Show-Me Institute intern Jessica Stearns talks about the recent “Show-Me $15” campaign for a higher state-wide minimum wage. She points out that the minimum wage hurts the people it is suppose to help because employers inevitably fire workers to deal with their higher labor costs.

The post Show-Me Now! Raising the Minimum Wage Costs Jobs appeared first on Show-Me Institute.

This past week, when my flight into Saint Louis was over an hour and a half delayed, I realized I would have to catch a cab home. I usually can persuade my friends to pick me up by offering them Starbucks, but since my flight landed at 1:00 a.m. no one was able to pick me up. With MetroLink stopping service at 12:57 p.m., I was left with no other choice than to get a cab ride back to my apartment in Midtown. After collecting my bags, I went to the taxi stand to find only one company offering cab services. After a 15-mile ride to my apartment, I was stuck with a $44.14 cab fare.

Ridesharing companies like Uber and Lyft operate out of cities like San Francisco and Chicago at much more competitive rates. San Francisco even offers UberPool, which matches you with other riders heading in the same direction with the fare split among several riders.

However, since I live in Saint Louis, a city that is inhospitable to innovative and competitive ridesharing companies, I was unable to seek an affordable option.

The Metropolitan Taxicab Commission (MTC) is a regulatory body meant to protect the consumer. Instead, they protect the cab companies who profit from anti-competitive regulations, while consumers are left without options that are prevalent in a competitive market.

Looking through the ridiculous regulations of the MTC’s code, cab companies picking up customers from the airport must obtain a permit and give one dollar for every fare to the MTC. At this time, the MTC has only granted permits to seven cab companies. With limits on the number of permits made available, cab companies are shielded from meaningful competition and can set prices that would be too high in a market with free entry.

I hope the next time I fly into Saint Louis, UberX or Lyft will be an option because I cannot afford many more $45 cab rides.

The post Blame It On the MTC appeared first on Show-Me Institute.

In 1950 Saint Louis was the eighth largest city in the United States with a population of 856,796. According to the 2014 Census estimate, Saint Louis has two-thirds fewer people than in 1950.

Such a dramatic decrease in population has major effects on local government. As the population declines, taxable income and sales leave the area and revenue declines with it. Lower population levels exacerbate other issues such as abandoned buildings, lower property values, and, as a result, fewer funds for public schools.

Saint Louis is a city that has much to offer. So why are people continuing to leave? What should the city do to halt the deflating population?

The post The Incredible Shrinking City appeared first on Show-Me Institute.

Since news articles reporting on the hearing only highlighted the arguments of those in support of HB 803, I’ll reiterate what analysts at the Show-Me Institute have written so many times before: Film tax credits are bad public policy!

Supporters of the program argue that the film tax credits bring immense economic benefits to the state. However, the problem with this argument is that it doesn’t look at the costs of the program along with its benefits. While supporters spout claims that “Gone Girl brought in $7 million into the economy,” the reality is the program’s return on investment (tax dollars generated versus tax dollars spent) is merely cents on the dollar. In other words, the program does not pay for itself.

Furthermore, the argument that the film tax credit helps create permanent jobs is a fallacy. Film production jobs, by their very nature, are short-lived. To add insult to injury, the highest paying jobs often go to non-Missouri residents, since production jobs require specific and highly skilled professionals. However, perhaps the most shocking fact is that Missouri has had a film tax credit program since 1999, and yet, according to data gathered by the Bureau of Labor Statistics, jobs related to film production decreased during the time the film tax credit program was in place.

It is bewildering that lawmakers can ignore important economic indicators, and the advice of the state’s own Tax Credit Review Commission, just so Missouri can play hostess to Hollywood for a few weeks. I hope legislators and political spectators will take a look at our testimony and exercise some common sense.

The post Touted Benefits of the Film Tax Credit Program Are Misleading appeared first on Show-Me Institute.

Former Fire Chief Mike Ballmann, who claims that the firefighters union pressured the board to fire him, believes that the union has overstepped its role in the affairs of the fire district. When asked about union involvement in the management of the fire district, Ballmann said that the Fire Protection District Board of Directors was “packed with union people so the shop gets what it wants without any grief.” With the union’s heavy involvement in deciding who will run for the board positions, has the government union overstepped its role?

