The story is similar to a piece published almost a year ago by Flatland, an online news source operated by Kansas City PBS that claims to be “committed to providing context” to the region’s challenges. The breathless piece was titled: “5 Companies Own 8,000 Kansas City Area Homes, Creating Intense Competition for Residents.” That claim comes from a 2023 study from the Mid-America Regional Council (MARC), which states: “Nearly 14,000 single-family homes in the region are owned by 33 companies. Of these, five companies own nearly 8,000 homes.”

Okay. Is that a lot? How many single-family homes are there in the region? The MARC report doesn’t say. Flatland, despite its commitment to context, provides none. Neither does the Star.

I’ve reached out to MARC for these data, but while I’m waiting, I did some basic calculations. The Census estimates there are 969,534 housing units in the Kansas City Metropolitan Statistical Area. Nationwide, about 74% of housing units are single-family residences. Data provided by the Greater Kansas City Regional Housing Partnership indicate there are 682,546 single-family homes in the region. If 14,000 are owned by institutional investors, that amounts to 2% of the market.

Are we being asked to believe that large firms and investors owning 2% of the housing market is “contributing to rising prices” or “creating intense competition?” Really?

The worst part is that, according to the Star, Missouri legislators are considering an effort to bar corporations from buying residential real estate.

While it may be ideologically satisfying to cast corporate landlords or institutional investors as the real enemy, it does nothing to actually solve the problem. The truth is that housing affordability is driven more by restrictive government regulations that impede the ability of the free market to meet demand. Zoning restrictions, burdensome regulations, neighborhood NIMBYism, and slow permitting and approval processes are the actual drivers of housing costs. Addressing those problems requires real policy work.

Using legislation to tinker with who is permitted to buy homes may feel like progress, but it is more likely to reinforce the problematic status quo in housing—too many rules and not enough houses.

The post Reporting on Housing Fails to Ask Basic Question appeared first on Show-Me Institute.

The question: how much over the $34.9 million budgeted for the project could 0.7 miles of rail cost taxpayers? The answer: another $10 million, and possibly more:

“We determined that both of the (contractors) were qualified, the technical proposals were sound, but their costs were above the estimate, and both of their costs were above the budget, significantly so,” KCATA Deputy CEO Dick Jarrold said during a Tuesday presentation to the agency’s Finance Committee. The KCATA is one of four groups heading the riverfront streetcar project, alongside Kansas City, the Kansas City Streetcar Authority and Port Authority of Kansas City. . . .

The Mid-America Regional Council (MARC) has authorized about $9.6 million in additional federal dollars for the riverfront streetcar through the Surface Transportation Block Grant program, and a MARC committee has recommended an additional $1 million in federal Carbon Reduction program grant funds. The programs require local matching funds, which Jarrold said are anticipated from Port KC and the Streetcar Authority in an as-yet undetermined amount. [emphasis mine]

Keep in mind that the estimate for the original plan to extend the streetcar to the riverfront was $22.2 million, meaning the apparent final (?) cost of the line is on course to double that estimate, with or without the local match considered.

Yet, that’s been the track record for this toy train for over a decade now. I wrote here in 2011, 2012 and 2013 and for Forbes in 2014 that the Kansas City streetcar was a profligate and bad idea. And yet, despite the many opportunities to prove naysayers wrong, the streetcar remains a remarkably poor fiscal and policy decision to this day.

The post To Nobody’s Surprise, Riverfront Extension of Kansas City Streetcar Going over Budget appeared first on Show-Me Institute.

It is important to realize that this marketing campaign, even though it uses biker-oriented talking points, is not talking about 36 cyclist lives—the latest annual data from 2017 showed zero cyclist fatalities. Instead, it estimates:

• 15 lives saved by increased physical activity
• 6 lives saved by improved air quality
• 15 lives saved by a reduction in fatal car crashes (not crashes that occur because a cyclist was involved—any fatal car accident counts)

Only the physical activity category is directly connected to bikers who would use the lanes.

