We’re told early in life that nothing is truly free. If you’ve had to learn this lesson first-hand, you know that some “free” things are actually quite costly.

The Saint Louis Zoo, one of our region’s most beloved institutions, is one of those expensive free things. And soon it could get a whole lot more expensive.

Senate Bill 49 (SB 49), if signed into law, could mean voters in Saint Louis County and City will be asked to hike their sales taxes by one-eighth of one percent (0.125%) to help fund infrastructure, conservation projects, and other zoological activities at the Saint Louis Zoo. By all accounts, the needs at the zoo are genuine—many of its pipes, sewers, etc., are original. But the zoo already receives $21 million—about one-third of its budget—from county and city taxpayers through a property tax. Is ratcheting up the region’s already-high sales taxes the best way to raise additional funds?

Here are some reasons to think not.

Sales taxes in both the county and city just went up. The city’s sales tax rate will soon be 9.179%, higher than New York City’s or San Francisco’s—and another half-percent hike is on the horizon. Things don’t look much better in the county. With the passage of Prop P, Clayton will soon have a rate of 9.113%, as will places like Olivette, Webster Groves, and Ballwin. In Ferguson, sales taxes will sit even higher, at 9.613%. Add in the extra 2% levied by numerous, overlapping special taxing districts, and in some places you’ll be paying more than 11%! A new zoo tax will only make your shopping more expensive, and it will hurt the region’s poor the most.

Considering that policymakers have a seemingly never-ending list of “transformative” or “essential” projects that require tax hikes, is a zoo tax the best use of limited public resources? There is no formula to determine the optimal sales tax rate, nor is there a documented sales tax ceiling, but taxpayers will only stomach so much. If the sky isn’t the limit for tax rates, could a zoo tax help exhaust the region’s sales tax capacity?

And then there’s a basic math issue. The proposed tax could raise roughly $20 million per year if passed in both the county and city, and zoo officials have claimed there is a backlog of needed infrastructure projects that will require approximately $100 million. Accordingly, by conservative estimates, a mere six years of the tax could take care of all the zoo’s infrastructure needs, and an extra year or two could raise tens of millions for conservation efforts. But there is no language in the bill that states the tax would be temporary. So while zoo officials talk of specific needs that justify the tax, they fail to mention that, in addition to taking care of these needs, the tax would increase their annual budget by a third—and, apparently, permanently so.

Finally, a sales tax hike wouldn’t fix the underlying funding problems. Since the zoo does not charge admission, it has what economists call a free-rider problem. Not all of the visitors who enjoy the zoo pay for its operation. The result is a zoo with piling bills and no way to pay for them. But rather than address this problem, a zoo tax would simply exacerbate it. City and county taxpayers who currently subsidize the zoo for everyone would be forced to doubly subsidize the zoo for everyone. And while it’s convenient to say Saint Charles, Franklin, and Jefferson counties should impose a zoo tax too, residents from these counties comprise only 13% of the zoo’s visitors, and taxing them would likewise fail to address the free-rider problem.

There are alternatives to hiking sales taxes, and one in particular deserves greater consideration: charging a reasonable admissions fee. If other top zoos charge more than $50 for admission, visitors can pay a fraction of that to keep ours one of the best in the county. A small admissions fee—for those not currently paying property taxes for the zoo—could raise millions annually, and help avoid hiking an unnecessary, regressive tax.

It’d be great if some things in life were truly free, but they’re not. And nothing is wrong with that. The user-fee system works—it’s both fair and financially sustainable. Let’s hope policymakers and zoo officials keep that in mind in the coming months.

The post To Keep the Zoo Great, Keep It Out of Taxpayers’ Pockets appeared first on Show-Me Institute.

Any real estate, now or hereafter owned by the City of Olivette or any agency or instrumentality of the City, which is principally used or held out for use as a public park, shall not be sold, leased, given away or otherwise disposed of, and shall be used only as a public park, nor shall any structure be built in any such park to accommodate activities not customarily associated with park use or outdoor recreation, unless such sale, lease, disposal, gift or structure is approved by a majority of the qualified electors voting thereon.

To say this language is broad is like saying the Great Wall of China is long. True, but it is also kind of an understatement.

I get why people would be in favor of this measure. They want to have a say in case the city wants to do something drastic, like sell a public park. However, the problem with this amendment covers more than just selling a park. If passed it would require the city to seek voter approval if the city wanted to lease park management to private operators for a whole assortment of activities.

For example, if Olivette wanted to let a private operator open a restaurant on park grounds, like Saint Louis does for the Boathouse in Forest Park, then it would have to be approved by the voters. If Olivette wanted to let a private company open an ice rink in one of their parks, like Saint Louis does with Steinberg Skating Rink, then it would have to go to the voters. There are other successful examples of  private groups operating recreational services,  like Saint Louis does with the golf courses in Forest Park. Olivette residents won’t have to worry about golf courses, but they just go to show that if Proposition 1 is passed then any lease or contract will have to go to the voters.

