So, Kansas Reinstated the Border War (for the Chiefs)
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Waah, waah, waah Jackson County Missouri and Missouri politicians decrying the Kansas legislature’s STAR Bonds to try to lure the Chiefs to Wyndotte County. I wonder what percentage of Chiefs’ staff and players already live in Kansas. Imagine a Sofi-like stadium next to the Kansas Speedway. It’s fun to think about. My junior high self would have challenged: Come on Missery do something about it.
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I hope they do so Kansas doesn’t have to finance this boondoggle.
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Just sounds like a lot of politician grand standing. Would be fairly surprised to see a move when the Chiefs would have been happy with the $800m renovation. Chiefs are just trying to get leverage on the city for the next vote/MO proposal which probably would have passed already if it wasn’t weighted down by the royals stadium deal. Even if they have to drop the funding split to 50/50 to get it to pass, that would only be a $400 million cost for the chiefs vs the reported ~$550 relocation fees the the Chargers/rams are reported to be paying. Maybe the Chiefs wouldn’t have as big of a fee since they are staying in the same metro, but it hardly seems worth the hassle and negative publicity and I can see the league feeling this way too and not even approving it.
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I’m thinking of all the +'s. Dome, super bowls, final fours, concerts… big 12 championships or whatever it will be. I need to hear more about cost.
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Taxpayers pay for 75% of the project plus tickets, Clark gets lots of money from working folks when he could write the check himself if it was a great investment. (It’s not)
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@FarmerJayhawk explain the bonds. Is this all of Kansas on the taxes? Does hunt live in Kansas?
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Tax payers pay for STAR bonds?
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@Crimsonorblue22 yeah, the sales taxes from the new district pay off the bonds. So the Hunts get all this guaranteed revenue from a new stadium at really no cost to them. And if there’s a default at the end of the day it’s not ideal. The state forgoes all that revenue just to pay off the debt. And they have a horrific record. Only 2/16 STAR projects have met their tourism goals and are still around. It’s one of these things that we teach in basic Econ and public finance that the record is that public money for stadiums doesn’t work but politicians loooooove ribbon cuttings and sitting in the owners box.
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@Woodrow yes. If you go to a game or anywhere in the STAR district you pay for the infrastructure plus the price of admission. Where typically a business would pay for its own buildings and such and you’d just pay for a good or service and sales tax on top. It would be like putting in a garden at your house where you could charge people to come see it. The sales tax, instead of remitting to the state, goes right in your pocket for building the garden.
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STAR bonds are sold - people can buy them, the Chiefs will likely buy some, the Hunts will likely buys some. That money is repaid by tax revenue from that district over a thirty year term. Tax money that would not exist without the stadium.
If you live one block from the stadium and never go to a game or purchase anything from within that new area you pay zero taxes. An area that you a producing no taxes currently. New revenue created by the project to pay for the project. You never get something like that from the government. They always just want to tax everyone. This seems like a fair solution that not only creates a possible uptick in revenue, but is billed as a way of not creating taxes for those that don’t use it.
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Forgot to post this earlier but the record of public investments in stadiums is absolutely dismal. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4340483
So at the end of the day we’re going to use a program batting .125 for a type of project with no record of success. BANG UP JOB
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@FarmerJayhawk why look at a WVU study done by academics with no skin in any game? University studies almost always say what you pay them to say. Those studies are garbage because it’s based on people with no basis in the real world, they’re easily manipulated. Meanwhile there is wildly successful STAR bond project that was passed for the race track. Also the amazon warehouse. Some fail, but the recent local track record is pretty good.
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@dylans because I know the methodology and data required to estimate economic impact. Do you? Or are you just shooting the messenger? There’s no money behind a lit review, my dude. I’ve done a bunch of academic studies and have only been contracted for one. There was a clause in the contract it was going to be published no matter the results. And that’s standard. Go find an economist who thinks these are good deals for taxpayers. It’s totally non-ideological and is taught in undergrad micro and public finance classes.
