Proponents say the development will raise property values and increase sales tax revenue in Rolla through the construction of a Menards and four smaller retail stores yet to be named. But while new shopping options could be exciting for local residents, the financial impacts might not be.

Missouri law requires any developer asking for TIF to show that the project wouldn’t be undertaken without financial assistance. In the case of the Westside Marketplace proposal, justifications for the subsidies include inadequate street access, an old barn that may be unsanitary, and (here’s the real kicker) a portion of the TIF area being classified as a Special Flood Hazard Area with a 26% chance of flooding in the next 30 years.

Flood risks aside, the location is ideal from a commercial standpoint with Kings Highway steering in plenty of traffic. Still, if the potential for flooding is enough to make the developer reluctant, maybe it should make taxpayers think twice as well.

In addition to depriving the county of tax revenue, subsidizing a Menards that will compete with other home improvement stores is unfair. Stores such as Lowe’s and Meek’s that already operate in Rolla without subsidies will lose business to Menards, and the local community will lose tax revenue from any reallocated spending. This selection of winners and losers shouldn’t fall under government jurisdiction—something the Phelps County Commission should take into account when deciding if this TIF is worth the risks that come with it.

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First, a quick primer on property taxes. Homes are assessed at 19% of their market value. So, for example, a school levy rate of $3.00 per $100 of assessed value applied to a house with a market value of $100,000 would mean that person pays $570 per year in tax.  An increase of 50 cents per $100 in assessed value would mean paying an additional $95 per year.

As a reference point, the statewide average millage rate is $3.69 per $100 in assessed value, and the state calculates “local effort,” the amount local districts are expected to contribute before the state adds its funds, at $3.43 per $100 of assessed value.

Sometimes tax levy increases are necessary.  For districts that are growing and need to build new school buildings, or districts that operate efficiently but are facing aging infrastructure, modest increases to the tax levy are perfectly appropriate.

That said, there are reasons to be skeptical. First, many school districts are not currently operating as efficiently as they could be. By comparing teacher/student ratios and administrator/student ratios, we see that many schools do more with less.  The same is true with the average salaries for those positions—there is serious variation across districts (even in what seem to be similar labor markets) in how much teachers and administrators get paid. Also, some districts ask for levy increases to build new buildings when it is clear that their enrollment is on the decline.  They should be figuring out how best to use what they already have.

We should also always be on the lookout for the pernicious effect of TIF deals that erode the tax base of school districts.  Kansas City and St. Louis are chronic abusers of this system, which diverts tax revenue that should go to schools back into the pockets of developers, but TIF projects take place all over the state.  If a district has hollowed out its tax base through TIF, why should ordinary citizens have to pick up the slack through increased property taxes?

To better inform voters, we have put together a series of information sheets on the proposed mill levy increases that are on the ballot on April 5. We provide data on what the mill levy means for homeowners in terms of the increased taxes they will be paying every year.  We also provide data, drawn from publically available spreadsheets on DESE’s website, on the school district and the school districts that surround it so taxpayers can compare and contrast how well or how poorly the district is being managed.  

Links to each of the info sheets are below.

Update, March 23: We now have an info sheet for the Maplewood-Richmond Heights school district.

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Numerous studies show that the use of TIF does not lead to economic growth for the area and isn’t a financial boon to the jurisdictions that use it. For example, studies of the use of TIF in Iowa and Chicago both found that TIF does not deliver tangible economic benefits. A more recent study in Indiana found “. . . uniform negative impacts of TIFs on traditional measures of economic development such as employment, the number of business establishments, and sales tax revenue.”

So why do Phelps County and Osage Beach (which approved TIF for a senior living center earlier this year) think that their projects will be different in the face of so much evidence to the contrary? It would be a nice to know an answer to that question, but in the meantime, the proliferation of TIF districts continues.

It is easy to understand the appeal of using TIF to redevelop vacant property. If the project gets completed, a new development is in place instead of a deserted lot, and all without “costing” taxpayers. However, development can occur without TIF. It has in Olivette, and it can happen in Rolla, too. 

The post “This Time It’ll Be Different” appeared first on Show-Me Institute.

