By NICK GOSNELL
Hutch Post
Kansas Policy Institute CEO Dave Trabert doesn't see the proposal passed by the Kansas Legislature to potentially lure the Kansas City Chiefs and Kansas City Royals to the other side of the state line as real economic growth.
"These STAR Bond initiatives, subsidies in general, and especially STAR Bond projects, don't work," Trabert said. "The research shows that. We did a study, we had an economist from KU study two projects in Wichita, and he concluded that all it really did was shift activity from one side of the city to the other, and that's just a basic economic fact that we all have the same budget, whatever it is. It doesn't change. What we're gonna spend on entertainment, on dining out, on retail, we're gonna spend what we have. We might spend it in different places, but right now, that money is being spent."
Trabert would argue that it is actually a net negative for taxpayers, all things considered.
"The developers want to put all kind of hotels and retail around that, so the money that gets spent there all year round at all those other shops is money that would have spent somewhere else, so those businesses in the somewhere else group lose," Trabert said. "The money that you spent there was taxed, sales tax, and that money went to the state general fund. Now, that money is gonna be spent in a STAR Bond district if it happens, and that money is used to pay off debt, so the state does lose tax revenue from that."
The state argues that they will get their money back through taxing the teams that play in Kansas on their incomes.
"We asked the Scoop and Score, the army of lobbyists that were hired, they were predicting a billion dollars a year in annual economic activity, and we said, okay, show us your math, and they wouldn't, because these kinds of predictions never take into account the unseen circumstances," Trabert said. "You can see where you're spending money, but they never account for that that money is mostly just shifted, and there's also, I mean, the return on investments are sometimes absurd. The assumptions that are made, they wouldn't show their math. That's pretty telling, but it's not a good deal for taxpayers, even if you live in the area where it happens to be. There will be some winners, the people that have businesses around there, but it's gonna come at the cost of everybody else."
The other issue is that this could rekindle the economic border war between Kansas and Missouri, where each state incentivizes Kansas City based businesses to move back and forth across the state line for the best deal, and that doesn't do anything for the community as a whole.