Originally published at Market Watch.

​Supporters of Measure 4 say it would repeal the 'most egregious and least moral of all the taxes.' Critics say it would 'create chaos.'

Many homeowners across the U.S. aren't happy with property-tax bills that have climbed alongside a pricier real-estate market. But voters in North Dakota have a chance to act on that discontent next month by repealing property taxes and barring counties, towns and other local governments from levying them.

If the ballot measure passes, North Dakota would become the first U.S. state to end property taxes. Its passage could also add muscle to the push to eliminate the tax elsewhere, property-tax skeptics say. The idea has been floated in states like Texas, Nebraska and Michigan, while lawmakers in the Great Plains and Mountain West states say big reforms are needed quickly.

Property taxes are the "most egregious and least moral of all the taxes," according to Rick Becker, chair of the organization that put Measure 4 on the North Dakota state ballot. The ballot measure would repeal residential, commercial and agricultural property taxes, he noted.

These taxes uses opaque formulas to make homeowners keep paying for property they already own, he said. They're also based on the "unrealized" paper value of a home, he added.

For Becker, a "yes" vote is a win inside the state and beyond. "Once that happens, the light turns on for so many people. As soon as a state steps outside that box, the other states see how possible that is," Becker said. "The sky didn't fall, and maybe we should give it a try."

On the other hand, Chad Oban, who chairs Keep It Local, a coalition opposing the ballot measure, argued that property taxes need fixes - but not a "sledgehammer approach." The group's members include utility companies, farmers, educators, business groups and law enforcement.

"I think we're going to defeat Measure 4," said Oban. "But I do think if it passes, there will be a lot of other states doing something similarly, or feeling like there's a political appetite."

However, "if North Dakota - ruby-red North Dakota - thinks it's a bridge too far," it could make others reconsider their bids to bury the tax, Oban noted. The measure leaves it to state legislators to figure out where money comes from next for schools, parks and roads, he said. "It will create chaos, frankly, if it passes."

Four in 10 North Dakota voters say they oppose the ballot initiative and 28% say they'll vote for it, according to a late-September poll of 500 voters commissioned by the North Dakota Monitor, a state news outlet. One-third of voters hadn't made up their minds, the poll said.

Same proposal, rising property-tax frustration

North Dakota voters easily rejected a 2012 proposal to end the state's property taxes. But the current proposal is coming at a time when voters are more frustrated, Becker and Oban both said.

Municipalities across the country collected $363.3 billion in property taxes from single-family homes last year, according to Attom, a real-estate data-analytics company - a nearly 7% annual increase. The average property-tax bill climbed 4%, to more than $4,000, Attom said.

Nationally, homeowners faced an effective tax rate of 0.87% on their home's estimated market value, per Attom data. North Dakotans paid a higher-than-average rate, at 0.99%, but still far less than residents of top-taxing states like Illinois, New Jersey and Connecticut.

Seven in 10 people (69%) say their property taxes are too high, slightly more than the 67% who say their federal income taxes are too steep, according to a poll conducted in December 2023 by the University of Chicago Harris School of Public Policy and the Associated Press NORC Center for Public Affairs Research. Six in 10 people say their property-tax bill is unfair, the survey said.

Though property-tax bills have climbed on the back of higher assessed values, people feel they aren't getting the same increase in services, said Jared Walczak, vice president of state projects at the Tax Foundation, a center-right think tank. Even when municipalities hold their property-tax rates steady, they are still collecting more tax revenue from rising property values, he noted.

"To some degree, it's been opportunistic," he said. "That's why it's rubbed so many homeowners the wrong way."

Read more: My property-tax bill spiked 40%. I fought the city - and won. Can I get tax write-offs for my time and costs?

Property-tax ire isn't new, Walczak added. California voters famously capped property-tax hikes with the Proposition 13 ballot measure way back in 1978. States also have all sorts of tax breaks geared toward property-tax relief, especially for senior citizens.

Talk of repealing property taxes has long occurred at the margins, Walczak said. "It's one thing to have this ongoing low murmur; it's another thing to have it start to bubble up to the surface," he said. "That seems to be where we are going now." Still, while there are good justifications to reform the tax, "none of this is a good reason to repeal the property tax," Walczak said.

Karla Wagner, executive director of the organization AxMiTax, led an effort in Michigan this year to get a property-tax repeal on the ballot. The first-time attempt didn't gather enough signatures, but Wagner said her organization would try again.