If you’re concerned about bought and paid for studies look at the economic impact “studies.” Go ask them for their data and methods and see if they give them to you (they’ll laugh). If they do it’ll be like Scoop and Score’s $900 million number. They’re counting estimated impact to the metro as a whole as impact to just Kansas. Which, that impact estimate was a Chiefs commissioned study. So if you’re following the money, look at that. And do they have training in economics? Probably not. They wouldn’t know what a regression was if it slapped them in the face and called them mommy.
And the figure I cite is from state auditors, who are tasked by the legislature with rigorously studying state programs. And ask why other state legislatures don’t use STAR bonds. It’s not exactly a secret.
I was also a senior staffer in the legislature at one point and know a couple former Secretaries of Commerce. They all agreed the Border War was bad policy and we shouldn’t do it anymore. This is insanity.
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@FarmerJayhawk is there another way to make this work? Have hunt guarantee a certain amout? Would mahomes? Could we lose them to, say Dallas?
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@Crimsonorblue22 there’s no threat the Chiefs are going anywhere but KC. Owners would never approve of them going to the metroplex. Voters are increasingly rejecting incentives for stadiums. I have no problem if Clark wants to buy some land over here and build it. SoFi in LA was privately funded, so I would support that for sure. Busch in St. Louis was 90% private money.
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@FarmerJayhawk Data coming from universities is often flawed by methodology in my many of my experiences, flawed by work ethic in others, and further flawed by the researchers biases. The government (lawmakers and universities both) will freely lie to the people to get what they want without repercussions.
personal examples I can point to are not in the economic field as I don’t give it much merit, it has very limited usefulness. Economists are just people with no skin in the game telling everyone what’s going to happen like the weather man - wrong all the time, but no accountability. But I know the previous researcher at KSU would only release the results of herbicide trials if they gave the expected outcome, otherwise nda’s went into effect. I also know her methodology was poor, her follow thru was shit, but her presentations were bubbly and full of information that she fed you whether it was properly researched or not.
Economic impact studies, just like any other study, can be twisted to say whatever you want. I just wish I was so naive to think otherwise.
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The votes on the Kansas stadium-financing plan were 84-38 in the state House and 27-8 in the Senate. Lawmakers from across the state — even western Kansas, far from any new stadium — supported the measure.
It would allow state bonds to cover up to 70% of each new stadium, paying them off over 30 years with revenues from sports betting, state lottery ticket sales and new sales and alcohol taxes collected from shopping and entertainment districts around the new stadiums.
-areowheadpride.com
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@dylans again, I ask. Do you know the methodology and data necessary to do a rigorous economic impact study? Do you have any real critiques of the studies I’ve cited? Or just vague generalities?
Data almost never come from universities, it’s up to individual researchers to collect and analyze. Shouldn’t researchers have no skin in the game? That sounds like a recipe for bias. Which is why if we’re given any money for research it has to be disclosed on page 1 of the paper. This ethics stuff isn’t complicated. If there’s a small mountain of evidence pointing in the same direction and almost none the other way, there’s definitely something to it.
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Funding smunding, if the Chiefs move to Kansas all I want to do is stand on State Line Road, drop trou and show my bare butt to all of Missouri.
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@FarmerJayhawk sample size is crap my friend. That is how you skew results. Use local data not national. It’s already proven to work right in that’s area! Sheesh what’s better a study by academics or an actual working example just a few miles down the road?
https://www.espn.com/nfl/story/_/id/40401734/kansas-governor-signs-offer-chiefs-royals-stadium-help
You’re in the bipartisan minority. Maybe tell your representative.
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@dylans what do you mean by that? Decades of work showing convulsively that these incentives aren’t good investments? Again, read what I’ve cited. This holds for all sorts of locales. But sure there’s something unique about KC that will wildly change things. It’s like that scene in Arrested Development where they’re like yeah it’s never worked for other people, but maybe this time lol.
Oh I have. Troy has long known my feelings about these things. He got a kick out of my “it’s not socialism if it’s going to sports!” line when I texted him the other day. Big KU fan, super nice guy, good friend, but he’s simply wrong here.
