December 19, 2014

Map Series: III. Proposed MetroLink and Bus Rapid Transit Routes

Metrolink_BRT routes

The map above shows the proposed MetroLink expansion, along with the prime candidates for the first Bus Rapid Transit (BRT) lines in Saint Louis. One of those routes runs through North Saint Louis along West Florissant and Natural Bridge Road (West Fl-NB), while the other BRT route runs along I-64/40. The proposed MetroLink expansion would mostly mimic the route of the West Fl-NB BRT, but it also would serve South Saint Louis City. None of these proposals run cheap. The proposed BRT routes would cost around $40 million to implement per line, but they have funds from Proposition M, passed in 2010. The proposed MetroLink expansion would be much more expensive, between $1 billion and $1.6 billion, and would almost certainly require additional tax revenue from Saint Louis City and County. Read more from the Show-Me Institute on the MetroLink plan here.

 

December 15, 2014

Map Series: I. North Saint Louis Municipalities Fines per Resident

North_County_Munis

This map shows the amount of revenue from fines and fees the many small municipalities of North Saint Louis County collect per resident. While many collect amounts similar to Saint Louis City and larger municipalities in the county, some collect much more. As the map shows, Edmundson, Calverton Park, Normandy, Pine Lawn, Vinita Terrace, and Beverly Hills collect more than $300 in fines per resident annually. See more of our writings on municipality fines and fees here.

December 12, 2014

Why Saint Clair Wants Congress to Close Its Airport

In a previous post we detailed how one Missouri city, Saint Clair (located in Franklin County), has been trying (and failing) to close its small, money-losing local airport since 2006. The city government believes that the resources and land devoted to the airport would be better spent on commercial property development, not keeping a small general aviation airport with a handful of tenants up and running.

While there is some local support for keeping the airport open among politicians and a particularly vocal tenant, the principal protector of St. Clair Regional Airport is the Federal Aviation Administration (FAA). Because the airport has received federal grants to improve the airport in the past, the ability of the local government to operate (or close) its airport is tightly constrained by FAA grant assurances. As we wrote before:

Two of the more cumbersome assurances for a city like Saint Clair are Nos. 5 and 25. Assurance No. 5 obligates Saint Clair to maintain it as a public airport and not dispose or sell any part of the airport without FAA approval. The FAA will only give approval if Saint Clair can show that closing the airport improves aviation in the area. In addition, the dispensation to sell the airport does not free Saint Clair from reimbursing the federal government all recent federal grants. This will cost the city more than $750,000.

The city’s back-and-forth negotiations with the FAA have failed to produce results.

In an attempt to accelerate the process, Senator Claire McCaskill introduced a bill (S.2759) that would specifically close St. Clair Regional Airport. That bill passed the Senate on December 3, and if it passes the House and receives the president’s signature, the FAA would have to allow the airport’s closure.

You read that last paragraph right. Getting a bill through the U.S. Congress is considered a shortcut to closing a general aviation airport owned by a Missouri city with less than 5,000 residents. That is the kind of intransigence and red trap cities encounter when they, by taking what looks like free money, accept the oversight of federal bureaucracies over local infrastructure. If other local governments want to avoid Saint Clair’s headaches, they should support the development of private airports and local user-funding sources whenever possible.

November 25, 2014

Warrant Forgiveness: A Step in the Right Direction for Saint Louis County Cities

Recently, 65 municipalities in Saint Louis County announced a warrant forgiveness program for December. In the program, defendants with outstanding warrants can get their warrant dropped if they go to the municipal court that issued the warrant and post a $100 bond. While this is a good thing for many poor residents who have, for whatever reason, failed to attend court, it does not change the underlying problem of cities relying on fines and fees to fund themselves.

We’ve written before about how many Saint Louis municipalities get large, possibly illegal, portions of their revenue from zealous enforcement of traffic laws and local ordinances. Twenty municipalities get more than 20 percent of their revenue from fines and fees, with three cities (Calverton Park, Bella Villa, and Vinita Terrace) deriving more than 50 percent of revenue from those sources.

