat, even when the people we’re working with deeply disagree with us about the proper course of action. The world doesn’t work that way, and we must keep that in mind as we chart a path forward.

The post The Great Urban School District That Wasn’t, but May Be Soon appeared first on Show-Me Institute.

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For instance, if we go back to 1990, Jackson County, which contains the Kansas City core, contained more than half of all employment in the Kansas City area’s most populous counties (Jackson, Johnson, Clay, and Wyandotte). Johnson County (KS) was a distant second, with about a quarter of the region’s employment. Johnson County could even have been considered a bedroom community, with more people commuting out of than commuting into the county.

Flash forward to 2013 and the situation had changed radically. While Jackson County still housed about the same number of workers as it did in 1990, Johnson County added nearly 120,000 jobs. More workers still commute from Johnson County to Jackson County than vice versa, but the gap narrowed significantly. Johnson County is also now a net importer of workers. Jackson County’s share of employment among Kansas City’s largest counties dropped from 52% to 44% in the period, while Johnson County’s share reached 36%.

Residents in the Kansas City region are more likely than ever to work in, and not just live in, the suburbs. Unfortunately, Kansas City officials still have a tendency to channel investment to the downtown area to a degree that is disproportionate to its actual economic importance and promote transportation plans (public and otherwise) that would be more appropriate to 1920 than to 2020. The region would be better off planning for the city it has rather than an outdated image of the past. 

The post Working in Kansas City: The Rise of Johnson County appeared first on Show-Me Institute.

So where does bad policymaking come from? Sometimes it comes from getting so caught up in the debate that we don’t examine the facts we’re dealing with. Today’s example comes from the December 10 Kansas City Council’s business session. The topic was the airport. And as he seems to do every time he talks about the airport, the Mayor offered up statements he must know are not true. At least three times he made the same mistake:

[2:28:55] “The cost is in the airport, the region has nothing to do with it. All of the costs are in the airport and come from the airport. There’s not tax money that comes from Johnson County or Wyandotte County or Clay or Platte or Cass. Its all airport money. It’s in the airport; stays in the airport; and gets recycled.”

[2:30:29] “Airport revenue can only be used for airports. Money that is generated in the airport stays in the airport.”

[2:30:58] “You can’t take any money from the airport and use it for sewers or sinks or anything else.”

This is not the first time the Mayor has made this claim. He’s done it in interviews and in his state of the city speech.

We know this is not true because we have a city ordinance that authorized the city to move funds from the Aviation Department to the Finance Department. We know because while James was mayor the city renegotiated the debt to give them more time to pay it off. We know because the Mayor’s own submitted budget for 2015-16 includes it as a line item.

Perhaps most strikingly, we know because earlier at the very same December 10 business meeting, aviation consultant Sheri Ernico said:

[35:47] “There was an instance, which is very unusual for airports in this country, where the [Kansas City] general fund borrowed some money from the airport in 2008, but it had to be repaid with interest.”

What makes the Mayor’s stubborn memory lapse most worrying is that the loan was made to cover losses the city incurred in bad tax increment financing deals for things such as the Power & Light District.

What hope can we have for good public policy when mistakes are papered over with denied consequences?

The post How Bad Policy Survives appeared first on Show-Me Institute.

The Star’s “letter of the week,” titled “Sensible Sex Education Works,” provided a perfect example of this concept. In it, a retired healthcare executive from Johnson County, Kansas, implored the state to take action on preventing unwanted pregnancies.  Given that unwanted pregnancies are by definition unwanted, trying to decrease them seems like a good idea.

But he goes off the rails in his second recommendation when he argues that the state should “develop comprehensive sex education in our schools, with no opt-outs.”

No opt-outs.  Your children will be made to care.

Now, I don’t want to make a mountain out of a molehill here—it’s not clear that the author has any particular sway with any local education system.  Nor am I opposed to schools teaching sex education. But I am bothered by the principle that schools should be able to force certain value-laced information on children, parental preferences be damned.  

Kansas City would not be the first place where such a battle might be fought. In Fairfax County, Virginia, it took huge parental outcry to get an opt-out provision in the district’s sex education curriculum. Our friendly neighbors to the north have created mandatory sex education programs.  It’s not far-fetched to think that some school might try that here.

In 1925, the US Supreme Court ruled in Pierce v. Society of Sisters that children are “not mere creatures of the state.” Just because someone believes that a certain sex education program would decrease unwanted pregnancies, that doesn’t trump a parent’s right to shape their child’s education.  If that means opting students out of sex education class, so be it. 

