KC's corrupt corporate welfare culture
Yael T. AbouhalkahThe Center School District just hit the jackpot.
Freightquote broke ground this week for its new headquarters on long-vacant land in south Kansas City.
In a few years, land that has yielded only $7,000 a year in property taxes for the school district will be creating upwards of $600,000 annually in property taxes to educate 2,300 children. Just over 75 percent are minorities; 71 percent are eligible for the free/reduced-price lunch program.
Wait, what’s that? The kids aren’t going to get much of that money from Freightquote?
Oh, that’s right. It’s all coming back to me now.
Freightquote, an online freight-shipping broker, is going to get a staggering amount of taxpayer incentives to leave Lenexa and hop the state line.
Missouri is kicking in $33 million in taxpayer incentives and, incredibly, Kansas City decided to sweeten the pot even more with an outlandish $31 million in extra tax breaks.
That includes a 100 percent abatement on local property taxes for 20-plus years. So the city, Jackson County, Mid-Continent Public Library, Jackson County Community Mental Health Fund and other taxing jurisdictions will get next to nothing in property taxes from Freightquote, which essentially will get to keep that money.
Center Superintendent Bob Bartman told me Wednesday that his district does expect to get a payment in lieu of taxes approaching $25,000 annually because of the Freightquote deal. But that’s still far short of the $600,000 a year and more over time that the district could have received.
In an email, Mid-Continent library director Steve Potter said, “Freightquote is HORRIBLE public policy.…”
But it turns out school and library officials had no real voice in this matter.
That’s because local school districts, counties, libraries and other taxing jurisdictions don’t control how millions of dollars in public incentives are granted.
Instead, state laws allow the decisions to be made by TIF commissions stacked with city-appointed members and by city councils.
After years of wrangling and being ignored by city officials, the taxing jurisdictions are fit to be tied.
As Kansas City Public Library director R. Crosby Kemper III recently wrote to Mayor Sly James and the City Council:
“Is there any chance a few of you might just think something needs to be changed rather than continuing to shove this down our throats?”
Kemper was upset that the city decided to use hundreds of thousands of dollars from the Kansas City Public Schools, the library and other jurisdictions to give away in incentives to Lockton Cos. on the Plaza.
There’s no shortage of other flashpoints in this longstanding battle.
- One plan under review would spend $3.1 million for extended streetscape improvements on Main Street, produced by tax revenues from the Federal Reserve Bank headquarters south of Penn Valley Park.
Kansas City Public Schools would lose $1.9 million, and the library and Jackson County close to $200,000 each, in future revenues in the deal.
The school district and library TIF officials oppose this plan because it would force them to do the job of the city or private companies in paying for infrastructure repairs and landscaping along Main Street.
The Raytown School District wants to control up to $4 million in potential school funds from a southeast Kansas City TIF plan. But the city instead might use the money to build youth soccer fields.
In North Kansas City, city officials are supporting a plan to divert $6 million in North Kansas City School District funds to development of a mostly residential community. School officials voted against the plan at the TIF meeting.
But that panel is controlled by city-appointed members who wanted to use educational funds to back a private development.
So how will things change?
Cities sure won’t give up their control of the money.
Let’s hope the excessive local subsidies for Freightquote become Exhibit No. 1 in the taxing jurisdictions’ attempts to overhaul state regulations in 2013.
To reach Yael T. Abouhalkah, call 816-234-4887 or email abouhalkah@kcstar.com. He blogs at voices.kansascity.com.
William R. Nelson
9 months, 1 week agoBRAVO! Good article.
I think Yael might be a closet Tea Partier.
Kent Mueller
9 months, 1 week agoYael, you are right. And William, I think you are right, also!!!
This has to be fixed at the state level. The state must change how non-school district and non-library representatives can have so much influence over money that should belong to the district and library. I don’t have much hope that can get changed, but it needs to be changed. The people who control that money now will never voluntarily relinquish that control.
Yael? I disagree with most of what you write. But, you deserves attention. I suggest you dedicate most of your time to this issue. The city will be better for your efforts.
George Harris
Kansas City
9 months, 1 week agoKent, this is an example of the danger of classifying people as “right” or “left.” You can bet that many of the people who push for these tax breaks will vote for Republican, maybe even Tea Party candidates. On the other hand, I (labeled a liberal by some) am skeptical about the value of these tax abatement programs. At least this one isn’t downtown, but it seems it’s a huge amount of money with little gain for the city. The consistent thread (for me) is that the wealthy will take advantage of the poor unless stopped, and that’s true at the national and local levels. Anyway, isn’t it nice when we agree on something?
ps I think it’s pretty hard to label Yael as conservative or liberal. The labels just don’t work.
Chris Bembynista
9 months, 1 week agoWell, I guess I will have to be the one to not completely agree with this post. While I do think that the tax breaks that perpetuate the “border war” are ridiculous, I am troubled by this blanket anti-development attitude that I see here. I am not completely unsympathetic to the criticisms against the P and L, but at the same time, I also get the sense that some in this city would be perfectly content if our downtown was still an embarrassing sea of parking lots, as long as we we are not giving tax breaks to, dear God, developers. I find it interesting that all of the people who criticize tax breaks for downtown, never propose how they would do it better. How would you, realistically, increase housing density downtown? I think we can all agree that having a vibrant area down there is very important for this city. I also get a kick out of how the people who complain about all of the TIF projects in this city will, simultaneously, point with envy to other cities and criticize KC for some perceived deficiency, but they will often point to things from those cities that are the very products of TIFs and other tax breaks.
Kent Mueller
9 months, 1 week agoGeorge, I can appreciate your desire to get away from the conservative and liberal labels. But it can’t be done. There is a continuum from liberal on one side and conservative on the other. We all fit somewhere along that line.
To say many people don’t fall more into one group than the other just doesn’t work. Few completely agree with each other, but for many there is significant overlap.
An example. Wouldn’t you agree that Barb Shelly will agree more often with Yael than she will with McClanahan? The answer to that is obvious. Who would be more likely to have Judge’s cartoon on his wall?….Lewis or Thomas? When the editorial opinion is political in nature, how often is Thomas in the majority of the Editorial Board? The answers to all of those questions are quite obvious. And that is because Thomas is a conservative and liberals include Yael, Barb, Miriam, Judge, Lewis and most everyone else at the Star.
There are specific tenets to liberalism just as there is to conservatism. Rarely, are they completely compatible. Some are more polarizing than others, but there are specific differences, mostly dramatic ones.
My agreement with Yael that there is a problem with how the TIF board can take money away from school districts and libraries is neither conservative nor liberal.
And George……you are perhaps the most reasonable writer here, but I have to very much disagree that Yael is not a liberal. We will never know how Yael votes, as that is his personal business. However, can you think of a Republican candidate for US Rep, US Senate or for the national Pres/VP ticket that you could see Yael voting for? Not just this year, but in his lifetime. I think it would be pretty safe to say that voting record is skewed significantly to the more liberal Democratic Party.
In short, George, there are specific philosophical differences between the two schools of thought. It’s only natural that many people gravitate towards one of the two groups.
Michael E McKinzy Sr
8 months, 4 weeks agoKC’s corrupt corporate welfare cuture, well the KC Star is part of that culture, so the pot is calling the kettle black go figure, and the answer is always the same with enough money a corporation will be given the key to the city!-Born to do battle, drafted at birth.a.k.a.Warrior Breed!-Michael E. McKinzy, Sr.-08-24-2012KC’s corrupt corporate welfare culture | Midwest Voices »