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The post Mask Mandate Lawsuit, Judge Rules on QuickTrip, Medicaid Update appeared first on Show-Me Institute.

While growing up in the small border town of Atchison,
Kan., my father, uncles, and family friends made frequent trips
over the Amelia Earhart Bridge to a small convenience store in
Buchanan County, Mo. They usually returned with a full gas
tank and small quantities of alcohol or cigarettes. I was too
young to understand what prompted these excursions. Now I
know. My father and others took advantage of Missouri’s low
excise tax rates on gas, alcohol, and cigarettes. As these trips
continued, sales and tax revenue were redistributed from Kansas
to Missouri. While the convenience store in Missouri remained
busy, the Shell station near the bridge in Atchison was often
empty.

Missouri benefited at Kansas’ expense as a direct result
of maintaining a lower tax rate in a competitive marketplace. In
2009, the QuikTrip on Southwest Blvd. in Kansas City, Kan.,
moved its location 100 feet into Missouri to take advantage of
the lower excise taxes. However, the situation that prompted this
move may be about to change.

Last fall, the Missouri Secretary of State gave approval to
a coalition of Missourians, led by the American Cancer Society,
to circulate a petition proposing an increase in the cigarette tax
from 17 cents to 90 cents per pack, a whopping 429 percent
increase. If passed, this proposal will stop the heavy cross-over
traffic of people coming to Missouri from other states to buy
cigarettes at a bargain price. In fact, business likely will shift in
the opposite direction – out of Missouri into other states.
Kansas’s 79-cent cigarette tax would certainly serve as an
appealing alternative to Missouri’s potential 90-cent tax. Under
the proposed increase, those who purchase cigarettes in Missouri
would pay $2.20 more per carton than they would if they
purchase cigarettes in Kansas.

While raising excise taxes might appear to be a simple way to
increase revenue, it can backfire and may even cause a loss in net
cigarette sales. Missouri’s two largest metropolitan areas, Saint Louis
and Kansas City, border states with much higher cigarette taxes,
prompting residents of neighboring Illinois and Kansas to make their
purchases here. Missouri’s 17-cent tax is certainly attractive to residents
of Illinois, where the tax rate is 98 cents, and Kansas, where the rate is
79 cents. Missouri benefits when residents of other states who come to
Missouri for work, sporting events, etc., voluntarily make such purchases
here.

Missouri Attorney General Chris Koster, a proponent of raising
Missouri’s cigarette tax, claimed in the Kansas City Star that a fivefold
increase in the state’s cigarette tax would lift revenue by a commensurate
amount – from $90 million a year to close to $500 million. But Koster’s
figures do not account for the major decrease in sales likely to occur
should the tax hike become a reality. It is silly to think that cigarette
sales will remain the same if Missouri smokers are required to spend
$14.60 more per carton of cigarettes. Remember, when you tax
something, sales will decrease. Increasing a cigarette tax might result in
less smoking, but it will also drive down purchases of cigarettes.

Patrick Fleenor, former senior economist at the Tax Foundation,
provides a telling example: When Michigan increased its cigarette tax
rate from $2.50 to $7.50 per carton (25 cents to 75 cents per pack), sales
decreased 26.7 percent. During the same period, cigarette sales greatly
increased in Indiana and other neighboring states with lower cigarette tax
rates. Should Missouri follow in the footsteps of Michigan, convenience
stores in Atchison, Kan., are likely to become much more profitable and
Missouri will experience a loss of cigarette revenue because fewer
cigarette will be sold on the eastern side of the border.

Amy Lutz is an intern at the Show-Me Institute, which promotes market
solutions for Missouri public policy.

The post Why a Whopping Increase in Missouri’s Cigarette Tax Is a Bad Idea appeared first on Show-Me Institute.

Read what David Martin wrote in The Pitch:

The project, which has neighborhood support, sounds worthwhile. But there’s a catch. The public has to provide assistance. The developer is asking for a tax break worth $2.76 million.

The Kansas City City Council will be told that the project won’t work without the incentives. Yes, West 39th Street is vibrant with restaurants. Across the state line, the University of Kansas Hospital is expanding.

The developer concedes that the failed Qdoba sits on a valuable piece of land. But here’s where the proposal begins to look like blackmail.

“Sure, it’s an attractive piece of property for development for lots of different uses,” Aaron March, an attorney working for Price Development, tells The Pitch. “But if we were just in it for the money, we would sell it to McDonald’s or QuikTrip. But we’re not.”

[…]

So what will you have, Kansas City, a spiffy new apartment building or a McFlurry? “If you’d rather have a convenience store or a gas station or a fast-food restaurant,” March says, “then don’t give the incentives.”

This is the view from the property’s doorstep.

View Larger Map

It takes real je ne sais pas quoi to go to the government, concede that your property’s valuable, and then claim that if you don’t get a tax abatement, your only option would be to build a gas station or a fast food joint. That may be business as usual these days when it comes to the private sector’s interactions with the government, but it’s bad business, and bad policy.

The post Hot New Argument for Tax Breaks in Kansas City: Abate My Taxes, Or I Just Might Build a QuikTrip appeared first on Show-Me Institute.

Is it right for the government to take your property for the benefit of another private party? Voters across the nation were outraged last summer when the Supreme Court said “yes” to that question in its infamous Kelo decision. Missouri’s elected officials reacted by pledging to change Missouri law to ensure that Show-Me state residents’ property would be secure.

But judging from the legislation passed last week and expected to be signed by the governor, they didn’t mean it. True, the legislation does impose some new requirements on cities seeking to take peoples’ homes, but it does almost nothing to prevent the use of eminent domain to benefit one private party at the expense of another. If the governor signs the legislation this week, property rights in Missouri will still be in danger.

