Zach Lawhorn (00:04.504)
Welcome to the Show Me Institute podcast. I'm Zach Lawhorn from Show Me Opportunity. And today I'm joined by Elias Chappellis, David Stokes, and Avery Frank from the Show Me Institute. Elias, last month Show Me Institute released their plan for the Missouri Office of Government Efficiency, or MOGE. And in the weeks that followed, people around the state, around the country, I'm sure have been hearing a lot about Doge and Coge and Show Me Doge and MOGE.

And so what I want to do to start the podcast today is do a little bit of cleanup, a little explanation. What has the Missouri House done? What has the Missouri Senate done? What has the executive branch done? And does any of it impact what ShowMe Institute is putting forward with their MOGE plan?

Sure, so the Missouri House and Senate both have committees on government efficiency and they've started their work. They've had some joint meetings. I would say they're kind of in the information gathering phase, a little bit of what you see at the federal level. The House and the Senate, though, seem to be kind of going different routes, at least in how they're going to approach their individual efforts. The Senate has made a, or created a portal for submissions.

So people in Missouri, state employees, anyone who has some ideas about government efficiency are invited to submit those. think thus far they've received more than a thousand. They've published some of them and they are continuing meetings on some of these things. And I think eventually they'll get to bills, but right now they're kind of figuring out, kind of getting the lay of the land of where some inefficiencies are. And the House has taken a little bit different approach where they've been looking at

bills basically considering different good government efforts essentially and trying to You know rain and waste or you know, just sort of the more standard legislative approach But I think at the very least they've been discussing following the footsteps of Oklahoma Which has something they call the legislative office of fiscal transparency Which sounds pretty good, but it it's essentially something that allows the legislature to do more

Elias Tsapelas (02:16.182)
kind of investigations into inefficiencies, of like audits or, you know, looking more closely at things. People in Oklahoma have said that it's been very successful, but it's a little bit different route than what we outlined in our MOGE document, which is something that the governor would be leading. Now, Governor Kehoe did mention during his stay in the state that he, it seemed like he had a proposal.

proposal for what he called show me doge so maybe that's something we'll be seeing relatively soon but the Show me Institute document goes into essentially it kind of follows a little more closely to what Governor Ronald Reagan did back in the 60s which essentially brings in outside experts from outside of government and With private funding not government funding to basically look at all of Missouri's government

where I think right now at least the legislature is doing a little bit more targeted approach or kind of taking suggestions for figuring out where to look more closely. The idea for a MOGE is more let's get people from outside that aren't dependent on government funding to look at everything. with that, because the governor does have at least more capability to change things for how the departments are running because he oversees them and

you're essentially seeing something where not everything needs legislative, not everything needs a bill to change. And so you could get outside ideas when everyone goes through, when outsiders look at the budget, look at different departments, specific things, submit recommendations. And then ultimately there'd be recommendations that would then sort of loop back in presumably the, the house and Senate committees and get towards, you know, hopefully finding a lot of efficiencies.

So that does seem like an important distinction to me currently in the House and Senate. have people inside the government that are going to be, even with the public comment, like you said, there's a portal where citizens can submit what they think are inefficiencies. even then you have people within the government looking at these things. And I think we recently had an event, and I think you put it very well, that you're then relying on some people who may not just rely on these programs, but they work with these people in Jefferson City. They may know some of the people running these programs.

Zach Lawhorn (04:38.256)
Just personal conflict of interest does seem like an obvious issue. So that's why it's important to have outside input and have people that are privately funded looking into this. Am I understanding that correctly?

That's exactly the point. And I think a lot of times too, it's very easy for people in Jefferson City that work on these programs all the time to think maybe the way things have been going, maybe they think they're going very well or the data they're collecting or their performance makes a lot of sense to them. Maybe it looks good, but from someone that's never looked at the program before, it doesn't make any sense at all. And so just those outside eyes, I think will do a lot to

kind of shine a light on some, you know, maybe some duplication, maybe some areas where it doesn't make sense to still have something like this in 2025, or even efficiencies as it comes to, you know, what staffing level should be or how the state should be, you know, entering contracts, a lot of different things like that. I scanned some of the portal submissions that people had brought into the Senate recommendations. And I mean, they're...

there were a ton of pretty good ideas in there just from lived experience. Why does the social services website not show all the information for people receiving benefits so that they can tell if they need a call, as opposed to people saying, well, we have a six hour wait time. mean, there's tons of stuff like that all across Missouri's many executive departments. And so some outside eyes, some fresh eyes,

would be helpful and I think that's something that ultimately the governor is going to be the best one, best place to provide the support needed rather than the legislature. Not to say that what they're doing isn't good, it really would be something that would be best working together.

