The Real Story Behind the TIF Settlement
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If you’ve been reading this column for any length of time, you know that I think Kansas City’s use of tax incentives for developments is a big ugly scam that loots the city’s coffers and leaves us without enough money to shovel snow and fix sidewalks.

One of the big reasons why it’s so jacked up is that for years members of the City Council have used these incentives as a sort of money tree where they can harvest millions of dollars to build projects in their districts.

Obviously, it’s not good policy to give out tax incentives to projects that arguably don’t need it, or to waive minority contracting requirements so that a fancy shopping center can be built more quickly, or to float a dicy project on city-backed bonds.

But city officials love these kinds of deals because they’re the kind of short-term wins that make them feel good about who they are and what they’re doing.

The groundbreaking ceremonies and headlines in the newspapers that go along with these projects can help mitigate the misery of duking it out every week in Council Chambers with a bunch of other vain control freaks.

So the TIF Commission, which oversees the city’s use of its most popular and powerful incentive program, has been hardwired to give these city leaders what they want.

One of the most effective ways they’ve done this has been by limiting how much say other taxing jurisdictions have over the use of these tax breaks. Until last week, the counties, school districts and libraries — all of which are impacted enormously by the use of these incentives — didn’t have full voting rights on the TIF Commission.

Now that’s all changed, thanks, ironically, to the City Council — the members of which probably don’t even realize just how much power they lost.

The other wonderful bit of irony is that the Council probably wouldn’t have done this if the staffers at the Economic Development Corporation, which administers the TIF program, had been able to count.

Here’s how it all went down.

A year or so ago, representatives of Jackson County, the Kansas City School District and the KC Public Library voted along with a couple of the mayor’s appointees on the TIF Commission to uphold minority contracting requirements on a subsidized development downtown. Together, they formed a narrow majority on the 11-person commission, and they were happy that they prevailed.

A few weeks later, however, they received a letter from EDC staff saying that their votes were nullified. The TIF Commission’s rules at that time stated that their votes only counted if they were in agreement with a majority of the city’s six appointees.

In other words, their votes were essentially worthless.

That pissed off the folks at the county, school district and library. So they started fighting for full voting rights.

The funny thing is that it turns out the EDC staffers were wrong: They’d miscounted the votes cast by the city reps.

If they had counted them correctly, those letters wouldn’t have gone out, no one would have gotten pissed and the status quo would likely remain today, unchallenged.

Fortunately, however, the screw up happened, perhaps thanks to God — the county, school district and library sued, and the City Council acquiesced to their demands.

I say fortunately because it gives these agencies more leverage for power, and they’re more likely to look out for the city’s best interests than the city is.

First of all, the power. The counties, school districts and libraries now have five of eleven votes on the commission. That’s quite a block. All they have to do is pick off one of the Mayor’s appointees, and they can basically control the whole commission. This is eminently doable because the current mayor has appointed a number of people who share a lot of the same values as the taxing jurisdictions.

Secondly, it’s a good thing for us because, simply by virtue of their role on the TIF Commission, the reps of the taxing jurisdictions are going to be more naturally inclined toward policy that is in the best interest of the city.

They’re more likely to require developers to stick to minority contracting requirements because, as one county official told me the other day, “it’s good policy.”

Conversely, they’re less likely to approve the issuance of city-backed bonds for dubious projects because its bad policies.

Is this because the folks at these taxing jurisdictions are somehow better people than their counterparts in the city?

Not at all. They’re human. They’re just as susceptible to vanity and ego as anyone else.

The key is that they’re just reps on the commission. The TIF projects that come before them aren’t their projects in a political sense — in terms of wins and losses.

They’re their projects in the sense that their our projects — with implied us being tax payers.

And in that role, they’re naturally inclined to assess the projects from a more community-wide perspective, as opposed to the short-sighted goal of attending a ribbon cutting.

In other words, it’s quite a coup.

It might not seem like much, but this victory will likely have a far greater impact on how Kansas City uses tax incentives than anything else that has happened over the last two years. And that includes the new Economic Development Incentive Policy that the Mayor and City Council established early in their term together.

I’m betting that this is going to bring about the changes we’ve all been hoping for.

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This week’s survey results:

Did the Parks Board act appropriately on the issue of a dog park in Sunnyside Park?
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56%
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Comments 4 comments for this article
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Added: February 02, 2010. 01:26 PM CST
Good column
I also was bothered that the EDC could make such a silly mistake. Maybe we could get a first grader who can add to act as their math advisor pro bono?
Pookie
Added: February 01, 2010. 08:04 PM CST
Does it bother anyone else that the so-called professionals staffers of the EDC could make such and elementary mistake.

No wonder this city is in the shape it is in!
Anonymous
Added: February 01, 2010. 07:24 PM CST
The Evil Empire Will Fight Back
Like the previous post, I agree the EDC and the development forces will rally to make sure their gravy train keeps rolling. Mike Sanders, Crosby Kemper and John Sharp may be tough and even capable of a victory like this recent one but greed is a strong motivator and the development boys are greedy and tough. Watch out for the revenge of money grabbers.
Anonymous
Added: February 01, 2010. 10:48 AM CST
wait and see
I am interested to see how the EDC staff responds to the new city ordinance. I wouldn't be surprised if there is a rub between the EDC and the taxing jurisdictions, that is until the EDC makes personnel changes. Interesting view of the situation though.
in_the_loop
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