Our legislators seem to think that private property is an issue of money and paperwork. Municipalities exercising eminent domain must pay an extra 25 percent if they take your primary residence, and an extra 50 percent if the home has been in your family for 50 years or more. And the law requires more public input, more negotiations, and more court oversight before a taking can occur.

Such tweaks miss the point. Fundamentally, property rights are about equal rights before the law. Private property places the smallest homeowner on an equal footing with the largest corporation. If the company wants the homeowner’s land, he must pay a price the homeowner is willing to accept or look for land elsewhere.

In contrast, when the law permits eminent domain for private profit, ordinary property owners become subject to the whim of the powerful and well-connected. We recently saw a clear example of the dangers of eminent domain abuse in Clayton, where the Board of Aldermen is in the process of condemning five small downtown retail establishments to make room for the expansion of Centene Corp’s corporate headquarters. The city justifies the taking on the basis that the retail establishments are “blighted,” despite the fact that downtown Clayton is one of the most prosperous neighborhoods in the St. Louis metro area.

“Blight” has become a catch-all term that allows municipal leaders to condemn anyone’s land. It was the pretext under which the city of Sunset Hills condemned properties in its doomed re-development plan, which collapsed last fall when it was discovered the developer couldn’t finance the project. And it was the justification given by St. Louis alderman Tom Bauer when he sought to condemn several homes and businesses to make room for a QuikTrip gas station—a plan that led his constituents to recall him.

Yet the legislation being sent to the governor this week wouldn’t have done a thing to stop any of those three abuses. “Blight” takings are still permitted, and no change has been made to the current “anything goes” rules for defining blight. Under the current rules, cities commission blight studies by friendly consulting companies that invariably give cities the answers they’re looking for. Such studies often cite trivial problems such as broken drain spouts, declining tax revenues, or windows that are too small for the latest fire code. Amazingly, some studies even cite poor upkeep of public streets and sidewalks as evidence of blight, even though those are the responsibility of the city government that sought the blight designation in the first place.

Even worse, the new legislation continues to allow land to be taken if a “preponderance” of a proposed redevelopment area is blighted. That means that the city can take your home even if it’s in perfect condition, as long as some of your neighbors haven’t been maintaining their properties. In Sunset Hills, several meticulously maintained homes were condemned because their owners happened to live in a neighborhood the city government considered “blighted.”

Missouri’s elected officials have failed to keep the promises they made last summer to pass meaningful restrictions on eminent domain abuse. Instead, they passed legislation that is little more than window dressing, in the hopes that that would satisfy voters’ demands for stronger property rights. Show-Me state voters shouldn’t be fooled by that kind of legislative sleight of hand.

Timothy B. Lee is a policy analyst at the Show-Me Institute.

The post Legislation Fails to Protect Property Rights appeared first on Show-Me Institute.

Tuesday’s recall of St. Louis Alderman Thomas Bauer puts all Missouri public officials on notice: voters won’t put up with politicians who abuse the power of eminent domain for the benefit of well-connected private developers. Voters in the 24th Ward were outraged after Bauer attempted to seize several homes and businesses at the corner of Manchester and McCausland in order to make room for a QuikTrip gas station.

It’s inspiring to see ordinary Missourians standing up for their rights in the political process, but the fact that the effort got as far as it did only highlights how the courts have been shirking their duty to protect private property. With Tuesday’s victory under their belts, Missouri property owners should keep up the pressure on elected officials to reform the state’s eminent domain system. Homeowners shouldn’t be forced to take the drastic step of recalling their elected officials just to keep their homes.

Eminent domain, the power of government officials to seize private property, is supposed to be used for public infrastructure like roads and courthouses. The United States Constitution says that property may only be taken “for public use,” and only with “just compensation.” But over the years, that power has been abused by local officials who define “public use” in increasingly questionable ways.

The issue reached the Supreme Court this summer in the case of Kelo v. New London. The city of New London, Connecticut, sought to condemn more than 100 private homes and businesses to make room for new research facility being planned by drug maker Pfizer. The only “public use” the city could cite was “economic development”—in essence, that the new owners would pay higher property taxes than the old ones.

The court ruled for the city in a bitterly divided 5-4 decision. In an eloquent dissent, Justice Sandra Day O’Connor charged that as a result of the decision, “The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.” Bauer’s QuikTrip boondoggle demonstrates the truth of O’Connor’s warning. He claims that the project qualifies as a “public use” because QuikTrip has promised to pay for a new right-turn lane at the intersection. But it’s not clear why it’s necessary to condemn several homes and businesses just to make room for a turn lane. And if chipping in some money for public infrastructure transforms any private development into a public use, then none of our homes or businesses are safe.

Fortunately for Missourians, help may be on the way. The Kelo decision focused on the protections available under the United States Constitution, but individual states are free to enact stronger protections for property rights at the state level. Governor Blunt has created a Task Force on Eminent Domain, which will make recommendations in December on how to reform Missouri’s eminent domain system.

It’s great that voters responded when one elected official stepped over the line, but the fact that the recall was necessary shows the inadequacy of Missouri’s legal protections for private property. Missouri’s eminent domain system needs to be fixed so that homeowners can once again be sure that their rights will be upheld in court. Our laws shouldn’t allow politicians like Thomas Bauer to play political games with their constituents’ homes and businesses.

Timothy B. Lee is an editor at the Show-Me Institute.

The post Bauer Recall Shows Demand for Eminent Domain Reform appeared first on Show-Me Institute.