Zach Lawhorn (06:35.702)
And something in the ShowMeInstitute mode proposal that I thought was interesting and important was the timelines. There's timelines. So like you said, currently, all these different

initiatives are in the information gathering stage and to quote Jerry Seinfeld, anyone can just take them, know, talking about reservations. The important thing is, is what you do after you get the feedback. And so in ShowMeInstitute's proposal, there's some deadlines for when action needs to be taken. Are you aware with either the House or the Senate if there are similar deadlines for action on this information?

I haven't heard any deadlines. I know that they want to get something done this session, at least with these committees. when you're this far into the session, I realize it's only February and it seems like it's just started. ultimately, since the legislature is only in session for five months and you're still in information gathering, a lot of things, especially when it comes toward downsizing government or finding efficiencies, implementing changes

can take a while. And so I think that setting timelines is very important. And I wouldn't necessarily say that what the legislature is doing is going to, by May, find millions of dollars of savings or something. But it might be what we consider a good first step. And hopefully, with the governor diving in and some deadlines, maybe next year we could really have some concrete achievements.

Also could be the perfect opportunity for a continuing or an interim committee to keep this work going outside of session. They have interim committees every year on various things. I think it'd be perfect for this to be a continuing effort for a year or two as opposed to just tightened into the legislative timeframe only.

Elias Tsapelas (08:25.336)
that would be, I think that would be perfect for this and also bringing up continuing so that it's not another thing that once May comes, maybe what Elon Musk is doing isn't in the news as much and then next year no one brings up the Committee on Government Efficiency again. It's something keeping, it would allow the efforts to find efficiencies to stay in the news, stay top of mind and keep people working in the

same direction because ultimately making Missouri's government more efficient is the goal and so hopefully everyone remains committed.

And did anyone else notice that with all this talk of Doge and Moge that earlier in his comments when Elias tried to say proposal, he almost said propose. I don't think I didn't hear that, Elias.

Finally, before we move on from Mojdoj Coach, that does seem like it's been the fate of some of these other initiatives throughout history. You mentioned Ronald Reagan in California and loss of momentum or just kind of gets mired in bureaucracy. So is that something that you're keeping an eye on kind of to see if, like you said, stuff starts to fall out of the news, it's not the shiny object anymore, and it kind of meets a similar fate as to some things we've seen in the

past

Elias Tsapelas (09:48.046)
One of the big concerns we had when putting together a document creating a new office, the Missouri Office of Government Efficiency, looking at, at least in my mind, was the past efforts of state tax credit task forces or different commissions, whatever we've called them. There have been various different ones. There's a lot of momentum. They look at a lot of economic development programs.

the report shows that they're not good and then ultimately nothing comes out of them. you know, we're mindful of, you know, something being creating or looking for government efficiency and creating a new office or something like that. And also that past. Let's just say the state doesn't have a great track record of necessarily implementing all of the recommendations. So, yeah, definitely keeping a tight timeline and keeping everyone focused and on the ball is.

something we're going to be keeping a very close eye on.

All right, well, we will be checking in. Avery, there has been some movement already in the session on education. There's a bill in the Senate that we're going to talk about, a bill in the House. Let's start with open enrollment, SB 215. This is something we've been talking about a lot this year. Let's start with kind of a top level primer with open enrollment for our listeners who maybe are not familiar. If you could just briefly explain what the idea behind open enrollment is.

So open enrollment, part of a, it's just one item on the menu of a school choice, you know, just three course meal. usually have, sorry for the bad analogy, but you have open enrollment, you have charter schools, you have ESA programs where it's basically you have charters as one option, you have another public school, which when you use open enrollment, you're basically.

Avery Frank (11:39.296)
allowed to go to any public school, not just the one that you're assigned to based on your zip code. And then you have ESA programs, which you could use funding to go to a private school or to use it for tutoring. So those are kind of the big three items for creating a school choice atmosphere that creates a robust educational marketplace where innovation and competition guide improvement in public schools. And open enrollment is just one part of that.

