Walmart TIF Explained

It has been nearly two weeks since I last posted. My apologies for being late. The Thanksgiving Holiday were busy. That, and the crush of business has taken up a lot of my time. So, I have some catching up to do . . . from my reading of the posts, it is clear that explanation called for in explaining how the TIF created by the city for Walmart works. Raytown Live is the name given to the TAX INCRMENT FINANCING District where the new Walmart Super Center is to be constructed next summer. Call it what you will – the TIF is there for two purposes: 1. To build a new votech school for the School District. 2. To pay for the infrastructure (parking lot, buildings, etc.) for Walmart RAYTOWN’S WALMART TIF: Tax Increment Financing is the term given to the practice of creating a taxing district and using the tax collected to finance the commercial entity within the district. Most TIF’s are written in such a way that a 1% sales tax increase is split between the community (in this case the City of Raytown) with the other half to the development. Raytown’s Walmart TIF does not work that way. In the Raytown Live TIF District most of the sales tax dollars collected will go to pay for the building of the new votech school and the new Walmart. That sales tax revenue collected includes the city’s regular 1% sales tax, the Fire District’s ½% sales tax and the special transportation sales tax voters recently approved to pay for street overlay. To appreciate the enormity of the bite the TIF district is taking out the city’s sales tax one need only look to the sales tax revenue collected by the current Walmart Store located at 67th and Blue Ridge Cutoff. That location collects 12% of the city’s sales tax dollars. The difference between the old Walmart and the one to be built on 350 Highway is that the 12% collected at the current location goes directly to the city’s coffers. The sales tax at the new location will not go to the city, but to pay off the debt of the infrastructure costs of the school district and Walmart. Since the new Walmart will be larger and have a grocery store it will create more than 12% of the city’s sales tax revenue. Some place the additional sales tax as capable of creating up to 18% of the city’s sales tax revenue. The point is, the amount will be greater than the current 12% -- whatever that figure is, it represents money that will not be available to maintain our streets, remove snow, pay police, etc. Raytown’s TIF is also unique in another way. It has the full faith of the city behind it. That means that if the new Walmart does not meet the anticipated income levels to pay off the debt, the city is obligated to pay the debt for Walmart. The majority of the city’s fathers are betting that other development will take place in property adjacent to the new Walmart to make up the difference created by the debt service. Time will tell whether or not that scheme is successful. In the meantime, look for tight city budgets in the near future. STREETLIGHTS – THE LAST WORD Back in October, the Board of Aldermen approved a $10,000 expenditure for new street lights in Raytown. At the meeting former City Finance Director Dan Estes opined that the $10,000 could buy about 19 new street lights. Fortunately, Mr. Estes was wrong. At its last meeting, the Municipal Committee was told that an additional 53 lights will be installed. A spokesman for the Public Works Department said the lights should be installed by late spring. ZIP CODES . . . AGAIN!!! Ward 4 Alderman Pat Ertz wants Raytown to have just one zip code. Sounds innocent enough at first glance, but, as with all things, the devil is in the details. During a recent meeting of the Board of Aldermen, Ward 3 Alderman Christine White told the Board that changing the zip codes could create a hardship on businesses and individuals who have to change their stationary, billing forms, etc. I agree with Christine. And, remember, I am in the printing business. It will cause an expensive hardship on those it affects. It really does not matter. Having dealt with the United States Postal Service for the past 30 years, I can assure the readers that the Post Office will not change postal zip code lines to meet a city’s boundary any more than the Election Board will make state representative district lines fall along city borders. The reason is simple and logical. Zip codes are created to help with sorting the mail. To change the zip code in the middle of a large metropolitan area would create a ripple effect throughout Kansas City of astronomical costs. AREA CODES NEXT? A local wit tells a story of a Raytown Reaching for Tomorrow meeting. A lot of the folks at the meeting were clamoring for one zip code for Raytown. One gentleman got up and explained that it would be difficult because Raytown is served by three zip codes (most thought it was two). This caused quite an uproar. Until another gentleman rose to explain that the previous speaker was correct – and this speaker has credentials – he worked for the post office. On the way out of the meeting the first speaker tapped the postman on the shoulder and whispered to him, “watch out, next week they plan to go after the area codes!”