The ultimate decision on whether to adopt the charter amendment is up to the residents of Olivette. I believe that voters should have a direct say if, for instance, a city decides to sell their municipal parks. However, I also think that city officials should have more leeway when it comes to leasing the park or contracting for services.

The post Some Thoughts on the Proposed Olivette Charter Amendment appeared first on Show-Me Institute.

The proposal is for BWB Sports to lease the land that now holds the Olivette Community Center and athletic fields around it. (My kids have played many team sports on those fields.) The company wants to build ice rinks, lacrosse fields, and more, and operate it as a private entity. BWB officials do not appear to be asking for a subsidy (I’ll amend this post if they are), which is one of the reasons I support this. However, the fact that they are going to lease this land will likely limit the expansion of the tax base, as the city will still own the land. (There likely will be some tax base expansion from business equipment taxes, concession sales taxes, etc.) Not to mention the fact that the company will pay Olivette to lease the land.

So, basically, you have some residents of Olivette telling me that the park and community center really are not in very good shape and desperately need an upgrade. While others – the ones showing up at the meetings attacking the proposal – are demanding that the park be protected and the land preserved.

There is no doubt about one thing – this is not a half-measure. This is a major change to the property that I think would significantly upgrade the facilities and use of the land. The only thing the proposal is missing is an outright sale of the property, which is politically impossible and legally complicated. So they are just leasing it, but I doubt that means much to the opponents.

I hope that Olivette officials can see the long-term benefits in this proposal. But, unlike other NIMBY situations, I see some merit in the residents’ concerns. This is not like recent disputes in Brentwood, Maryland Heights, or South County. I understand why some neighbors are objecting. As I said in my study about privatization in Missouri, park privatization proposals are very contentious for good reason. Outsourcing the management of existing park facilities is not that controversial, but wholesale changes to parks themselves are.

This is the latter. I hope it passes. I think the long-term benefits are significant for Olivette and Saint Louis County. This plan would increase use of the property, grow the tax base (somewhat), inject private money into Olivette recreation instead of counting on tax dollars, and more. But I am not going to attack the opponents as NIMBY-based obstructionists, even the Keynesians among them.

The post Great Idea Will Be Hard Sell In Olivette appeared first on Show-Me Institute.

Another long-time example of shared services is emergency dispatch. We wrote a number of blog posts about the issue several years ago. Few cities have operated their own emergency call centers, which is a good thing. There are obvious economies of scale in sharing resources here, which is why so many cities have done it.

Brentwood is a particularly wealthy city due to the high level of shopping within the city, the high assessed valuation combined with limited government-service needs of Brentwood Forest, and more. So, it has been able to do something on its own that other cities have not been able to afford, such as operating its own emergency dispatch. There is nothing automatically wrong with that, but now officials are thinking about trying to save money by participating in the East Central Dispatch Service 9-1-1 center, which serves many other cities in mid-Saint Louis County.

I think this is a no-brainer “yes” decision for Brentwood. Even if the short-term savings are small, the long-term benefits of being in the larger system would be noticeable, primarily, greater access to a larger pool of resources (technology, employees, back-up systems, etc). Phone calls do not take longer to get to Olivette than they take to get to Brentwood. There are certain things cities do NOT have to do themselves, and emergency dispatch is at the top of the list.

Let’s be honest here. Opposition to this is about protecting public sector jobs in Brentwood, not about public safety. Brentwood should participate in the East Central Dispatch Service.

The post Brentwood Should Join Consolidated 9-1-1 System appeared first on Show-Me Institute.

Related:

• Learn what happened when Olivette, MO, rejected a TIF

The post David Stokes on Crestwood and TIFs on KMOX appeared first on Show-Me Institute.

Perhaps more surprisingly, the city’s urban planning partner, PGAV, has stopped working with Crestwood because, for once, a city didn’t do exactly what PGAV told them to do. Here’s hoping that this example of a city listening to its residents and voters instead of its planning consultants gains a lot of traction.

From a municipal finance perspective, Crestwood’s solution to the closure of the mall is straightforward: join the sales tax pool. As of 2010, Crestwood was receiving $189 per capita for its general sales tax, while the pool cities received about $116 per capita. However, the $189 number has probably gone down a lot since then, and is certainly going to go down fast now that the mall has closed. Joining the sales tax pool is the answer for city finances, both short-term and long-term. Would some services have to be reduced and some taxes raised? Perhaps. But responding to this situation by trying to resuscitate a failed mall with a huge TIF would be insane. Just look at Northwest Plaza to see how that simply will not work.