It's a pro public school bill. It strengthens public options. It strengthens public schools. And if we're just looking at it from a hundred thousand feet level, it's good because one, it gives parents more options. Two, through competition, can shine as a light on what the best practices are. So if one district has got a great program and it's attracting a bunch of students, other districts can be like, okay, that's working. It's attracting a lot of students. Families want that.

and then they implement it and the policies that are good, they get implemented more places and the policies that aren't working, they fade away. And then the third thing, which I think is kind of an underrated good aspect of open enrollment, is that it amplifies existing choice. So you think of charter schools. Right now charter schools in Missouri, and sorry for the long answer to this, but charter schools in Missouri are limited to the district they're in. So the ideas that could come to a charter school, they can maybe be

two niche just for one district. But if you can let open enrollment apply to charter schools as well, you can have an idea of serving an entire region rather than just one district. So in Arizona, there's the Arizona Autism Schools and parents come all over Arizona to go to this charter school because it's well renowned and open enrollment permits these charter schools to serve an entire region. So open enrollment is just a great policy overall.

All right, so including charter schools seems like it's a step past the first step, which Missouri is currently on. just the open enrollment that we're talking about is, and let me know if I'm off here, but if you're in a school district that has three high schools, you've got a north, south, and east, and you live near north, but you'd rather go to east. Open enrollment, if east has seats available, you can go to that high school. That's inter-district choice, right?

Zach Lawhorn (14:03.82)
Yeah. And then there is the option to go to a different district if they have seats available, right?

open enrollment would allow you to go to a different district and so basically parents would be whatever the reason whether it be bullying, academics, school values, they would just decide okay I don't want to go to this district anymore I want to go to I'm enrolled in district Alpha I want to go to district Bravo which is 10 minutes away so you can apply to that district and if the number of applications don't

don't exceed the number of stated seats. So districts, district Bravo and district Alpha, all the districts would have to establish the number of seats they have in each grade level in each school beforehand. And so after that, parents and families can apply to go to one of these schools. And if the number of applications don't exceed the number of stated seats, then the district can just just has to accept them. SB 215 is mandatory open enrollment. So that means

If you get an application, you have to accept it. And there's one little carve out for if you if there's trouble with disciplinary issues, but we don't need to go into that. But if there's more seat, if there's more applications and seats, then that's when Desi has to get involved in the district. Bravo would have to say, hey, we got more applications than we have.

seats. So we need you to sort it out. And then that's when you have the priority. So siblings would get first priority if you're on the waitlist because you got denied the previous year because there wasn't enough seats, then you get priority. And then there's other things like availability of transportation and other factors. And essentially, Desi would get to determine the overflow. So it's not a random lottery.

Zach Lawhorn (15:55.928)
But so it is first come, first serve for people that are applying for the open seats. Priority goes to people that are in the home district. It's their home district, their home school. if that's your assigned school by residence, you've got.

preference over people applying via open enrollment. And then the other thing you mentioned, transportation. And there are some different ways that different states have approached transportation. And that is something that would be open for discussion. Some states have done stipends. Some states have used ride share services. That's an area of this legislation where experimentation has been very common.

And I think the longer you go, you use open enrollment, the better you will get at determining what transportation strategies works. So if you have a cohort of just an area where a lot of students want to transfer another place, you could just establish a little micro transit van where you can send and gather clusters of people, or you can have stipends where you pay parents just to drive them to the nearest bus stops, or there's just a lot of options like that.

or you can pay parents half stipends to pick them up after school, but then you pick them up before school, there's a lot of options, but I think as you use open enrollment longer, Missouri will figure out what the best policies are for each district.

And finally, before we move on to the House bill about smartphones, we've kind of heard this story with open enrollment in Missouri in recent history. What has been the very recent history with these bills in the House and the Senate?

Avery Frank (17:33.56)
Four years in a row, this bill has made it barely, just barely through the House and then stalled in the Senate. It just didn't have enough momentum to get over the hump of the Senate. It's been four years in a row and you usually get a number of different pushbacks. This year, the biggest pushback is that there's going to be high school sport powerhouses. You're going to have dynasties form and that it's going to be completely uneven and there's not going to be any parity in Missouri high school football or basketball. And then the other big pushback you get is, well,

all the people are just going to leave and go to the wealthy districts. And those are just two of the many myths that come about when you talk about open enrollment. And these little hangups are the difference between getting a bill passed or not. When you're passing a big education choice bill, it's usually going to be on the margins. It's going to take a lot of effort. It's going to be really close. And so when you have these kind of ideas holding people up, it's hard to...

they have to be addressed. so when we talk about like a mass exodus to wealthy schools, we forget that open enrollment's not some new policy. It's been tested in a lot of other states, in Arizona and Florida. Only about 10 % of students go to another school outside the district. The number one reason why parents choose a school is proximity. So even when they have the option, they still want to, usually most parents choose the school that's closest to them.