The taxes are salt on the wound when people are already stretched thin, according to Wagner. "Pickleball courts or someone's home - which is more important? Stop spending our money foolishly. Stop taking our homes away when we can't afford our bill," she said, referring to the state's tax-foreclosure laws.

If they catch on, repeals are "going to spread like wildfire," Wagner said. Approval of the ballot measure in North Dakota, she added, would be "the gas on the spark."

How Measure 4 might play out

Measure 4 would "require the state to provide replacement payments" to the local government entities at "no less than the current real property-tax levies," according to the ballot measure's text. It could cost the state's coffers $3.15 billion over a two-year window, according to the measure.

The projected aftermath of Measure 4 is a good reason to vote "no," according to North Dakota Gov. Doug Burgum, a Republican.

"What you will do is, you will cause someone else to pick up the tab. That's what this whole thing is about. It's about, who's going to pay for it? It doesn't lower the cost of delivering anything in our state," Burgum said in August, according to the radio news outlet Prairie Public.

Burgum's office did not respond to a request for comment.

Becker, a Republican former lawmaker who served 10 years in the state's House of Representatives, said the state can afford the change with better decisions on its own budget. It's on counties, towns and cities to figure out how to pay for costs above what the state covers, he noted. One idea is establishing formulas for residents and businesses to pay their share of those costs.

In response to critics who say the measure would take away local control over spending decisions, Becker said the approach keeps local residents in control - just not with a tax pegged to a property's assessed value. He added that, by design, the specifics of legislative next steps aren't part of the state constitutional measure; those are for elected lawmakers to decide.

Vance Ginn, an economist in Texas, said state and local governments should find a way to move past property taxes, which he views as an "immoral form of taxation."

Spending guardrails and changes to sales taxes could be part of the answer, according to Ginn, president of an economic consulting firm whose clients include conservative-leaning think tanks like Americans for Tax Reform.

Ginn said he supports Measure 4 generally, but is concerned there "isn't a tangible path forward." If the vote fails, it's a lesson that crystal-clear funding alternatives need to accompany future repeal attempts, he added.

Nevertheless, "what North Dakota is doing is helping to drive the narrative for the need to do something about property taxes," Ginn said.

As Walczak sees it, turning to other taxes as a replacement would hurt "far more than a property tax does now." He's waiting to see what happens with the North Dakota vote, and what could come next.

"It's likely to turn out very poorly - but it could be hard to reverse," he said.

-Andrew Keshner

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.


 
(END) Dow Jones Newswires

10-21-24 0600ET

Copyright (c) 2024 Dow Jones & Company, Inc.

Originally posted at American Enterprise Institute and by Kevin Kosar. 

​Regular readers know that I am worried about the federal budget. The nation is $35 trillion in debt and neither party in Congress has a shown real interest in staunching the flood of red ink or fixing the 50-year old congressional budget process. America spends more on interest on the national debt than on national defense and Medicare.

Last month, former Rep. Tom Reed (R-NY) reminded us that the current budget process does not force Congress to consider revenue and spending issues in tandem when it is budgeting. So, unsurprisingly, elected officials are happy to enact tax cuts while increasing spending.

This fiscal insanity cannot continue forever. Social Security benefits will be cut if Congress does not do something. And who knows, maybe financiers and foreign nations will decide they just do not want to keep purchasing so many U.S. government bonds, and a debt crisis will erupt.

My chat with Dr. Vance Ginn, who worked at the Office of Management and Budget and hosts the Let People Prosper show and podcast, reminded me of two truths:

1. The president’s formal powers over aggregate revenue-raising and spending are very modest. Congress can ignore his proposed budget and the chief executive’s powers are marginal—he can reprogram and transfer funds, for example.
2. Yet, As budget guru Dr. Allen Schick explained on the Understanding Congress podcast long ago, the president plays a key role. He can focus a nation’s attention on a budgetary problem, and thereby create the space for legislators to take unpopular votes that address the problem.

To date, neither party’s candidate for president shows any interest in leading on budget issues. In fact, each of them has proposed policy plans that would increase the deficit and debt, which is dispiriting.

Originally published at Texans for Fiscal Responsibility.

Big Government Is Holding America Back
America’s federal debt has now skyrocketed past $35 trillion—an increase of $2.3 trillion in just the last fiscal year. Inflation persists, with core prices rising 3.3% over the past year. Meanwhile, government jobs are growing faster than private sector employment, which is draining the economy. 

The warning signs are everywhere: big government stifles growth, and the solution is less intervention, not more.

