Policy Studies
The Prognosis for National Health Insurance: A Missouri Perspective Print E-mail
By Art Laffer, Arduin, Laffer & Moore Econometrics   
Wednesday, August 19, 2009

In 1960, the private sector funded more than three quarters of the nation’s health care expenditures. Individuals paid nearly one half of total national health care expenditures through out-of-pocket expenditures. Beginning in 1967, the way health care is purchased in the United States began to reverse. This has resulted in a large and growing government “health care wedge” — an economic separation of effort from reward, of consumers (patients) from producers (health care providers) — caused by government policies. Rising government expenditures for health care are the main factor driving the growth of this wedge, which is a primary driver in rising health care costs, i.e., inflation in medical costs. Federal proposals for health care reform currently under consideration would exacerbate these problems, rather than solve them.

Government in Missouri Print E-mail
By David Stokes, Justin Hauke   
Thursday, February 05, 2009

This policy study undertakes a broad review of Missouri’s state and local governmental structure, as viewed from the perspective of public choice economics. It applies various economic theories, as well as insights from the broader world of political science, to Missouri’s present system of government and politics. This study’s findings include proof of the economies of scale that occur when measuring spending within smaller Missouri counties. They also describe the lack of any hard proof of relative overspending in the city of Saint Louis, despite strong theoretical indications that such proof might be found. The author concludes the study with recommendations for ways to improve the quality and efficiency of government in Missouri.

Private Provision of Highways: Economic Issues Print E-mail
By Kenneth A. Small   
Tuesday, November 25, 2008

Privately financed and operated highways are an idea whose time has come, ended, and returned. The idea returns, however, as part of an infinitely more complicated system than that of America’s 19th-century turnpike era. Throughout the 20th century, public expenditures were successfully used to finance, design, and implement the transportation infrastructure that helped to open the United States for its great economic expansion — most famously, the Interstate Highway System. Several factors have brought the private sector back into transportation infrastructure. The economic analysis of these issues is the focus of this study.

Missouri's Challenge: Managing Long-Term Employee Benefit Costs Print E-mail
By Richard C. Dreyfuss   
Friday, November 21, 2008

The Missouri public pension system currently faces serious long-term financial challenges. Missouri taxpayers are facing compound problems regarding the state’s ability to manage effectively both defined benefit public pension and retiree medical liabilities. While current payments to retirees are not in jeopardy, the emerging cost patterns to both current and future members and taxpayers will be predicated upon future asset growth and favorable health care cost trends, both of which present significant risks to taxpayers.

Is the 'Missouri Plan' Good for Missouri? The Economics of Judicial Selection Print E-mail
By Joshua Hall and Russell Sobel   
Wednesday, May 21, 2008

For 68 years, Missouri has selected its Supreme Court judges through a system of merit selection dubbed the “Missouri Plan.” Today, 26 states use some form of this plan, most having abandoned partisan judicial elections amid concerns about the effects of political pressure on a fair and evenhanded application of the law. Recent debates about this process in Missouri have instigated many proposals for changes. Because judicial independence is critical to a well-functioning legal system, this study will analyze judicial selection and its effect on the quality of courts.

A New Defendant at the Table: An Overview of Missouri School Finance and Recent Litigation Print E-mail
By Michael Podgursky, James Smith, and Matthew Springer   
Wednesday, April 30, 2008

Like many other states, Missouri has gone through several rounds of school finance litigation. However, the trial just concluded was unusual in two respects. First, three taxpayers were allowed to intervene for the defense and, in the process, raise important questions concerning the efficiency of school spending and broader questions of school reform. Second, the outcome at the circuit court level, which focused nearly entirely on points of law, was a complete victory for the defense. This article provides an overview of disputes of Missouri school finance and evidence pertaining to some of the points in dispute at the trial. These lessons generalize to other states facing school finance litigation. The authors conclude that changes in school funding formulas, and the seemingly interminable litigation about those formulas, are not an effective vehicle for addressing achievement gaps or the overall level of school performance.