But more than this, it should mean that parents have the right to opt out of the traditional public system entirely, and send their children to the charter or private school of their choice. 

The post You will be made to care: Sex Ed Edition appeared first on Show-Me Institute.

The map above shows the mean travel time to work per census tract in the Kansas City area. The dark black outline is the city itself. This map shows how mean travel times tend to be lowest on the border within Kansas City as well as within eastern Johnson County. Longer travel times are experienced by those living in northern Clay and southeastern Jackson County. Read more from the Show-Me Institute on Kansas City transportation here.

The post Map Series: IV. Kansas City Area Travel Time to Work appeared first on Show-Me Institute.

But census data paints a different picture of the metropolitan area and the city itself; a picture of falling income, rising poverty, and slow population growth. Kansas City was hit hard by the recent recession, and simply put, the city has not seen a recovery in terms of income.

Census data shows that employment is increasing in Kansas City since the recession, but total employment is still significantly below prerecession levels. That may be partially explained by lower labor force participation and fewer households. The income data is more troubling. The median household income from 2010 to 2013 is still almost $3,000 lower than it was from 2007 to 2009, not accounting for inflation. When that adjustment is made, real income has been on a continuous decline in the city since 2009.

A similar trend exists in Johnson County and the metropolitan area as a whole.

The recession caused poverty levels in Kansas City and surrounding areas to spike, and they have yet to significantly recede. Poverty levels were actually higher from 2011 to 2013 than they were from 2009 to 2011 (which includes the recession). As with income, Kansas City has yet to see anything that could be described as a healthy recovery. The following chart demonstrates recent trends:

There’s plenty of excitement and optimism in Kansas City, and that’s no bad thing. But much of the excitement seems to be for prestige projects, entertainment venues, and young people in the downtown area. If that attitude allows people to forget that for most people in Kansas City there really has not been a recovery, much less a renaissance, then the optimism may be counterproductive.

The post Where Is Kansas City’s Recovery? appeared first on Show-Me Institute.

Kansas City Mayor Sly James argued that hosting the convention is a once-in-a-lifetime opportunity, and he may be correct. Certainly, we all are proud of Kansas City and eager to show off on the 40th anniversary of the last time we hosted. Those are arguments for spending the money — they are not arguments for not telling taxpayers how the money is being spent. If the mayor is so confident about his choices, there is no reason to hide who is getting the money and for what. Furthermore, taxpayers ought to know what additional commitments the city is making to the convention committee. Remember, the $165,000 spent so far is just for the bid to host. Hosting itself will cost millions.

The city claims that the convention will have a large economic impact. We previously have written that those estimates are largely useless as they assume that without the convention there would be no economic activity — which is just silly. The city’s “fact sheet” suggests the economic impact to Kansas City would be similar to Tampa’s in 2012: $214 million. The city likely is getting that from a Tampa Tribune story in which they cited a University of Tampa analysis:

The total impact takes in $214 million in direct spending by the groups that put on the convention, including the Tampa Bay Host Committee, the City of Tampa, the convention’s Committee on Arrangements and corporate sponsors.

Note that in addition to ignoring any economic activity that would have happened without the convention, this impact includes spending from Tampa’s taxpayers.

Lastly, it was gratifying to read in their “fact sheet” that the city thinks we have sufficient hotel rooms and bus service to accommodate the convention, and that our airport has more than 50 direct flights. Let’s hope city officials remember this the next time they advocate committing public funds to convention hotels, streetcars, and new airport terminals.

The post Tell Taxpayers Where Their Money Is Going appeared first on Show-Me Institute.

Perhaps to make up for stealing the Kings, Sacramento has decided to show Kansas City the pitfalls of expensive airport terminals. Sacramento opened a new $1 billion terminal in 2011. Like Kansas City, Sacramento wanted to attract more airlines and passengers with a state-of-the-art facility. Like the Kansas City experience, the terminal:

…drew rave reviews from local business leaders and politicians…the project was criticized by airline executives, including those at Southwest, as too big and too expensive for their needs.

Despite the criticisms, the Sacramento County Airport System decided to build anyway. This gave the airport a high debt load and made it one of the most expensive medium-sized airports in the nation, a dubious honor that will belong to Kansas City if its new terminal plan takes flight.