Debt, Deficit, and Sluggish Growth: The Hidden Costs of Overspending
​The U.S. is on an unsustainable fiscal path. A $2.3 trillion deficit and a debt-to-GDP ratio of about 125% are squeezing private investment essential for real, long-term economic growth. Instead, Keynesian-style interventions aimed at boosting demand through government spending have ballooned the national debt and undermined productivity.

Historically, government spending programs have delivered questionable short-term benefits but have left long-term economic consequences. The more the government grows, the more it crowds out the private sector’s ability to innovate and create high-quality jobs. This economic distortion is only deepening as Washington pours more money into inefficient programs while ignoring the importance of fiscal responsibility.

Inflation: The Persistent Threat to Household Budgets
September’s Consumer Price Index (CPI) showed a 2.4% overall increase, with core inflation excluding food and energy at 3.3%. While inflation has cooled from its 2022 peak, these numbers are still too high. American households feel the squeeze as the cost of essentials like shelter and services continues to rise, undermining real wage growth. Average weekly earnings adjusted for inflation have been down 3.4% since Biden-Harris took office in January 2021. It is no wonder that nearly 60% of Americans believe we are in a recession.

The Federal Reserve’s monetary excess continues to cause inflation. Between 2020 and 2021, the money supply expanded by over 40%, sparking inflation. The federal government’s continued spending spree makes it difficult for the Fed to drain its bloated $7 trillion balance sheet, so inflation will be around much longer than otherwise. This is because the Fed chooses to not let interest rates rise to fund the increased national debt, so it prints more money and disrupts economic activity, contributing to the fragile economy we have today.

Labor Market Distortion: Government Outpacing the Private Sector
On the surface, the U.S. labor market appears strong. The economy added 254,000 jobs in September, with private-sector employment increasing by 223,000. However, government jobs grew by 31,000, continuing a troubling trend that has persisted since April 2023. Government employment has been rising faster than private-sector jobs, shifting the labor market toward less productive sectors. This growth of government payrolls is not just unsustainable—it’s a drag on economic dynamism.

Private sector jobs are the engine of innovation and prosperity, but when the government grows at the expense of the private sector, it hampers job quality and wage growth. Real average hourly earnings remain below pre-pandemic levels, leaving workers with less purchasing power despite more jobs. Expanding government employment also means higher costs for taxpayers and more resources diverted from productive economic activity.

Texas: A Model of Free-Market Success
Texas exemplifies how free-market policies can lead to robust economic growth. The state’s low taxes, minimal regulation, and pro-business environment have consistently helped it outperform national job creation and economic growth averages. However, even Texas is not immune to the negative impacts of federal policy and its big-government, Keynesian creep. The crowding-out effect of federal debt growth and regulatory burdens imposed by Washington are raising costs for businesses and consumers alike.

To maintain its competitive edge, Texas must continue pushing for property tax elimination and spending limits at the state and local levels with a maximum of population growth plus inflation, but with excessive spending in recent years, there’s more evidence to at least freeze these budgets if not cut them by 10% or more. Phasing out school district M&O property taxes by state surpluses is essential for sustainable fiscal management and long-term growth. By keeping the government in check, Texas can remain a national leader in economic freedom.

Free-Market Capitalism: The Path Forward
The solution to America’s economic woes is clear: embrace free-market capitalism and reduce the size of government. Policymakers should focus on:

1. Cutting Government Spending: Reducing spending will help control inflation, lower deficits, and allow the private sector to flourish. 
2. Reforming Taxes: Cutting taxes on individuals and businesses will increase disposable income, encourage investment, and support more job creation.
3. Deregulating the Economy: Removing burdensome regulations will reduce business costs, spur innovation, and create high-paying jobs.
4. Ending Monetary Excesses: A disciplined approach to monetary policy is essential to restoring confidence in the dollar and curbing inflation.

​
Milton Friedman once said, “The only way that has ever been discovered to have a lot of people cooperate voluntarily is through the free market.” This wisdom remains true today. America’s best chance for renewed prosperity is shifting from big-government Keynesianism toward free-market capitalism with strict fiscal and monetary rules and massive deregulation.

Government Spending Is The Problem

The late, great economist Milton Friedman said, "The real problem is government spending." This is true as spending comes before taxes or regulations. In fact, if people didn't form a government or politicians didn’t create new programs, then there would be no need for government spending and no need for taxes. And if there was no government spending nor taxes to fund spending then there would be no one to create or enforce regulations. 