There are problems with these estimates. Physical activity benefits, while hard to measure, are dependent upon more Kansas Citians choosing to bike instead of drive. Only 0.3 percent of commuters used bikes in 2018, and a survey noted that fewer than 50 percent of respondents were interested in biking more. More bike lanes could mean an increased number of bikers—but it’s just a projection, and there’s no way to know how many more bikers we’ll see with expanded bike lanes, let alone what the actual health benefits will be.

Six lives saved by improved air quality also seems a stretch. The number was achieved by expanding data from research in New Zealand. Even if this study was properly applied to Kansas City, the boasted number is the highest estimate possible. An economic summary of the Bike KC Master Plan read:

Assuming 1 death due to air quality for every 100 million vehicle miles traveled and 1 per 40 million vehicle starts (trips), the bike plan could reduce Kansas City air pollution fatalities anywhere from 1-6 deaths per year . . . [emphasis added]

The most puzzling estimate is that of fatal crash reduction. The economic summary of the bike plan noted that 228 fatal car crashes occurred within the city limits of Kansas City from 2015-2017, and that 94 of these occurred along the route of the proposed bike lanes. While the summary boasts a 47 percent reduction in these crashes due to the way bike lanes will change the flow of traffic, no crash data was included.

Upon reaching out to the authors of the economic summary for more information, I was told that they did not have any data on the cause of these car accidents: 

The dataset provided by the Mid-America Regional Council did not provide any context on the causes of the crash. There has been some analysis of the contributing factors in fatal crashes . . . but our FHWA source on road diets does not differentiate by crash cause or even crash severity. It is simply an empirical measure on the impact of road-dieted streets on total crash volume. These benefits accrue to all users, regardless of mode or how many people take up bicycling.

How can a 47 percent reduction in fatal crashes be a realistic estimate when there is no available data on what caused the crashes? If the reduction is due to fewer cars traveling the roads with the bike lanes, does that simply mean the crashes occur on the alternative routes these cars travel? Stating the number of crashes occurring within city limits and presenting some traffic flow statistics from other areas does not seem compelling. If BikeWalkKC wants to claim 15 fewer lives taken annually by fatal car accidents as a result of expanded bike lanes, shouldn’t there be more data to back that claim up?

By portraying the Bike KC Master Plan as a strategy that will save 36 lives per year, BikeWalkKC is not avoiding the real problem at hand: this project will cost hundreds of millions in taxpayer dollars, money that could be better spent elsewhere. As my colleague Patrick Tuohey noted,

Kansas City has significant needs, significant transit needs. They are not biking. It is infrastructure. It is infrastructure repairs. It’s getting those steel plates off our streets.

The use of questionable statistics will not help develop solid city policy. If the city has millions of dollars to toss around and is concerned about saving lives, a better idea would be hiring more police officers, not building more bike lanes.

The post Would Kansas City Bike Lanes Actually Save 36 Lives per Year? Probably Not appeared first on Show-Me Institute.

Supporters for the value of pre-K point to a single preschool program, the HighScope Perry program in Ypsilanti, Michigan that ran from 1958 to 1962. The participants had been tracked over 40 years and the resulting data provide much of the basis for what supporters claim is the benefit of pre-K.

The Mid America Regional Council (MARC), which will administer the Kansas City pre-K program if approved by voters, claims in its 2018 “Status of Children and Families” report that (page 45):

Research shows that every dollar invested in early childhood education saves up to $13 in future social costs, leading to lower crime rates, fewer adults on public assistance, fewer teen pregnancies, and a stronger, more prepared workforce.

Mayor Sly James’s pre-K Implementation Plan for pre-K similarly claims (page 44):

. . . the public benefits accrued over time from children who attended HighScope Perry Preschool program in Ypsilanti, Michigan, at a rate of 13 to one.

These returns seem too good to be true. And they are. The 13-to-one return comes from a single study of the HighScope Perry plan published in 2005, which claimed:

For the general public, higher tax revenues, lower criminal justice system expenditures, and lower welfare payments easily outweigh program costs; they repay $12.90 for every $1 invested. However, program gains come mainly from reduced crime by males.

