KANSAS CITY, Mo. — Missouri public schools are missing out on over $180 million a year due to public incentives, according to a local professor.
Terry Ward is an assistant professor of public administration at Park University.
Ward says he, “Saw this as a growing threat to the revenue stream of the school district that everyone was talking about but nobody knew how much there was."
After collecting data for the entire state, he found, “Back in 2007, it was $130 million a year diverted or abated for public education. Now, it's over $180 million a year."
The Economic Development Corporation credits the boom downtown to the TIF program, citing the assessed value of projects.
The New York Life building went from $243,000 to $7,600,000.
The 11th Street Corridor went from $340,000 to $2,800,000.
The Americana Hotel and Garage went from $880,000 to $3,600,000.
Those three projects received $30 million in TIF reimbursements.
"I think it's pretty easy to look at the downtown in Kansas City today versus the downtown in Kansas City 12 or 15 years ago and you have to give a certain amount of credit for that transformation to the TIF program,” Bob Langenkamp, President of the Economic Development Corporation, said.
Missouri State Rep. Dan Stacy of Blue Springs put this bill forward to crack down on TIF incentives.
Tax increment financing allows a developer to use money that would go toward taxes for their project. Ward says that money is often used for infrastructure. He also understands, “If you start on the school district end, it's money being diverted away from public education. If you start at the developer end of the discussion, the deal is that the projects wouldn't happen without it so you haven't lost anything."
He adds that Jackson County uses more public incentives than any other county in the state. Clay County and Platte County are also in the top five.
Langenkamp said, “Typically we look at applying public incentives when we're able to determine that a project wouldn't go forward without the application of those public incentives."
In the last 5 years, the EDC has used a third party to do a full financial analysis of every proposed project. Langenkamp explainer developers pay taxes on the assessed value of a property before improvements even if a public incentive is granted.
Ward believes, “We're in a spiral to the bottom where we have more and more expectation for public services and we're gradually defunding what's provided in the way of revenue to support them. We need good school, we need good roads, we need good businesses, we need development. You can't take all of your money and fund one of those and have a good, vibrant community."
