Kansas City
Patrick Tuohey

If, despite all that has been written here and elsewhere about how Kansas City’s Incentives Study was a complete and utter sham, you still think there may be something to it, consider this additional item. The Kansas City Star reported the other day that in 2018, Kansas City spent $175 million in economic development incentives. The story includes this gem:

City Hall officials say it’s difficult to establish what Kansas City gets in return for it its investment in incentives.

Kerrie Tyndall, director of economic development for Kansas City, said the benefits of incentives are spread over several years and agencies and, thus, “extremely difficult to quantify.”

Extremely difficult? The city just spent $350,000 on a report Tyndall oversaw that concluded, “each incentive dollar invested generated $3.83 in additional tax revenue.” So to quantify the benefits of incentives for 2018, we just take the $175 million spent on incentives and multiply by 3.83. That gives us . . . $670,250,000 in additional tax revenue! Voila!

Even if that $670 million in additional tax revenues doesn’t appear right away, Kansas City has been doling out more than $100 million each year in incentives for quite a while. Where exactly in the budget might we find that tax revenue windfall?

Nowhere. The city sees nowhere near the return on incentives claimed by CDFA in a report Tyndall personally oversaw for two years. The fact that she doesn’t mention the multiplier today suggests that even she knows it is laughably wrong. Laughable, that is, if these subsidies weren’t so tragically destructive to Kansas City.

 

About the Author

Patrick Tuohey
Patrick Tuohey
Director of Municipal Policy

Patrick Tuohey is the Director of Municipal Policy at the Show-Me Institute.