Since the district is funded by taxpayers, its business should be conducted with the interest of the taxpayer in mind. However, when board meetings are closed, interested taxpayers do not get to see how government unions involve themselves in district affairs. Furthermore, according to Ballmann, there are instances when the union shop steward is invited into the closed board meeting, which not even fire chiefs are allowed to attend. The problem isn’t the existence of a union, but rather their conspicuous control over the fire protection district.

The obvious and sensible solution is for fire districts like O’Fallon to follow in the footsteps of the Monarch Fire Protection District and initiate an open collective bargaining process. This would make sure that any changes made to district operations, union contracts, and decisions to hire or fire employees are free from ambiguity. However, despite efforts to gain the O’Fallon Fire Protection District Board’s insight on this issue, the inner workings of the district seem as ambiguous as ever.

Taxpayers are aware of the great importance firefighters play in protecting their community; their concern, rather, lies in the fact that their fire district is lacking representative leadership and sufficient oversight. Transparency is essential to guarantee that the taxpayer interests are being met. Once open collective bargaining becomes the norm for all government unions, we can ensure that both the worker and the taxpayer are being represented and considered in the political process.

The post Transparency Would Shine Some Light appeared first on Show-Me Institute.

However, we should not be over-eager in offering handouts to Hollywood. Other than pride, we get little in return. As we have written before, the film tax credit has been ineffective in spurring economic development and leaves Missouri taxpayers to pick up the bill for mega-million-dollar moguls.

The intent of the film tax credit program is to provide initial seed money in an effort to create a sustainable film industry. Yet, despite the fact that Missouri offered a film tax credit for nearly 15 years, the state never became a major hub for film production. In light of this, Missouri’s own Tax Credit Review Commission wrote in their 2010 report that the film tax credit should be cut because it “serves too narrow of an industry and fails to provide a positive return on investment to the state.”

The failure of this program comes from the nature of Hollywood productions. Since nearly 40 states offer similar programs, Hollywood studios can simply wait and see which state will offer the most money for their production. With scarce resources and tight budget constraints, Missouri should not go head to head with states like New York and California on who can hand out more wasteful tax credits.

The success of Gone Girl should not overshadow the fact that the film tax credit program is bad policy for Missouri. If lawmakers are truly determined to bring more economic development to the state, then they should lower taxes for all businesses instead of offering handouts to billion-dollar industries.

The post Missouri’s Film Tax Credit Should Remain Gone appeared first on Show-Me Institute.

Last fall, when Gone Girl began production, Cape Girardeau descended into a starstruck madness. All talk focused around the movie and the stars; Facebook and Instagram became flooded with celebrity sightings. I don’t blame locals for their enthusiasm of hosting a movie star like Ben Affleck and being the center of a major film production, but I do think it is more than a little ridiculous that Missouri taxpayers will be stuck with a $2.36 million tax bill to pay for this fleeting moment in the presence of Hollywood stars.

Taking advantage of the Department of Economic Development’s (DED) Film Tax Credit program before it expired in November 2013, the producers of Gone Girl received $2.36 million in tax credits from the state to offset the cost of production and taxes on income and payroll. Tax credits are dollar-for-dollar reductions in a tax filer’s tax liability, meaning that every dollar of “credit” given by the state for projects like Gone Girl ultimately results in a dollar less in revenue to the state, which could pay for schools and other taxpayer needs.

Don’t be fooled by reports that these credits pay for themselves. The truth about film tax credits is that they bleed taxpayers to subsidize an industry that last year brought in $36 billion in revenue worldwide.

Take, for example, the $3,262 in DirectTV charges for the installation of satellite TV in the hotel rooms of Affleck, director David Fincher, and other highly paid Hollywood producers. Or try the subsidization of a movie star’s hotel room. Then there is the $70 massage Rosamund Pike received courtesy of taxpayer dollars. And, my personal favorite, $650 for an espresso maker for the cast and crew. Agreeing to these tax credits means taxpayers end up paying for outlandish expenditures that benefit Hollywood rather than Missourians.