The hopes that a state-of-the-art terminal would attract more passengers to Sacramento’s airport have not materialized. Passenger traffic fell from 2011 to 2012. But because of the increased debt, the airport had to increase landing fees. Airlines’ concerns, especially those of Southwest, over the increased expense of using the airport has led to an impasse over a new airline lease agreement.

The inability to increase airline service and need to make significant payments has put the airport into a financial bind. In April, Sacramento’s airport executive was replaced and his successor was given “marching orders to improve airport finances.” As the Sacramento Bee reported this week:

Faced with declining passenger levels and high debt, Sacramento International Airport officials say they plan to cut airport system costs by 15 percent over the next 18 months.

While that will save the airport about $14 million, the airport’s management claims that it must further increase parking fees and work with a developer to build a new airport hotel.

The managers of Sacramento International Airport made a $1 billion mistake. Their experience shows that, even with large airports, debt payments and competitiveness still matter. Just as in Kansas City, Sacramento officials downplayed critics like Southwest and took on significant debt to build a new terminal when cheaper options would have sufficed. Sacramento County Supervisor Jimmie Yee said of the airport’s new terminal, “What’s done is done…” But it is not done in Kansas City.

Not yet.

The post The Ghost Of Airport Terminals Yet To Come appeared first on Show-Me Institute.

Supporters of the tax leave a few questions unanswered: Why a county-level tax? Supporters cite lack of federal research funds as an impetus to look for more local funds, but sales taxes typically fund public assets such as parks or public safety projects. The half-cent tax would make Kansas City’s already high sales tax rate one of the highest in the country. Do other local governments fund this type of research with specific taxes?

I could only find two comparable taxes: one in Johnson County, Kan., and one in Rochester, Minn. (If anyone knows of other like taxes, please share them in the comments.) Even these two taxes have very important differences, however, from the Jackson County proposal.

Voters in Johnson County passed a one-eighth-cent sales tax in 2008 to fund the Johnson County Education Research Triangle. The money went toward building facilities at Kansas University and Kansas State, as well as to some researcher salaries. Jackson County’s proposal, however, would divert more than half of the revenue to private medical institutions: $20 million to Children’s Mercy and $8 million to St. Luke’s Hospital.

In 2012, voters in Rochester extended a half-cent sales tax that devotes $20 million in bonds (approximately one-seventh of the revenues) to the “Destination Medical Center” (DMC). The Destination Medical Center is the Mayo Clinic’s 20-year, $5 billion project to upgrade its own facilities and the surrounding area’s infrastructure and amenities.

Importantly, the Mayo Clinic initiative uses mostly private funds for the venture — more than $5 billion in Mayo Clinic’s own funds and those of private investors. The $500 million that the state, city, and county pledged over 27 years are primarily for infrastructure and transit improvements, which are the sorts of things public tax dollars typically fund. Additionally, state funds are contingent upon private investment occurring first. Mayo Clinic President and CEO John Noseworthy said in an interview:

We are not asking for a handout. We’re asking for nothing upfront. We’re not asking the state to fund the medical facilities, the science facilities and so on as other states are doing for our competitors, by the way. We’re simply asking for, once we have grown and proven that growth, to have some of that tax revenue infused into the public infrastructure.

Jackson County voters, unlike those in Rochester, are facing a different request. The translational medical research tax is a unique proposal that taxes citizens to fund buildings and salaries for researchers at primarily private institutions, in a field that private investment traditionally funds.

Being on the cutting edge of implementing new and higher taxes is not the right kind of innovation for Kansas City.

The post Why Should County Taxpayers Fund Private Medical Research? appeared first on Show-Me Institute.

