Electric companies in the Midwest say new large scale power lines are needed to get more energy onto the grid to serve big power consumers such as artificial intelligence data centers. Now, the utilities argue reducing competition is the fastest way to [build transmission infrastructure].

Specifically, utilities want to reduce competition by halting competitive bidding for multi-state transmission projects, as the bidding process can take 16 to 20 months. If approved, the utilities would be the default developers of those projects, with no competition involved. In Missouri, both Ameren and Evergy, our state’s largest utilities, operate in multiple states and would gain that right of first refusal.

For starters, it’s worth acknowledging that 16 to 20 months is a long time to select a developer, and these companies are right that we quickly need more energy to serve big new customers.

This situation illustrates why Missouri is between a rock and a hard place in its efforts to modernize our electricity grid. Do we really need to choose between (1) remaining content with the slow, bureaucratic speed at which the energy sector operates, which is unsuited for this time of rapid and unpredictable growth or (2) giving up on a competitive bidding process and simply awarding the project to the biggest utility in the region?

There has to be a better way—and fortunately, there is. Missouri instead could allow private electricity grids (also known as consumer regulated electricity, or CRE) for large customers like data centers.

With CRE, a company like Amazon could partner with a supplier that would build and possibly operate a power plant and transmission/distribution exclusively for its customer(s). Since these grids would only be serving islanded, sophisticated clients, they would not need to be regulated like a utility serving the general public—meaning less red tape and fewer delays in getting power plants up and running.

Authorizing CRE would not mean replacing the existing regulated grid. Rather, it would create parallel pathway to serve the growing number of big power customers. Allowing private companies to work directly with electricity providers also would incentivize both parties to find innovative ways to bring power to data centers and other industries. Missouri doesn’t have to sacrifice competition for speed; rather, it can create more pathways for competition simply by letting the power suppliers and the power providers negotiate the price and schedule themselves.

The post Utilities Want More Control to Meet Growing Energy Demand appeared first on Show-Me Institute.

Residents are asking why.

The answer, at least in part, is Missouri’s Sunshine Law. Smith and Goldman’s reporting found that Belle, another small Missouri town, has seen the once-free cost of producing public records rise sharply since it began contracting with Lauber. Alderwoman Rebecca Withouse has been pushing the town toward more openness on her own, trying to make records easier for residents to get without paying attorney fees. Nathan Nickolaus, an attorney at the firm, told the Missourian that an increasing volume of open records requests is part of what’s driving the cost, and that many small towns simply lack the staff to fulfill the requests without outsourcing the work. (The dramatic increase in the number of records requests in Sedalia has been driven in part by citizen opposition to real abuses of power over the last few years. More details are provided here and here.)

This is a real tension, and Missourians who care about open government should not wave it away. The Sunshine Law exists because taxpayers have a right to see what their government is doing, and that right shouldn’t depend on the size of the city. But when a town of 20,000 people is paying half a million dollars a year in legal fees, much of it tied to records requests, something in the system is broken. The law is functioning as intended—it’s the capacity to comply with it that’s failing.

Part of the problem is structural. Missouri’s smallest cities and towns often have no in-house attorney, no records clerk, and no dedicated compliance staff. When a Sunshine Law request arrives, towns often hire whatever legal help they can afford. Firms like Lauber have built a business model around exactly this gap. The arrangement isn’t necessarily predatory—someone has to do the work—but it does mean the cost of transparency in a small Missouri town scales with legal billing rates rather than with the actual complexity of the records involved.

The Show-Me Institute has documented this problem before, and the numbers get worse than Sedalia’s. In 2018, Institute researchers sent Sunshine Law requests to cities across the state asking for basic spending records. Battlefield billed $35,000 and Hollister billed $25,000 for records that Springfield, a far larger city, and Strafford, a far smaller one, handed over for free. The ability to produce a checkbook register has nothing to do with city size. It has to do with whether a city’s leadership wants residents to see how their money is spent. Missouri courts have recognized how far this can go—Rudi Keller wrote for the Columbia Daily Tribune in 2019 that a Boone County judge ruled that the University of Missouri’s demand for more than $82,000 to fulfill a records request amounted to a de facto denial, not a fee.

Small, struggling towns deserve some benefit of the doubt. Maybe they are simply receiving more requests as residents want more visibility into local government. A town that has historically operated with little scrutiny may find that its first real exposure to the Sunshine Law is uncomfortable. But there’s a difference between a town facing legitimate scrutiny and a town being structurally unable to respond without hiring outside counsel for routine requests.

If the goal is government transparency rather than legal billables, Missouri lawmakers and municipal associations have better tools available. The Missouri Municipal League could develop shared records-request templates and training so small towns aren’t paying attorney rates to answer routine questions. The legislature could examine whether some categories of Sunshine Law compliance could be standardized in ways that reduce the volume of one-off requests requiring individual legal review. And towns themselves should be asking whether a records clerk, even a part-time one, would cost less over a year than the current pattern of per-request legal bills.

Missourians should take seriously the problem that small towns are struggling to comply with the burdens of being open. The current model of outsourcing routine compliance to law firms billing by the hour is an expensive way to deliver necessary transparency. Sedalia’s residents are right to ask where the money is going, as are the taxpayers of a town paying outside counsel to handle a request that should take a few hours.

Missouri’s small towns didn’t create the Sunshine Law’s compliance burden, and taxpayers shouldn’t need to fund a cottage legal industry just to see what their government is doing.

The post Small Missouri Towns Are Paying a High Price for Open Government appeared first on Show-Me Institute.

1. The “Seven Sisters” colleges merging their women’s studies programs, or
2. Seven cities in St. Louis County merging their fire departments?

You could understandably guess A, but since I am writing about it you probably know it is B.

Olivette, Clayton, Richmond Heights, Maplewood, Webster Groves, Shrewsbury, and University City have launched a study to consider whether merging their individual fire departments would be a beneficial move. (As an aside, it is worth noting that University City has four streets named after a “Seven Sisters” school.)

The economic and political science literature on local government mergers is cautious. In one major literature review of studies of municipal mergers from dozens of counties, the author came to a few primary conclusions. First, cost savings from mergers do happen, but they are usually much smaller than predicted. Second, public services may be improved through having greater municipal resources, but this often results in a larger bureaucracy that limits potential cost savings. (The third main conclusion doesn’t apply in this instance.)

One of the main reasons cost savings are smaller than predicted is because governments rarely have the willingness to fire employees in mergers, so redundancies are maintained at first. Cost savings tend to come from attrition as redundant positions are not filled over time. That is indeed what happened when several fire districts merged in Oregon in the 1990s, where all reductions in employment came through attrition. But over time, there were some cost savings.

Another reason why local government mergers don’t save as much as promised is that everybody is moved up. If City A pays trash collectors more than City B, and City B pays their clerks more than City A, both sets of employees get moved up to the higher salary spot. That could certainly happen here. For these seven cities, the lowest median fireman salary is in Shrewsbury, at $83,668. The highest median salary is in Maplewood, at $117,873. Do you think the combined department will have a median salary closer to Shrewsbury or closer to Maplewood after negotiations with the union? According to the story in the Post-Dispatch, the union certainly likes its odds here:

There’s another reason the union supports a regional fire department — bargaining power.

Instead of negotiating seven separate contracts, which has sometimes led to conflicts between firefighters unions and city administrators, the union would negotiate just one contract with the fire authority. And it would have a chance to standardize pay and benefits.

