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Reform of Economic Development Policy and Process

For many years, the City did not have a policy for economic development and incentive packages. Nor did it have a vision in place for economic development, or an evaluation process to study outcomes. Incentives, such as TIF and tax abatements, were approved without a study of their impacts to the City’s fiscal health. The mantra being sold to the residents of our city, “Build it and they will come,” was lipped daily by the well-connected few who were making a killing using taxpayer’s dollars.

Before long, the City’s approach to incentives became a progressive dinner of giveaways. TIF became Super TIF, and then it became Super TIF with city guaranteed debt. Of course, this willy-nilly use of TIF’s couldn’t go on forever, the chickens eventually had to come home to roost.

And roost they did. The City has paid the price. When I took office in 2007, the City’s general fund was supporting more than one and a half billion dollars in bonded debt. Bonded debt can be likened to interest accrued on personal loans. Last year, the city had to cover a debt payment of $15 million for the Power and Light District. That money could have been used to pay the salaries for additional cops, street repairs and other basic services.

Since my top priority was to stabilize the City’s finances, I immediately appointed a 20-member task force to study this problem. The task force was comprised of six council members (one from each district) and 14 members representing a cross-section of community stakeholders. Their recommendations were accepted in full and adopted as policy unanimously by the City Council on Sept. 9, 2007.

The policy set goals to create quality jobs; strengthen the economy, build the wealth of Kansas City, develop affordable housing opportunities, and promote opportunities for education.

From there, City staff worked with the Kansas City Economic Development Corporation and statutory agencies to develop a process to implement the policy. Today, developments being considered for incentives are given much more rigorous evaluation, so that we understand both their impact on our neighborhoods and their impact on the city finances.

Meanwhile, I have aggressively sought to diversify the boards and commissions that guide the use of our city’s economic development tools. Regular folks finally have a voice in their City government. I’ve appointed artists and neighborhood leaders to the TIF commission and other statutory agencies to inject new perspectives into the processes of approving and evaluating development projects. I have also pushed for a greater voice for representatives from school districts, libraries, and other jurisdictions. We need to understand that in order for the city to thrive, our schools and libraries must succeed as well.

With the recession still lingering and unemployment remaining historically high, Kansas City needs a vision to expand its market in order to survive and thrive. I am diligently working toward making Kansas City a key economic player in the global trade market by using the Port Authority as an export hub for homegrown Kansas City products. We need to take advantage of Kansas City’s many economic strengths, such as its central location, its river, rail lines, and highways. Helping Kansas City businesses expand in the global market will help revive the economy and create jobs in Kansas City.

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