First, let’s make clear that the hotel market in Kansas City is already crowded. The Kansas City Star made this point just a few months ago, and it’s something developers themselves admit. It’s so bad that the city’s tourism board is asking for more public funding to help sell rooms to address the fear that too many hotels will reduce hotel rates (as hotels compete for guests). In short, problems created by subsidizing hotel construction resulting in foregone tax revenue are to be solved by directing even more of the remaining tax dollars toward subsidizing hotel sales departments. If you think this is crazy, it gets worse.

Despite all this, some Kansas City Councilmembers want to offer more tax breaks to build two hotels near Country Club Plaza. (Regarding a crowded hotel market, the immediate area around the plaza area is already served by 12 hotels.) Specifically, the plan this time around is to have taxpayers underwrite $80 million in bond debt. With Chapter 100 bonds, the property taxes may end up being abated as long as the bonds are outstanding. This means that for up to 20 years, there may be no property taxes paid on the projects—taxes that might otherwise be used for police, public safety, and roads.

Twenty years is a long time to abate property taxes. Back in 2004, the council passed an ordinance in which it agreed, “Bonds will be issued for a term not to exceed 10 years. Bonds issued for personal property shall have a term limited to the life of the personal property, but not to exceed 10 years.” This new effort, however, just waives that 10-year limit. Laissez les bons temps rouler!

Mayor Quinton Lucas told KCTV5 News,

There is no money coming from taxpayer sources to directly fund this. The question on the bond obligation is to what extent is the city pledging its full faith in credit in connection with the lending?

The first claim is misleading at the very least. The project doesn’t use existing taxpayer sources, but it may abate or redirect the taxes that would have been paid but for this ordinance. It’s a distinction without a difference. As for the second part, that is a whole other consideration: If the project goes belly up and no taxes are being redirected to bond payments, will bondholders come after the City of Kansas City, the folks who issued the bonds? This is not an easily resolved question.

If hoteliers want to invest their own resources in Kansas City—and themselves reap the rewards—that is welcome. If they agree with VisitKC that the market is already saturated and choose not to invest, that is understandable. But taxpayers should not be asked to go without so that one more developer, one more well-heeled lobbyist or one more connected attorney can earn a few bucks selling Kansas City what we may already have too much of.

The post More Hotels; Fewer Taxes appeared first on Show-Me Institute.

In January 2014, streetcar boosters floated downtown economic growth figures of $879 million. By March of that year, they reduced it to $791 million. That dropped further to $750 million in May. According to KCTV at the time [emphasis added]:

The mayor also said businesses are already investing $750 million in downtown, like with the new Marriott Hotel that’s set to be built just feet from the construction site. The mayor said it’s all thanks to the new streetcar.

A few months later, the number shot up to $900 million again, albeit with a caveat. Amy Hawley at KSHB reported:

The city has long said streetcars drive business. It attributes $900 million of new downtown business to the new streetcar line.

“We have about $900 million in projects in the downtown area right now since the starter line was first approved by the voters,” Chris Hernandez, the KCMO Director of Communications, said.

Those are very different standards. On the one hand the city wants to say the development happened because of the streetcar, on the other the city says the development happened after the streetcar. This is a classic logical fallacy: post hoc ergo propter hoc or “after therefore because of.” The city wants to claim everything that happened after the streetcar vote as happening because of the streetcar vote. We have pointed out that basic flaw for over a year here and here and here.

As of January 2015, the number is $1.24 billion, according to the Downtown Council. They put the number at $1.24 billion according to their “research.” But they seem to commit the same logical fallacy as the city [emphasis added]:

The past two years marked the beginning of an exciting new chapter in the renaissance of Downtown Kansas City as more than $1 billion dollars of new investment was announced or started construction since voters approved the new streetcar line.

If the economic development benefit of streetcars is so concrete, why can’t boosters agree on a number? The answer, of course, is that the numbers aren’t concrete. In fact, they’re often baseless.

The post Kansas City’s Shifting Development Claims appeared first on Show-Me Institute.

We actually went back about eight years and found that there was over $25 million paid in stipends either unapproved, unauthorized or improper. I have to say, with all the money paid in stipends, the district would not be in the condition it’s in if it were under control.

This quote comes from the late Missouri State Auditor Tom Schweich, in remarks about his report on the St. Joseph School District. In the same story, Schweich reported, “There were significant other problems with payroll, overtime hours, summer school credits, nepotism issues and other questionable spending.”