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@FarmerJayhawk I mean it’s already a proven winner in the area for the racetrack. Why look at a study when you have actual working proof right in front of your face? You have your mind made up, I can respect that. You don’t want to subsidize billionaires in this way. Fair enough. The area will not get developed and no taxes will be created nor utilized. That line of thinking is why Kansas has steadily gone backwards economically since the late eighties. It used to be a fairly progressive state when it came to attracting business, now it all goes across the line due to better policies.
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@stoptheflop You can do that anyway. Any day of the week.
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@dylans big difference. The track wasn’t 10 miles away. 2/16 STAR projects have met their stated goals. There are good reasons almost no other states use them.
Hey look I just want Clark to pull himself up by his bootstraps and pay for his own hobby. If he can’t afford it maybe get a second job.
Kansas not doing a lot of corporate welfare is good. Many audits of those programs have shown a real lack of effectiveness and even outright fraud. Everyone agreed the Border War was dumb so we stopped doing it. Our economic struggles have much more to do with demographics and other long term factors, not how much taxpayer money we throw at companies that don’t need it. https://www.kslpa.org/audit-report-library/evaluating-the-department-of-commerces-major-economic-development-incentive-programs/
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Math says the nfl salary cap is 255million and increases at a rate of 8% annually.
That amounts to a little over 30.8 billion in Chiefs player salary alone pad out over the 30 year period. Of that 15.4 billion would be taxable by Kansas at 5%. The income tax on the player salaries alone would total 770 million. Just the income tax on the players not the staff, not the taxes generated by tourists, not the revenue generated for the community that gets taxed. Just the players salaries will generate three quarters of a billion in tax revenue for the STAR bonds.
Also the opponents have the same salary cap and have to pay income taxes when they play in Kansas, so you can double that total. As in the STAR bonds will be completely paid for by the income tax generated by the players alone.
Add in 2-3 super bowls and that economic impact over the 30 year period as well. It’s really a no brainer to want to attract an NFL team.
tldr - The players will generate 1.5 billion in income tax alone thru the life of the STAR bonds, which should be around 1.5 billion as well
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Good thing is if you’re correct @FarmerJayhawk these business in Lawrence won’t feel any impact. https://www.kctv5.com/2024/01/31/businesses-lawrence-fear-economic-impact-ku-games-kansas-city/?outputType=amp
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@FarmerJayhawk Boeing pulled most of its business out of Wichita and moved it to Seattle due to policy. OKC is booming with previous Kansas business due to better policy. It’s very common for business to close shop in Kansas and just move to OKC or Texas and find great success.
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@dylans I’m sure having better than 50% lower (or no) business taxes has nothing to do with it and yep it’s all incentive packages and definitely not the broader policy climate no sir.
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@FarmerJayhawk Ignoring the math I see. There is zero substance behind your argument.
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@dylans I’ve made substantive arguments and cited a ton of sources, none of which you critiqued except to say they’re all rigged. The evidence for which you had none. You also didn’t address the LPA audits that found significant underperformance of Kansas’s economic incentive programs. I can give you chapter and verse on why the Chiefs estimates are bought and paid for propaganda and economic malpractice if you’d like.
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@dylans this is apples and oranges. Arrowhead would move about 10 miles. It would generate no additional economic activity outside that narrow space, just redistribute it. They aren’t even leaving the metro. Businesses in LFK will be fine, they survived for years when nobody came out for games. One year won’t kill them. Maybe Black Stag but that place runs at a loss anyway.
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@FarmerJayhawk Completely ignoring a very easy math reality to site studies is what is wrong with permanent residents of academia.
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Math checks out. Farmer is just being a hater, too dug in to face facts. The NFL is a cash printing press.
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@dylans seriously, what math? You cite a single project. And some vagaries about how my entire field is a fraudulent enterprise and something something sample size. Do the studies not have sufficient statistical power? Are their error terms wrong in their models? I can tell you the Chiefs study model is stunningly bad. It’s bad press release, nothing more.
Clearly putting the Chiefs over here will work because of all the development that current Arrowhead has generated. After all who doesn’t love a good vacation in Raytown?