​While this might sound like a utopian paradise, which I desire, there are essential limited roles for governments outlined in constitutions and laws. Of course, most governments are doing much more than providing limited roles that preserve life, liberty, and property. This is why I have long been working diligently for more than a decade to get a strong fiscal rule of a spending limit enacted by federal, state, and local governments promptly under my calling to "let people prosper," as effectively limiting government supports more liberty and therefore more opportunities to flourish.

Empirical research underscores the importance of spending restraint over tax hikes in promoting economic growth. Studies by economists Alberto Alesina and Silvia Ardagna, John Taylor, Casey Mulligan, and others have consistently shown that fiscal adjustments based on reducing government spending better foster economic growth than those based on raising taxes.

Fortunately, there have been multiple state think tanks that have championed this sound budgeting approach through what they've called either the Responsible, Conservative, or Sustainable State Budget. I recently worked with Americans for Tax Reform to publish the Sustainable Budget Project, which provides spending comparisons and other valuable information for every state. This groundbreaking approach was outlined recently in my co-authored op-ed with Grover Norquest of ATR in the Wall Street Journal. 

When Did This Budget Approach Begin?

I started this approach in 2013 with my former colleagues at the Texas Public Policy Foundation with work on the Conservative Texas Budget. The approach is a fiscal rule based on an appropriations limit that covers as much of the budget as possible, ideally the entire budget, with a maximum  amount based on the rate of population growth plus inflation and a supermajority (two-thirds) vote to exceed it. A version of this approach was started in Colorado in 1992 with their taxpayer's bill of rights (TABOR), which was championed by key folks like Dr. Barry Poulson and others.  (picture below is from a road sign in Texas)

Why Population Growth Plus Inflation?

​While there are many measures to use for a spending growth limit, the rate of population growth plus inflation  provides the best reasonable measure of the average taxpayer's ability to pay for government spending without excessively crowding out their productive activities. It is important to look at this from the taxpayer’s perspective rather than the appropriator’s view given taxpayers fund every dollar that appropriators redistribute from the private sector.

Population growth plus inflation is also a stable metric reducing uncertainty for taxpayers (and appropriators) and essentially freezes inflation-adjusted per capita government spending over time. ​The research in this space is clear that the best fiscal rule is a spending limit using the rate of population growth plus inflation, not gross state product, personal income, or other growth rates. In fact, population growth plus inflation typically grows slower than these other rates so that more money stays in the productive private sector where it belongs. To get technical for a moment, personal income growth and gross state product growth are essentially population growth plus inflation plus productivity growth. There's no reasonable consideration that government is more productive over time, so that term would be zero leaving population growth plus inflation. And if you consider the productivity growth in the private sector, then more money should be in that sector at the margin for the greatest rate of return, leaving just population growth plus inflation. Population growth plus inflation becomes the best measure to use no matter how you look at it.

Given the high inflation rate more recently, it is wise to use the average growth rate of population growth plus inflation over a number of years to smooth out the increased volatility (ATR's Sustainable Budget Project uses the average rate over the three years prior to a session year). And this rate of population growth plus inflation should be a ceiling and not a target as governments should be appropriating less than this limit. Ideally, governments should freeze or cut government spending at all levels of government to provide more room for tax relief, less regulation, and more money in taxpayers' pockets.

Overview of Conservative Texas Budget Approach

Figure 1 shows how the growth in Texas’ biennial budget was cut by one-fourth after the creation of the Conservative Texas Budget in 2014 that first influenced the 2015 Legislature when crafting the 2016-17 budget along with changes in the state’s governor (Gov. Greg Abbott), lieutenant governor (Lt. Gov. Dan Patrick), and some legislators. ​

​The 8.9% average growth rate of appropriations since then was below the 9.5% biennial average rate of population growth plus inflation since then, which this was drive substantially higher after the latest 2024-25 budget that is well above this key metric (before this biennial budget the growth rate was 5.2% compared with 9.4% in the rate of population growth plus inflation). 

This approach was mostly put into state law in Texas in 2021 with Senate Bill 1336, as the state already has a spending limit in the constitution. The bill improved the limit to cover all general revenue ("consolidated general revenue") or 55% of the total budget rather than just 45% previously, base the growth limit on the rate of population growth times inflation instead of personal income growth, and raise the vote from a simple majority to three-fifths of both chambers to exceed it instead of a simple majority.  There are improvements that should be made to this recent statutory spending limit change in Texas, such as adding it to the constitution and improving the growth rate to population growth plus inflation instead of population growth times inflation calculated by (1+pop)*(1+inf). 