From the perspective of what to do with the space, that is going to require a commitment to patience and a faith in free markets. Just look at our recent (and now very timely) video about the rejected TIF in Olivette as an example of how good things can and will come without huge incentives if you give it time.

I went to Crestwood Mall plenty when I was younger. I remember its glory days. Those days are not coming back. Reacting to the closure with some huge tax subsidy and more corporate welfare won’t work either. No matter how grandiose the planner’s dreams may be, it does not justify taking other people’s money to give out more corporate welfare. Crestwood officials deserve great credit for their judiciousness so far. Here’s hoping it holds.

The post What Should Crestwood Do? appeared first on Show-Me Institute.

The area that was supposed to be razed, with “help” from eminent domain, using TIF in 2000 is doing just fine in 2013. There are new homes and new businesses, all without subsidies. Most importantly, the residents and the neighborhood are still in good shape. That situation was not made any easier 15 years ago, when the entire community was in fear of being bought out (or taken) and torn down for a Walmart.

Check out our newest video about the Olivette TIF proposal here. Communities are strongest when individuals are empowered, not government planners and subsidized developers.

The post New Show-Me Institute Video About Olivette TIF appeared first on Show-Me Institute.

In the 1990s, private developers partnered with members of the Olivette City Council to endorse the implementation of a $38 million in the area just west of the intersection of I-170 and Olive Blvd. Due to the threat of eminent domain and several years of unresolved negotiations, local homeowners were left in the lurch about the status of their property. Finally, in 2000, Olivette residents voted in a referendum against the project with a margin of 53.5 to 46.5 percent (absolute numbers are 1,656-1,435) to defeat the TIF proposal.

Supporters of the TIF proposal argued that it was the only way for Olivette to compete and generate new tax revenues. At the time, the
Riverfront Times reported on the debate about this tax subsidy. After the TIF was defeated, what happened? Were the TIF supporters correct? Was a taxpayer-subsidized mega-project the only way to save the area?

Not surprisingly, the TIF supporters were completely wrong. By letting the free market have control over real estate development, the area has experienced a period of sustainable economic progress and revitalization. A bustling Chevys Fresh Mex restaurant continues to thrive. A CVS Pharmacy that opened in 2009 was built without public subsidies. Most notably, the area’s previously existing homes are well maintained, and a new, post-TIF, housing development?— The Villas at Hilltop?— offers upscale townhome-style living. 

Rather than enduring the forfeiture of tax revenues, as would have occurred under the TIF proposal, these properties naturally generate income for local government services instead. The Chevys, CVS, and Villas together are appraised for a noteworthy $11,329,300 and paid $212,355.48 in property taxes in 2012. Additionally, between the years of 1993-1995 and 2005-2007, Olivette’s average sales tax receipts increased more than 143 percent ($1,022,382 to $2,487,038) and its total share of the state’s tax receipts largely stayed the same as well, at about 0.5 percent. The private land developers and their allies on the Olivette City Council warned that TIF funding was absolutely necessary in order to stimulate economic growth. But does this area look blighted to you?

More from the Show-Me Institute on Tax Increment Financing:

• Stokes on KWMU – TIF Hurts Communities
• The Use of Tax Increment Financing in the City of Saint Louis
• Counties, Not Municipalities, Should Determine TIFs

•  (PDF)

The post The Tax Subsidy That Wasn’t appeared first on Show-Me Institute.

Here is the chart of fire districts and municipal fire departments in St. Louis County. Indeed, it’s pretty confusing. There are cities with their own fire departments, fire districts for the unincorporated areas, cities within fire districts where the city has no involvement with the fire district, and even one small unincorporated area in which the county pays a municipal fire department (Olivette, I think) to provide fire service because many years ago the area was somehow left out when fire districts were drawn up. Since that area (between Olivette and Overland) has long had a primarily African-American population, I have to guess that racism played a role in that oversight.

I live in a city with a municipal fire department — University City. At times, people have discussed saving money (?) by switching to a fire district. Needless to say, that would be the worst possible decision the city could ever make. We have a terrific fire department, and I hope we keep it just like it is now, run by the city, its mayor, and the city manager, rather than by three members of a fire district for which nobody has any idea who to hold responsible for taxes, performance, etc.

The post Fire Districts Are About as Confusing as It Gets in Local Government appeared first on Show-Me Institute.

McCormack has saved two months’ worth of calls to St. Louis County’s main dispatch center, which serves forty of the county’s municipalities, including larger areas such as Chesterfield and Eureka.

