Reform, Not Spending, Should Top Agenda

As first appearing in the St. Louis Business Journal on January 24, 2014:

A year ago at this time, Missouri Gov. Jay Nixon railed against the state’s out-of-control, multi-billion dollar tax credit system, using 150 words and six paragraphs to stress his concerns. In this year’s “State of the State address,” delivered on Tuesday night, he devoted all of 18 words – one sentence – to the issue.

That is one unfortunate change. It is not the only one.

It seems the governor has had a change of heart regarding tax policy. After vetoing last year’s tax cuts for all businesses and individuals, Gov. Nixon led the charge to promise nearly $2 billion of new tax incentives to just one company, Boeing. That bid failed.

But if, as we often are told, Missouri is a “low-tax state,” why would we have to make Boeing’s taxes even lower? And why should the state support corporate handouts to one company, but actively deny them to the family businesses in our communities?

Second, the governor is promoting a costly expansion of Medicaid rather than what is really needed – which is substantial reform of the program. Not only is the current Medicaid program wasteful, but the access and quality of care available to Medicaid enrollees is deplorable. To make matters worse, a recent study found that expanding Medicaid may actually increase, not decrease, costly emergency room use, driving our health care costs even higher.

We should be reforming this multi-billion dollar program, not making it bigger.

Many of the other policy prescriptions of the State of the State address are beset by the same philosophical infirmities of the tax and health care plans.

For example, it is not how much money we spend on education that really matters; it is whether we are spending that money effectively and efficiently. Education funding has soared upward over the last few decades, and yet in terms of student achievement, our children remain stuck in the middle. Our kids deserve to have the best education, and one of the best ways to do that is through school choice and competition.

The governor’s address made no mention of such reforms – his focus was on simply spending more.

That is wrongheaded. Wide-ranging reform, not wide-ranging new spending, should lead the state’s agenda in 2014. I hope that is what we will see instead.

Patrick Ishmael is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.