But this limit is now one of the strongest in the nation as historically the gold standard for a spending limit of the Colorado's Taxpayer Bill of Rights (TABOR) has been watered down over the years by their courts and legislators, as it currently covers just 43% of the budget instead of the original 67%. 

My Work On The Federal Budget In The White House

​From June 2019 to May 2020, I took a hiatus from state policy work to serve Americans as the associate director for economic policy ("chief economist") at the White House's Office of Management and Budget. There I learned much about the federal budget, the appropriations process, and the economic assumptions which are used to provide the upcoming 10-year budget projections. In the President's FY 2021 budget, we found $4.6 trillion in fiscal savings and I was able to include the need for a fiscal rule which rarely happens (pic of President Trump's last budget).

Sustainable Budget Work With Other States and ATR

When I returned to the Texas Public Policy Foundation in May 2020, as I wanted to get back to a place with some sense of freedom during the COVID-19 pandemic and to be closer to family, I started an effort to work on this sound budgeting approach with other state think tanks. This contributed to me working with many fantastic people who are trying to restrain government spending in their states and the federal levels. Here are the latest data on the federal and state budgets as part of ATR's Sustainable Budget Project.

​From 2014 to 2023, the following happened:

Federal spending increased by 81.7%, nearly four times faster than the 23.1% increase in the rate of population growth plus inflation.

• Had the federal government limited the growth in spending to the rate of population growth plus inflation during that decade, the federal government would’ve spent $2.1 trillion less in 2023 than the $6.47 trillion. 

• If the federal government had done this over the entire decade, the national debt would have increased by $1.8 trillion instead of the actual $12.8 trillion.
• And if this had been done over the last two decades since 2003, the cumulative national debt would have increased by less than $700 billion instead of $20.2 trillion.
• This means that following a sustainable budget would help leave more money in Americans’ pockets so that they can flourish. 

Aggregate state spending, excluding funds received from the federal government, by the 50 state governments increased by 59.0% during that decade. 

• Had their spending grown by no more than the rate of population growth plus inflation from 2014 to 2023, state governments would’ve spent $1.44 trillion in 2023, which is $430 billion less than the $1.87 trillion that all state governments spent. 
• If the states had done this over the entire decade, cumulative spending would have been $1.4 trillion less than what was actually spent, resulting in more money in people’s pockets across the country.

Result: American taxpayers could have been spared more than $2.5 trillion in taxes and debt just in 2023 if federal and state governments had grown no faster than the rate of population growth plus inflation during the previous decade. And this would be even more if we considered the cumulative savings over the period.  

My hope is that if we can get enough state think tanks to promote this budgeting approach, get this approach put into constitutions and statutes, and use it to limit local government spending as well, there will be plenty of momentum to provide sustainable, substantial tax relief and eventually impose a fiscal rule of a spending limit on the federal budget. This is an uphill battle but I believe it is necessary to preserve liberty and provide more opportunities to let people prosper.

​Sustainable State Budget Revolution Across The Country

Below are the states and think tanks which I'm working with and this revolution is going, which you can find an overview of this budgeting approach in Louisiana and should be applied elsewhere. 

Here are the latest efforts:

1. Americans for Tax Reform released the Sustainable Budget Project with every state's spending compared with population growth plus inflation and valuable comparisons and data for each state.
2. Alaska: Alaska Policy Forum released its third Responsible Alaska Budget.
3. Colorado: Independence Institute recently released the first Sustainable Colorado Budget.
4. Florida: James Madison Institute released its first successful Conservative Florida Budget.
5. Iowa: Iowans for Tax Relief Foundation released its fourth Conservative Iowa Budget.
6. Kansas: Kansas Policy Institute released its third Responsible Kansas Budget.
7. Louisiana: Pelican Institute recently released its second Responsible Louisiana Budget. Here is a comparison of the RLB with ATR's Sustainable Budget project.
8. Michigan: Mackinac Center released its second Sustainable Michigan Budget.
9. Mississippi: Mississippi Center for Public Policy recently released its first Responsible Mississippi Budget.
10. Montana: Frontier Institute released a Conservative Montana Budget and a report on Responsible Local budgets.
11. South Carolina: SC Policy Council released its third South Carolina Sustainable Budget. Oconee County Council in South Carolina used this approach and filed their own sustainable budget. 
12. Tennessee: Beacon Center released its third Conservative Tennessee Budget.
13. Texas: Texas Public Policy Foundation released its fifth Conservative Texas Budget and the recent release of Responsible Local Budgets.
14. Federal: The Let Americans Prosper Project along with the Responsible American Budget to rein in federal government spending to support fiscal sanity in D.C., which is essential for the future of our country.