Yes I’ve cited such fancy metrics as “return on investment” and “but for analysis.” Absolutely far beyond anyone with a room temperature IQ to understand.
And I love the NFL, watch RedZone every Sunday. But there are good reasons both governors said shutting down the Border War was good policy. Moving a few enterprises a few miles for billions in taxpayer funds was a giant waste of money and put both states at financial risk. I was in the same room with a former Secretary of Commerce that warned if we started it again it could ruin the state’s financial position given their horrendous record of performance.
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@dylans good then Clark should have no problem writing the check himself if it’s such a great investment
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@FarmerJayhawk It’s simple math and that’s why your field is a mess. You would rather site a study than admit you’re wrong about the exact example we are referencing. If you can entice any business, let alone a business that attracts tourism, that has a projected payroll of 1-2 billion dollars(depends if you figure 5 or 8% annual increase in the salary cap) a year at the end of the term and only cost 1.5 billion to entice, the economics are simple. Any money that is created over the players income tax is positive revenue. Let that sink in.
You’re upset because I called your methodology into question. The exact reason I do so is because you are so entrenched in the studies that you are ignoring the known outcomes in this case. It’s like you won’t admit that this is easily paid for by player salary income tax alone because someone did a study somewhere about some entirely different business that happened to be funded the same way. Do any of those 16 examples have a minimum employee salary distribution of 255 million with 5-8% annual growth proven over the last 25 years? No they don’t, so they’re irrelevant and yet you keep circling back to worthless info.
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@dylans well, if we must. Arrowhead in KC would bring in about 195 people per day of the year. That’s about the same as a small shopping mall. Is it worth billions of incentives to bring in a… mall?
Yeah, but what about the income taxes? Well, chop that number in half. You’re looking at 10ish income generating events per year. The top state income tax rate will be 5.8%. 5.8% of $2 billion is… $116 million. If you spread that over the life of the bonds it can fund a rural school district for a while I guess?
And sure, people will spend to go to them. But budgets are relatively fixed. How many people come from outside the area? And from those here, do they already spend their entertainment budget in Kansas? If so, that sales tax revenue goes to the state to fund things we all want: roads, hospitals, etc. If they spend additional money, cool. But it’ll come at the expense of other things in the state (again, budgets are fixed) because the sales tax revenue has to go to debt service, and will be from other parts of the family budget.
Let’s look at the Braves stadium as an example. That development got about $300m in subsidies. What happened? Well, the stadium sure generated a bunch of sales tax revenue. Beer is expensive! Unfortunately, it was at the expense of other businesses in the community so it was basically a wash except for the taxpayers were on the hook for tens of millions in annual debt service.
The Chiefs math here is pretty simple. Moving about 20 miles will generate over $900 million in annual economic activity. Which, to put mildly, is INSANE. It more or less assumes ALL Chiefs related activity would move across the border, e.g. all players, coaches, and staff would not spend a nickel in Missouri. And each dollar invested here would generate on the order of $40 in additional economic benefits. It’s extraordinarily rare to find post hoc estimates of this multiplier over FIVE.
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@FarmerJayhawk 5.8% of 30 billion. The salary cap goes up 5-8% every year and is currently 255million it projects to 1-2 billion per year in 25-30 years. Come on man! It’s easy math, you’re way over complicating it. Plus the local sales tax stays local with star bond projects - ie there will be added income to Wyandotte county or wherever it lands.
I figured an economist could easily figure some really basic stuff out, but you’re really proving my point of how easily the data is skewed when providing outcome driven results. The 1,200 workers on the home games will pay taxes. The parking lot will collect fees, tickets will be sold, hotdogs and beer will be bought. This is all taxed and is income above the already paid for star bonds by the players income tax alone. Oh yeah the Hunts get to pay taxes on their half of the revenue to Kansas as well. The income from a couple super bowls (that will never happen in Arrowhead). But wait there’s more it’s a dome - add in revenue from possible final four games, concerts, etc. Then add in revenue from sports betting in the venue, hotel income, dining, bars - getting people in your town instead of a county over creates a boat load of income producing opportunities.
