On May 22, 2011, a tornado ripped through Joplin, Missouri killing 166 people and damaging or destroying 7,500 structures. In the aftermath of the devastation, the people there were determined to rebuild.
Just six weeks after the tornado struck, Rush Limbaugh spoke to the people of Joplin on July 4 and said:
It’s going to be rebuilt. It’s going to be better than it ever was. You are going to show the rest of the country how it’s done because you represent the best of what this country has to offer. You understand the principle of hard work and self-reliance. You understand the difference between self-interest and selfishness.
Joplin was rebuilt. As part of the reconstruction effort, the city leaders adopted a tax increment financing (TIF) subsidy program and created the Joplin Redevelopment Corporation (JRC) to manage it. What happened next is an excellent lesson in TIF and developer subsidies for all Missourians.
The developers, Wallace Bajjali Development Partners, made all the usual claims about the need for government subsidies. In most cases a developer who gets TIF claims credit for every bit of construction that happens afterward. But in Joplin’s case, the developer went under before building anything. The JRC still issued the bonds and continues to collect the TIF taxes that would otherwise go to funding libraries and schools. But it has only bought and sold properties and paid professional fees (and even that earned it a rebuke from the state auditor). According to the JRC’s own reports, it has not built any infrastructure, developed any sites, or rehabbed any buildings.
Instead, the real reconstruction of Joplin was done by its private citizens—exactly as Limbaugh said it would be. Within four short years, Joplin recaptured the $34 million in assessed land value destroyed by the tornado—despite being saddled with a do-nothing TIF and redevelopment corporation for at least another decade, maybe until 2035.
The Show-Me Institute’s study of the TIF project (available here) is a lesson for all of Missouri. While studies of development subsidies in Saint Louis and Chicago show little lasting benefit from redirecting property tax revenue to developers, the circumstances in Joplin make this lesson exceedingly clear. No tax-subsidized developer rebuilt Joplin; The people did it themselves .