And what open enrollment does is just basically gives an option for a lot of these families that just aren't satisfied. It's not going to be mass transfer portal. Everyone's going all over the place. It's like college football today. No, it's going to be about people on the margins that really just aren't satisfied with their school. Maybe they're getting bullied. Maybe they want to go to a place that has an AP physics program. They've wanted to be a phys- and they don't have it at their school. Like these are just-

this is just a policy to give kids and families options to match with the district that better meets their needs. It's not going to be the norm, but it's going to be able to serve those families that really want to take advantage of this program.

Zach Lawhorn (19:40.598)
It's a very small steps towards school choice that a lot of other states have already taken. like you said, it's not a radical idea. It's very common around the rest of the country. All right. So let's move on to a House bill. And this one I think I've.

It seems like there's a lot of similar bills around the country. Some school boards are taking action. And the idea is banning smartphone use in schools. So this idea that elementary schoolers, middle schoolers, high schoolers, across the grade spectrum, that kids are on their cell phones during the school day. And a lot of legislatures and school boards and communities want to do something about it. What is Missouri considering doing about it?

So Missouri is, they're looking to have unity statewide. teachers, parents, people, I mean, you talk to the common person, they're like cell phones are a problem in classrooms. Technology is a problem in classrooms. got people playing games on the back of the phone. I, admittingly, was probably guilty of it in my day of schooling. what Missouri wants to do is House Bill 408. They want to basically prohibit any sort of usage of your phone, keeping it on your person during class time.

are mandating that every single district create a policy to prohibit having the cell phone on your person during class. But they also mandate that these districts have to come up with an idea for when you're at lunch, when you're on the bus. They don't say you have to prohibit, but you have to come up with a policy for it. And so the state just is looking for unity in this. They don't want one district to be the bad guy. want to come up with an over the top, this is what you need to do.

for your school phone policies, because it's a big problem with young people these days.

Zach Lawhorn (21:27.02)
And so the idea is that even if the state isn't going to legislate enforcement, that this gives maybe school boards or even teachers some of the initial nudge, some of the initial backing that they need to, like you said, be unified, have kind of a unified front and decide that we're going to do something about this issue. And I think that during this conversation, a lot of people have brought, it's not just the distraction. We had John Ketchum on the podcast recently. It's not just the distraction in the classroom, but also

You see these fight videos that students have recorded. so students walking around with smartphones and recording fights that happened in school and then posting them on social media. just the, so it's not even just the academic issues. There's also a lot of social issues that I think people are pointing to and saying we should try to do something about this.

in Normandy, the Normandy School Collaborative, they initially have a cell phone ban in their classrooms, but students weren't really following. It was hard to enforce, like, what's instructional time, what's not, and they're just, they decided to have a full ban on the entire district property. You can't have your cell phone at all in Normandy on school property. They went further from the classroom ban to just banning it across the

in their entire schools. And I think it'll be interesting to see how different districts will enforce it. They're leaving it up to districts because I think the way you enforcement works in one district will be different than how it works at another district. There may be different incentives to get students to actually listen to the policy and put their phone away. So I think honestly it's a good idea not to mandate how a district enforces this policy because student bodies are different, incentives are different.

And so districts are going to have to figure out from the top, honestly, your superintendent, your principals, how are we going to actually enforce this policy? Because it's a good idea. Phones are very distracting. They're lower grades. They distract people that aren't even using them because other people are using them. And it's something that's really hurting our students. Our scores are struggling. It's exacerbating the problems of discipline and having trouble paying attention in class. And districts are going have to figure out how

Avery Frank (23:44.622)
can we tackle this problem, but at least they have some backup from the state.

And so far it seems like there's some bipartisan agreement, right? Yeah.

It's a very bipartisan bill. think over 70 % of all teachers agree that cell phone policy is a major problem. so people are kind of backing the teachers on that and saying, let's get these out of classrooms. They're really harming our students' learning.