The main reason I am supportive of this effort to study the merging of fire departments is because of what it is not. It is not an attempt to merge the fire services into a new, independent fire district. That has also been proposed, and it would be a terrible idea. The various firefighters’ unions prefer fire districts because they are easier for the fire union to control, although unions are certainly influential in cities with fire departments, too. Fire districts elect their board members in April elections that get very little attention, and their board members are only concerned with managing the fire district. Union support for these obscure votes is vital. With municipal fire departments, the local races, particularly the races for mayor, get more public attention. More importantly, the revenues and costs of operating the fire department must be shared as part of the revenues and costs of operating the entire city. Elected officials in a municipality have to operate the fire department within the overall revenues and budgets of the larger city. If these cities merged into a shared fire department, the cities would still be funding the departments. That’s a good thing.

Overall, I think there is reason to be optimistic about these proposed changes. If I have to pick between a regional fire department or a new fire district, I’m going with the department.

The post Seven Sister Cities in St. Louis County Considering Merging Fire Departments for Mutual Support appeared first on Show-Me Institute.

Susan Pendergrass speaks with Emily Ekins, vice president for policy and society and director of polling at the Cato Institute, about new survey data on Americans’ declining civic knowledge and growing openness to socialism. They discuss why younger Americans are less averse to socialism and communism than older generations, what Cato’s polling reveals about basic civic knowledge gaps, why the founders prioritized protecting rights and freedoms above solving economic problems, the psychological concept of locus of control and its link to support for socialism, and more.

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Episode Transcript

Susan Pendergrass (00:00):
Thanks so much for joining us on the podcast. Emily Ekins, you are at the Cato Institute, vice president of politics and society and also director of polling, right, Cato? Thanks for

Emily Ekins (00:10):
That’s correct, yes.

Susan Pendergrass (00:11):
joining us. You guys do lots of great polling and survey that you did recently this summer that kind of coincided with the two hundred and fiftieth birthday of the United States particularly caught our eye, and I appreciate you coming on to talk about it.

Emily Ekins (00:25):
Thank you for having me. Glad to talk about it.

Susan Pendergrass (00:28):
Yeah, I mean, honestly, there’s a lot in the news these days, multiple surveys coming up with results that I guess some people are shocked by, but clearly within this week we’ve had new election results, and something about the idea of socialism is really resonating with folks in the United States right now. Why do you suppose that is?

Emily Ekins (00:52):
Well, that’s a really tough question. I think

Susan Pendergrass (00:53):
That’s a big question. But first of all, you could tell us what your poll found on it, but your poll supports what many of them support, which is that views on socialism are more positive than they’ve been in the past, and views on capitalism are more negative. And I just wonder, since you’re out talking to people, why do you suppose?

Emily Ekins (01:12):
Yeah, so first let’s separate out young people from older people.

Susan Pendergrass (01:17):
Okay.

Emily Ekins (01:17):
especially Americans who grew up and came of political age during the Cold War, they know what socialism is and they know how many tens of millions of people it murdered over the past hundred years or so. And so there’s really a strong aversion to the word socialism, to the word communism, among people of that older generation. But there really is a drop-off. And it’s hard not to think that the Cold War ending had something to do with it, where these younger generations had less reason, perhaps, or teachers didn’t talk about why not socialism, why not communism, it just doesn’t work. And so right now, a lot of young people are worried about affordability, and particularly housing. I have to say, looking through the data, it seems like housing may be kind of a linchpin here, that people who are really struggling to afford their rent or their mortgage, or paying a large percentage of their income on housing, they’re very susceptible to these arguments, because people come around and say, well, we’re going to lower your price, the cost of living. The problem is that these policies, centralized economic planning, just does not work. It has the same set of consequences. But I think economic anxiety is part of it. But there’s actually more to it, and I’d love to talk to you about that, because our survey was connected to America’s 250th and the Fourth of July. We launched it right before the Fourth of July, but we had a lot of questions on our nation’s founding. What led to the founding and the creation of our country? And I think what we found is that young people know next to nothing about things that matter. We asked, we had a series of civic questions, seven questions. They only answered one of seven correctly. The one they answered correctly was, who was the first president? And 70% knew it was George Washington. And I thought, well, good, at least they know that. But the problem is they don’t know the more important questions. Why did we declare independence from Great Britain? Why did we adopt the Constitution of the United States? What is the purpose of the Constitution of the United States? And without knowing the why, it’s really easy for other people, trying to curry favor and win votes, to come in, rewrite history, and basically tell young people that they offer an alternative program that will solve their problems. And without knowing the history of why we set up a system of limited government, when they hear these alternative proposals, they don’t understand where it could go wrong.

Susan Pendergrass (04:10):
Yeah, and just to clarify, some of the questions you asked were like, how many branches of the federal government are there? And half, almost half, of the respondents got it wrong, right? They did not know it was three. What country we fought in the Revolutionary War, a lot of folks didn’t get that right. I mean, some of these very basic questions, and that jumped out at me immediately, like when you ask somebody their opinion on socialism and they don’t know how many branches we have of our federal government, how could they possibly answer that question in an informed way? Right.

Emily Ekins (04:40):
Yes, no, I’d love to share something with you. We kind of got into the weeds on this one question. We asked a question where we said, what is the purpose of government? Is the purpose of government primarily, not to say there’s no other purpose, but what’s the primary purpose of government, is it to protect rights and freedoms, or is it to solve economic and social problems, or both equally? And about a third of all Americans, so this isn’t just looking at young people, this is all Americans, only a third of Americans said to protect rights and freedoms. Most everyone else said it was either both equally or to solve economic and social problems. And so here’s the fun part. We took this question and we loaded it into four of the leading AI models, so Grok, ChatGPT, Claude, Google Gemini. We said, feed in all of the writings, speeches, drafts, letters, published and unpublished works of the American founders. How would they have answered this question? And all four models came back with the same answer. They said, this isn’t even contestable, this isn’t even hard, it was very clearly number one, which was to protect rights and freedoms. So why? Well, so that’s why I’m saying the why really matters. Teaching young people, teaching Americans the why. Why did the founders think it was protecting rights and freedoms? Aren’t there complex economic and social problems we want to tackle? Well, here’s why. The argument they made was, they weren’t anarchists, they wanted the government to do some things, but they recognized that when government was not constrained in its power, and was not governed by consent of the governed, right, that problems happened, that government exploited people, government oppressed people. And so there was a hierarchy of goals here, and the main goal was government needs to protect rights and freedoms first. And then everything else has to be subordinate to that. And as long as your program or your idea does not require the government to fail in its duty to that first goal, which is to protect rights and freedoms, then you can have a discussion. And apparently, this was just the thing the founders agreed on. Now, you had Alexander Hamilton and Thomas Jefferson, different sides, different opinions about the role of government, but I thought that is the argument, that’s the discussion I think is missing from our current framework, which is why. Why is unlimited government dangerous? Why do we want to limit it? Isn’t it obstructive? Isn’t it preventing us from solving problems that we need to solve? Well, here’s why. And then if you want to have government do X, Y, or Z, make sure we don’t undermine liberty in the process of doing it.

Susan Pendergrass (07:41):
Yeah, I think that’s right, but then you also see, okay, so absolutely, when you talk to folks who are gravitating towards this new idea of socialism and democratic socialism, it’s like, well, I think

healthcare should be free for everybody, I think housing needs to be affordable, I think childcare needs to be affordable, without kind of taking that next step, which is to say the government’s going to pay for everything. And then the government’s going to decide. I’ve talked to people who like this idea, and they’re like, I’m

Emily Ekins (08:07):
Mm-hmm.