The HighScope Perry study was of 123 “low-income African-American children who were assessed to be at high risk of school failure.” Only 58 were randomly assigned “to a program group that received a high-quality preschool program at ages 3 and 4.” The high-quality program included:

• Two school years of preschool running October through May;
• A center-based program for 2.5 hours per day with “4 teachers for 20 to 25 children”;
• Home visiting for 1.5 hours per week; and
• Group meetings of parents.

Only 39 of the participants in this study were male (see footnote 3 here). In other words, Mayor James and MARC want voters to believe that a small-scale, intensive two-year education program conducted with 39 high-risk boys can be extrapolated to the more than 6,000 children in Kansas City.

Even other proponents of pre-K are more restrained in calculating possible returns. Economist and Nobel laureate James Heckman wrote in a 2017 research summary of that same HighScope Perry program (emphasis added):

Every dollar spent on high quality, birth-to-five programs for disadvantaged children delivers a 13% per annum return on investment. These economically significant returns account for the welfare costs of taxation to finance the program and survive a battery of sensitivity analyses.

As I pointed out in a recent American Public Square panel discussion about pre-K in Kansas City, the program Kansas City voters are being asked to support is nothing like the HighScope Perry program Heckman analyzed. The plan being put before voters does not have anywhere near the 5 or 6 to 1 ratio of child to teacher, will not include home visits, will not be two years, and will not spend as much per child as HighScope Perry did.

A recent blog post discussed the unimpressive findings on pre-K programs such as Head Start that more closely resemble what Kansas Citians are being offered. But using HighScope Perry’s results to pitch pre-K for all in Kansas City is nothing short of a bait and switch.

The post Kansas City’s Pre-K Bait and Switch appeared first on Show-Me Institute.

The US Department of Health and Human Services (HHS) launched the Head Start program in 1965. It was expanded in 1981 and now has a $9 billion budget. Operated in Kansas City since 2005 by MARC, the program works to provide:

Comprehensive, high-quality birth-through-five early education services that facilitate healthy development including physical and social/emotional development and prepare children for school success.

Is it working? No. According to HHS’s own 2012 report, “after the initially realized cognitive benefits for the Head Start children, these gains were quickly made up by children in the non-Head Start group.” The report indicates this finding is similar to other studies published between 1995 and 2010. 

A 2013 story in The Washington Post is a pretty even-handed write up of the value of pre-K. The author points out that extrapolating findings from the HighScope Perry study (an influential pre-k study of a small group of children in Michigan) to larger populations like Kansas City’s is highly questionable. In discussing the fade out of any initial Head Start benefit, the author wrote:

Some Head Start supporters, like Danielle Ewen, formerly of the Center for Law and Social Policy (CLASP), argue that this says more about K-12, and that what’s likely happening is that poor quality public schools are actually reversing Head Start’s gains.

If this is the case, children in the Kansas City Public School District can expect to see no long-term benefit whatsoever. Russ Whitehurst of the Brookings Institution points not only to research on Head Start, but to large scale pre-K programs such as the Tennessee Voluntary Pre-K (TVPK) program. In those follow-up studies, children in the control group soon outperformed those who received the preschool benefit.

Using the state test data and the full randomized sample, the evaluators report negative impacts for reading, math, and science scores at the end of third grade for children assigned to TVPK. The negative impacts on math and science are statistically significant and substantive: children randomly assigned as preschoolers to TVPK had lost ground to their peers who had randomly not been offered admission to the pre-K program.

Whitehurst revisits this in a 2018 paper in which he writes:

Unabashed enthusiasts for increased investments in state pre-K need to confront the evidence that it does not enhance student achievement meaningfully, if at all. It may, of course, have positive impacts on other outcomes, although these have not yet been demonstrated. It is time for policymakers and advocates to consider and test potentially more powerful forms of investment in better futures for children.

As we wrote in a previous post, policymakers in Kansas City may not be interested in confronting such evidence. This is especially true of Whitehurst’s observation that direct aid to families, such as the earned income tax credit (EITC), “produced substantially larger gains in children’s school achievement per dollar of expenditure than a year of preschool, participation in Head Start, or class size reduction in the early grades.” 