What Do Cost Functions Tell Us About the Cost of an Adequate Education? Print E-mail
By Robert Costrell, Eric Hanushek, and Susanna Loeb   
Wednesday, April 30, 2008

Econometric cost functions have begun to appear in education adequacy cases with greater frequency. Cost functions are superficially attractive because they give the impression of objectivity, holding out the promise of scientifically estimating the cost of achieving specified levels of performance from actual data on spending. By contrast, the opinions of educators form the basis of the most common approach to estimating the cost of adequacy, the professional judgment method. The problem is that education cost functions do not in fact tell us the cost of achieving any specified level of performance. Instead, they provide estimates of average spending for districts of given characteristics and current performance. It is a huge and unwarranted stretch to go from this interpretation of regression results to the claim that they provide estimates of the minimum cost of achieving current performance levels, and it is even more problematic to extrapolate the cost of achieving at higher levels. In this article we review the cost-function technique and provide evidence that draws into question the usefulness of the cost-function approach for estimating the cost of an adequate education.

Can Judges Improve Academic Achievement? Print E-mail
By Jay Greene and Julie Trivitt   
Wednesday, April 30, 2008

Over the last 3 decades student achievement has remained essentially unchanged in the United States, but not for a lack of spending. Over the same period a myriad of education reforms have been suggested and per-pupil spending has more than doubled. Since the 1990s the education reform attempts have frequently included judicial decisions to revise state school finance systems. Invoking general clauses about the need for an adequate education found in every state constitution, judges in more than half of the states waded into the development of finely tuned reform strategies. This article empirically estimates the effect of judicial intervention on student achievement using standardized test scores and graduation rates in 48 states from 1992 to 2005. We find no evidence that court-ordered school spending improves student achievement.

Spending Money When It Is Not Clear What Works Print E-mail
By Paul Hill   
Wednesday, April 30, 2008

Public school funding in the United States is not a product of intelligent design. Funding programs have grown willy-nilly based on political entrepreneurship, interest group pressure, and intergovernmental competition. Consequently, now that Americans feel the need to educate all children to high standards, no one knows for sure how money is used or how it might be used more effectively. This article shows that Americans can learn how to make more effective use of the money available for public schools. But to do so, states and localities must keep careful track of how money is spent; how children are taught and by whom; and what programs, schools, and teachers are most and less productive. Foundations should sponsor rigorous development and testing of new instructional programs, and every level of government should permit experimentation with alternative uses of funds, reproduce effective schools and programs, and abandon ineffective ones.

Next Needed Steps in the Evolution of American Education Finance and Policy Print E-mail
By James Guthrie   
Wednesday, April 30, 2008

This article asserts that although there has been a consistently increasing demand on both the national and state levels for alignment of resources (inputs) to improved student outcomes (outputs), the lack of a systematic and well-defined policy portfolio has limited reform effectiveness. This article specifically examines the overreliance on standards and curriculum as reform mechanisms and the often distracting and unproductive judicial interventions connected to equity and adequacy litigation.

A Framework for Choice Remedy Litigation Print E-mail
By Clint Bolick   
Wednesday, April 30, 2008

Although school choice proponents have generally been on the offensive in legislative arenas over the past 2 decades, they have played almost constant defense in the judiciary, seeking to prevent courts from undoing school choice programs. Opponents typically wield state constitutional provisions against school choice programs. Properly construed, such provisions often are intended not to thwart but to secure educational opportunities. School choice supporters should consider taking the offensive, applying such provisions toward their intended ends by challenging defective schools and seeking meaningful remedies for children trapped in them. Choice remedy litigation can provide an effective complement to legislative efforts in the larger campaign to secure for disadvantaged children the precious educational opportunities that are their constitutional right.