Susan Pendergrass (08:08):
willing to give some of my paycheck to help do this. And I’m like, but there’s central planning involved. They will decide how much of your paycheck and they will decide where it goes to. And that is, they, whoever’s in office. Like if you don’t like the people in office today, they, we are the central planners. That’s how it works, and generally they haven’t done a good job at it. But on the other hand, they’re like, I just want people to have healthcare and I just want people to have housing, what’s wrong with that? Without realizing, I think, to your point, this idea of the social contract, where the government only governs by the consent of the people, I just think that violates that in a way that says, we’ll give all the power to the government and we’ll let them decide how that gets redistributed. Not to mention the fact it’s never worked. It’s been tried multiple times and has never worked, but it sounds so attractive right now. And

Emily Ekins (08:57):
Right.

Susan Pendergrass (08:58):
I also think part of that attractiveness that comes out in your survey is people recognize that currently there is a feeling that capitalism is turning into crony capitalism, and there’s a lot of fears around fraud and things at the federal level, that I think is not only making socialism more attractive but is kind of giving capitalism a bad name. What do you think?

Emily Ekins (09:28):
Yes. Okay, there’s so much I agree with what you were saying there, and there’s a lot to unpack. I think that there’s two things going on when we’re talking about, like you said, people just want affordable healthcare, they want people to be able to afford their housing, childcare if they need that, and so forth. So there’s two issues. One is abuse of power, and then what actually works. So one is, make sure that you don’t give government too much power, because it always leads in the same direction. Can someone show me an example where unchecked government power ever didn’t result in the oppression of the people? I would

Susan Pendergrass (10:07):
Yeah.

Emily Ekins (10:08):
love for a democratic socialist to point that out, because there isn’t one. That’s something we’ve learned through the test of time. The second thing is just more pragmatic, centralized economic planning, where the government says, we’ll take more of your taxes and then we’re going to plan out your healthcare, your childcare, we’re going to, when it comes to housing and things like that. Whenever you centralize economic decision making, we have some data on that, and it has never worked, because of something called the knowledge problem. Nobel Prize-winning economist F.A. Hayek wrote extensively about this. Those government experts, you could take the whole faculty from Harvard and MIT and Yale, and have them sit on a board and try to figure this out, they would not do as good of a job as millions of Americans making individual decisions when they’re free and able to do so. Now, people would say, well, then why isn’t the free market working in healthcare, why isn’t the free market working in housing? And the argument is this: that’s not the free market. That’s actually

Susan Pendergrass (11:16):
Right.

Emily Ekins (11:17):
government, excessive government management of those areas. Like with housing, there’s a lot that goes into it, and I’m not going to go, we don’t need to go into all of it, but there’s just some simple things, right? When you think about supply and demand, if you have more people in demand of housing than you have supply of it, the first thing you should look at is, are we limiting the supply of housing in some way? And if the answer is yes, start there before we have the government seizing property from landlords, for heaven’s sakes. So there’s some first steps that people should look to. But again, without civic knowledge, without economic knowledge, how could we expect people to do that?

Susan Pendergrass (11:57):
I mean, that’s the basic point, right? We talked a little bit before we started, like Missouri, our kids aren’t even learning to read. So I understand that we need to do a better job of teaching civics and history and geography, and certainly at the federal level, there’s NAEP tests on those things and the results are terrible. And the results of your survey are dismal when it comes to why younger people, what their civic knowledge even is about how the government works and why it was founded. But I don’t see how we can begin to tackle that, or what is capitalism, what is socialism, and who are Lenin and Stalin and Friedrich Hayek, how do we tackle that if they can’t even learn to read? I feel like we’re

Emily Ekins (12:36):
Yeah.

Susan Pendergrass (12:37):
we’re slouching towards Gomorrah, it’s like, I feel like we need to start at these basic levels and then try to take on civics and history, but I could see you thinking we need to do them simultaneously. What do you think?

Emily Ekins (12:52):
Well, yes, to your point about wanting to raise the reading level of kids in Missouri, my very first thought was let’s think about Mississippi versus California, and the dramatic differences in reading competency between the kids in both states. One state implemented better processes, phonics, right? Phonograms, phonics.

Susan Pendergrass (13:17):
Yes. Yes.

Emily Ekins (13:19):
I was raised in California, they were like, we’re not going to do something new, we’re going to teach it this new way, like sight words, and learn by absorption. Anyway, some things work better than others. And when economic decisions like education are made in a centralized fashion, and the centralized planners get it wrong, then all the students suffer. So what can we do about that? Well, more school choice, that’s one approach that we could look at, and then also doing a better job at figuring out what works, what doesn’t work, and actually implementing it. Public education is not a jobs program for adults, right? It’s for children.

Susan Pendergrass (14:03):
Yeah, I’ve heard it argued both ways, honestly, in Missouri, but that’s it.

Emily Ekins (14:06):
Well, we care about both. We want teachers and students to be taken care of well.

Susan Pendergrass (14:11):
Yes.

Emily Ekins (14:11):
But again, if we have experimentation, competition, where people are actually innovating, apply what works. But if we just have it centrally determined by one small group of people and they get the answer wrong, lots of kids suffer.

Susan Pendergrass (14:30):
So where do you see this heading? You know, Zohran Mamdani is opening up government grocery stores in New York, and as somebody who grew up in the sixties and seventies, I can only think of what happened in the Soviet Union when they had government grocery stores, and there were lines and they were terrible. The fact that that isn’t an attractive idea to anyone kind of blows my mind. So where do you see this going? Are they going to have to, is it going to have to play out? Rent controls and government grocery stores and free childcare, are they going to have to play that out and see that it doesn’t work? Or what do you think is going to happen ten, twenty years from now?

Emily Ekins (15:09):
Yeah, it’s hard to say. Maybe they’re going to just do a live demonstration for us so we can repeat and learn exactly what we learned every other time government

Susan Pendergrass (15:17):
Yeah.

Emily Ekins (15:18):
tried to do these things. I mean, it’s just like a huge eye roll. Like, what are they doing? We

Susan Pendergrass (15:23):
Right.

Emily Ekins (15:23):
have some data. I mean, I think that a lot of these leaders would purport to support the idea of scientific research, academic research. Well, consult that. What does that say will happen with government-run grocery stores? It’s not going to go well. But

Susan Pendergrass (15:41):
Right.

Emily Ekins (15:42):
I understand, again, his goal, people could say, is noble. But

Susan Pendergrass (15:46):
Right.

Emily Ekins (15:47):
markets actually deliver that better than government, and empirically there is evidence to support that.

Susan Pendergrass (15:55):
I mean, New York’s had rent control for a long time. I just am kind of surprised, if it’s not maybe the person and the personality, I just don’t understand. And again, I go back to thinking to myself, right now we have a group of folks with a lot of money. We have our own president making a lot of money in office, and he’s hanging out with people with a lot of money, Elon Musk, Jeff Bezos, and maybe if people are associating that with capitalism, maybe what they’re saying is they want to reject that.

