News from Wichita Liberty: TIF districts, AFP summit speakers, markets as regulators
| Prudence Requires Postponement of Wichita TIF District
Remarks to be delivered to the Wichita City Council on January 6, 2009.
Mr. Mayor, members of the council: Last month it was discovered that procedures used to investigate the background of potential city business partners were lacking in some respects. It is now recognized that the process that were in place failed to give city council members information that they needed in order to make a fully-informed decision about the desirability of partnering with a certain development firm. Today the council is facing a similar situation. As with the previous case, the TIF district itself has already been approved. Now the actual project plan is before you. Also as with the case last month, these developers made application under the vetting process that this council has now realized was faulty. To my knowledge, no one has made any allegations that the developers before you today have problems like those that caused the postponement of the project in December. But since these developers applied for and were approved for TIF financing under a system that is now recognized as flawed, we really don’t know. There is one thing in particular I would like to know: The developers have been asked to agree to what the city calls a “Tax Increment Shortfall Guaranty.” It seems to me that this guaranty is only as good as the financial condition of the guarantor. Has the city examined financial statements of Reverend Harding and his partners, in order to determine whether they have the financial capacity to make good on this commitment, if it becomes necessary? I think the citizens of Wichita would sleep better at night if these developers would go through the new qualification process that the city is preparing. It’s been reported that this new process will be ready soon. Mr. Mayor, why don’t we wait a month or two and investigate these developers under the new process that is presently being developed? Then the citizens of Wichita can have confidence in this council and the project the taxpayers have been asked to subsidize. Mr. Mayor and members of the council, there’s another issue that I’d like to call your attention to. That’s the possibility that the city or county – perhaps both – might decide to raise their sales tax rates in exchange for lowering the property tax mill levy. If that were to happen, what would be the impact on TIF districts? The assumptions used in the projection for this TIF district assume that the mill levy in future years is the same as it is today. But if either the city or county were to reduce or eliminate its mill levy, it seems that this – and other – TIF districts would not generate enough property tax to service their debt. |
| Steve Moore of The Wall Street Journal to Speak in Wichita
AFP announces that in addition to Jonah Goldberg, Steve Moore of the Wall Street Journal will be a speaker at the summit in Wichita on Saturday January 10.
Steve Moore is a great writer and speaker. One of his best columns was the subject of my post The Decline of Local Chambers of Commerce. This summit should be a great event. Click here to learn more and register for this important event.
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| Markets Are the Best Regulators
Since the start of the current financial crises, we’re told that markets are at fault. The most common diagnosis is that there’s not enough regulation in place, and only a move away from reliance on markets and toward more laws and regulations will save the economy.
One thing that did happen is that someone misjudged the risk that was present in the mortgage-backed securities that led to the downfall of several investment banks. A recent article in the Wall Street Journal does the best job I’ve seen of explaining how this mistake, made by credit rating agencies, was responsible for this crisis. The article, written by Robert Rosenckanz, is Let’s Write the Rating Agencies Out of Our Law. Click here for the full story.
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| Sedgwick County Legislative Delegation Public Hearing
At 7:00 p.m. on Tuesday, January 6, 2009, the Sedgwick County legislative delegation will host a public hearing and inviting public input in the Jury Room of the Sedgwick County Courthouse, 525 N. Main, Wichita, Kansas. This is your opportunity to address your concerns to area legislators prior to the convening of the 2009 legislative session in Topeka on January 12, 2009. Entry to the Courthouse will be through security on the north side of the building. In past years speakers have been given approximately 3 minutes to speak depending on the number of people wanting to speak.
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| The U.S. Taxpayer – AKA second, third or even fourth class citizen
Here’s a note I received from someone who isn’t appreciative of the tax collector. This reminds me of the Internal Revenue Service’s effort to improve “customer service.” That’s funny. It reminds me of David Henderson, who wrote “calling taxpayers customers of the IRS is like calling chickens customers of the egg farmer.”
Click here for the full article.
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