The Missouri Legislature passed Senate Bill 330 last week. I hope the governor signs it (I cannot see a reason for a veto). SB 330 makes several small but worthwhile changes to state licensing rules. Generally speaking, the legislation expands the practice areas of certain jobs, allowing them to do things they were previously prevented from doing. Nurses, dental assistants, and counselors now all have slightly expanded practice areas and slightly reduced regulatory control of their jobs. This is a good thing. Furthermore, there are now a few more ways to become licensed as a hearing instrument specialist in Missouri. This is also a good thing.

What is a VERY good thing is that we appear to be moving in the right direction on the larger issue in Missouri. To the best of my knowledge, we have not passed wholesale licensing requirements for a new occupation in Missouri for a few years. (I may be overlooking some, but I do not think so.) Last year, due to prompting by court rulings, the state significantly reduced the licensing burdens to open a moving company in our state. This year, we passed SB 330, with its entirely positive changes. At the state level, we have leaders such as Missouri Rep. Eric Burlison (R-Dist. 133) who care about the personal and economic harms when government makes choices that markets and customers should be making.

At the local level, we still see an expansion of licensing abuses, from street performer auditions and valet parking licenses in Saint Louis to totally bogus HVAC rules in Saint Louis County. But at the state level, we are doing the right thing. Remember, occupational licensing of most occupations benefits current practitioners at the expense of future competitors and the public. We need less of it in Missouri.

Tony’s Kansas City has had the story about some in Kansas City who are considering changes to the city charter in order to strengthen the role of the mayor. This is as good an opportunity as any to remind people of all the work we have released on the issue of local government in Kansas City.

My main charter recommendation for Kansas City government is to remove the peculiar designation that makes each at-large councilmember also represent one of the council districts. There are benefits to at-large elections (lower overall spending), but they are reduced if you make at-large officials also represent a district. Just let the at-large reps serve at-large and the district reps serve the districts.

It will be interesting to see what concrete proposals come out of this. Will the role of the mayor be increased at the expense of the council or the city manager? It is basically impossible to implement a true “strong mayor” system like Chicago (or, for a Missouri example, like Florissant — neither is really a good comparison) and maintain an influential city manager. But there certainly can be smaller steps taken to strike more of a balance. I cannot wait to hear what those steps may be.

Senate Bill 207 is a major topic of conversation in Jefferson City this year. Simply put, it allows AmerenUE to add a surcharge to bills to collect funds now to pay for upcoming infrastructure investment. Under current law, AmerenUE has to wait until a project is complete before it can charge for it.

I support the changes in SB 207. I support it because I support infrastructure investment in our state and if the current customers of AmerenUE (which is all of us) do not pay for it then who will? I guess Ameren could make greater use of bonds and debt instead of price increases, but that comes with increased costs of its own (e.g., interest). Who will pay for those bonding costs? Us, of course.

I think electrical companies should operate under the same terms as water and gas companies, which this bill would allow them to do.

In case you think I am shilling for the electric companies, please note that I completely support deregulating Missouri’s electrical system and giving Missouri consumers more choice in their electrical providers. They have done this in Illinois, among other states. I think we should do it here as well.

But for now, we have our regulated monopoly system in place, and I support most ideas designed to encourage real infrastructure investment in that system. (”Real” = actually produces power without ridiculous government subsidies, i.e., not wind energy or ethanol mandates.) That infrastructure investment costs money, and I think charging current customers for the expansion of a system we (or at least most of us) will use is fair.

Last week, I testified in favor of Missouri House Bill 914 in Jefferson City. This latest attempt at Tax Increment Financing (TIF) reform is simply a cap on the size of individual TIF projects along with a total cap on the amount any one company (or “anchor tenant” in the definitions) can receive via TIF in Saint Louis, Saint Charles, and Jefferson Counties. I think the cap is justified and necessary. More importantly, I hope we can take this good step toward TIF reform in our state (even though the substitute version of the bill limits this reform to the Saint Louis region).

The language in the bill is admirably simple, maybe too simple. Clever lawyers will have little difficulty in getting around the caps and what I hope is the plain intent of the law. With that in mind, I hope the Missouri General Assembly strongly considers some of the language changes we suggested in the testimony. Those changes are not designed to change the bill, but simply to buttress the limits from the inevitable municipal end-runs.

The Missouri Municipal League (MML) testified against the TIF reforms, which restored order to the universe after the incident the previous week when the MML and I actually agreed on something.