Emily Ekins (16:27):
Yes, I think that that’s exactly right. There’s something called policy moods, where when you have a Democrat in office, the voters tend to say they want smaller government. When you have a Republican in office, the voters start to say they want bigger government. This is a well documented phenomenon, that kind of whoever’s in office, voters will tend to go the other direction. And I too have wondered that very thing, if having a billionaire for president and having him be friends with lots of billionaires, anyone that’s like, well, I’m against them, then whatever they stand for. So if they were religious, then they’d probably be like not as religious, depending on how they’ve really been framed. And I think Trump has been framed as this billionaire capitalist. And so I think that that is definitely playing a role here. I also think that there are some

deeper trends happening in the American electorate, and we probably don’t have time to go into that in too much depth. But

Susan Pendergrass (17:24):
Let’s try. Yeah.

Emily Ekins (17:25):
what I would say is I think some of the problems are psychological, in kind of almost a spiritual psychological sense, not religious, I’m talking about something else. I’m talking about this concept of the locus of control. In psychology, there’s this idea that people can differ to what extent they explain events in their lives as being within their control, or outside their control. And people who think of things inside their control, they’re more likely to be happier and earn more money, have better relationships, better friendships, be healthier, less likely to get in fights, because they think that they have some say in what’s happening in their lives. They think their choices matter. Now, for the external locus of control group, psychologists have really worried about this, because all the good things I just mentioned just reversed, flipped, worse grades, worse health outcomes, poorer relationships, more likely to get in fights when they’re in high school, because, you know, if people think, well, it’s not my fault, they’re just a victim of circumstance, then it’s harder for them to feel like their choices matter. Well, anyway, at a more societal level, what we are observing is that each generation of young people, when asked survey questions to measure their locus of control, they’re becoming more and more external in their locus of control. What that means is, young people, each generation of young people, we’ve been studying this since the 1970s, this is Jean Twenge’s work, each generation of young people is more likely than those before them to say external forces are shaping their lives. They’re less likely to believe that their own agency is what matters in their lives. Now, the reasons for that are complicated, multivariate, and

Susan Pendergrass (19:22):
Sure.

Emily Ekins (19:23):
complicated. But what the consequence of that is, is that we do know this, people that have an external locus of control, they externalize the events in their lives, they are far more drawn to socialism. That’s just the way it is. They’re drawn to socialism, a zero-sum view of the world, it’s like us versus them. And some really bad things can happen when people go down that route. There’s a lot more tolerance of political violence, and we’re seeing that play out. And so the question is, well, why is that happening? I don’t have all the answers to why, but I do think we should recognize that it is happening, and it’s not just economic, it’s not just political, it’s at the level of psychology.

Susan Pendergrass (20:05):
Yeah, and were we to enact the agenda of some of these democratic socialists, then we would simply be, I think I heard somebody say, fitting people for cement shoes. We would simply be putting them more into the externalist camp, right? Where it’d be like, I depend on the government for food, housing, healthcare, and childcare, I have no control over my life. And if they decide to raise how much or lower how much, or put in a work requirement, I have no control over how well my family’s doing or my own well-being, because it all depends on these decisions by the government, doesn’t that exacerbate this idea of externalism?

Emily Ekins (20:48):
Well, that’s actually the irony here. So evolutionary biologists have actually gone through and documented what happens here, is that kind of this external locus of control will lead people to support policies that actually make the world more external, meaning

Susan Pendergrass (21:04):
Oof.

Emily Ekins (21:04):
that they have less control over the situation. So, in the case of the 2008 financial crisis, in which they were really examining this, the crisis will make people feel like they lack agency, because understandably a recession is not the fault of any one person. So then those voters go out and vote for politicians who promise to do X, Y, and Z policies that actually will, ironically, make another recession more likely, will actually slow the economy, make things worse. And so it’s interesting from an evolutionary biology perspective, how that can happen, those negative feedback

Susan Pendergrass (21:40):
It’s a self-fulfilling prophecy. Well, what’s the policy implication of that? Or what do we do to try to stem that tide? I mean, I’ve heard folks say, number one, we improve high school education in regard to civics, history, and economics. Maybe, I don’t know. That feels like a very

long term goal that’s unlikely to have any real impact, but what do you do from a policy point of view?

Emily Ekins (22:05):
Right, no, that gets tricky. I feel like a book could be written on this topic.

Susan Pendergrass (22:09):
Yes. Mm-hmm.

Emily Ekins (22:11):
But I do think, like, the way I’ve thought about it mostly is from a perspective of kids, and how do you raise each rising generation to have a more internal locus of control rather than external. Right now we’re doing the opposite. And, you know, just anyone that’s a parent of young kids, I think you can probably, or if you’re a parent of children at all, you’ve probably seen this in action, where kind of the zeitgeist in our public schools, the zeitgeist, and especially social media, is not helping, where like you can see at micro levels how we all the time are telling young people it’s not their fault, it’s forces beyond their control. I do think that in colleges and universities, as well as K through 12, critical race theory and ideologies that are similar to that really emphasize the external. That’s not to say that external forces like racism or sexism don’t exist or don’t matter, that’s not what we’re talking about. But if you tell kids the reason for the challenges you face are due to insurmountable challenges that you cannot overcome without electing this politician, that’s teaching young people an external locus of control. So at the college level, it’s rampant, and I don’t observe any efforts on the part of administrators or faculty to recognize the psychological harm that they are doing to their students by propagating ideas that really turn the attention of their students to focus and emphasize on external forces.

Susan Pendergrass (23:43):
Yeah, there’s certainly folks like Ian Rowe out there who are fighting hard against it, to say don’t

Emily Ekins (23:48):
Yes.

Susan Pendergrass (23:48):
you dare talk to our kids that way, but I think you’re exactly right, we don’t even talk about AI. But I can see us heading for a big correction, and if that’s what it takes, that’s what it takes. But it’s hard for me to foresee a future where the idea of the government taking care of things for everybody loses popularity. I just don’t see

Emily Ekins (24:18):
Right.

Susan Pendergrass (24:19):
where we’re going with it. Like, I just don’t know.

Emily Ekins (24:23):
And here’s why it works. This is what I would also remind people is that when the government runs businesses or runs industries, we observe the same sorts of consequences. It’s all a matter of degree, longer wait times, lower

Susan Pendergrass (24:35):
Yeah. Yeah.

Emily Ekins (24:37):
quality services, limited access to kind of the best of the quality. So, like in healthcare, for instance, the more government gets involved, and this is, there’s academic papers that demonstrate this, it’s quite clear, you have less access to the star doctors, to the star hospitals, to the highest ranked, in terms of quality. And think about it, if you have a cold or the flu and you need something minor, for instance, a government-run healthcare system, I think, probably seems great in that situation.

Susan Pendergrass (25:11):
Yeah.

Emily Ekins (25:12):
But what if you have a life-threatening illness? You don’t want long wait times. You want the best quality. You want to have access to the best doctors and providers, clinicians. Unfortunately, the more government gets involved in running things, longer wait times, lower quality, less access to the best. And it is like that everywhere it’s been tried. And I think we should do more to push back, to say no, they will fail to deliver what they’ve promised, and here’s why.

Susan Pendergrass (25:45):
Yeah, I know somebody who moved to Canada for the healthcare system and currently has a torn ACL. Surgery is

Emily Ekins (25:52):
Oh no.

Susan Pendergrass (25:53):
scheduled for like twelve months from now. And that’s like a year wait to fix a torn

Emily Ekins (25:56):
Oh my god. Yes. Wait time. Wait time.

