Toughen up on Kansas City’s tax breaks

A wide range of Kansas Citians wants to reform economic redevelopment rules and make it tougher to pass out tax breaks to private businesses.

They have good reasons to be concerned, but the path forward is full of obstacles.

Some citizens are riled up. A group of petitioners recently stopped what they saw as excessive subsidies for the proposed conversion of a dilapidated Crossroads building into the headquarters for the BNIM architectural firm. Last week, a group called off the threat of an election on a housing project near Crown Center after developers properly changed the plan’s financial details.

Officials from school districts for good reasons have long complained because they lose the chance to gain millions in revenue every year from subsidized projects approved at City Hall.

Plus, residents on the long-neglected East Side understandably often get upset at incentives doled out to boost better-off areas.

However, this issue is controlled in large part by lawyers and special interest groups that pass out the subsidies, all in the name of promoting economic growth. And who’s against that?

Reasonable — and questionable — incentives have been awarded in the last few decades to build retail, hotels, housing and other projects.

Last week, City Council member Quinton Lucas unveiled some changes to tighten up the city’s rules. Lucas said Monday he was “dedicated to a material reform” of how the city grants tax breaks. His basic goals are sound.

One is to respond to the public’s legitimate, recent concerns about the city’s policies. The second is to give the development community a set of consistent, dependable rules they can follow to get projects approved at City Hall. They don’t need to run into lengthy delays just to work things out in private with elected officials or affected taxing jurisdictions.

If that sounds like utopia, well, maybe it is.

The mayor’s office on Monday said it had questions about how the new ideas would affect development. In addition, a long-promised study on the city’s incentives likely won’t be done until this fall; the information in that review could be invaluable in any reform.

Defenders of the status quo often belittle regular Kansas Citians by saying they just “don’t understand” how incentives work. Actually, many do get the fact that these complicated tax-break procedures favor the well-connected and well-off. That’s part of the problem.

Lucas and other council members have pointed out some real troubles with the current redevelopment process. They have not yet identified the real solutions needed to solve them.

The next few months will be full of charges and countercharges on this issue, as befits one that involves tens of millions in public subsidies awarded every year.

The end result should be rules that allow City Hall to pass out fair but not excessive incentives to developers.

This story was originally published May 16, 2016 at 5:26 PM with the headline "Toughen up on Kansas City’s tax breaks."