All right, so something that we'll update listeners on and I know that you'll be keeping tabs on it. David, during COVID, St. Louis decided that they were going to stop shutting people's water off for non-payment. We can debate whether that was a good policy or not, but it's 2025. COVID was a few years ago. And there was a story this week that some of the collections haven't started and the totals

are starting to add up to some real money as they say. So what's going on?

David Stokes (24:42.51)
I think we can say that it was a reasonable policy during COVID to not disconnect water. You wanted people staying home. You can't stay home if you don't have running water. Sure, it was perfectly valid for 2020, 2021 at times, but right, it's 2025. They still have this policy against shutting off water. And shockingly, some people are taking advantage of that. And miscollections are way up.

The numbers are staggering. think it's up to like 20 % of bills are not being paid right now, according to the Post Dispatch story on it. It's like you feel like you're the sucker if you're the one paying your water bill. So yes, it's beyond time to reinstate the punishment for turning off water for non-payment of bill. It's beyond time to get serious about collecting the back bills that people owe. know, St. Louis water.

It's not particularly expensive. You have to pay for what you need. You have to pay that money so that the city can invest in its system, which about a year ago, maybe slightly longer, they finally did that. They raised rates in the city because they had a rash of major water issues and sinkholes and the like. And so they raised rates to raise money to address that as they should have. Yet here they are at the same time, not collecting unpaid bills, not shutting off water.

greatly affected the effectiveness of the rate increase. Just all the more reason for the city to get around to privatizing the water division. should take, know, water was one of the most agreed upon parts of this use of Rams money until the whole deal fell apart at the end to take, I think it was about $40 million of that and invest in the city's water system. They absolutely need to do that. know, what, water's not free. It may fall from the sky. And if you want to go put a

rain bucket in your yard to collect it for yourself, feel free. But the pipes, the treatment facilities, everything else that brings it to your house, that's expensive. And they need to improve it. I don't necessarily blame anybody long-term in the city on this. It's an old system. Of course it needs improvement. But they need to do that. They need to use the Rams money for it, probably even more than the 40 million. And then in the end, and this is where I think most city officials would not agree with me,

David Stokes (27:08.344)
they need to take that money and put it out for auction. Once they've improved the system to increase the value of it, put it out to bid for private actors. St. Louis County is entirely served by private water. Much of Missouri is served by private water. City of St. Louis should be too.

And you brought up the Rams money, so there was this drama around what to do with it, and now it's delayed until April at least. But correct me if I'm wrong, but wasn't spending some of the money on water, that was kind of a common point of agreement that it seems like a lot of people say, yes, this is what we need to do.

was the widest point of agreement. And pretty much every faction arguing about what to do with the Rams when he agreed on major investments in the water system to go and repair pipes that are, look, they're 100 and some of them 150 years old, like fix it. It's nobody's fault, but it needs to be replaced. So hopefully when they come back into session in a couple months, they will, they will agree on at least that part of it. And, and then, you know, you want to make

You want to go from good to great, get that value up, fix some of these old things, and then put it out to bid to raise, in that case, hundreds of millions, hundreds of millions more in an upfront payment and other advantages of privatizing water.

And so the city said that the shutoffs, the collection has been delayed because there's this assistance program that isn't online yet. And then some have speculated that it's an election year. So maybe there could be some feet dragging for some political considerations. You're a political creature. What do you think about that idea?

David Stokes (28:46.894)
I think it's completely obvious that this is one of the reasons for the foot dragging here. That is in fact, one of the problems with municipal utilities generally, is that the customers are also the voters for the people. So the people in charge of raising rates are also the same people who need the votes of those customers. So you find across the board with municipal utilities that they tend to hesitate to raise rates, which results in...

a lack of investment in the infrastructure of whatever system it is, whether it be gas, electric or water. So then it tends to be, you have to wait for disasters to occur like happened in the city with its water pipes a few years ago. And then you have to raise rates a lot to address it. So it's just a bad system and private regulated utilities do a much better job of small annual.

year-to-year rate increases approved by the regulators then turned around and invested in the system.

All right, let's talk about source of income laws. There was a, we'll call it a small legislative victory, and then there was a judicial victory. Which one do you want to talk about first?

We'll talk about the judicial issue first over in Kansas City. Source of income laws, we talk about them a lot, our laws. Six cities in Missouri have them, including several of our largest cities, St. Louis, Kansas City, and Columbia, which require landlords to accept housing vouchers.

