In his recent essay, “TIFS: Cities’ Unfair Advantage”, David Stokes, Policy Analyst for the Show-Me Institute, politely asks this rhetorical question regarding the unfair advantage (redistribution of wealth) produced with Tax-Increment Financing:“Would you like to be able to unilaterally take some of your neighbor’s money and spend it on ways that benefit you, but not him?”
Some Missouri cities’ appetite for redistribution of wealth is apparently not being satisfied via the existing “Tax Increment Financing” (TIF) machinery, so it looks like the General Assembly may add sales tax revenue bonds (STAR bond financing) as a so-called economic development tool (aka redistribution scheme) to sweeten the pot for its favored constituents.
STAR bond financing, under the pending proposal, could be used for projects with at least a fifty million dollar capital investment and fifty million in projected gross annual sales revenue. Cities would be allowed to use transient guest taxes, state and local sales, and use taxes to retire bonds to cover certain new project development costs within qualifying redevelopment districts. And, yes, the abusive use of eminent domain for private gain is allowed under the pending STAR bond financing act.
Such newly developed retail projects are sure to siphon off sales revenue from existing competitors in the market place as well as from nearby markets, clearly producing effects that benefit one competitor at the expense of another.
I’ll put it a little more bluntly than Mr. Stokes. If HB 1592 is adopted, cities will have a second major mechanism in place to afford them the opportunity to “steal” more from one neighbor and “dole” it out to another. In addition, cities will be able to take the property of its citizens and then sell it to the developer for use in connection with the proposed project(s).
Teed up on the House Calendar for a late session – late night debate is House Bill 1592, sponsored by House Majority Floor Leader Tim Jones and co-sponsored by House Minority Leader Mike Talboy. The bill touts 26 other cosponsors. Following a 21 to 0 vote in the House Economic Development Committee, the bill is poised for passage by the House, after which it will then be up for consideration by the Senate, all with the customary lack of consideration for the citizens of Missouri. With both sides of the aisle in support of the measure one would not expect the debate to last very long – no late night work for either the House or the Senate may be necessary.
Speaking of work – the work of one of the house’s primary mischief mills, the House Economic Development Committee, has by no means been limited to the STAR Bonds financing act. Of the 37 bills referred to the Economic Development Committee, at last count a total of 10 bills have been reported out of committee for consideration by the full House. That’s more bill activity on route to the House Calendar than is assigned to some other committees for consideration. For example: Downsizing State Government, the committee assigned the chore of ridding the state of unnecessary, burdensome, interventionist laws and regulations, has only been referred six bills for consideration. Out of 1000+ House bills that have been introduced this session, we have seen only six bills to reduce or eliminate laws that produce an unnecessary restriction upon our lives and liberty, or eliminate or reduce regulations that negatively impact our trade and commerce. An unbelievable statistic in the face of what one resource says about burdensome regulation in Missouri.
The Pacific Research Institute, in its last index of Economic Freedom of these United States, ranked Missouri 36th worst in terms of regulation and 44th worst in terms of relative size of state government. These measurements represent two of the institute’s five categories that determine the ranking of the states and the relative level of Economic Freedom enjoyed by each state’s citizens. Since the amount of Economic Freedom is highly correlated with the level of prosperity enjoyed by a state’s citizens, one would think this would trigger legislative motivation and action to be directed away from the increase in regulations and towards the downsizing of state government. One would think.