Designing public policy is not easy. Neither is delivering effective education on a large scale. But we need to rise to the challenge of both. As it stands, the proposal of pre-K in Kansas City is unlikely to lead to significant long-term benefits for the children involved, especially if they matriculate into underperforming K-12 schools. A program with questionable efficacy that taxes the very low-income families it is meant to help seems, on balance, to make this plan more harm than help.

The post Pre-K in Kansas City Likely Won’t Deliver on Its Promises appeared first on Show-Me Institute.

On Tuesday, March 12, I appeared as a panelist on an American Public Square discussion titled “Pre-K for All?“ about the upcoming April ballot measure. Proponents of pre-K point to a single, small-scale study of a specific pre-K program conducted from 1962 to 1967. The study, called HighScope Perry, did show a positive relationship between participation in the program and educational and financial success. However, the program that was studied was intensive, expensive, and only included 123 children. While the Mayor and Mid America Regional Council (MARC) specifically cites the HighScope Perry study, the plan they endorse for Kansas City is nothing like what was done there.

Russ Whitehurst of the Brookings Institution has written at length about the failure of larger-scale pre-K programs such as Head Start and the Tennessee Voluntary Pre-K Program to generate impressive results. We’ll discuss that research more in future blog posts. But in a survey of the research on various school-readiness interventions, Whitehurst pointed out that direct aid to families, such as the earned income tax credit (EITC), “produced substantially larger gains in children’s school achievement per dollar of expenditure than a year of preschool, participation in Head Start, or class size reduction in the early grades.” That is a fascinating bit of information and should be of interest to anyone who is serious about helping low-income children.

During the panel discussion I offered, “You could do more for poor families in Kansas City by removing the sales tax on food and by exempting, say, the first $26,000 of earnings from the earnings tax. You can do more by aiding families—giving them more money in their pocket—than you can by taxing them and providing a program.”

But Mayor James was not having it. He responded, “There’s no way that you can tell me, regardless of what study you may cite,” that by reducing taxes on the poor that they, “are going to use the money to educate their children.” And maybe they won’t, but the data Whitehurst cites don’t specify how families spend the extra money. EITC funds are not earmarked, yet this direct support to low-income families still outperformed pre-K according to Whitehurst’s research.

Perhaps what low-income families need is not to have more money taken away from them in order to provide them more services. Perhaps what they need is more money, more flexibility, more agency to address their own challenges as they see fit. Perhaps telling poor people that government knows best how to spend their money and educate their children isn’t the best way to solve problems. The research (at least if we go beyond a specific study that seems cherry-picked to support a rosy view of Pre-K programs) seems to suggest this, if only policymakers will listen.

The post Pre-K Supporters Dismiss Research on Efficacy of Pre-K 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.

The table above shows the projected revenue sources and costs of the proposed streetcar expansion. Note two things: (1) The expansion is over 20% more expensive per mile than the existing 2.2-mile downtown line; and (2) $14.5M of the required revenue would come from Surface Transportation/Congestion Mitigation–Air Quality (STP/CMAQ) funds.

STP/CMAQ grants are federal dollars allocated throughout the region by the Mid-America Regional Council (MARC), a consortium of government officials. These funds are used to build streets, bridges, trails, and other transportation projects. Jurisdictions from Platte to Cass counties rely on these funds to meet their basic infrastructure needs.  

By targeting these funds, streetcar advocates are asking that the streetcar be given higher priority than other regional projects—much higher priority. During the next two-year STP/CMAQ funding period, roughly $42M in funds will be available. So the $14.5M grant that rail advocates are after could gobble up more than a third of the total funds. As a result, other regional priorities could wait years until funding becomes available again. The request for STP/CMAQ funds also demonstrates that rail proponents are trying to offload even more of the cost of their expensive project on taxpayers far outside city limits. (Note the $100M federal grant listed among the revenue sources.)

