This just in: Kansas City TIF is a mess
 Today I attended a press conference presented by ReclaimDemocracy.org. The topic was the release of a TIF study that the group had commissioned UMKC Economist Michael P. Kelsay, Ph.D. to perform. I figure since I am the candidate talking about fiscal responsibility and reform of economic development incentives, this was the place I needed to be.Dr. Kelsay did not fail to disappoint. At least not for me. His presentation was full of dry economic analysis and lots of big wonky words like "rescission" that finance geeks like me love. I don't know if the rest of the room found it as interesting as I did. Economics is not everyone's cup of tea. There wasn't anything groundbreaking or surprising in the executive overview. TIF is being misused. No surprise there. There is no comprehensive TIF policy. Uh huh. There is no transparency of the process. Nope! We are damaging our economic health by including Economic Activity Taxes (EATs) as part of the incentives rebated back to the developer. Preach on brother! The Q&A was a bit more lively and interesting. There were several questions about how detailed the study was. Did it analyze any particular TIF plans? Most of the answers were "not that detailed" and "no." Somewhat disappointing but then again this study wasn't directed at people like me who actually study economic development incentives. I finally decided to ask the obvious question. ReclaimDemocracy wants to remake itself from a Walmart foe to a TIF watchdog. They obviously have connections with the UMKC Economics Department. There is a need, and a definite interest in detailed review and analysis of individual TIF plans. Would the good professor commit to tasking UMKC Economics students to perform these analysis as an academic study? Each semester a student, or group of students could perform a detailed analysis of an actual TIF project and publish their findings on the internet. "I could possibly see that happening" was his reply. I could see the gears turning in his head. Another question was asked. Another answer given. Dr. Kelsay looked back in my direction and this time with much more enthusiasm exclaimed "You know, we require our students to do projects, but they're usually just artificial cases. What you're proposing is a great idea! Students working on real projects. That's what we'll do!" I love the mind of an academic. He was processing and formulating the entire time. I look forward to UMKC assuming a more active role in our economic development policies. Considering we don't even have economic development policies, what harm could it do? And to the Economics students whom I've just doomed to a semester of painful TIF analysis? Uhhh... Sorry? |
posted by Mark at 4:33 PM
Comments on "This just in: Kansas City TIF is a mess"
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Eric said ... (11:38 AM) :
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hip critic said ... (12:26 PM) :
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Anonymous said ... (8:34 PM) :
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Mark said ... (9:34 AM) :
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Anonymous said ... (7:32 PM) :
post a commentGreat idea, but it's kindof a no-brainer and scares me that he hadn't already thought about it. This should be widespread across the university - professors using KC as a research subject and engaging students in the process.
There's a lot of talk about the need for more resources to make UMKC a true urban research university, but this story is an example one of the many small details that don't get attention.
At my university it was standard practice for professors to involved students in whatever research they were doing. It's a great benefit for students to get more and realer experience, and it greatly helps the researchers.
There are serious moral and ethical considerations in having UMKC sponsor any type of "urban renewal" plan in the very city they dwell. UMKC is currently engaged in trying to become involved with the process for purposes of studying poor folks and their reactions to urban renewal (READ: the mass displacement of po' folks). What a tragedy.
Developers have forever tried to bring credibility to pet projects by getting large Hospitals, Universities, etc to back the plan. Quite simply, the plan will not stand by itself and everyone knows it.
So.....there you have it. Any community project which lends itself to studying the very people society has a responsibility to protect (READ: projects which allow UMKC to secure federal funds to make guinea pigs out of urban residents) will be fiercely opposed.
Mark, specifically what type of detailed review and analysis of individual TIF plans should there be?
Anonymous,
I would like to see a breakdown of the financial performance of an individual TIF deal. Are the projected revenues meeting expectations? How far along is the payback?
Specifically I'd like to see the developer's books. Every developer comes in and asks for subsidies saying their "numbers don't work" if they don't get X amount of subsidies. I would like to see running reports on those projections. Was the developer right? This is important data to have as we go forward and make decisions on future deals.
Finally, and this is the biggest challenge of all to economics students, I would like to see them put together a top-level executive summary of each deal they analyze. One that any taxpayer can understand. Communicating your findings is perhaps the most important lesson any professional needs.
Thanks for reading.
Mark,
What do you think about the argument that the city shouldn't care about the performance of TIFs that aren't backed by city bonds because the developer is taking the risk, not the city?