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https://www.kmbc.com/article/closer-look-at-star-bond-projects-in-kansas/61180045
Here’s some examples not in Atlanta
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@FarmerJayhawk But, gee, I thought that every penny of corporate welfare always produces hundreds of millions of dollars in tax revenue! I so fondly remember how trickle down economics of the 80’s made so made impoverished people into millionaires. Or was that millionaires into billionaires?
And I am soooooo looking forward to the plan of a certain ex-president to eliminate income tax altogether and to initiate 100% tarrifs!!! Our economy will just burst at the seams as inflation goes into double-digits with prices for many consumer goods being doubled! Combined with eliminating numerous agencies and voiding federal regs left and right, there might be a few hiccups associated with throwing 2 million federal employees out of work, and flying will be a tad more dangerous without actual air traffic controllers and because we will let every manufacturer self-certify like Boeing, and without those safety fanatics at the FDA untested drugs could wreak havoc, but those things aren’t as important as making the top 1% richer than King Midas while surfing on the delusions of millions going broke. And gosh, without OSHA we can finally get back to having more emergecy medical care like we have always wanted.
Wow, too bad you don’t understand math, being so confused by all those dozens of impartial economic studies and your years of education and experience and useless stuff like that.
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@dylans that’s a whole drop in the bucket in terms of SGF, which in 30 years will be well over $100 billion. And cut that number in half unless the NFL lets the Chiefs play every game at home. If it is a dome then we’re looking at $2.4ish billion in bonds. So both your revenue and expense figures are wrong. Weirdly both in the direction that make it look like a good deal. Assuming that growth when participation in football is going down (7% the last 5 years) in favor of other sports is a nice touch too.
There’s also no evidence a new stadium will produce significant additional development given what’s already there. See current Arrowhead. People don’t go out to bars and restaurants for NFL games. They sit in the parking lot and drink beer they likely bought in Missouri. Or Kansas, but that’s not new spending. Just reallocating from couch beers to parking lot beers. And of course it’s taxed, that’s what the ST stands for lol.
Consumers are paying for both the infrastructure via taxes and the privilege of being there. That’s the whole point. Where normally you’d have a developer pay for the building and such and if the product or service was good it would easily pay for itself.
That article is fun because it doesn’t cite the state audit that reported the STAR bond program overall a failure at driving tourism given the metrics in statute. But I’m sure the law is just wrong.
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@FarmerJayhawk The away team has to pay taxes, just like the Chiefs do when on the road. You’re so entrenched in your position that you can’t even do the straight line logic there. I’m sorry it’s such a sore point to you, but the bright side is if you never set foot on the stadium you will not pay any taxes. That’s the point of STAR bonds, show your principals and just don’t go.
And if the STAR bonds become available to the general public in a denomination I can afford I would put my money where my mouth is.
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Wow, i am now officially fascinated with STAR bonds. I’ve been reading like a madman the last day or so. (i don’t live in Kansas).
I’m sure i’ll have some thoughts eventually, but these state documents provide some base knowledge.
Some basic facts can be found here in the STAR bonds annual report. I find it lacking in some details (re: ROI on STAR bonds), but has project basics like bonds issues, outstanding, tax revenue:
https://www.kansascommerce.gov/wp-content/uploads/2024/02/2023-YE-STAR-Bonds-Annual-Report-FINAL.pdf
This doc is older (2021), but very interesting reading. Points made by the a non-partisan audit division of the Kansas government. Very interesting point/counterpoint/responses at the end from communities involved in STAR bond projects.
Enjoy! I have.
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@dylans ok, that’s still about the same income tax revenue as a shopping mall, but for billions in new debt. I’m not a Chiefs fan so I won’t, never been to Arrowhead, never will go to a stadium in Kansas because it’s just not my scene. I’m a huge Bears fan and they’re trying to fleece the city of Chicago too. I oppose all public subsidies for stadiums and corporate welfare. I’m a free market, work for and buy what you want with your own money guy what can I say
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@rockchalkjayhawk I can add a little color there. When I was in government we tried to get those numbers but Commerce would never provide them, citing NDAs and such nonsense (why revenue figures should be kept from the public when the public is financing the project should raise a hell of a lot of questions but alas). Same restrictions apply to this deal. We taxpayers can’t see inside the Chiefs or Royals books, or in a very recent example, we weren’t allowed to know the state was even in discussions with Panasonic until the bill passed and the deal was signed. Aside from the bad economics, the public should be livid about that.