Hope for Children Trapped in Failing Schools: The Promise of Crawford v. Davy Print E-mail
By Julio Gomez   
Wednesday, April 30, 2008

On October 4, 2007, a trial level court in New Jersey dismissed Crawford v. Davy, a class action lawsuit filed on behalf of 60,000 schoolchildren throughout the state seeking the court's authority to leave schools that fail to educate their students. By filing suit, plaintiff schoolchildren had hoped to be transferred to an alternative successful public or private school utilizing their pro rata share of state and local school funds to subsidize the transfer. Now, the dismissal of Crawford consigns these children to poor inadequate neighborhood schools indefinitely. If the dismissal of Crawford v. Davy is not reversed on appeal, it will not only extinguish the hope of plaintiff schoolchildren to receive an equal and adequate educational opportunity, but could threaten the right of a thorough and efficient education guaranteed by the State Constitution and reverse gains achieved over the past 40 years in New Jersey's education jurisprudence. This article places Crawford in the context of the state's enduring legal struggle to equalize educational opportunities and discusses its claims and purposes in relation to that history. The article then addresses the significance of the Crawford dismissal on the state's legal precedents, especially rulings in the on-going Abbott v. Burke equity funding litigation. Finally, the article concludes with a prediction of the impact that Crawford's dismissal may pose for the larger equity/adequacy litigation movement playing out across the country. For the moment, the hope of 60,000 plaintiff schoolchildren is diminished. Only time and New Jersey's appellate courts will dictate whether their hope for an equal and adequate education shall survive.

Missouri's Changing Transportation Paradigm Print E-mail
By David Stokes, Leonard Gilroy, Samuel R. Staley   
Wednesday, February 27, 2008

Successful societies and growing economies have always depended on efficient transportation. As cars have become more efficient, the fuel taxes used to fund the state’s highways have leveled off — but the transportation needs of the state have not. Other states have looked to the private sector to provide transportation infrastructure, as a means of augmenting gas taxes. The people of Missouri would be well-served if officials were to give this new paradigm strong consideration as the economy evolves. Public roads, funded by gas taxes, will be the primary model for transportation in Missouri far into the foreseeable future. However, the options that public-private partnerships facilitate should be a part of the discussion for future transportation projects and plans.

Review of Kansas City Transit Plans Print E-mail
By Randal O'Toole   
Wednesday, January 23, 2008

After rejecting rail transit proposals at the polls six different times, Kansas City voters approved a light-rail plan in November, 2006. This plan, however, has proven infeasible, with costs at least 50 percent greater than its promoters projected. Implementing the plan would require cutting bus service by as much as 40 percent. While the City Council formally repealed the plan in November, 2007, many people in Kansas City still believe that some form of light rail or streetcars would be worthwhile. A close look at other urban areas that have built light-rail transit during the past three decades offers many lessons for Kansas City transportation policymakers, demonstrating that rail transit is more likely to worsen congestion than solve it.

The Fiscal Effects of a Tuition Tax Credit Program in Missouri Print E-mail
By Michael Podgursky, Sarah Brodsky, and Justin Hauke   
Monday, January 14, 2008

Tax credit programs have helped to reduce inequality of educational access in states where they have been adopted. In many cases, they have also helped save taxpayer dollars by lowering the per-student district costs of educating public school students. After the recent loss of accreditation of the Saint Louis Public School District, and several other metro-area districts, tuition tax credit programs offer a timely and effective way to help students and parents stuck in districts that are failing, or in receivership. This study looks at recent legislative efforts to reform Missouri's public schools, and surveys the results in other states that have adopted some form of tuition tax credit. The core of the study is its economic model, which calculates the effects that various implementations of a tuition tax credit might bring. If such a program were structured carefully, it could actually save the state money — in addition to providing greater access to improved educational opportunities for low-income families.