Susan Pendergrass (26:00):
I assume it will heal itself, but I mean, I don’t think that reality sinks in. Certainly there’s a lot of work to be done, and there’s a lot of people with a lot of great ideas. You mentioned one I work on all the time, school choice, to improve outcomes in education for everybody, and give all kids, regardless of income, more opportunities. That’s what you do. You make the schools perform for the families. But even that faces incredible headwinds. And there’s great ideas out there around healthcare and around housing. We had Bryan Caplan on talking about, just build more housing. San Francisco, it’s impossible to buy a house, build more, stop regulating and over-regulating where they can be built. We know that there are some things that could work, but instead I think it just must seem easier to just have the government print the money and pay for it. I just don’t know. That’s why I think we might have to see a correction of some sort, because when I see in your poll that of the eighteen to twenty-nine year olds, thirty-eight percent had a positive view of communism, that means that we have an incredible work ahead of us. I mean, communism,

Emily Ekins (27:15):
That’s right.

Susan Pendergrass (27:16):
like Stalin, and like, yes, what led to genocides, and they must, I don’t think that side of communism is out there. So

Emily Ekins (27:28):
No. And I think there’s an organization that has polled on this, and we should do some polling as well. But most young people just don’t, I think they

Susan Pendergrass (27:34):
Yeah. I don’t know.

Emily Ekins (27:36):
run out of time after World War II, and like everything after that, they just

Susan Pendergrass (27:40):
Yeah, yeah, yeah.

Emily Ekins (27:41):
too. I was a studious student, I paid attention, and we didn’t get to any of that. Like

Susan Pendergrass (27:47):
No, yeah.

Emily Ekins (27:47):
the Cold War, the Cultural Revolution, Mao’s Cultural Revolution, the Khmer Rouge, like all of these communist revolutions that killed probably upwards of a hundred million people. How did we run out of time to talk about that? Might there be some value in us

Susan Pendergrass (28:02):
Right.

Emily Ekins (28:02):
learning some lessons of the very recent past?

Susan Pendergrass (28:06):
Yeah, absolutely. Okay, well, what’s next for you guys in terms of what we can look for, for more interesting polls? I know you’re always doing

Emily Ekins (28:14):
Yes, actually, we are in the process right now of writing an exciting survey where we’re looking at economic populism and democratic socialism. And this is where I get really excited. We’re looking at the psychological correlates of those types of policies. What types of psychological traits and underlying beliefs and assumptions correlate with support for these types of economic policies? So we’ll have to wait to see what the data says, but I’d love to share it with you.

Susan Pendergrass (28:45):
That’s awesome. Thank you so much, Emily. I really appreciate it. I could talk to you forever, but let’s wait and come back and talk about that one. I do really appreciate it.

Emily Ekins (28:54):
Thank you for having me.

Produced by Show-Me Opportunity

The post The Rising Appeal of Socialism in America with Emily Ekins appeared first on Show-Me Institute.

Many states are considering whether to follow their path, including Missouri.

The retention component of these literacy policies is often controversial. Critics worry that it amounts to “punishing children.” But it is no kindness to promote a child through school who cannot read. Indeed, research shows that, at least in the early grades, retained students benefit tremendously in terms of on-grade academic performance when they are held back.

The debate also tends to focus narrowly on the students who are retained. However, new research in several states (including Michigan and Ohio) suggests that these policies produce broader benefits by affecting the much larger group of students who are ultimately promoted. This is because it turns out that students benefit from just the threat of retention, even if retention doesn’t actually occur.

Why? The answer is a bit uncomfortable: Weak reading skills alone do not seem to motivate schools and parents to make literacy a top priority. The possibility of retention, however, creates a clear incentive for everyone to intervene earlier and more intensively.

Writing on recent changes that weakened Ohio’s grade retention policy at the Fordham Institute’s Gadfly Daily, Vladimir Kogan provides a nice discussion of the value of the grade-retention threat. He writes: “Although much of the debate about retention laws has focused on impacts on students, the new evidence suggests that benefits come primarily from changing the behavior of two sets of adults—parents and educators.”

The evidence that early-grade retention can benefit retained students is already strong. This newly emerging evidence that these policies also improve outcomes for many students who are never retained only strengthens the case for reform.

Missouri lawmakers should consider such evidence as they consider literacy reform during the 2027 legislative session. During the 2026 session, they failed to pass literacy reform. Another year of inaction would mean that another cohort of children will pay the price for Missouri’s weak literacy policies.

The post The Value of the Threat of Grade Retention appeared first on Show-Me Institute.

As I stressed in my first piece on Flock, there may be no clear “right to privacy” on public roads, but that doesn’t mean average American citizens should be tracked as we simply move around doing our daily business. Police have abused and will likely continue to abuse these systems. One police officer was recently fired in Joplin for doing so.

The risk, however, goes beyond bad law enforcement actors misusing the system. Concerns about constant government surveillance are legitimate. Surveillance equipment such as this was used by police around the world to enforce authoritarian restrictions during COVID. We shouldn’t have to give up our personal liberty—and that liberty includes the right not to be tracked by the government without a warrant—under the guise of safety.

Thankfully, people are starting to push back against Flock and similar police surveillance equipment. I don’t believe our state or our country should become a vast surveillance society (assuming we are not already there), even if it makes us “safer” in some ways.

The pushback against Flock has come in many forms. There are websites devoted to exposing and opposing it. John Oliver’s HBO show just released an episode dedicated to the issue. There have also been numerous acts of vandalism against Flock equipment. (Note: I do not support vandalism.)

Several Missouri communities have recently ended their Flock camera contracts. The towns of Weston, Seneca, Louisiana, and Bolivar have cancelled, or are in the process of cancelling, their Flock contracts. The Dutchtown CID in St. Louis did the same. I hope that this is the start of a major policy shift against the cameras.

Much more to come from me on this topic. The solution to crime in Missouri does not have to be a vast surveillance system watching every person in the state.

The post Update on Flock Cameras in Missouri appeared first on Show-Me Institute.

There is a proposal for a $39 million tax-increment financing (TIF) district in the Midtown area of the City of St. Louis. The forces behind the TIF proposal include the area’s commercial and artistic associations. The backers are claiming that because the redirected taxes will go toward “public” items such as infrastructure improvements for sidewalks, crosswalks, and streets, that this is a responsible use of TIF. They could not be more wrong.

This TIF plan will work just like all the others do. If the appointed TIF commission approves it, up to $39 million in future increases in property, sales, and earnings taxes within the boundaries of the Midtown TIF district will be redirected away from City Hall. The funds will be given to the TIF district itself to privately allocate towards the projects that it chooses. The St. Louis school district, the city itself, and other taxing districts will still collect what they do now, plus a portion of increased taxes over the next 23 years. But most of the increased revenues will go toward projects chosen by the leadership of the TIF district.

Before you think that this sounds fair, please do a mental exercise with me. What if the residents of the wealthiest neighborhoods in St. Louis city, let’s say the area roughly surrounded by Lindell, Skinker, the Forest Park Parkway/Waterman, and Kingshighway, put together their own TIF district. Those residents could make the same argument. The city and the other taxing districts can keep what they get now, we just want the increased revenues for the next 23 years to come under our control, not the control of the various elected boards. We promise to spend it on better sidewalks, private security, public art along Lindell, and more. It’s only fair that we get to keep the increased revenue for our own community. Who are you to oppose this request?