David Stokes (30:14.614)
such as primarily Section 8 housing vouchers, but there are others. This is a federal program that is a voluntary federal program. It's completely inappropriate for local governments in Missouri to be requiring landlords to participate in this program. And in Kansas City, when they passed this law slightly over a year ago, some landlords sued and they won in court just a week or so ago as a federal judge ruled that Kansas City had no ability, had no right.

to pass this law. Now it was just a temporary injunction. The whole case is gonna go to trial later this year. And I don't know what the results of that trial will be, of course. But for now, the source of income program in Kansas City is on hold. And I would love to see attorneys and landlords on the eastern side of the state file the same things in St. Louis that have the suburbs and the suburbs here that have these same laws. So definitely be following this court case closely.

and interesting to see how it reacts in Kansas City. That said, just because there was a short-term win in Kansas City doesn't mean that the legislature still doesn't need to ban cities and counties from enacting sorts of income laws in the first place. There is that bill. There were two bills filed by representatives, Chris Brown and Ben Keighley. I believe they sort of been combined into Representative Brown's bill. And it has passed out of the Missouri House of Representatives to ban cities and counties.

from enacting these sorts of income requirements. It's terrific bill. It passed with, I believe, unanimous Republican support and a few Democrat votes, which is always rewarding to see. So some level of bipartisanship there. And now it moves on to the Senate, where it did not pass last year, but hopefully it will pass this year. This needs to be a priority for the legislature. More and more cities, if we don't pass this now, and if it loses in court eventually...

More and more cities in Missouri are to pass these rules. It's a total violation of the property rights of landlords to force them to participate in a federal welfare program that they don't want to. And we need this ban passed by Jefferson City.

Zach Lawhorn (32:21.184)
And it seems like you're ahead of the game here. Hey, something passed in February. I mean, it's got a ways to go, I know, but more action than we're used to seeing.

The House seems to be moving at a pretty good clip in getting things out of the House committees and out of the House very early on. It seems to be ahead of the game in the opening month of the legislature here.

All what I want to do to our final segment here is just briefly.

ShowMeInstitute talks about eliminating the income tax a lot and this year in the session it's been a very hot topic. There are several bills that have been proposed to try and eliminate the state income tax. Elias, what I would like for you to do is to just maybe tell us some hard truths for some people about what needs to be considered, what needs to be done if Missouri is serious about eliminating the state income tax.

So I guess the first thing to know is that Missouri is one of the most reliant states in the country on the income tax. So about 60 % of Missouri's general revenue comes from the income tax. And we have a budget that is very large and is growing. State general revenue spending has grown about 50 % in the last five or six years. And so when you start talking about eliminating the state's biggest source of revenue,

Elias Tsapelas (33:44.142)
you know there's a couple different ways you could sort of deal with that. So you can deal with it on the spending side somewhat by you know reining in spending making it easier to sort of absorb that blow. But also start looking at you know how much can Missouri really afford with the same level of government services to lower the income tax rate before you know starting to look at other taxes. So what Missouri currently has been doing in terms of lowering the income tax

is if revenues come in, it's about 150 or 200 million more than the year before, the rate will drop about 0.1%. And so right now, Missouri's income tax rate is 4.7%. Current law will allow it to go down to 4.5%. So what people are discussing is how do we continue this incremental reduction?

from 4.5 all the way to zero. And if so, you keep going down like that, eventually do you need other, whether that be sales tax revenue, how do you get that? can you have enough, can the state have enough economic growth, economic activity, population growth to keep revenues high enough without it? Or can enough,

funding be cut from the budget? Is there enough waste out there that can be brought up? And so there's a lot of discussions going on, but I think that's sort of the general understanding, at least for where things are right now.

And sure, there's got to be some adjustments on spending, just speaking in general terms, it doesn't seem like that fraud, waste, and abuse is going to get you there. Again, I'm talking about being serious about getting this done.

Elias Tsapelas (35:33.762)
Yeah, probably not. you know, going, looking across Missouri's budget, I mean, there's, there's certainly areas that are not mandated programs that, you know, Missouri is funding. And so, you know, maybe, maybe there's a level, a different level of government services that, you know, Missouri, you know, would rather have than, you know, other options for paying for getting rid of the income tax. You know, one of the things that, you know, the Show Me Institute,

been talked about a lot is a lot of economic development incentives. There's a lot of money that go towards those that if you got rid of those, that could pay for some reduction in the income tax. there's definitely some out there, but I think ultimately it would be a pretty difficult task to assume no changes to Missouri sales tax and eliminating the income tax and keeping everything else the same. don't really think that is.