Should Missouri Eliminate the Individual Income Tax? Print E-mail
By Rik W. Hafer   
Wednesday, December 05, 2007

This study considers the effects of eliminating Missouri's income tax, which would alter the state's tax structure in a way that encourages a wide variety of individuals and firms to relocate here. Evidence shows that this would not be detrimental to the growth of employment and income. Moreover, it may be possible to eliminate the income tax without sacrificing current levels of state services. Other states make up for lost income tax revenue in a number of ways, such as through higher property tax or sales tax rates. This study concludes that altering or even eliminating Missouri's individual income tax could well improve the state's economic condition.

The Specter of Condemnation: The Case Against Eminent Domain for Private Profit in Missouri Print E-mail
By Timothy B. Lee and Shaida Dezfuli   
Wednesday, October 17, 2007

This study examines the abuses of eminent domain when used for private profit in Missouri. Although many government officials believe that eminent domain is necessary for comprehensive development projects that will help stimulate the economy, authors Timothy B. Lee and Shaida Dezfuli focus on how eminent domain often hurts economic development by creating economic uncertainty and harming small businesses. Furthermore, it exacerbates poverty in inner city communities by destroying affordable housing and undermining community reform efforts. The study documents numerous examples of the negative impact that eminent domain has brought to local communities. It argues that the abuses will only worsen, until the Legislature passes a constitutional amendment that strengthens property rights in Missouri.

Ready for Change: What Missourians Think of Parental Choice and Public Schools Print E-mail
By Verne Kennedy and Sarah Brodsky   
Monday, May 07, 2007

The Show-Me Institute commissioned a telephone poll of Missouri residents. Respondents reported a high level of dissatisfaction with public schooling in Missouri and little faith in the power of parents to change public schools for the better. When asked how well Missouri’s K-12 public schools are doing, just 12 percent of respondents believed the schools are “doing very well,” while 63 percent reported that public schools in Missouri are either “in a crisis” or have “serious problems.” Respondents were strongly supportive of proposals to provide tuition tax credits to families with children in private schools. Particularly significant is that while Missourians had only modestly positive views of the politicized term “school vouchers,” two-thirds of respondents embraced the notion that all families should be able to use public funds to send their children to a public or private school of their choice.

Unleashing Video Competition: The Benefits of Cable Franchise Reform for Missouri Consumers Print E-mail
By Joseph Haslag   
Wednesday, February 28, 2007

Joseph Haslag estimates the benefits of increased video competition to Missouri consumers, to state coffers, and to the state as a whole. He finds that increased video competition would benefit consumers by between $66 million and $76 million annually. On the other hand, incumbent cable companies would be harmed by between $45 and $53 million per year. On net, therefore, increased competition would benefit the state by more than $20 million per year. Franchise reform would also benefit the state if it attracted new infrastructure investments. Based on the experience of other states, Haslag estimate that new entrants would make $420 million in capital investments. If made in one year, that quantity of investment would generate roughly $17 million in additional state revenues the first year, and approximately $1 million annually in subsequent years.

Looking for Leadership: Assessing the Case for Mayoral Control of Urban School Systems Print E-mail
By Fredrick Hess   
Tuesday, February 06, 2007

There is anecdotal evidence that mayoral control can be more effective, with Boston, Chicago, and New York frequently touted as success stories. But Washington D.C. is an important reminder that all proposals for ‘mayoral control’ are not created equal. The record suggests that mayoral control can work, but only if it is sensibly designed and a strong mayor is actively engaged in improving the schools. If mayoral control is to be effective, the mayor must be willing to expend political capital and enlist the support of business and civic leaders on behalf of his reform agenda. Business and civic leaders, in turn, must be willing to hold the mayor’s feet to the fire, insisting that he set high standards for the district. Finally, mayoral control does not necessarily do anything to address the crippling legacy of rigidity and uniformity that infuses urban school management, staffing, compensation, and operations. It is only if the mayor is going to tackle these challenges that mayoral control may be worth the fight.

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