Rail advocates might reply that even if a grant is awarded to expand the streetcar, funds would still be available for other projects. While it’s true that some funds might still be available, this response overlooks the opportunity cost of funding the extension, not to mention the opportunity costs already incurred for the downtown line. In 2013, the downtown line received an unprecedented $17.3M in STP/CMAQ funds. The streetcar has already pushed projects to the back of the line before—why should it do so again?   

So while rail advocates seek out another multi-million-dollar grant, public officials should ask themselves: Is the streetcar project the best use of regional funds?  

The post Could KC Streetcar Expansion Drain Regional Resources? appeared first on Show-Me Institute.

While low fuel prices may give an unexpected boost to the economy at-large, they confound the expectations of city and state planners. Whether the source is the Mid-America Regional Council (MARC) (the Kansas City area planning agency), the Missouri Department of Transportation (MoDOT), or East-West Gateway (the Saint Louis regional planning agency), they all expected rising fuel prices to continue into the future. For example, in MoDOT’s October 2014 Financial Snapshot, they figured gas would average $3.26 in the upcoming year.

None of this is to blame these agencies for failing to predict future gas prices. The price of oil is historically volatile, and few predicted prices to fall as they have. What these government bodies should be faulted for is using what was at best an educated guess about the direction of gas prices as a standard plank in their arguments for billions of dollars of state and local investment in alternative transportation and restrictive land-use policies. For example, MoDOT used the trend in fuel prices as part of its argument that they needed the ability to fund billion-dollar passenger rail lines as well as support urban transit. MARC predicted that rising gas prices, along with other trends, would “demand for more walkable, transit-friendly development closer in.” This is part of their reasoning for recommending regional densification and urban refill.

Regional planners have consistently made the argument that citizens will increasingly use public transportation and live in denser environments, due in part to more expensive fuel. But instead of waiting for these markets to materialize and responding to steadily rising needs, residents are asked to spend billions today to meet uncertain demand down the road. What the precipitous fall in oil prices should remind us is that long-term predictions can be mistaken. While the estimates themselves may be prudent, using them to speculate with public dollars is not.

The post Fuel Prices Falling, Along With Planners’ Expectations appeared first on Show-Me Institute.

In a strange twist, the ballot language will not mention a rail plan. That’s because city leadership has fought Chastain’s rail plan for years, even going to court to prevent it from making it on a ballot. Although the city has now lost that fight, because officials and Chastain could not agree on ballot language that included the rail plan, voters will be asked to decide on tax increases for “capital improvements” and “transportation.”

City leadership has described Chastain’s plan as unfeasible, and it does not take much math to figure out why. A 3/8-cent sales tax increase would net Kansas City approximately $30 million per year. However, just the initial part of the plan (a line from downtown to just south of the Plaza) would have $1.4 billion in upfront capital costs and $11 million in yearly operating costs. Assuming that the line can be built for $1.4 billion and that no major capital costs are incurred for 25 years (25 years is also the lifespan of the taxes), the plan has a $900 million funding shortfall.

Supporters of the plan hope that 60 percent or more of the necessary funding will come from the federal government and private donations. However, because the city leadership and MARC back a streetcar, not light rail, plan, the federal government might not give the project much support. Even if the federal government does provide funding, it would be unlikely to exceed 50 percent of total capital costs, not nearly enough to cover the shortfall. Bottom line, it might not be financially possible to implement the rail plan even if the proposed sales tax increases pass.

But imagine that everything breaks in the plan’s favor. Say the tax increase passes, the federal government provides 50 percent of the capital costs, and more than $200 million in private support materializes. After all that, Kansas City would have one light rail line from the Plaza to downtown. Hardly a transportation revolution worthy of $1.4 billion. But for some rail supporters, that does not matter. The initial rail line is a part of a larger dream; a dream that involves many more lines and billions more taxpayer dollars. Voters get to decide whether this plan, at least, is finally put to bed.

The post Kansas City Transit: Light Rail Never Sleeps appeared first on Show-Me Institute.

Source: Kansas City Business Journal

Speaking of bad math, the cost of the projects in MARC’s chart (above) adds up to $800.4 million, not $775.7 million. So what’s getting cut? Does anyone check these things? 