• Kansas City has a top marginal income tax rate of 7 percent — the state’s 6 percent income tax, plus the city’s 1 percent earnings tax. Kansas has an income tax of 4.9 percent. In 2018, it will be 3.9 percent. No earnings tax. We’ve said it before and we’ll say it again: Income taxes hurt growth, penalizing productivity and deterring greater investment. And this is to say nothing, of course, of the 100 percent deduction Kansans get for non-wage pass-through income. For Kansas businesses organized as LLCs, S-corporations, and sole proprietorships, the tax rate is effectively 0 percent. (And as we all know, 0 percent is also a lower tax rate than 7 percent.)
• Not counting its special taxing districts (TDDs, CIDs, etc.), Kansas City’s sales tax ranges from 8.1 percent to 8.85 percent, depending on the county. Those are pretty comparable to the rates charged on the Kansas side of the metro area — generally between 8 percent and 9 percent on sales, also not including special taxing districts. Not a huge difference. But what if we include special districts? Kansas City’s “1200 Main/South Loop TDD and DT Streetcar (KC Live!)” area — in other words, the Power & Light District — has the top sales tax in the bi-state area, with a whopping 12.35 percent tax on the sale of prepared food. (Click that last link to see the rates not only of the city, but also of the special districts. I found them startling.) One special tax costing a fraction of a cent may not seem like much, but put a few together and — as we’re seeing across the city — it adds up to real money. And the new, and bad, sales tax ideas keep coming.
• As our own David Stokes would note, apples-to-apples property tax calculations are tough to come by because property valuation norms can vary wildly from jurisdiction to jurisdiction. If I’m charged a 5 percent tax on a property valued at $100,000 by one set of assessing criteria, or a 6 percent tax on the same property valued instead at $83,333 using different criteria, I’m still paying the same amount in taxes ($5,000) regardless of the legislated property tax rates. Kansas property taxes, driven in Johnson County by taxes for schools, generally sit at higher rates, yet that doesn’t say a great deal on its own. What is notable on this front is that both Kansas and Kansas City have a bad habit of concentrating their property taxes on fewer and fewer taxpayers with special incentives. Check out the latest example on the Kansas City side; I’ll have more to say about that project later.

And we won’t even go into the city’s hotel taxes, rental car taxes, water and sewer fees, which are all high. Kansas City is one of the highest-taxed cities in the region, and Kansas Citians are the first to tell you as much. Especially after Kansas’ tax reforms, is it credible for Kansas City, Mo., policymakers to suggest the region has been or is tax competitive with its Jayhawk neighbors? Do they really believe the city’s businesses, particularly its small businesses, don’t know what’s happening in Kansas and won’t consider moving under these circumstances?

The post Is Kansas City A ‘Low Tax’ City? appeared first on Show-Me Institute.

Suburbanization, whether between or within states, doesn’t happen in a vacuum. Lots of factors are considered when people decide to move, and among those considerations is taxes. And to be clear, tax policy matters not just when taxes are reduced or repealed, but also when bad tax policies persist. And a bad, bad tax that both Kansas City and Saint Louis have had for a long time is the earnings tax. As our own Joe Haslag concluded in a policy study way back in 2006:

[T]he growth rate in [the modeled] economy where there is no city earnings tax is 1.72 percent, while the growth rate in the economy with a city earnings tax is 1.66 percent. Thus, a city earnings tax results in the growth rate falling by 0.06 percentage points on an annual basis.

That might seem small, but it can result in large differences in the size of the economy. Suppose that the initial value of the economy’s income is $78 billion. (This is the 2002 personal income level in the Missouri part of the St. Louis metropolitan area). After a generation (25 years), the no-tax economy would be $1.78 billion larger than the economy with a one percent tax rate. That is a difference of 1.5 percent.

Indeed, tax policy can be a contributing (rather than motivating) factor in where people live and grow their businesses. Even small tax policy mistakes can be economically destructive for a city — just more quietly and over a longer horizon. If you hurt your city’s capacity to grow economically, you truly hurt your city’s future.

Alas, unlike Iocane powder, it’s very difficult to build up an immunity to destructive taxes over time. And obviously, suburbs developed around Kansas City on the Missouri side as they did on the Kansas side. But the fact that Jackson County lost “only” a half billion dollars of Missouri income to Johnson County before Kansas enacted significant tax cuts in 2012 (and 2013) should be cold, cold comfort to Missouri tax cut opponents. Tax policy was a factor considered in moving from Missouri to Kansas before; it may be the preeminent factor considered today. Where people retire is a thornier proposition bound up with both economic and non-economic considerations, but one thing is certain — Kansas Citians haven’t moved, and won’t be moving, en masse to Olathe, Kan., for its sun-kissed shores. Will they move there for its tax climate? Quite possibly. And that’s the problem.

On a more personal note: I have heard from businessmen and businesswomen across Kansas City about the pressure longtime-Missouri businesses are under to consider a move to Kansas — motivated almost entirely by the new taxing environment there. Businesses already are asking the question, “Is it time to leave Kansas City?” I cannot stress enough how serious their concerns are. How long can Kansas City and the state of Missouri afford to ignore them before risking a plunge off the Cliffs of Insanity?

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