I have nothing against middlemen nor beer distributors. In fact, I rather like beer distributors. I intend to consume their product at Blueberry Hill for my birthday tonight. I love Guns ‘n Hoses and have had a great time when I have attended. Heck, I even have a Googleganger in the industry. (Note, providing a link to the Googleganger totally defeats the substance of having one.)

That said, I just cannot believe that the latest attempts to preserve the three-tiered alcohol system by further tightening the regulations will be productive. Missouri Senate Bill 412, SB 365, and House Bill 759 will involve the government further in the alcohol industry, and I do not think that is necessary. Look, we can all agree that there should be some government regulation of the alcohol industry: age limits, DWI laws, basic liquor licenses. However, I think that preventing a producer from having even a small interest in a distributor goes way too far, as do the rest of these proposed legislative changes. Producers should be able to, more or less, have the same freedom to get their product in front of final consumers as any other business. As the title suggests, the government should not mandate the use of a middleman.

All that said, I have no doubt that most producers will still continue to use distributors in this industry. The distributors have the contacts, the relationships, the networks, and the equipment to get the product to the market. However, the choice to use a distributor should be a voluntary activity as part of a free-market economy, not a government mandate.

On Tuesday, people in both Saint Louis City and County will vote on an increased parks sales tax to support changes to the Arch grounds and increased funding for local parks. In my opinion, the various arguments for and against it are all washed away by one fatal flaw in the proposal. The state legislature, when it authorized the tax to go before the voters, did not exempt TIF funds from the sales tax. That means in most — if not all — of Saint Louis City and County, the almost 200 TIF districts will be able to keep half of the new sales tax revenues — supposedly going to parks and the Arch — and use it for themselves.

The infuriating thing is that when the legislature passed the bill allowing this tax last year, they also passed the enabling legislation for a new parks tax in Kansas City as part of the very same bill. And for that KC tax, they exempted the new sales tax from TIF. So this was not some oversight by legislative supporters of the tax in Saint Louis. If they knew to exempt the KC tax from TIF, they could (and should) have done so for the Arch tax. The fact that they did not can only be seen as an effort to help developers and other consistent TIF users by adding this new tax to the pot of money available for subsidies. That alone makes this new tax a bad idea for Saint Louis.

Things seem to be moving very quickly in the debate about the future of the North Kansas City hospital. Lawsuits, amendments to bills, new trustees, late-night rule changes . . . the only thing missing is the Turk trying to finish off Don Corleone. This is unfortunate, because the discussion about the potential future sale, transfer, or privatization of the hospital is extremely important.

Needless to say, rushed changes to the board rules and amendments added to bills after public hearings are completed does not make for good public policy. A judge upheld the right of the city to add new members to the hospital board, but I have heard that the current board members changed the board rules to require a super-majority vote on certain actions before the new members could be appointed. That might be clever, but it is hardly admirable.

Legislation taking the hospital away from the entity that has owned it for decades would be a very dangerous  precedent, terrible policy, and wrong, all combined. Maybe it is just me, but I think taking away ownership of the hospital from the city is, you know, a bad idea. The city owns the hospital. It has always owned the hospital. The city should be able to do what it wants with the hospital, be that sale, privatization, closure, expansion, whatever. (Let’s be clear, however: under every legitimate scenario, the hospital is going to continue operating.)

I am no lawyer, but I have to imagine the courts will continue to side with the city here. That makes legislative changes the best option for hospital activists opposed to any structural changes. It would be extremely unfortunate if a pro-free- market legislature made an exception in this case and blocked the city from even considering something such as privatization, which most members of the legislature would usually support.

In conducting some research over the past year, we encountered a regrettable example of government keeping basic public information hidden. We asked for a breakdown of the total assessed value of each county by land and improvements. (Improvements are any structure on the land.) All we wanted was county totals, not individual parcel data. We did not think this was a complicated request, and all of this is public information.

Unfortunately, many counties do not track the land and improvement data separately in their software systems, so they were unable to provide us the requested info. (I think they should be required to track the data in that manner, but that is another issue.) Some counties that do track those valuations separately in their software quickly sent over the requested information for free. Other counties requested small amounts of money for the work. No problem there.

So far, so good. I was disappointed in the success rate of the information request, but at least every county was straight with us or sent us a reasonable estimated bill. Every county, that is, except Grundy.