I would hope that one would look at a request by the owners of the beautiful mansions along Lindell to keep their own taxes for their own, preferred purposes to be a ridiculous proposal. We pay taxes (at least we should) for public purposes and in a manner determined by elected officials who are responsible to voters. The request by the backers of the Midtown TIF proposal—including the Kranzberg Arts Foundation, Grand Center Inc., and the Locust Central Business District—is every bit as absurd as the theoretical example I gave for Lindell Boulevard.

This is not to defend, in any way, the other TIF arrangements used throughout the City of St. Louis and the rest of the region. They have been a failure from top to bottom. But at least the other TIF plans attempt to grow the overall economy through the tax incentives. This Midtown TIF proposal doesn’t even bother with that. The Midtown TIF district’s proponents just want to keep more of their own taxes for their own uses. I can’t blame them for wanting that; don’t we all wish to do so? But the idea that an unelected group would get to privately decide how its future taxes are going to be used makes a mockery of democracy itself.

Investments in the infrastructure serving the theatres and restaurants along Grand may well be necessary and beneficial investments. More police in North St. Louis may also be a good investment. A new fire house in South St. Louis may be a good investment. We elect people to make these decisions and answer to voters for the outcomes. Turning the entire process over to a private group is the exact opposite of everything we are supposed to be celebrating on this 250th anniversary of our nation.

The post Midtown St. Louis TIF Deal Is as Bad as It Gets appeared first on Show-Me Institute.

On July 30, 2026, while guest hosting Mundo in the Morning on KCMO Talk Radio, Patrick Tuohey spoke with Missouri Attorney General Catherine Hanaway about her office’s lawsuit against Kansas City over its race- and sex-conscious contracting preferences.

Listen to more from KCMO Talk Radio here.

The post Missouri AG Catherine Hanaway Discusses the State’s Lawsuit Against Kansas City appeared first on Show-Me Institute.

On July 30, 2026, while guest hosting Mundo in the Morning on KCMO Talk Radio, Patrick Tuohey, senior fellow at the Show-Me Institute, spoke with Susan Pendergrass, the Institute’s Director of Research, about declining school enrollment in Missouri. Pendergrass walks through the demographic data behind the decline, why it isn’t a pandemic-related blip, and what it means for school funding, staffing, and building use going forward.

Listen to more from KCMO Talk Radio here.

The post Declining School Enrollment with Susan Pendergrass appeared first on Show-Me Institute.

Listen to the full segment here. 

On July 30, 2026, while guest hosting Mundo in the Morning on KCMO Talk Radio, Patrick Tuohey spoke with Kansas City Mayor Quinton Lucas about the city’s race- and sex-conscious contracting program. The city’s own consultants recently told the council it lacks the factual basis to continue the program.

The post Does Kansas City Still Need Race- and Sex-Conscious Contracting Preferences? appeared first on Show-Me Institute.

#1: It should be difficult to fire teachers, and their pay should primarily depend on how long they have worked.

#2: It should be difficult to fire teachers, but better teachers should get paid more than worse teachers.

#3: Being a teacher should be like any other job, where better teachers get paid more and worse teachers can be easily fired or get paid less.

Sixty percent of participants agreed with position three—teachers should be paid like any other job. This is surprising because of the outcry usually associated with weakening teacher labor protections and awarding teachers merit pay.

However, paying teachers like other professionals is reasonable, and this type of pay structure could be beneficial to students, teachers, and principals alike.

How could Missouri move toward a pay structure that most voters prefer? An initial challenge is measuring teacher quality—if better teachers are to be paid more, we must be able to identify them. There have been plenty of teacher evaluation systems where the evaluations are unhelpful; nearly all teachers are rated as exceeding expectations, and there is not meaningful differentiation. But there are also exceptions. A notable example is right next door in Tennessee: The Tennessee Educator Accelerator Model (TEAM).

TEAM calculates a rating for each teacher on a 1–5 scale based on announced and unannounced in-class observations, academic growth data, and student performance data. A holistic system like TEAM would be a fair way to rate teachers, and principals could use the ratings to inform teacher pay in their schools.

Twelve years ago, a ballot initiative in Missouri on this topic was soundly defeated (the initiative did have other controversial items attached to it). But two years ago, the Missouri Legislature passed Senate Bill 727, which allows for pay differentiation for teachers in hard-to-staff subject areas, like special education or physics, and those teaching in hard-to-staff schools.

This was a big step in the right direction, as noted by the blue ribbon commission assembled to tackle Missouri’s perceived teacher shortage. One member of the commission stated:

The biggest surprise to us businesspeople serving on the Blue Ribbon Commission is the lack of flexibility you all [the board] have for meeting high-need positions, it’s unbelievably inappropriate in today’s highly competitive market.

Paying all teachers the same, regardless of subject or school, was a longstanding policy that Missouri policymakers were right to reconsider and change. We need to continue that momentum and consider merit pay next.

The post We Need to Reconsider How We Pay Teachers appeared first on Show-Me Institute.

Test data from the National Assessment of Educational Progress (NAEP) show that 42 percent of Missouri fourth graders can barely read. Some of these children are functionally illiterate; others can read written words but have little to no comprehension. Missouri’s fourth-grade reading scores rank 38th out of the 50 states on NAEP reading, far from our ranking of 14th in 2003.

There are several reasons for our decline, but a key problem is that teachers in Missouri still use scientifically unproven practices to teach reading.

Decades of research show clearly that phonics-based reading instruction is what works. In states that have emphasized phonics-based reading instruction, like Mississippi and Louisiana, fourth-grade reading scores have taken off.

Truly fluent readers perceive each and every letter of print. Ideally, skilled readers come to read every letter rapidly and fluently as they connect the letters’ sounds with their oral vocabulary. In contrast, an alternative practice known as the three-cueing system encourages students to rely more on memorization, on contextual clues, or on how the “whole word” looks.

We should teach students to practice reading using the foundations effective readers rely on. All teachers in Missouri should be teaching reading using phonics-based instructions, which is scientifically proven and field-tested.

However, many are not. There are various reasons for this (some claim it’s boring to teach, drives the “love of reading” out of students, etc.). But one system-level reason is that numerous teacher-preparation programs in Missouri have not bought into the science of reading.

The misalignment of our teacher-preparation programs is on display in a new 2026 report from the National Council on Teacher Quality (NCTQ). The report evaluates colleges and universities across the United States on how effectively their curriculum addresses the five core components of the science of reading: phonemic awareness, phonics, fluency, vocabulary, and comprehension. It also considers whether programs teach practices contrary to the science of reading, like the three-cueing method.

In the report, Missouri ranks 44th in its coverage of the core components of the science of reading, with an average score of just 2.3 out of 5.0 components. Half of states scored 4.0 or higher, while often-praised Mississippi scored 4.7.

Even more alarming, Missouri ranks second in the nation, behind only Maine, in teaching practices contrary to the science of reading. Teacher-preparation programs in Missouri taught, on average, almost four times more contrary practices than the national average.

Nearly half of the universities in Missouri evaluated by NCTQ received an F in teaching the science of reading, including Northwest Missouri State University, Truman State University, and Missouri Southern State University. By comparison, 73 percent of Mississippi’s programs received an A, and none earned an F.

Also concerning is that 52 percent of Missouri’s programs either refused to participate in the NCTQ survey, provided heavily redacted materials, or were otherwise unresponsive. These institutions are approved by the state to prepare future teachers; they should be transparent about how they train our teachers.