And should one of the many recipients of these citations need to appear in local court because they wish to challenge the citation or cannot pay the fine (or fix their ticket), it is far from convenient. Calverton Park and Bella Villa both only hold traffic court one evening a month. As an in-depth story in the Washington Post described, many residents, especially the poor, have a difficult time navigating the process.

Allowing defendants with outstanding warrants to set things right is a way of relieving some of the built up stress for locals, but a more long-term solution is to make policing about law and order, not revenue collection, in all Saint Louis County municipalities. That may mean combining police or court services with other municipalities, or if necessary disincorporating cities altogether. At the state level, that could mean strengthening and enforcing the Macks Creek Law. If something isn’t done to fix the underlying problem of burdensome municipalities, this holiday amnesty’s impact won’t long outlive the holidays themselves.

November 18, 2014

University City Should Carefully Consider Privatization Proposal; Ignore Special Interests

University City is considering outsourcing emergency medical services (EMS). Predictably, this proposal has been the subject of debate among city council members. Two council members have questioned whether the city should outsource one of its core services, while another member urged the council to remain open minded until they have all the data on outsourcing.

The Show-Me Institute has written favorably about EMS privatization policies in the past. Privatization, when done right, can increase efficiency and expertise, provide improved services to the public, and decrease costs. However, all outsourcing proposals must be carefully considered to ensure privatization is done properly.

The University City Council ought to investigate the specifics of this privatization proposal for how it would affect services and city finances, rather than shooting from the hip and accepting or rejecting a privatization proposal on purely political grounds. Public employees, city officials, and businesses that the city may contract with are all interested parties in any outsourcing effort. When deciding whether to contract out services, the council should do its best to ignore the special interests and focus on the details of how this proposal affects the city as a whole.

Private ambulances have served parts of Saint Louis County for years, and University City might be able to benefit from private ambulances as well.

November 13, 2014

Star Survey Results Actually No Surprise at All

The Kansas City Star‘s Yael Abouhalkah seems surprised that voters in the Star‘s unscientific online survey rejected the question, “Should taxpayers build a downtown stadium for the Royals?”

  • Strongly agree — 26 percent
  • Agree — 9 percent
  • Disagree — 14 percent
  • Absolutely not — 51 percent

That’s a pretty strong vote of 65 percent opposition to the idea. Readers offered several dozen comments.

We at Show-Me had some immediate comments too. The least of which not being that you’d certainly have to work at the Star to be surprised by this result. Kansas City has had ruinous results in building big projects like this. For example:

Furthermore, just as mega-events such as Republican Conventions and Super Bowls fail to generate economic benefits, stadiums and arenas fail as well. (Read here for studies by The Brookings Institution and The Atlantic.) Kansas City voters are wary of such promises, and they are either defeating such efforts as translational medicine taxes and streetcars or are demanding sign-off on efforts to build new airport terminals. Why this well-founded skepticism is surprising to anyone is itself a surprise. The city should focus on delivering basic and necessary services and leave the economic speculation to others.

November 11, 2014

The Beef With Kemper Arena

Kansas City heavy hitter Tony Botello of Tony’s Kansas City is not exactly a bashful guy. In a recent blog post on his website, he strongly criticized Show-Me for not weighing in on recent events involving the future of Kemper Arena, KC’s 1970s-era multipurpose sports facility. I’m happy to step on the scale.

For those unfamiliar with the Kemper situation, the shortest of the short stories is one of a contract dispute. The American Royal—a century-old nonprofit and scholarship-granting organization focused on agriculture—has a lease with Kansas City to use Kemper but doesn’t think the city has maintained the facility at the level the city promised.

Why the city would neglect Kemper is straightforward enough; the arena has operated in the red for years now, and with the Sprint Center now online downtown, the public face of the city for many concerts and sporting events is no longer in the Bottoms, but on the Bluff. Rather than continue to operate in what it says is a poorly maintained facility, the Royal wants the arena bulldozed and replaced with a new facility that more closely accommodates the Royal’s mission and substantively fulfills the requirements of their lease, which extends amazingly until 2045.