​
If you're interested in doing this in your state, please reach out to me.

For more details, check out these write-ups on this issue by Grover Norquist and I at WSJ, Dan Mitchell at International Liberty, and The Economist.

​As election day approaches, critical issues like school choice, the federal deficit, Medicare, illegal immigration, inflation, and financial data privacy dominate discussions. From the growing debate on school choice to alarming projections about our national debt, these policies will impact the economic well-being of Americans. Here’s a brief look at where things stand and what’s at stake.
​
Watch the episode on YouTube below, listen to it on Apple Podcast or Spotify, visit my website www.vanceginn.com for more information, and get show notes at www.vanceginn.substack.com.

Originally posted at The Sentinel. 

​​In a recently released report, the Kansas Department of Legislative Post Audit found that an economic development tool popular with cities across the state often do not work as intended.

The department evaluated six “Tax Increment Financing” districts across the state to determine if they were working as designed.

In 1976 the Kansas State Legislature authorized cities to create TIF districts. A TIF district, also known as a redevelopment district, is a defined area within a city that uses a tax increment to help fund development. 

When a city establishes a TIF district, the assessed valuation of all existing real property located in the district is effectively frozen at a base level. Any subsequent property tax revenue generated above the base level — either from increases to the value of existing property or from the added value of new property — is called the “tax increment.” The development can involve building houses or apartments, renovating retail space, cleaning up environmental contaminants, and more.

The idea is to leverage future tax revenue from value increases to pay for development that might not otherwise have occurred.

There are 114 TIF districts in the most populous cities in Kansas — most in Kansas City, Kansas and Wichita — and Post Audit picked six from across the state for study:

- Melrose (Kansas City): this is an industrial (business and industry) district that was created in 2002. It was completed in 2022.
- College Hill (Topeka): this is a mixed-use district (with a large residential component) that was created in 2006. At the time of the report, it was still active.
- Douglas & Hillside (Wichita): this is a mixed-use district (with a large residential component) that was created in 2006. At the time of the report, it was still active.
- Lambertz (Salina): this is a retail district that was created in 2007. It was completed in 2020.
- Ken Mar (Wichita): this is a retail district that was created in 2008. At the time of the report, it was still active.
- Valley View (Overland Park): this is a retail district that was created in 2010. At the time of the report, it was still active.

Post Audit reviewed project documents and tax records to determine the construction and financing timelines for the selected TIF districts and found that three of the six TIF districts reviewed are not expected to pay off their TIF costs on time or have not generated enough revenue to cover these costs.

All six of the TIF districts reviewed are on track to be at or below estimated costs, but most experienced delays in construction.

Additionally, Post Audit said of the TIF districts they reviewed, cities have incurred between $1.6 and $7 million in direct costs and in at least four of the districts there are significant indirect costs because of and increase in crime.

Moreover, it is difficult for the state to determine the efficacy of TIF districts as — while state law authorizes them — they are administered by local city governments.

TIF districts don’t have the benefits many claim
While Post Audit was at pains to note that six districts is too small a sample size to extrapolate results for all 144 state-wide, Economist Dr. Vance Ginn, a senior fellow at the Kansas Policy Institute — which owns the Sentinel — said in a recent post on the KPI website, that the issue is far more complicated than it might seem.

“The reality of TIF projects is far more complicated, as audits frequently show delays in cost recovery and overestimated economic benefits,” Ginn wrote. “Worse, these government subsidies often crowd out private investment and leave taxpayers footing the bill for developments that may not deliver their promised benefits.”

As an example, Ginn noted the College Hill district — audited by the department — in Topkea.

“The audit for Topeka’s College Hill district revealed that the city is expected to use general funds to cover 40% of project costs — diverting resources from other essential services,” he wrote “This mismanagement highlights a fundamental problem with TIF districts: they often fail to deliver the economic benefits they promise while locking cities into long-term financial commitments.”

Ginn, who was also the former chief economist in the White House Office of Management and Budget also noted that — while the audit was successful at quantifying direct costs to the cities, it “overlooked a more significant issue — the opportunity costs to taxpayers.”

“What if the funds tied up in these TIF projects had remained in the hands of taxpayers instead?” Ginn asked in the column. “Instead of subsidizing developers, that money could have stayed in local pockets, allowing individuals to spend, save, or invest in ways that meet their needs and preferences. This missed opportunity for organic economic growth — driven by individual decisions rather than government intervention — should not be ignored.”