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Last point on this, Kansas has a tax credit for residents that pay taxes in other states. So if a bunch of people relocate across the state line and work on away games, Kansas refunds a nice chunk of their income taxes paid elsewhere. So again it’s more millionaires getting a nice subsidy while we pay for it. Twice.
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@FarmerJayhawk On the other hand, relocating the teams will result in millions of people finally being correct about how Kansas City’s teams “are in Kansas, right?” This will save us ex-KCers from Kansas, now living hundreds of miles away, from untold hours of frustration, resulting in no longer wasting massive amounts for therapy…or bourbon. (Ok, the bourbon is a fixed cost.)
Aggregate savings of hundreds! That is more than 2 billion, right?
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@FarmerJayhawk I guess you’re not for attracting any business that generates positive tax revenue if it requires luring them with incentives. I suppose you would call it corporate welfare. The thing is this is more like the Jesus fishing parable than a government handout - it will actually return the tax money and then some. The free money the government gave to the public caused inflation without job creation and left the people with a lifetime of greater future expenses that far outweigh the pittance they received. This is what happens when you give gobs of money to us peons instead of the fortunate few that can actually use it for the greater good even if it further lines their pockets. Lining their pockets, but creating jobs for us normal folks.
You can deflect to projects that didn’t work as planned, but none of them involved nfl teams. I’m afraid you’re stuck with your confirmation bias and simply cannot see how this project should actually be very profitable.
Near as I can tell the economic failure of the previous STAR bond projects isn’t the inability to repay the bonds, it’s simply that more Kansans are enjoying the nice new things in Kansas than out of state folks. Isn’t that terrible?!?
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@dylans indeed, it has to pass a “but for” and other analyses that say the project did add additional money and increase income in the area, not just reallocate existing spending, which is what the STAR bond projects that didn’t pass LPA’s audit found. I’d rather people frequent existing local establishments than reallocate spending toward publicly subsidized ones.
It doesn’t generate any growth, just people already there adjust their spending toward the new and shiny thing while existing businesses lose. That’s what happens with most big stadium projects. So other local businesses are losing revenue while people spend their money to pay off debt at a project that may be there without the bonds anyway. LPA found most Kansas incentive programs couldn’t provide the “but for” assurance Commerce identifies as the main goal of incentive programs.
If tax revenue is what you’re after, oops. “We estimated none of the incentive programs will return more than $1 in tax effect returns per $1 of incentive costs… These results show the incentive programs don’t likely cover their own costs in terms of state tax effects. In other words, the future tax effects likely won’t fully cover the state monies awarded as incentives for these programs.” In other words, you’re better off doing exactly nothing than awarding incentives.
Now on the NFL stadiums thing, WyCo does have some unique factors that will blunt the impact of a new stadium. There are already a ton of hotel rooms, restaurants, and whatnot over there. There won’t be a lot of new development. Especially since KCMO is so close. Many (most?) won’t even stay and spend all their money in Kansas. They’ll just come over for the game. And not all development will be new, Commerce has retained significant eminent domain authority to bulldoze whatever business it wants in the new STAR district for the stadium, again replacing existing spending. I would doubt most “jobs created” would even result in significant consumption in WyCo. Most likely live across the border since there isn’t any real housing over there, and there won’t be. Housing doesn’t generate sales tax revenue so there would be no reason to put it in a STAR district, which has to be huge in size given the multiple billions in debt.
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@FarmerJayhawk 🥱 there is no such business that “lose” for the dodge city or garden city water parks. There simply isn’t anywhere local to spend your money on like that. It didn’t relocate money from one business to another, it relocated it from people’s savings.
It doesn’t matter what you or anyone else thinks, we don’t even get to vote on the matter.