It’s perfectly fine with me. In tough budget times, the state has to cut spending somewhere, and assessors deserve the cuts just like everyone else. (I am fully aware of the mistaken Keynesian arguments in favor of increasing government spending at all levels right now.) The assessor in Phelps County is complaining that the cuts to the reimbursement fund — from $6 per parcel to $4 — leave him hanging:

Rasmussen said actual per-parcel, assessment-maintenance expenses amount to $28.48. Assessment maintenance includes the actual assessment, pricing new construction projects, assessing all personal property in the mobile-home count and keeping parcel ownerships current.

I have proposed a perfectly reasonable method of residential assessment, based on very common real estate property indices, that would substantially lower the cost of doing assessments. It would also make the job of the Phelps County assessor easier, and thereby less expensive, if they adopted the certificate of value method, like in St. Louis, but we all know that won’t happen. If the residents of rural Missouri don’t want certificates of value to be filed when homes are sold, that is fine with me, but they have to realize their rejection of that method might increase the local taxes they have to pay for their assessments.

But why do we have to do the assessments? I see no problem with amending the state law to allow for reassessment every three years instead of every two, allowing for some caveats, because you probably do want to do a reassessment after each census when you have the most accurate information available. I really doubt anyone would complain if, after 2011, the next assessment does not take place until 2014. I certainly wouldn’t.

The post Should Missouri Reassess Property Less Often? appeared first on Show-Me Institute.

“It started with HAVA,” Kristy Urich, Grundy County’s clerk, said. “We had to have very expensive electronic equipment, and it forced us into having fewer polling places.”

Grundy County underwent precinct consolidation in the wake of the Help America Vote Act (HAVA) of 2002, meaning it reduced the number of polling places available to voters. Why? To save money.

HAVA requires that federal money be given to states: “to replace punch card voting systems or lever voting systems (as the case may be) in qualifying precincts within that State with a voting system (by purchase, lease, or such other arrangement as may be appropriate) […]”

But even though federal funds were available, there was only so much money to go around.

“They allocated X amount of dollars per location,” Urich said. “And they don’t pay for ongoing maintenance. Although they paid for most of the original setup costs, they don’t continue to pay.”

Without enough federal funds, changing over to more high-tech voting systems was cost prohibitive. And, just like that, places to vote disappeared from Grundy County.

“There was a lot of ongoing legislation [leading up to HAVA],” Urich said. But ultimately, “Our lovely hanging chads created that bill.”

What does precinct consolidation mean for voters? Well, it could mean fewer voters bothering to turn out. After Grundy County’s precinct consolidation, turnout in the April municipal election dropped from 23.88 percent in 2007 to 4.84 percent in 2008.

Urich attributes the drop in turnout to non-elections. She said that school districts and other political subdivisions no longer have to hold elections each year, and fewer races mean fewer issues to attract voters to the polls.

“If [districts] have the exact same number of people file as positions open, then they consider the position filled, and they don’t have an election,” Urich said. “With many of the schools doing the nonelections … it just leaves very little on the ballot.”

Crawford County, too, underwent precinct consolidation. Dedee Hamilton, voter registration clerk for the county, told me it had to do with making polling places accessible to disabled persons.

“The reason [the county clerk and staff] consolidated from 18 polling places to seven is because we had a lot of small polling places,” Hamilton said. “They determined it would be better to bring all those polling places into one area.”

So, to make polling places accessible to disabled persons, as required by HAVA, Crawford County simply got rid of smaller polling places that weren’t up to standard. While HAVA does provide for federal funds to equip polling places for the disabled, the amount of funding again wasn’t enough. Hamilton also mentioned new equipment requirements when specifying why consolidation occurred.

After consolidation, turnout in the April municipal election for Crawford County dropped from 15.28 percent in 2006 to 8.41 percent in 2007. It rose to 14.23 percent in 2008, but the initial drop is interesting.

Could it be that when the polling place to which a voter usually goes disappears, he doesn’t make the effort to travel to a new polling place? Maybe it’s farther away, or just unfamiliar. A year or two later, he falls into a new habit — and turnout starts rising again.

Although I didn’t speak directly with anyone from Jasper County, turnout dips about 5 percentage points after consolidation there. It drops about 15 percentage points in Phelps County.

This is clearly still anecdotal, but I hope to explore it further. It may be that HAVA is not having the desired effect. The new equipment may make it easier for voters who show up, but ultimately, more may be staying home because of reductions in polling places.

If you have any thoughts about precinct consolidation and how it affects voter turnout, please feel free to leave a comment below, or email me.

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