Moreover, Ginn said, the direct costs noted by the audit do not include the additional interest on the debt accumulated when cities use bonds to finance their portion of the projects.

“These costs ultimately fall on taxpayers, as cities must dip into general funds or raise taxes to cover the shortfalls,” Ginn wrote. “Worse, these funds could have been used for other purposes — like lowering taxes or investing in essential public services — if the city had avoided entering into these development deals in the first place.”

Ultimately Ginn said, TIF districts are simply inefficient and expensive.

“The audit of Kansas’s TIF districts reveals deep flaws in the management and outcomes of these projects,” he wrote. “Rather than continuing to gamble on subsidies that rarely deliver, policymakers should focus on spending less and putting more money back into the hands of taxpayers. The costs of TIF districts — direct and in terms of missed opportunities — are too great to ignore. 

“A more prosperous future lies in allowing individuals to drive economic growth through their choices rather than relying on government subsidies that pick winners and losers.”

Originally published at Real Clear Policy.​

By Deane Waldman & Vance Ginn
October 14, 2024
Seeking to focus the final month of campaigning on healthcare and away from immigration, inflation, and violence both abroad and at home, V.P. “Harris proposes Medicare pay for home health care.” She claims to have a fully developed policy for the healthcare market in contrast to Trump’s mere “concept of a plan.” Never mind she has no idea how to pay for it. What does she have in mind for our future?

Based on her actions, V.P. Harris intends the healthcare marketplace to be under complete federal control, devoid of free market forces or personal choice. As president, she would institute a centrally controlled economic system.

If Medicare “pays for” home health care, that means Centers for Medicare and Medicaid Services (CMS) would dictate both benefit and payment. In market terms, government would determine – balance – both demand and supply. That is the definition of central economic control, the opposite of a free market.

Earlier this year, CMS adjusted the market ratings of insurers Elevance and UnitedHealthcare based on “arbitrary,” “capricious,” and “unlawful” actions according to a lawsuit against the government agency. Together those two companies enrolled more than half of all those who signed up for Medicare Advantage. Obviously, seniors wanted to purchase these policies, but CMS chose to control the market rather than letting consumers decide.

Millions of Americans have purchased short-term health insurance. The Biden-Harris White House labelled these policies “junk insurance,” and “protected” Americans from their own stupidity by instructing CMS to prohibit them. Removing these plans from the marketplace limits consumer choices – demand for services – to what Washington approves.
​
As all providers know, price or charge in healthcare is meaningless as payments are dictated by Medicare “allowable reimbursement schedules.” Harris has also made clear her desire for price-fixing. Recall her solution for what she called “price-gouging.” The Biden-Harris Inflation Reduction Act of 2022 gives Medicare the authority to fix prices for drugs though they call it a negotiation.

Thus, Washington controls supply as well as demand.

Harris says, “her values have not changed.” So, keep in mind her full-throated, in fact passionate, support of Medicare-for-All, H.R. 1384. This is Bernie Sanders’ plan for unabashed total take-over of the entire healthcare market, one sixth of the U.S. economy. The Senator admits his plan could cost up to $40 trillion, one third of the combined GDP of all nations on planet earth – for a healthcare system that doesn’t care.

In addition to bankrupting the U.S., Medicare-for-All will drive more clinical doctors to quit (there will, however, be more bureaucrat doctors like Fauci); will make the wait for medical (health) care interminable; and death-by-queue will become an hourly rather than daily occurrence.

Consider what the progressive, sixty-year expansion of the federal role in healthcare has accomplished. In 1960, the U.S. spent 5.6 percent of GDP on healthcare, you got an appointment within a week, and your doctor knew your first name. Last year, the U.S. expended 17.8 percent of GDP, $4.8 trillion, on healthcare. Approximately half was spent on BARRCOME – bureaucracy, administration, rules, regulations, compliance, oversight, mandates, enforcement – and thus produced no patient care! Despite spending more on its healthcare system than the entire GDP of Japan, Americans can wait more than 130 days to see the doctor and die while waiting.

According to its Trustees, Medicare will be insolvent by 2036. At that time, the program will be unable to pay for in-patient care for seniors.

Trump’s intentions for healthcare may be vague but Harris’ plan for the healthcare market is clear: total central economic control as in the U.S.S.R., Venezuela, China, and North Korea.