While there were some bright spots, most Missouri teacher-preparation programs remain poorly aligned with what works. The states with the largest reading gains—Mississippi, Louisiana, and Indiana—all rank among the best in alignment with the science of reading. Teacher-preparation reform is not a silver bullet, but it’s part of a comprehensive early literacy policy.

Until our teacher-preparation programs correct their practices, we’re going to continue to infuse our teaching workforce with new cohorts of teachers each year who are unprepared to follow the science of reading.

What can be done? The good news is that at least in principle, this is easy to fix.

In 2023, Indiana required teacher-preparation programs to align their curricula with the science of reading and prohibited them from teaching the three-cueing method, which NCTQ identifies as a contrary practice. If a program refuses to comply, it loses state accreditation. In a previous NCTQ report from 2023 based on data from before its reform, 33 percent of Indiana’s programs received an A+ or an A. In 2026, 96 percent received an A+ or A.

Missouri lawmakers must work together to prevent teacher-preparation programs in Missouri from licensing teachers if they teach methods of reading instruction that are known to be ineffective. This simple step would help address the growing reading crisis in our state.

The post Teacher Preparation in Missouri Is Getting a Failing Grade appeared first on Show-Me Institute.

Many communities are unsure how to respond to data-center proposals.

The upside is real. Data centers have multi-billion-dollar assessed valuations that can bring significant tax revenue, expand the tax base, and allow for lowering tax rates for everyone. Loudoun County, Virgina—part of “Data Center Alley” —is a clear example. There, data centers account for almost half of property tax revenues, enough to fund every county function outside the school system.

But there are costs, too. A single 100-megawatt data center can use 80,000 households’ worth of electricity and consume, on average, 2,600 households’ worth of water. Hyperscale facilities push that further, and can have power draws of 1,000 megawatts, which is comparable to the output of the Callaway Nuclear Energy Center, one of Missouri’s most powerful generators. That kind of load can seriously strain infrastructure.

Further complicating matters is the fact that technology can change quickly, especially when billions of dollars and national security interests are at stake. Computing power that once required hardware that filled warehouses can now fit in a pocket or be worn on a wrist. A decision that originally seemed reasonable when a proposal was first presented might not age well if the costs or benefits of a data center change as a result of technological advances.

Missouri has already taken some action to limit ratepayer costs resulting from new data centers by requiring large data centers to pay their share of costs for connecting to the grid, such as for transmission lines. But Ameren recently stated:

All Ameren customers, including residential customers, pay for expanding the grid through building new power plants through rate increases, and that may be needed to accommodate large-load customers.

This means that average ratepayers would likely pay for new power plants constructed to meet data center demand if Ameren or Evergy does indeed need new power plants. But this possibility is also in question based on how major technology companies implement their recently signed “Ratepayer Protection Pledge” with President Trump.

One promising state-level solution are private electricity grids, also called consumer regulated electricity (CRE). This could create a parallel path for energy generation, and help protect ratepayers from risk, accelerate capacity buildout and innovation for both data centers and power plants, and alleviate pressure on the government to meet every aspect of this complex challenge. New Hampshire became the first state to allow it, and the U.S. Congress is considering a federal CRE policy. Similar solutions can be implemented for water usage.

Locally, the most important thing communities can do is resist handing out large tax incentives. Beyond the digital services they support, the primary local benefit data centers provide is tax revenue. Unlike many other industries, data centers generally do not create large numbers of long-term jobs, generate substantial secondary development, or attract tourists.

If local governments heavily reduce tax collections through incentive packages, they ask residents to absorb many of the significant costs while receiving little benefit.

Besides, developers are scrambling to find suitable locations. We don’t need to bribe them to come here. At Missouri’s Nuclear Energy Summit at the University of Missouri, numerous development experts noted how electricity availability and speed-to-operation had moved to the very top of many industrial corporations’ priority lists. Communities with reliable electricity, water, and advantageous locations are already attractive. Reforms like CRE could make Missouri even more competitive while keeping risk on investors rather than ratepayers.

The better answer is patience. If communities resist handing out tax incentives, ensure additional revenues turn into broad tax cuts, and focus on removing barriers that could hinder timely development, then data centers could become a genuine opportunity rather than a threat.

The post How Missouri Communities Can Keep Data Centers from Raising Utility Bills appeared first on Show-Me Institute.

At first glance, the concern seems straightforward. Since the government is the single largest purchaser of health care in the country, hospitals operating on thin margins could understandably struggle if they were paid less by Medicare or Medicaid. The first question, though, is what exactly is being cut.

The OBBB does not reduce the payment rates hospitals receive for treating Medicare patients or Medicaid patients who remain eligible. Instead, it implements community engagement requirements for some able-bodied Medicaid enrollees beginning next year, while changes to the provider tax financing system (explained more here) would not begin until 2028 at the earliest.

So, what are hospitals worried about? A recent KY3 report in Springfield provides some context. A spokesman for the Missouri Hospital Association explained that Medicare and Medicaid reimburse hospitals for only about 80 percent of the cost of providing care, describing the gap between costs and payments as “pretty enormous.” Mercy’s Sherry Clouse Day added that if someone loses Medicaid coverage under the new community engagement requirements, they may still seek care without insurance, leaving the hospital to absorb the cost.

That certainly could happen. But it assumes not only that a significant number of people will lose Medicaid coverage because of the new requirements, but also that many of them will become uninsured rather than finding work and obtaining employer-sponsored insurance or coverage through the Affordable Care Act marketplace.

That raises another question, though: If hospitals are already losing money treating Medicaid patients, why would treating fewer of them threaten their financial stability? Missouri hospitals already receive billions of taxpayer dollars every year through supplemental Medicaid payments and provider tax financing precisely because lawmakers recognize that Medicaid reimbursement often falls below the rates paid by commercial payers.

For those who have followed Missouri’s Medicaid debates for a while, this type of argument should sound familiar. Hospitals made similar claims during the campaign to expand Medicaid, arguing that adding more people to the program was necessary to protect rural hospitals. Today, even a policy change that doesn’t obviously reduce what hospitals are paid is being treated as a threat.

None of this is to say that lower Medicaid enrollment couldn’t result in less government money flowing to hospitals. But ultimately, hospitals are the only ones with a complete picture of how public dollars and other revenues from commercial payers affect their bottom line. After years of hospitals opposing efforts to bring greater transparency to their prices and financing, it’s fair to question yet another claim that a Medicaid policy change would threaten vulnerable hospitals. Before lawmakers accept those warnings, they should make sure there’s sufficient evidence to support the claim.

The post A Curious Hospital Argument appeared first on Show-Me Institute.

There are several cities and counties seeking to have new taxes or bond issues approved by voters on August 4. These include several major bond issues in Kansas City, a countywide use tax in St. Louis County, and sales or property tax increases in cities throughout Missouri, including in Hazelwood, Lee’s Summit, Ash Grove, and many more.

I’ll begin with the one local issue that is being voted on statewide (for various reasons that I won’t get into): Should the Jackson County assessor be an elected position? This is a pretty easy answer. Yes, it should be elected. Jackson County reassessments have been a disaster for over a decade now, and taxpayers have every right to be angry. Jackson County voters held the county executive responsible for it by recalling him, but being able to hold the assessor directly accountable is even better. St. Louis County changed its assessor from appointed to elected almost twenty years ago, and in my very informed opinion, the assessment process has improved since then. (Here are a few pieces on the general question on which positions should be elected and which should be appointed.)