In light of the maintenance requirements and duration of the lease, how much does the Royal say the city is liable for?

Based on the numbers that the American Royal received and validated with the city, [American Royal attorney Chase] Simmons said, the city has $150 million worth of obligations to the organization, on top of the $2.5 million it’s losing on average each year.

In other words, this was a dumb lease by the city for an older facility, whose subsidies we have criticized before. Our longstanding objections to city-ownership of sports stadiums still stands, but it’s accentuated here by what has happened in Kansas City with Kemper Arena. The city has a money pit on its hands and, on top of that, appears to have done a poor job of honoring its remaining lease obligations.

But that doesn’t make the American Royal a victim or a hero in all of this. (Disclosure: I am a Governor with the American Royal.) When the city balked at the Royal’s plan to bulldoze the arena, another group proposed turning Kemper into a multipurpose community sports facility, leveraging . . . historic preservation tax credits. Just two years ago I criticized not only Missouri’s practice of throwing historic preservation incentives around, but I was specifically critical of throwing them at Kemper Arena. The “Foutch Plan” (as it was called) was an alternative, and as a matter of policy it wasn’t “better,” but it did have the positive effect of forcing the Royal to try to make its proposal more attractive.

When it appeared the city may accept the Foutch Plan over the Royal’s, the Royal did something really, really sad—it floated the possibility that it would move out of Kansas City entirely, a nuclear option presumably intended to shock the city back to the Royal’s side. In my view, an American Royal outside the West Bottoms is not the American Royal, and I think most civic leaders would agree with that view. In any case, such a move by the Royal would almost certainly rely on subsidies provided by someone else in the region, probably in Kansas, which would  run afoul of Show-Me’s longstanding opposition to border war incentives.

Ultimately the idea of moving didn’t tip the scale to the Royal, but litigation threatened by the organization against Foutch did, and Foutch dropped its proposal. That threat, while effective in pushing out the competing plan, exacerbated the PR nightmare that got rolling after the Royal’s leadership threatened it could move. But that’s where things stand today: The Royal’s plan appears on track to prevail, and Kemper appears on track to be bulldozed.

The most basic reaction we would offer here is that Kansas City shouldn’t have been in the arena business anyway. Moreover, the overly generous terms of the lease goes to show that trusting government to act as a fiduciary for taxpayers in financial matters is hardly ever prudent. We rejected historic preservation tax credits to save Kemper and also reject border war incentives that would subsidize the Royal so that it could possibly move out of Kansas City.

However, we support contract rights, and to the extent that an agreement was made between the Royal and the city, the terms of that agreement have to be substantively performed. Taxpayers deserved a better deal than the one the city made, but they got a lot of bull instead. And like the city’s predicament with the money-hemorrhaging Power & Light District, what taxpayers deserve does not change what taxpayers are on the hook for. Yes, the Royal may eventually “win” the question of what happens to the Kemper Arena property, but that win will have come at a price—for the organization, and for the city.

There has to be a fundamental shift in the political and policy culture of Kansas City if we are to avoid debacles like this in the future, and that means fighting bad ideas before they are implemented and educating taxpayers about better development strategies that will make them, their families, and their communities better off by empowering them, not the government.

November 6, 2014

Proposed Property Tax Increase Fails in Columbia

Since the proposed property tax increase failed in Columbia, it seems the city is heading for a disaster of biblical proportions. I mean Old Testament, real wrath of God type stuff. Fire and brimstone coming down from the skies! Rivers and seas boiling! Forty years of darkness! Earthquakes, volcanoes . . . the dead rising from the grave! Human sacrifice, dogs and cats living together . . . mass hysteria! Okay, not really. In fact, if you read my commentary on the ballot measure, you’d know that crime, especially violent crime, and the total number of fires are actually declining in Columbia. This is a good thing.

However, what if you’re among the more than 10,000 residents who feel that Columbia needs a bit more in the way of police and fire protection? I’d say don’t despair. There are other means by which the city can increase revenues without resorting to a property tax increase.