The Grundy County Assessor demanded $9,000.

It was $9,382, to be exact. One dollar per parcel in that north central Missouri county, even though we did not want parcel data, just cumulative data. We pointed out to the assessor that we are a research institute and requested that he waive the fees. He declined and wrote, “I have a very large investment to protect.” And then it got good.

We noticed that most of the counties that provided us with the information used the same software, and the software company’s name was at the bottom of those replies. We went to that company’s website looking for public customer lists, etc. (This was not about Grundy County at this point. We realized that we needed to find all the counties that used this assessment software so we could make sure we at least had their assessment data.) The software company’s website lists client testimonials, and who do you think was listed among their clients? That’s right, Grundy County.

So, the Grundy County assessor was demanding more than $9,000 to provide us with public information that he could have gathered from their software in a matter of minutes, if not seconds.

About a dozen Missouri counties using this system provided us with the public information we requested quickly and at no charge. When we pointed this out to the assessor, and asked him to justify the demand for $9,382, he got angry and wrote, “I don’t want to do business with you anyway,” and added that we should “get the information you need somewhere else.” This, of course, ignored the fact that we are a charitable research organization, not a business, and that there is no place to get Grundy County assessment data except from the Grundy County assessor’s office. Also, just whose investment did the assessor think he was protecting?

Our initial request was on June 4, 2012. We filed a Sunshine Law violation complaint with the Missouri Attorney General’s office on July 2. Over the ensuing months, we heard some vague promises that we would get the information. To their credit, the AG’s office stayed on it. Finally, we received it, for free, on Tuesday — March 19, 2013. Even though the original project we wanted it for has been completed for a long time, the data is still helpful for another project I am working on. Plus, it was the principle of the thing . . .

It took more than nine months for us to receive a simple request of public information that probably took the office 2 minutes to send us once they realized they had no choice. The Sunshine Law is important. Keeping public information hidden by obscene fees is immoral and wrong. Apparently, Grundy County Assessor Don Stotts does not feel that way. Thankfully, however, he (or at least his assistant who sent us the data) finally changed his mind.

By the way, 25 percent of the assessed valuation in Grundy County is land, and 75 percent is improvements. This entire nine-month controversy was about us being able to write the preceding sentence.

There are definitely some good things happening in the Missouri Legislature. There are, as always, plenty of bad ideas, too. Unfortunately, this session appears to be missing an opportunity (again) to reform the rampant abuse of Tax Increment Financing (TIF) in Missouri. There are several very good bills in the Missouri House that appear to be stalled. I would love to be wrong. I would be delighted to eat crow on this, but everything I see and hear tells me TIF reform is not getting out of the House of Representatives despite substantial support for reform from the rank-and-file of both parties.

TIF reform can be accomplished if voting from all taxing districts that the TIF affects is required, as the above linked bills propose, or if the ability for cities to override a county TIF commission is eliminated. Both would be excellent. Neither plan would eliminate TIF in Missouri, though both would heavily reduce its use, in my opinion. The overuse of TIF is empowering local governments to plan our economy, pitting city against city (willingly, too often) in a property tax base race to the bottom, increasing the use of eminent domain, and is violating tax fairness because it allows cities to decide on tax exemptions that affect all levels of government.

Of course, there are many good aspects of TIF, but our word count limit will not allow me to go into them. That is a joke. There is absolutely nothing worthwhile about how we administer TIF in Missouri. (Other states use it more wisely, mostly because they focus TIF only on property taxes and do not include sales or income/earnings taxes.)

The focus for TIF reform is on the House because it pretty clearly will pass the Senate. (Last year, a major reform bill passed 34-0 in the Senate.) I think the governor would sign a good reform bill if it makes it to his desk. I am fairly certain that a substantial majority of House members would vote in favor of reform if it makes it to the floor. I think it is imperative that key House leaders allow TIF reform to get on that floor for a vote. Otherwise, this would be a tremendous lost opportunity for important changes in Missouri.

Would you be surprised if I told you that there is no clear rule about what qualifies for property tax exemption in Missouri? You can qualify for property tax exemption if you have a religious, charitable, or educational institution, but that simple list leaves plenty of room. What about for-profit schools such as the University of Phoenix? Should they be tax-exempt? How about the personal homes of part-time pastors of small independent churches? Should they be tax-exempt? (Many are.) How about Scientology? Should that be a tax-exempt church? For years it was not because it did not worship a God (see bottom note in link).