On the surface, that sounds great for residents of downtown Kansas City (if not elsewhere). Previously, they were asked to pay a 1 percent higher sales tax to get the streetcar expansion. Now, they still pay 1 percent more, but they get other road and transit projects that state taxpayers fund, in addition to the streetcar expansion.

Haven’t seen a deal like that since Billy Mays died. But wait, there’s more!

Actually, the math for that “swap” does not work. The TDD’s 1 percent sales tax was supposed to bring in approximately $30 million a year. If the city reduces that rate to 0.25 percent, it will create a funding gap of almost exactly $210 million. That’s the reason the city was originally asking for $210 million; it was not some random number (although the city is not beyond doing that).

Drop the amount that streetcar gets from the state to $144 million, and a $65 million funding gap opens up. And remember that the original plan already had a $31 million unresolved budget gap. That leaves almost $100 million up in the air, ready to come crashing down on Kansas City taxpayers. Unless there is some other very large source of funding for the streetcar, the TDD sales tax cannot be held to 0.25 percent. It would need to rise to about 0.50 percent to maintain adequate funding (but still not addressing the initial $31 million shortfall).

The underlying problem is the incredible expense of building a streetcar system. Even if the federal government and Missouri taxpayers cover massive portions of the streetcar’s cost, there’s still a significant burden for residents in downtown Kansas City. Residents in the proposed TDD, Kansas City, and state will have to decide whether the streetcar is worth it.

The post The Math Does Not Add Up For Murky Kansas City Streetcar Deal appeared first on Show-Me Institute.

But anyone who has read the streetcar’s financial plan knows the math for that “swap” does not add up. The streetcar TDD’s sales tax is supposed to bring in almost $30 million a year. If it is reduced to 0.25 percent, the TDD would only raise $7.5 million per year. With an extra $3 million a year from the state, that leaves almost $20 million per year in lost revenue unaccounted for, or $200 million over 10 years. Because the streetcar needs every dime (and then some) of that sales tax money, where is the extra $200 million going to come from?

The answer to this conundrum lies in Resolution 140500, which Kansas City Mayor Sly James introduced on June 19. It proposes spending an incredible $210 million of the 0.75-cent statewide sales tax revenue to fund the streetcar expansion. To get just how incredible of a request that is, consider that the Kansas City region is only supposed to receive a total of $776 million for all of its road, bridge, transit, rail, port, aviation, and greenway projects. In the plan that the regional planning agency (MARC) released, that is almost every dollar the region planned to spend on transit. That original plan had $32 million for the streetcar, but millions more for improvements throughout the entire region.

This money grab for what is essentially a development scheme for downtown Kansas City should enrage not only residents in the Kansas City region, but taxpayers throughout the state. For parts of the Kansas City region not called downtown Kansas City, it essentially means no new funds for more cost-effective transit solutions or other more pressing projects. For the state as a whole, it underlines the incredible waste of a transportation sales tax supposedly needed to fix MoDOT’s highway funding problems. That 4 percent of all sales tax revenue raised over 10 years would go to support an incredibly expensive want with dubious development potential makes the proponents of the sales tax, who constantly argue that our infrastructure is crumbling, look like chicken littles.

If reports are accurate, MoDOT may already have made an agreement with Kansas City to divert this vast sum of statewide sales tax revenue, completely upending the open process through which MARC developed its regional plan and entirely contradicting MoDOT’s preliminary list of projects (which Kansas Citians have been asked to fruitlessly comment on) for the Kansas City region. That should indicate to Missourians just what kind of policy the transportation sales tax would create: wasteful, opaque, and catered to special interests.

The post Kansas City To Spend 27 Percent Of All Regional Transportation Funds On Streetcar appeared first on Show-Me Institute.

Kansas City feels Saint Louis’ pain. Like Saint Louis, Kansas City has undertaken a series of urban redevelopment plans of its own that, again, have focused on attracting the “hip” class to the city center, oftentimes with significant tax incentives. And as has become commonplace, the hip have come, but the jobs have not.