Despite the ridiculous expenditures subsidized with taxpayer dollars, tax credits still don’t meet the basic tenets of their purpose. Take the promise of job creation for example. At the price of $2.36 million, each of the 116 Missourians hired for the production of Gone Girl should have a job that pays $20,344 for an entire year. Looking at the payroll of the production, none of these reported job positions were full-time or high-paying, and not a single Missourian is still employed in the same capacity. Furthermore, a closer look at their payroll reveals that many of the “jobs” created by the film went to out-of-state employees, businesses, and contractors—not Missourians.

Why doesn’t this tax credit work? Because Missouri does not have the proper infrastructure to support film production. Missouri has to compete with the 40 other states that have similar programs, but with much higher tax incentives. When faced with competition from states like New York and Louisiana who have hundreds of millions of dollars in film tax credits, Missouri can’t afford to compete in this race to the bottom.

Having lived in Southeast Missouri for the majority of my life, I can understand the thrill that the production of Gone Girl brought to the area. But the ugly truth is that these film tax credits don’t provide the jobs and economic growth that Cape Girardeau and Missouri need. Let’s leave Hollywood in California so that Missourians don’t have to finance celebrities’ espressos or massages and focus on attracting businesses and investors to Missouri that won’t leave taxpayers to foot the bill.

Jessica Stearns is an intern at the Show-Me Institute.

The post A Look Past Gone Girl Excitement Reveals a Raw Deal for Missourians appeared first on Show-Me Institute.

These figures, however, fail to acknowledge that the jobs are temporary and part-time. Even more troubling, most of the higher-paying jobs used in the production of Gone Girl went to nonresidents who were brought in from LA. Now that the production of the film has finished, these so-called “created” jobs are gone.

Despite the reality of failed promises of job creation, many legislators and supporters are calling for the reinstatement of the film tax credit (which expired in November 2013) to entice movie producers to film in Missouri. The tax credit, which reduces the production companies’ tax liability, is intended to generate substantial economic activity and jobs as a result of the productions.

There is little evidence to support the notion that these tax credits are successful. A 2010 study by the Tax Foundation, however, shows that film tax credits don’t create long-term jobs, nor do they create sustainable economic growth for the state.

Most film production jobs are filled by out-of-state residents specializing in particular areas of audio or visual production. Additionally, producing a film is a relatively short-term venture in comparison to other investment projects. Since most of these positions are not permanent, “workers are left unemployed” after the production ends unless a steady stream of films is present.

The ugly truth of film tax credits is that they bring an industry into a state that doesn’t have the proper infrastructure to support said industry, and thus they do not produce long-term, well-paying jobs. Missourians deserve more than a brief moment on the silver screen. Instead, Missouri policymakers need to invest in ventures that will bring long-term economic growth to the state.

The post Gone Girl, Gone Jobs appeared first on Show-Me Institute.

This past week, when the St. Louis Metropolitan Taxicab Commission (MTC) unanimously approved Uber’s application to function as a third-party dispatcher for existing premium sedans, I was initially excited, figuring that cab services would be cheaper and easier to use. My excitement, however, was misguided, as the commission’s recent decision still puts the brakes on any meaningful competition that Uber and Lyft would provide.

The MTC, “in its continuing endeavor to provide safe, high quality taxi service to St. Louis,” has retained and added regulations that will prevent Uber or any other ridesharing company from offering anything but an expensive, premium service. Some examples of these regulations include:

• The price of a premium sedan must be greater than $33,000.
• The price of a premium SUV must be greater than $42,000.
• The vehicle cannot be more than six model years old while in service.
• For-hire services must have a non-residential business address.

It gets worse. Aside from controlling the downstream pricing of ridesharing services, the MTC still plans to tightly control the supply of premium sedans available to Uber through the issuance of permits. Initially, the MTC will only issue 26 permits for premium services, and only five will be rewarded to new, single-vehicle operators. The rest will go to existing sedan companies that can afford three or more sedans. These smoke and mirror tricks, designed to make it appear that the MTC is becoming friendlier to other services and companies, are in reality reinforcing the restrictions on the entry and pricing of the taxi market.

These arbitrary restrictions become even more evident when trying to order an Uber. When I attempted to order a car through the Uber app, the message appears that “no Black cars are available.” So even after the changes, trying to use Uber is just as difficult as when they were barred from entering the market. Clearly, the MTC’s decision is not doing anything to fulfill their duty of providing enough supply to meet the demand.

The post Brakes Still On for Uber and Lyft appeared first on Show-Me Institute.