Very realistic. Now if you want to talk like very, very far horizon, mean, you know, maybe you could start getting somewhat closer to that in, you know, 40, 50 years, but most of the time when we're talking Jefferson City, we're talking, you know, much shorter horizon.

And finally, David, I want to give you a chance to plug a recent op-ed you had in the Springfield Business Journal here. You wrote about how Missouri municipalities may actually want to rely more on property taxes. And so when you hear Elias talking about the need to replace revenue if we are going to eliminate the state income tax, where does the property tax discussion come in there?

Right, talk about the real third rail of a state tax policy. But absolutely, it could be considered. You the first papers that show me it's never released were about the harms that the earnings tax, the local income tax in St. Louis, in Canton City, due to the local economy there and suggesting that the way to replace those was with a land tax, which is just a property tax on the value of land only. And I see no reason why we couldn't.

David Stokes (37:37.358)
Well, the reason that it would be difficult constitutionally, legally and politically without change I get. But in theory, you know, if we wanted to phase out the income tax with an increased land tax...

just a small property tax on the value of land around the state, I think that would be an excellent thing to consider. And the reason, one of the reasons why Missouri is one of those states that depends so heavily on income taxes for its revenue is because we're one of a small number of states that doesn't have a state property tax, like most states do.

Many states do I should I should say We do not there is a blind pension fund property tax at the state level that goes to support that one small fund But this other than that the state of Missouri is no general revenue. No, transportation revenue No other funds from property taxes and many other states do get that so I'd love to see part of that consideration be a land tax

phased in as the income tax was phased out, because I can assure you that the income tax does far more harm to economic growth in this state than a land tax would. That trade-off over time would be very much to the benefit of Missourians.

All right, we'll be talking about this a lot more in future episodes as the session goes along. Let's wrap up with what everyone is keeping track of over the next week. Avery, we'll start with you.

Avery Frank (39:04.376)
There's been a lot of movement in the energy sector in Jefferson City. And with growing electricity demand, a lot of coal plants coming offline in Missouri, it makes sense. But it'll be interesting to see.

what in this kind of energy omnibus that's forming in Senate Bill 4 with construction works in progress, test year, proceedings, reliable replacement where you have to replace base load energy source for a base load energy source. It'll be interesting to see what makes it through the fire and if anything makes it through in Jeff City. So I'll be keeping an eye on all of that. David?

In both St. Louis and Kansas City, there's significant changes to animal shelters, St. Louis County, I should say, coming forward in the coming week. In St. Louis County, the nonprofit.

Animal Protective Association that's been running the shelter for a while is stepping out of it. They chose to focus on other aspects of their mission and returning operation to the shelter to St. Louis County. And in Kansas City, which had been using a nonprofit to operate some of its shelter and animal control services, the city is considering taking back control over those funds. There's been...

Complaints about how that nonprofit has been operating there. I don't know if those complaints are valid or not, but but they're there Animal control animal shelters are a great opportunity for cities and counties to to privatize services I've talked about them a lot in our writings on privatization, but obviously it's a very passionate issue People, you know, there's some

David Stokes (40:36.974)
There's some dedicated animal rights people out there who are gonna make sure whether it's government controlled, nonprofit or whatever, that the job is being done right. I wish all government services were watching this closely. So it's really a controversial issue and I'm gonna be very interested to see how St. Louis County maintains the shelter now that the county is taking back control.

analyze

next week there's hopefully some action on other budget so the supplemental funding bills have been and so for those who don't know the supplemental funding bill is essentially the bill that basically adds additional spending to finish out the fiscal year at the current fiscal year that ends on june thirtieth and why this is important is that last year there's a lot of discussion about how big the budget was and then

Eventually when the budget got passed, there was cheers for being the first budget in a decade that wasn't bigger than the year before. A lot of celebration, but at the time I was like, let's hold our horses here because one easy way to pass a budget

that is not as big as the year before is to just not put all the money in there that you're going to need to get to the end of the year. And so we're going to be diving a little bit more into those numbers because as the house is currently working on putting their budget together for next year, we can learn a lot from the supplemental and we'll see how big that is and really how much above the $51 billion budget that passed last May, what more true totals are looking like.

Zach Lawhorn (42:14.412)
Alright, as always, plenty more at ShowMeInstitute.org. Avery, David, and Elias, thank you very much.