Another good example, along with the ones we discussed the other day, of shared municipal services. I found a crazy cool website dedicated to radio frequencies and 911 dispatch information. It shows that a number of county municipalities share 911 dispatch services with other cities, but we still have way too many separate systems in St. Louis County. For the record, Olivette has joined the East Central Dispatch system in Richmond Heights that I discussed the other day, so kudos to them. Most of the larger cities have their own dispatch systems (Florissant, University City), which is fine — they are big enough to afford it.

There are some typical examples of too much redundancy in the county, though. It’s nice that Glendale and Warson Woods share the dispatch system, but if Kirkwood does dispatching for Oakland, it can certainly do it for Glendale and Warson Woods, too. Same with Brentwood and Rock Hill. Why not just save money for everyone and join the East Central Dispatch system? Ladue, Frontenac, and Huntleigh?  How about some more coooperation here?

For the record, in my recent posts on St. Ann I wondered whether they were doing all they could to share services, as opposed to raising taxes. It seems that, in 911 dispatch at least, they are indeed sharing the service with a couple of other mid-sized munis, so they deserve credit for that.

As I wrote earlier, any new tax imposed to improve 911 service should mandate some consolidation of dispatch centers before the additional money is distributed. Then I will gladly vote for the cell phone tax.

The post The Riverfront Times Adds to the 911 Discussion … appeared first on Show-Me Institute.

The first Post-Dispatch article is about the efforts of local suburbs to create downtown areas for their communities. The second is specific to the Olive Boulevard area of University City and Olivette, with which I am pretty familiar.

As for the first article, it was excellent reading once I got past my initial, "Are you kidding me? Is this a joke?" response. There is some absurdity in suburban towns that "just decide" (say that like Chris Penn in Reservoir Dogs) to suddenly create an urban environment, with all its inherent hipness, in the middle of suburbia. It’s like Robert Moses and Jane Jacobs sat down and just worked out a compromise over coffee. Tell me what is missing in this statement:

Planners tout Manchester Road in Maplewood, downtown Kirkwood and Washington Avenue in St. Louis as premier examples of vibrant business and residential districts created by refurbishing existing buildings.

What is missing is the acknowledgement that the planners didn’t have anything to do with the success of Washington Avenue, downtown Maplewood, or Kirkwood. I was there on Wash Ave., man — to do my best 1967 Haight-Ashbury impression. Entrepreneurs made Washington Avenue what it is, along with some dedicated urban trailblazers. City government had nothing to do with it, although they almost screwed the whole thing up with a neverending street improvement project. I admit I like the zipper motif in the road, for which we can thank the city, but that’s it.

Downtown Maplewood is the same thing — restaurateurs built that up while the city was tearing down houses for Wal-Mart just to the north. (Side note: It’s a brilliant idea to take advantage of the fact that the city goes 100 yards west of Skinker to put up bars with 3 a.m. licenses on the city line, in what feels like the county. See Delmar Bar and Grill, Cheshire, and Cusumano’s on Manchester as successful examples.)

As for Kirkwood, the downtown area there was popular long before the new loft developments were planned. The hobby shops, diners, neighborhood bars, and markets gave the place a great feel without the new urban hipness everyone apparently wants now, according to this article. If Dardenne Prairie, Manchester, and Chesterfield want to just build downtowns out of thin air, I wish them luck (not really) but feel they are going to have the same results as Wildwood:

In Wildwood’s town center, leaders say some businesses have thrived, though some residents have been disappointed at the pace of the residential development.

"It’s been slower than most people expected," said Joe Vujnich, the city’s park’s and planning director.

Really? So people who want to move to Wildwood aren’t looking for loft living above the new P.F. Chang’s? Really? This surprises you, Mr. Developer and Ms. City Planner?

The University City / St. Louis Loop is one of the greatest areas in our community. I met my wife there and play darts there every week (excluding this summer, because of the birth of my son). Joe Edwards gets all the press, and he deserves every bit of it, but other business owners deserve credit, too, for making the area what it is. Business owners like Joe made the Loop what it is. To its credit, University City government has always responded well to the needs of the business community, and it could serve as a great example to other cities for how to let businesses lead, and how to work with them.

I say all this because if U. City thinks it is going to be able to work with a developer to turn Olive near I-170 into anything resembling the Loop, or any other successful mixed-use area, it ain’t gonna happen.  These things take time, not a horrible new Italian restaurant chain in a city filled with great Italian restaurants. Bob’s Seafood, Nobu’s and Beyer’s Lumber have been in University City for years. As Jane Jacobs argued, those are the types of small businesses that make vibrant areas, not things to be pushed out for some awful, artificial development. I hope U. City and Olivette avoid tax incentives that would give new chains advantages over older, established businesses. If new chains want to move in, fine, but they should do so without the type of government aid that distorts the free market and often fails anyway.

The post The Inherent Fallacy of Central Planning, Local-Style appeared first on Show-Me Institute.