At what cost?

A special session of the Missouri legislature was called by Governor Mike Kehoe a few weeks ago to hear a bill relating to a large tax incentive/credit package (SB 3) designed to keep the Royals and Chiefs on the Missouri side of the state line in Kansas City. Also included in the special session lineup were two more spending bills – one strictly a storm-relief bill for St. Louis and the other with unfinished budget items, plus more storm relief funding for impacted counties across the entire state. 

 

Once the storm-relief bills were passed, the House moved quickly into hearing the bill relating to stadium funding. 

 

Now, while I can’t say I’m a Royals fan (though one does live in my household), I AM a big Chiefs fan. And I would love to see the Chiefs remain right where they are. It’s tradition, right? Arrowhead Stadium. It’s iconic. Of COURSE Missourians would like the Chiefs to stay in Missouri! But at what cost? Do taxpayers really want to fund this effort to keep those teams in place? The ones I have talked to about this issue emphatically say, “No!”

 

This bill was pitched to the legislature as a competition of sorts between Missouri and Kansas. You see, Kansas currently has a funding proposal on the table to cover 70% of the cost of a new stadium complex for the teams (that’s the simplified version of their proposal). Their offer expires June 30; hence, why Governor Kehoe feels it is urgent to do something quickly. 

 

Now, let me be clear. I am NOT a fan of Kansas! I’m a MIZZOU graduate who understands the deep roots of hatred between the two states, dating all the way back to the Civil War. I attended MIZZOU when we were in the Big 8, then the Big 12, and I know how meaningful the Border War is between these two states. 

 

Did you know that during the height of the Border War, MIZZOU Basketball Coach Norm Stewart would not even allow any money to be spent in Kansas when they traveled to an away game in Lawrence? He would only allow the bus to be stopped in Missouri for the team’s hotel stays, fuel, meals, etc. He refused to be an active participant in adding to Kansas’ revenue stream.

 

This current battle for the sports teams involves revenue, too – a lot of revenue. I completely understand why some people would argue that we need to keep the teams for this very reason. But is it the taxpayer’s responsibility to dole out tax incentives and tax credits to the benefit of multi-billion dollar franchises? Many think it is not. 

 

There is always collateral damage in a war, so let’s talk about the collateral damage of this battle if Missourians “win” the right to keep the teams over Kansas. 

 

This is a 30-year commitment of a large tax revenue stream (~$50M/year) being returned to the Chiefs and Royals organizations (among other tax credits/incentives). So, my questions are: How old will you be 30 years from now? Will you even still be alive? Do you have children? How old are they? Will they be retired before this commitment has concluded? Do you have grandchildren? How many years will they have to bear this burden once they become taxpayers? They are all arguably part of the collateral damage.

 

You see, when you give away a large funding stream, that loss of revenue that was coming into the state coffers must be made up by someone.

 

That someone is you. That makes you part of the collateral damage. The paychecks of the teachers, farmers, factory workers, nurses, loggers, flooring mill workers, and more, will be a part of the collateral damage. These are District 154 taxpayers who may or may not even have any interest in sports or may not even be able to go to these games at $200+/ticket and $15 per hot dog. (I didn’t personally verify the price of hot dogs at the stadiums, but you get my point.)

 

Let me also mention it has been suggested by several elected officials that this stadium funding package is unconstitutional. Reps. Bryant Wolfin (R-Dist 145), Darin Chappell (R-Dist 137), and Bill Hardwick (R-Dist 121) put on a clinic displaying the unconstitutional nature of the bill. They made excellent points, and I would agree with them wholeheartedly.

 

Rep. Justin Sparks (R-Dist 110) summed it up by saying, “Article III, Section 38(a): Prohibits granting public money or credit to private entities unless it serves a clear public purpose. SB 3’s tax credits primarily enrich team owners, not Missourians.”

 

A REAL ESTATE TAX FREEZE/CAP PROVISION TO SWEETEN THE POT?

 

During Senate negotiations, a real property tax relief portion was added to the bill, but it applies to only certain counties in the state. 

 

For District 154, this would mean that a proposal for a real estate TAX FREEZE for primary residences would be placed on the ballot in April 2026. The taxes for qualifying properties would be frozen at 2024 amounts. Many of the counties in the state were included in this potential tax freeze (or cap for some areas), but not all. 

 

Enter that pesky little thing called the Missouri Constitution into the discussion again. 

 

As noted by Representative Sparks, “Article III, Section 40: Bans local or special laws that favor specific groups or areas. SB 3’s property tax provisions exclude major counties….creating unequal treatment without a rational basis.”

 

Sparks went on to refer to Article X, Section 3, which, “Mandates taxes be uniform and for public purposes only. SB 3’s selective property tax freeze, tied to county ballot approval, risks being struck down in court, leaving taxpayers with the stadium cost, but no relief.”

 

Do I hope the striking down of the tax relief portion doesn’t happen? Of course I do! It’s easy to imagine, though, that tax relief for only certain citizens across the state, while not others, could be construed by the courts as a violation of the Equal Protection Clause. 

 

Sadly, the final substitute presented to the Senate in the wee hours of the morning also included a change in language from a “non-severable” bill to a “severable” bill. While our laws are generally severable, this clause guarantees that if one portion of SB 3 is found to be unconstitutional, it can be “severed” from the rest of the bill, while the remaining portions of the bill stay in effect. 

 

During the House floor debate, Rep. Sparks rose, expressed his concerns that the tax relief portion was susceptible, and offered an amendment to change the bill back to a “non-severable” status. That would have guaranteed that the bill would either have BOTH the stadium funding AND tax relief included, or the entire piece of legislation would be stricken down if the court found any part of it unconstitutional. Unfortunately, House members voted down that amendment 26-90, with several members not on the floor for the vote. I voted “Yes” on the amendment. 

 

Ultimately, SB 3 itself also passed by a vote of 90-58. In case you’re still uncertain how I voted, I was a “No” on the bill.

 

In my final comments on the House floor, I likened this package to a trade in baseball. We have all heard the trade deals that contain a guaranteed, specific player plus “a player to be named later.”

 

I don’t feel that the agreement in SB 3 is a fair trade. We are trading a guaranteed “~$1.5 billion, 30-year debt” for a “POSSIBILITY that SOME Missourians MIGHT get real property tax relief LATER, IF that portion of the bill isn’t stripped off in the courts”. That which we stand to gain is not a sure thing, but what we are giving away is locked in. 

 

None of us know what will happen when the dust settles from all this debate and any subsequent court challenges. I can only hope that average Missourians get a little bit out of the deal in the form of some tax relief.