The St. Joseph District is not alone in wanting to spend more money. The Kansas City Public School District has been putting “trial balloons” in the air for some time seeking to increase the taxes that fund schools. Many education advocates want to spend more money on teachers and in the classroom. But in Kansas City, the amount spent per student, approximately $16,000 per pupil per year, is already very high. The likely problem, as highlighted by Schweich’s audit in St. Joe, is that the money is often not making it to the classroom; it is being eaten up by administrators through bad policy and perhaps even fraud.

In his 2011 audit of the Kansas City School District, Schweich found lots of similar problems. According to a story by KCTV:

The district could not account for $4 million in food costs and student incentives, repeatedly failed to competitively bid projects and monitor contracts, has excessive overtime and failed to properly oversee its closed buildings, the audit found.

The state audit said a principal at Lincoln College Preparatory Academy made $58,000 in unauthorized purchases and cash withdrawals. Jamia Dock is no longer at the school and has been charged in Jackson County Circuit Court with stealing more than $25,000 in district funds. She has pleaded not guilty and the case is still pending.

The Kansas City School Board was also faulted for repeatedly violating the Missouri Sunshine Law.

Schweich’s 2011 audit grade for KCPS was “Fair,” of a four-point scale including “Excellent,” “Good,” “Fair,” and “Poor.” According to the auditor’s office, most of these findings assume that district spending numbers are correct, which means they don’t do the time-consuming work of digging into expenses. Even still, for Kansas City to score in the bottom half is an indictment.

Many parents and teachers want to see more money making it to the classroom. As Schweich’s comment at the top of this post suggested, efficient money management means that more money can be made available where it matters most. If the Kansas City School District wants to build trust with parents, teachers, and taxpayers, they should invite a thorough and recurring examination of their books and remain transparent in all their expenditures.

The post Audit the Kansas City Public Schools appeared first on Show-Me Institute.

Of course not. Yesterday’s Post-Dispatch documented how teachers throughout St. Louis are getting their standard pay raises despite the economy, and the districts just assume that taxpayers will pick up the slack even as many of them have seen declines in their own income. At least the schools in St. Louis have, so far, followed the law and not filed a lawsuit.

When you base a tax system on property values, as we do in Missouri, you have to take the good with the bad. Sometimes, but not often, values will go down. For the school districts to sue in order to force the use of last year’s assessments — which everybody knows are no longer accurate — is the absolute height of bureaucratic arrogance.

How about this for an example of a typical made-up PR claim, from the KCTV story, in which the people filing the lawsuit to make taxpayers pay more actually claim to be protecting homeowners:

The source [from one of the public school districts] said the problem for homeowners is if they go to sell their home, most buyers will not go over the county’s assessed value, so sellers could get much less then what their home is worth.

I think many home purchasers don’t even know the assessed value of a home when they buy it. Most of them certainly don’t care. The idea that they won’t go over the assessed value is ridiculous. People generally know just the market value of a home, and that the current market values are lower than they were in the past.

The post Ridiculous Lawsuit Over Assessments in Jackson County appeared first on Show-Me Institute.

A quick note to commentators and blog posters everywhere: It is not sufficient to say that Randal O’Toole is simply opposed to light rail, and as such this study should be discounted. You have to actually read the study and then document where you think he may be wrong. So far, after reading various blog comments and news articles, I have not seen anyone do the latter.

So here goes the media roundup, if you are interested — as I am sure you are. The Kansas City Star published a solid article on the study, and linked to the full document as well, so readers can judge the arguments on their own — which we appreciate. Randal O’Toole and Crosby Kemper appeared live on two radio shows yesterday. The podcast of the "Chris Stigall Show" on KCMO AM 710 is here, and we’ll provide a link to the "Shanin and Parks Show" interview on KMBZ AM 980 when we have it.

I can only find one streaming video online for the TV station interviews. The video of the NBC Action News report is embedded here. Two TV stations, Fox 4 and KMBC-9, only have the online text versions of their stories online. KCTV-5 also appeared at the press conference, but I can’t locate the story on their website. We appreciate the coverage from all of these stations!

We will link to additional stories about the study as they appear. We are pleased to be a part of the discussion about this issue in Kansas City. Our primary goal was to give the people of Kansas City additional information about the other options they have for mass transit. If they choose to pay the higher taxes that will be required to move ahead with light rail, that is entirely up to them.

The post Media Round-Up for Kansas City Light-Rail Release appeared first on Show-Me Institute.