For instance, the city could look at the fire expense reimbursement that it receives for services that it performs for the three colleges located in town. According to the Columbia budget, these reimbursements are declining and have been for the past couple of years. Columbia can renegotiate with these colleges in order to get higher reimbursements.

Columbia also could look into privatizing its water and electric utilities. The sale of these types of utilities can bring in an immediate infusion of cash to cities’ bank accounts. For example, the city of Florissant, Missouri, privatized its water utility in 2002 and received $14.5 million from the sale. More recently, the residents of Arnold approved the sale of their sewer system, which brought the city $13.2 million. Not only can the sale of the utilities themselves bring in more money to the city, but privatization can also expand the city’s property tax base, which would generate more revenue in the future.

The instances of crime and fire have declined in Columbia, yet for those who believe that public safety is underfunded, there are other ways to raise revenue besides a tax increase. Maybe it’s time they explore them.

 

November 5, 2014

Arnold Residents Vote to Privatize Sewer System

Yesterday, the residents of Arnold voted to privatize their wastewater system by an overwhelming margin (70 percent of voters approved). While some of the larger local and state results may have captured Missourians’ attention, the result in Arnold is a step in the right direction for efficient, responsible government in that city.

Over the last couple months, we have written how privatizing the wastewater treatment facilities will be able to leverage the expertise and capital available in the private sector to provide better services and keep prices down. The sale price, $13.2 million, can be spent to retire debt and to create a rainy-day fund.

But as with all privatizations, effecting a sale should not be the end of public engagement. Arnold residents must ensure that the money from the sale is spent or saved in a wise manner. They also must ensure that city officials hold the private company, Missouri American Water, responsible for providing safe and efficient services.

Should the city be diligent in these areas, the privatization of Arnold’s sewer system has the opportunity to become an example to Missouri of how water treatment, like many public services, can be effectively provided through the private sector.

November 3, 2014

Where Is Kansas City’s Recovery?

Whither Kansas City? According to local media outlets, the city is clearly on this rise. Millennials are moving downtown, residential developments are multiplying, and new sources of employment are entering the city. Capping it all, the Royals had a fantastic season, which was enough for the Kansas City Star to roundly praise past public subsidies for Kauffman Stadium. The story is clearly growth.

But census data paints a different picture of the metropolitan area and the city itself; a picture of falling income, rising poverty, and slow population growth. Kansas City was hit hard by the recent recession, and simply put, the city has not seen a recovery in terms of income.

Census data shows that employment is increasing in Kansas City since the recession, but total employment is still significantly below prerecession levels. That may be partially explained by lower labor force participation and fewer households. The income data is more troubling. The median household income from 2010 to 2013 is still almost $3,000 lower than it was from 2007 to 2009, not accounting for inflation. When that adjustment is made, real income has been on a continuous decline in the city since 2009.

MeanMedianKC

A similar trend exists in Johnson County and the metropolitan area as a whole.

The recession caused poverty levels in Kansas City and surrounding areas to spike, and they have yet to significantly recede. Poverty levels were actually higher from 2011 to 2013 than they were from 2009 to 2011 (which includes the recession). As with income, Kansas City has yet to see anything that could be described as a healthy recovery. The following chart demonstrates recent trends:

PovertyKC

There’s plenty of excitement and optimism in Kansas City, and that’s no bad thing. But much of the excitement seems to be for prestige projects, entertainment venues, and young people in the downtown area. If that attitude allows people to forget that for most people in Kansas City there really has not been a recovery, much less a renaissance, then the optimism may be counterproductive.

November 2, 2014

Haven’t Been Able to Get Uber in Saint Louis? Blame the Taxicab Commission

When the St. Louis Metropolitan Taxicab Commission (MTC) altered its regulations in the past month to allow Uber, we warned that the rule changes did not go nearly far enough. We wrote:

. . . the MTC still plans to tightly control the supply of premium sedans available to Uber through the issuance of permits. Initially, the MTC will only issue 26 permits for premium services, and only five will be rewarded to new, single-vehicle operators. The rest will go to existing sedan companies that can afford three or more sedans. These smoke and mirror tricks, designed to make it appear that the MTC is becoming friendlier to other services and companies, are in reality reinforcing the restrictions on the entry and pricing of the taxi market.