Whether you call it Medical-for-All, single payer, or HarrisHealth, the V.P. wants the federal government to make all fiscal and thus all medical decisions for Americans. Judging by what federal control of the healthcare market has done to America and to Americans over the past sixty years, that will be the end of health...care.

Originally published at AIER. 

A viral clip on X (formerly Twitter) has reignited the debate over rent control, and for good reason. 

The video features a New York City tenant, Hattie Kol, paying just $1,334 monthly for a 1,500-square-foot Upper West Side luxury apartment with fireplaces, chandeliers, and a butler’s pantry. This rent is well below the market rate and median rent in the city of $3,500. Her family acquired the unit through rent stabilization 22 years ago, allowing her to stay indefinitely. She is now paying only 39 percent of the median rent in the city, highlighting the mismatch created by rent control. 

While this may seem like a win for the tenant, it’s a loss for the broader market, particularly for lower-income renters forced to compete in an increasingly constrained housing market.

At its core, rent control is a well-intentioned policy aimed at keeping housing affordable by capping rents. However, it disrupts the natural balance of supply and demand, discouraging developers from building new housing and disincentivizing landlords from maintaining or upgrading existing units. 

In the long run, this creates a housing shortage and degrades the quality of available units, all while keeping the most vulnerable renters stuck in a perpetual housing crisis.

The Flawed Economics of Price Controls
Rent control is a classic case of how price controls distort markets. By capping rents below the market rate, it prevents prices from reflecting the true quantity demanded and supplied for housing. This results in fewer new units being built and existing properties falling into disrepair because landlords have less incentive to invest in them. By reducing the quantity supplied of housing, rent control limits choices and increases the quantity demanded for the few units that remain on the market.

The economic consensus against rent control is overwhelming. Nobel laureate economist Milton Friedman famously argued that price controls, including rent control, are among the surest ways to create shortages. In the case of housing, this policy leaves cities like New York with fewer affordable units and an overall decline in the quality of available housing.

Who Benefits From Rent Control?
While rent control is marketed as a tool to help low-income renters, the reality is quite different. Higher-income tenants often benefit the most, locking in rent-controlled units because they pay far below market value. In cities like New York and San Francisco, people who can easily afford market rates stay in these units for years, while low-income families face fierce competition for a limited number of affordable apartments.

The woman in the viral clip is paying just 39 percent of the market rent, but there’s no evidence she needs that discount to survive. Meanwhile, those who do need affordable housing are crowded out. The result is a system where rent control helps the fortunate few while pushing the most vulnerable out of the market.

Government Failures vs. “Market Failures”
Proponents of rent control often cite “market failures” to justify government intervention. However, government failures are far more damaging, especially in housing. Rent control policies in places like New York and San Francisco have created severe housing shortages, leading to skyrocketing rents in the non-controlled market and forcing people to compete for fewer and fewer units.

Take Houston, a city that has embraced more free-market housing policies. Without zoning laws or rent control, Houston has managed to maintain much more affordable housing by encouraging the free market to meet demand. Rather than dictating prices, the city has allowed builders and developers to respond naturally to market signals, increasing housing supply and lowering prices.

The Unintended Consequences of Rent Control
​One of the greatest flaws in rent control is that it fails to address the underlying reasons for high rents. Instead of tackling restrictive zoning laws, excessive regulations, high property taxes, rising insurance, or other government-imposed barriers that drive up housing costs, rent control merely treats the symptoms. The result is fewer available units, a deteriorating rental stock, and even higher rents for those outside the rent-controlled system.

Landlords, faced with below-market rents, often convert rental units into condos or leave them vacant rather than rent them out at lower rates. This leads to a further reduction in available rentals and worse living conditions for tenants. It’s a vicious cycle that harms the housing market and the people relying on it.

The Path Forward: Embracing Free Markets
The solution to housing affordability isn’t more government intervention — it’s less. Instead of imposing price controls that distort the market, governments should focus on reducing housing construction and investment barriers. This means reforming zoning laws, streamlining building regulations, and encouraging new development. By allowing the market to function freely, we can increase housing supply, drive down costs, and create more opportunities for people at all income levels.

The viral clip on X is a powerful reminder of why rent control fails. While it may provide short-term relief for a select few, it harms the broader housing market and exacerbates the problems it purports to solve. If we want to make housing truly affordable, we need to let the market work — by encouraging development, reducing regulatory burdens, and allowing supply to meet demand.

Let’s move beyond failed policies like rent control and embrace free-market solutions that benefit everyone, especially those needing affordable housing.

Watch the full NTD News interview here.