A report released […] by the Brookings Institution said that in 2010 just 16.9 percent of the area’s jobs were in the core, defined as within three miles of Kansas City’s downtown. That’s down from 20.5 percent in 2000.

Dragged down by the Great Recession, the raw number of jobs in the central core also shrank from 180,000 in 2000 to 140,000 in 2010, according to the study.

For areas between 3 and 10 miles from the city center, the number of jobs also dropped. But between 10 and 35 miles from the central business district? As in Saint Louis, the total number of jobs rose — and in Kansas City’s case, they rose significantly.

The chart below, created by the Kansas City Star, tells the decade-long tale.

Indeed, all of the regions in Kansas City were buffeted by the Great Recession. Notably, the 10- to 35-mile band was still shy of its intra-decade high as of 2010. But the downtown Kansas City job figures tell a pretty unambiguous tale: jobs have been falling in Kansas City’s central core. Like Saint Louis, population in downtown Kansas City rose over the decade, but . . . (emphasis mine)

. . . new residents hadn’t translated directly to job creation in the core by the time the Brookings information was compiled.

Since then, “we’re seeing some small businesses locate in the Crossroads and the like, but they don’t employ that many,” said Jeff Pinkerton, economist at the Mid-America Regional Council. “And we haven’t had any major employer move downtown recently.

“The fact is that jobs follow rooftops, and housing is growing in the suburbs.”

As has been explained before, “the hip crowd” does not typically have much in the way of jobs coattails. Unfortunately, it seems, Saint Louis and Kansas City know this all too well.

The post Part Five: The Smallness Of The Potentially ‘Hip’ Core appeared first on Show-Me Institute.

Ray County is in the process of establishing eight different EEZ districts under one county umbrella. This is a massive bet government planners make that they know what, where, and how economic growth will occur in the county over the next two decades. I have studied the results of Enterprise Zones (EZs, the very similar precursors to EEZs in Missouri) in counties that adopted large EZs in the 1980s in Missouri. The economic data shows that the counties that adopted these zones did no better than neighboring counties that did not. Government planners cannot see the future, and they should not be empowered to use tax dollars to bet on it.

The dirty little secret that the DED, MARC, and the Ray County EEZ proponents do not want you to know is that EEZ, Tax Increment Financing (TIF), Transportation Development Districts (TDD), and other similar subsidies do not work. They do not succeed in growing the local economy. All this myriad of subsidies does is shrink the local tax base, encourage more government planning of the economy, and increase the chances of eminent domain abuse. As a famous Swedish economist once said, “It is not by planting trees or subsidizing tree planting in a desert created by politicians that the government can promote . . . industry, but by refraining from measures that create a desert environment.”

If you ask a DED or MARC official how effective EEZs are, they will tell you how much investment has occurred within EEZs over the past decade. Their hope is that you will assume all the investment is because of the EEZ. Their lie-by-omission is that they have no idea how much the EEZ aided that investment and how much would have occurred anyway. The consensus among economists is that special tax incentives such as EEZs matter little, and only a very small portion, if any, of investments within a zone can be credited to the subsidies. Yet government planners will happily let people assume the incentives make all the difference while hoping nobody asks any follow-up questions.

Most people would claim to oppose corporate welfare, but that is exactly what is being hoisted upon us in Missouri; one special taxing district at a time. This is all being done under the cover of fixing blight, without any real definition of what that means. But the word “blight” is not empty talk. It means many things. One thing it means is that Ray County is taking a major step toward much heavier use of taxpayer subsidies for all types of commercial activity. Once you have blighted a major portion of the county, it is but a short walk to the point where almost every development in the area has some type of subsidy. That is not a “maybe.” That is the current reality in Kansas City and Saint Louis.

Tools such as EEZs fail because politicians cannot see the future better than markets can. Ray County should focus on low taxes for all businesses, not special incentives for a few. It already has the lowest commercial property tax surcharge in the region. Ray County should trumpet that loudly. It does not need a massive implementation of Enhanced Enterprise Zones.

David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

The post Ray County Does Not Need Enhanced Enterprise Zones appeared first on Show-Me Institute.