Old Drum

Commentary on Warrensburg, Johnson County and Missouri issues from a Libertarian perspective. View my earlier commentary at www.olddrum.net.

Tuesday, January 31, 2006

Who's Handing Out Misinformation?

Golly, I'm uninformed and handing out misinformation! At least, that's what the Hawthorne developers said in their cosy little interview with the DSJ. [That's the same DSJ that published the "factual answers" about the zoning issue in 1997 (see www.olddrum.net/zoning for how true those facts were). It's the same DSJ that published an "article" lambasting the President by a local Democratic Party official without labeling it as "opinion."]. So I guess I'd better respond, since I've been one of the most vocal of local citizens on the issus.

First, I'm not opposed to the project or the development; it would be nice to have more retail choices so the marketplace could sort out the winners and losers. While I might not be up on allthe little details, I understand the basic difference between the Neighborhood Improvement District (NID) and the Transportation Development District (TDD). And I understand the difference between a tax abatement and directly taxing citizens. Let's look at some specifics from the DSJ article.

The DSJ cited the developer, stating "some people think this is a giveaway to them from the city." A direct quote was "Technically, we have been given nothing by the community." Technically, he's right: the city hasn't given the developer money directly; instead, it has allowed the developer to take money from the citizens without the city acting as a middleman. Practically, I fail to see any significant difference.

According tothe DSJ, the developer said he didn't go for Tax Increment Financing (TIF) because he was "told it would be unpopular here." I expect so, especially with the Mayor's wife, who is on the local school board that would be affected by a TIF. In addition, use of a TIF on undeveloped property is exactly the type of abuse that is likely to be curbed wither by the legislature or by voter initiative.

The DSJ also says the developers don't want to use eminent domain on the church. Now, I'm the one who made that issue public and I did so after a conversation with a member of that church. The developer may not have any long-term plans to condemn the property, but the church member certainly had that concern. However, any talk of condemnation is likely to be moot if the eminent domain reform efforts aren't derailed by "economic development" special interests.

The DSJ article further goes on to quote the developers lauding the city staff. It's now in the open - the city made the overtures to Wal-Mart, just as I suspected. I still think Wal-Mart signed on because the alternative was worse. While it is true that Wal-Mart is involved in a TDD down at Warsaw, their new store was the anchor of the development, not a well-established on-going operation.

A lot comes down to a question of values. If economic development is accepted as good, does it thus follow that otherwise-objectionable actions are ennobled? According to my values, it is objectionable to take money from the citizenry without their consent and give that money to another citizen. The ends, however worthy, do not justify the means.


  • At Tuesday, January 31, 2006 7:39:00 PM, Blogger Ben Pierce said…

    Thanks for being the light that shines on some of the goings on under the table. You keep things in the "no spin zone."

    In addition to the issues you so ably address, I'd just add that the city's tax-exempt notes pay tax-exempt interest to whoever purchases them. Since this is an interim measure until the TDD bonds are issued, the city pays the issue and interest costs on the notes.

    In addition, who cares if $0.50 on every $100 is purchased. First it's 50 cents, then it's $2.50, then it's $50. Just say no to these taxes.

    Federal and state taxes amount to over 30% of the cost of a gallon of gasoline. In Europe, it can be about 75%.

    0.5% doesn't seem like much until you add on your Federal tax, state tax, sales tax, etc. These are hidden taxes so people just don't seem to mind so much.

    Worse yet, people feel helpless to change things.

    We're not giving much to the developer except:
    1) the Wal-Mart 1/2 cent sales tax,
    2) the increase in sewage costs brought about in part by the development,
    3) the interest expense on the short-term notes used as a bridge loan until the TDD bonds are issued,
    4) a bit of an incentive for Wal-mart.

    I doubt if Wal-Mart was all that concerned about the transportation infrastructure in Hawthorne. They are doing just fine the way things are from the look of the parking lot.

    I doubt if the developers would be developing unless they were going to do just fine.

    I guess it's easier to ask forgiveness than permission, which is essentially what the city has avoided by going around voters who refuse to fund developer-initiated growth projects.

    Ask the voters whether they want a 50 cent additional tax on each hundred dollars they spend in exchange for additional homes and businesses and I bet the answer would be "no."

    We're so worried about too much debt at the hospital which serves us all--so worried that the previously approved hospital expansion has been postponed--but we're not that worried about a few million extra in notes for a private development and some new stores.

    Go figure.


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