As a result, Uber cannot hire new drivers as demand dictates; it can only use the limited pool of existing MTC-approved premium sedans.

The result, predictably, is that people who want to ride Uber’s premium service are often unable to. This mismatch between supply and demand hurts both Saint Louis residents hoping to use a service they want as well as Uber. MTC Director Ron Klein is unconcerned, stating, “We’re very flexible. . . . We just didn’t want to go out there and say, ‘Let’s add 100 [permits for black cars],’ and then have 75 guys standing around.” He stated that the MTC will vote on adding 26 cars next month, and might add more if Uber can prove there is a demand.

It should be readily apparent that demand exceeds supply if people are demanding Uber and there are no cars to send. Furthermore, why should the MTC, like a cabal of Gosplan apparatchiks, think it is appropriate for them to attempt to match supply and demand? Why should Uber have to prove demand before the MTC will consider allowing more black cars? When does it become obvious that MTC policies, far from ensuring safe taxi service, are limiting consumer choice and making the city a less attractive place to live?

If the MTC is so concerned about the quality of for-hire vehicle service in Saint Louis, they should limit the supply of regulations, not the number of premium sedans in the city. And if they can’t do that, perhaps residents should reduce the area’s supply of taxicab commissions. To zero.

November 1, 2014

Saint Louis City’s Growth: Trickle-Down Urbanism?

A look at the latest American Community Survey data confirms that income growth in Saint Louis City has been lackluster for the past decade. Since 2005, median income growth has lagged inflation by 6 percent, indicating falling real wages. But at the same time, some are proclaiming the return of the city, with new developments on Washington Avenue, Ballpark Village, and the Central West End pointing to a bright future.

These contradictory accounts of the city’s performance point to a more complex reality, a tale of different populations and neighborhoods. The bad news is that wages are stagnant and the poor and middle class continue to leave the city. From 2005 to 2013, Saint Louis City households whose income was less than $75,000 per year (more than twice the city’s median income) fell by 7.8 percent. But the good news is that wealthy households (earning more than $100,000 per year) increased by 78 percent. Households earning $200,000-plus per year more than doubled over the same period.

But as the map below demonstrates, lower income residents are most predominant in North and South Saint Louis City, while the very wealthy are most populous in the central corridor. That means increasing growth where growth is most visible, and stagnation and decline where it is out of sight, out of mind.

city_income

Saint Louis City’s planning strategies may have contributed to this bifurcated outcome. We have written before about the city’s attempt to generate density, walkable neighborhoods, and a vital downtown through lopsided investments to the central corridor. The city also uses tax incentives to subsidize high-end living and entertainment districts. Instead of fostering economic opportunity, which draws residents who will generate local culture from the bottom up, the city instead will become an entertainment machine, which will draw the creative class, who in turn will create jobs.

Even where this upended model succeeds (and there is no guarantee of that), there are questions as to whether this actually helps middle-class or poor residents, or simply makes them former middle-class or poor residents. Urban “renewal” in boutique cities like New York City and San Francisco has resulted in a displacement of the poor and middle class and rapidly rising income inequality. Although Saint Louis City is not NYC, income inequality is rising quickly. From 2005 to 2013, the city’s median income fell from 75.3 percent to 69.6 percent of the city’s mean income, indicating an increasingly top-heavy income distribution. This trend, compared to that of Saint Louis County, is shown below:

medincome_percent

 

If leaders focus on making the city a safe, affordable, and easy place to live and do business, it is possible Saint Louis City could enjoy an expansive resurgence. But as things stand, the city is pushing more publicly supported bar districts, luxury apartments, and expensive amenities to draw the rich into the city center and hope the wealth trickles down to the rest. For areas like North Saint Louis, that could be a long wait.

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