Some of the hardest debates come from retirement communities and daycare centers. Many organizations operate these businesses on a for-profit basis, but hold some spots for charity. They attempt to claim tax exemption from that small percent of charity cases. There can be a significant difference in the types of services these businesses provide. Many truly cater to the needy (Head Start, etc.) and likely deserve tax exemption. Others cater to the well-off and absolutely do not deserve it. Daycare centers have mostly been unsuccessful in obtaining tax-exempt status. However, the senior-care industry has much more money at stake and has been more successful.

A new senior community in Kirkwood is attempting to qualify for tax exemption. The amount of money at stake is almost $1 million per year. The Saint Louis County assessor is fighting back, and good for him. Tax exemptions should be given out very carefully, because other taxpayers have to make up the difference when properties are removed from the tax rolls. This is one of the reasons the city of Saint Louis is dependent on the earnings tax. There are so many tax-exempt organizations within the city that the property tax base is too small to depend on it. Think Barnes Hospital, SLU, etc. The city then makes the problem worse by generously giving out TIF and operating the LRA poorly, but I understand their line of thinking.

I do not think a private organization operating a for-profit senior center deserves tax exemption. I hope Saint Louis County Assessor Jake Zimmerman is successful in his efforts to fight it. I think he is dead-on correct in his opposition.

The final decision is up to the Saint Louis County Council, though. Ultimately, they will probably base their decision on whether the business is unionized or not.

In the past year (plus a little more), three Missouri towns — St. George, Mack’s Creek, and Quitman — have disincorporated. I particularly like the fact that a town named “Quitman,” well . . . quit. Uplands Park is now considering disincorporation, and another town needs to: Pevely.

Pevely, a small (but not tiny) town in Jefferson County, is having trouble on a number of fronts. It cannot pay for its employees’ health insurance, it cut fluoride from its water to save money, and it is staring down the barrel of a substantial judgment against it from a lawsuit. I am confident the troubles run even deeper.

Many small cities in Missouri, and especially in Saint Louis County, are having trouble providing a base level of services. For most of these situations, the county is better suited to provide local services in a cost-effective manner. Generally, this can be accomplished without raising overall county costs much, due to transferable taxes such as utility taxes, business licenses, state road funds, court fees, etc. (I am defining a transferable tax or fee as one where the tax is not layered. The city gets it if it is incorporated, and the county gets it if it is not.) This is especially true in Saint Louis County, where the sales tax pool comes into play.

Jefferson County has a solid county government system and it should take over services within the community of Pevely. Hopefully, Pevely can become another example of successful disincorporation in Missouri.

Last night, I testified before the St. Louis County TIF (Tax Increment Financing) Commission about the proposed TIF plan for a Walmart in Shrewsbury. There was a very large turnout and numerous people chose to speak. The majority of the speakers were opposed to the TIF (and opposed to the Walmart, though I am just against the TIF), but there is no denying there were plenty of speakers in favor of it. (My guess is 60 percent opposed to 40 percent in favor, unlike Ellisville last year, where it was probably 80-20 against that TIF.)

This is not meant to sound corny, but no matter how you feel about the TIF, it was impressive to see so many people at the meeting participating in their local government.

After all the testimony, the commission rejected (via a tied 6-6 vote) a compromise proposal from the Affton School District that would have capped the property tax funds that the TIF captures at 50 percent — the same as sales taxes. That is not a bad idea, and I commend the school district’s reps for trying to find common ground. However, my guess is that the rest of the board voted it down because that change would have only been advisory to the city while the full TIF would have gone forward with a “yes” recommendation. That means the Shrewsbury Board of Aldermen could have ignored the change and then passed the TIF anyway with just a simple majority.

Next, the commission voted on the primary TIF proposal to give the developer a $15 million subsidy ($11.25 million in TIF and $3.75 million in Transportation Development District or Community Improvement District funding). The commission voted this down 9-3, with only the Shrewsbury-appointed commissioners in favor. Now, in order to pass the TIF, the Shrewsbury Board of Aldermen needs a two-thirds majority vote in favor, which by all accounts, it has. So it goes.

The TIF is dead. Long live the TIF!

It was a good night to see a bad idea defeated. Unfortunately, the celebration is short-lived, as it will likely pass the next test.

P.S. Thanks to McGraw Milhaven for posting the testimony video to YouTube.