As I See It: Taxpayers are paying plenty for cities’ bribes to developers

Angered by my city council’s planned giveaway of millions in taxpayer dollars for the Shawnee Landing shopping center, I carried my protest to the biggest loser in the deal: the Shawnee Mission school board. Nearly half the cost of subsidizing the development was to come from their school budget.

After my talk I learned an amazing fact. Their deputy superintendent, Kenny Southwick, told the members that Kansas school boards and county commissioners can stop tax giveaways — in fact, have the “responsibility” to consider impact. This is the Kansas statute:

No privately owned property subject to ad valorem taxes shall be acquired and redeveloped under the provisions of K.S.A. 12-1770 … if the board of county commissioners or the board of education levying taxes on such property determines by resolution adopted within 30 days following the hearing … that the district will have an adverse effect on such county or school district.

The Shawnee Landing deal fell through — possibly because the vacant site is “blighted” by a slope so steep it would require a five-story retaining wall. But my Shawnee City Council loves this wooded, grassy tract. There are shopping centers on the other three corners of that intersection. They want one on the fourth. So they still designate it for Tax Increment Financing (called a TIF), an incentive tool meant for blighted property, with the possibility of zero new property taxes for 20 years to the next developer who comes along.

Forty years ago “blighted” meant something quite different for the redevelopment of cities. Then it described decayed industrial sites or slum neighborhoods of inner cities or inner suburbs. So hungry are businessmen now for tax dollars that the definition has been extravagantly stretched. Tax giveaways today go mainly to developers of fancy projects for expensive locations.

Nearly half of these developers’ tax savings is being sucked out of our Johnson County school budgets. Other big losers are Johnson County government, our community college, libraries and park district. As a 50-year Shawnee resident, I have watched my council and others spend countless millions of our tax money to bribe shopping center developers. Old subsidized centers like Metcalf South and Great Mall of the Great Plains were killed off by competition from new tax-supported malls. Now the old centers are “blighted,” hungry for fresh tax giveaways.

This is the richest, most populous county in Kansas. Would no one build strip malls here if cities stopped bribing developers? Were wealth-seekers ever bribed to join California’s 1849 gold rush? That’s ridiculous. Johnson County is where the shoppers live. Against what are we competing for these strip malls — Missouri sites, many miles eastward?

If, despite today’s glut of retail, businessmen want to build yet more shopping centers, let them do it as a free enterprise with their own money. Assuming we must subsidize business, let’s do it for employers who pay decent wages, technical or industrial firms like Sprint, Garmin and Cerner. Stupid rivalry between our own cities — Shawnee, Merriam, Lenexa, Overland Park and Olathe — drives the free money machine for business. Olathe is by far the worst of that lot, with 61 abatements as of 2014 compared to a total of 33 for the next four cities down the list.

So why do cities give away our money to wealthy developers? Partly because they collect 1 cent of the sales tax on every dime spent at those strip malls, more than 10 percent of the sales tax we pay. Guess what Merriam rakes in when a plush vehicle sells at one of its five taxpayer-subsidized car dealers lined up along Interstate 35. A $100,000 vehicle means $1,000 in sales tax for Merriam, which has only 11,000 residents but eight freebie projects totaling $53 million in giveaways. If our cities must give away money to business, let them do it with their own sales tax revenue — not school budgets.

No financial scam or burglary can equal the stealth of these tax thefts. We citizens pay tax bills every year. We know we are paying. But the one news story that reports a fat tax giveaway — that may be all we ever hear. Cities often call this “public-private investment.” Indeed, the public invests, but the private businessman owns the whole thing. Other citizens pay higher taxes to fund his police and fire protection, schools for his employees’ children, street repair, snowplowing in winter, libraries and parks and access to a community college. Other citizens also pay millions for access roads and infrastructure his projects require.

Kansas law empowers both county commissioners and school boards to stop tax giveaways. I urge those public officials to remember that school money belongs to schools. The same goes for taxes levied to support county, community college, library and park districts.

This story was originally published September 15, 2015 at 6:37 PM with the headline "As I See It: Taxpayers are paying plenty for cities’ bribes to developers."