St. Louis County has a countywide use tax on the ballot (again). A use tax is simply a sales tax imposed on goods you purchase online or through a catalogue and have delivered to your home. Municipal use taxes in Missouri actually predate the internet, but unsurprisingly most cities didn’t enact them until online shopping took off over the past fifteen years or so.

My view is that use taxes are a good way to expand the tax base, level the playing field for businesses, and raise local revenues. However, the last point is key. They should not be used simply as a way for cities to get more revenue, whether they need it or not. Cutting other taxes after the use tax is imposed—especially if you have a particularly harmful tax—is a great way to achieve the above benefits without a tax windfall for the county or city.

St. Louis County is having budget difficulties now, so I would understand primarily using the use tax money to address those issues. However, it would be even better if county leadership would agree to cut—at least in part—other taxes. I would suggest reducing the St. Louis County commercial property tax surcharge as a great place to start.

Kansas City is seeking approval for some substantial water and sewer bond issuances—about $750 million worth of each. There is nothing wrong with cities issuing bonds for infrastructure uses. It happens all the time, and there is a huge market for municipal bonds. If Kansas City is going to own and operate its water and sewer systems, it should invest in the system to prevent it from decaying, which is what happened to the water system in St. Louis. If that takes revenue bonds or price hikes, then so be it. (Note that these bonds will not, at least for now, require a tax increase.) So while I have no argument against approving these bond issues, I would also be remiss if I missed this opportunity to repeat that Kansas City would be even better off if it privatized its entire water and sewer system.

Remember, August 4 is a party primary election day, but you can always ask for a non-partisan ballot if you wish to vote on local ballot issues like these without voting in a party primary. The more you know . . .

The post Local Issues on the Ballot in Missouri This August appeared first on Show-Me Institute.

On July 22, Missouri Attorney General Catherine Hanaway filed a lawsuit against Kansas City for violating anti-discrimination laws. A copy of the suit is available here.

For some background, I recommend you read my June 18 column for The Kansas City Star. In short, I detail a city council session in which the city’s own consultants report that after reviewing seven years of contracting data, they could find no evidence to support the need for the city’s race- and sex-conscious contracting preferences. In fact, the consultancy’s director of research told the council bluntly, “You just don’t have the factual predicate” required to continue such set-asides.

What that really means is that the city has no defense against a lawsuit.

Members of the council were not pleased with the report’s findings. They could have viewed this as a huge victory for Kansas City—having reached a point where such discriminatory programs were no longer necessary. Instead, council members chose to question the results and the methodology. Mayor Lucas even offered a novel legal theory: “The courts suck.”

We know that column, the only reporting I have been able to find about the consultants’ report, played a role in Hanaway’s suit because she tells us so. Not only does the lawsuit track with what I wrote, including Lucas’s petulance, but she explicitly cites the column in the suit’s footnotes.

Following up on my column, on June 26, I spoke with Lee’s Summit–based civil rights attorney Jonathan Whitehead on KCMO Talk Radio’s Mundo in the Morning. Whitehead details the legal history regarding race- and sex-based discrimination, the rules it put in place for allowing such programs, and how the findings in Kansas City may put the city in legal jeopardy.

As with the Star column, you won’t find any such in-depth interviews on the topic anywhere else.

The post Show-Me Institute Shines Light on Kansas City’s Discrimination Policies appeared first on Show-Me Institute.

According to the Kansas City Business Journal, the revived program could help finance an expansion of CPKC Stadium, a possible new Royals ballpark, and billions of dollars in additional development connected to Kansas City’s Power & Light District and St. Louis’s Ballpark Village.

There are other provisions in the bill, including incentives for converting vacant office buildings into housing and programs tied to designated “innovation zones.” But the return of MODESA deserves particular attention because Missouri taxpayers already have some experience with the program. In Kansas City, that experience includes the Power & Light District.

Kansas City helped champion the original MODESA program in 2003, when downtown was struggling and city leaders were looking for ways to encourage investment. The program allowed new state tax revenues generated by qualifying developments to help finance projects, including public infrastructure associated with Power & Light.

The new version could be even more generous. The Business Journal reports that MODESA could redirect 50% of incremental state sales and employee income taxes generated by qualifying projects for as long as 30 years. For certain projects, that figure could rise to 70%. Local governments also would be required to provide substantial matching incentives.

Supporters believe the program can unlock investments that otherwise might not happen. The Cordish Companies, for example, says the legislation could help support $2.5 billion in new investment in Missouri, including an expansion that could “basically double” the size of the Power & Light District.

Perhaps. But before Missouri helps double the size of Power & Light, it is worth looking at how the financing of the original project has worked.

The district undoubtedly helped change the face of downtown Kansas City. It brought restaurants, bars, and entertainment venues to an area that badly needed investment. But it didn’t create new investment—it merely redirected economic activity at bars and restaurants from elsewhere in the city to downtown.

We know this because data provided by the city’s Regulated Industries Division shows us that the number of liquor licenses and employee cards required of bartenders and waitstaff remained flat after Power & Light opened. Despite new shops downtown, there was no growth citywide.

To make matters worse, the district has not generated enough revenue for Cordish to cover its debts. Because then-Mayor Kay Barnes was foolish enough to put taxpayers on the hook for debt payments, Kansas Citians have been paying out about $12 million each year over and above the tax revenue we divert back to the developer.

Kansas City is considering using the revived MODESA program as part of financing packages for an 18,000-seat expansion of CPKC Stadium and potentially a $3 billion Royals ballpark development at Crown Center. The city already has signaled its willingness to consider as much as $235 million in local incentives associated with the current project and $600 million for the Royals.

The state incentives are not insignificant, either. According to the Business Journal, the fiscal note for HB 3231 estimates the legislation will cost Missouri more than $62 million annually once fully implemented in 2034.

As Missouri leaders take on the task of cutting spending so that they may reduce and eventually eliminate the state income tax, these types of subsidies are not a sign of fiscal seriousness.

We’ve been here before. The effort failed. Why are we doubling down?

The post Missouri Doubles Down on Failed Economic Development Scheme appeared first on Show-Me Institute.

Missouri received a “B” on a national report card evaluating state policies on cell phone use in schools. This grade, available at phonefreeschoolsreport.org, places Missouri in the top half of states.

The primary reason for Missouri’s strong grade is its bell-to-bell ban on student cell phone use during the school day. State law also protects school employees from liability when they act in good faith to enforce the policy.

Missouri fell short of an “A” grade because students are allowed to store their phones in an accessible place during the school day. Only four states received “A” grades—Indiana, Kansas, North Dakota, and Rhode Island. They all require phones to be stored in an inaccessible location.

Overall, Missouri’s “B” grade is good news. Our lawmakers deserve credit for moving early on an issue where both common sense and research point in the same direction. Removing phone access during the school day is a straightforward solution to the obvious distractions that students’ devices bring into the classroom.

That said, our policy can be improved. When phones remain within arm’s reach—inside backpacks or pockets—there is temptation to use them. Requiring inaccessible storage would make enforcement easier and reduce classroom disruptions further. It would also align Missouri with the strongest policies in the country.

Missouri has taken an important step toward phone-free classrooms. Strengthening the law to require inaccessible storage would help get the most out of our students during school.

The post Missouri Earns a “B” on Cell-Phones-in-Schools Report Card appeared first on Show-Me Institute.

Susan Pendergrass speaks with Jude Schwalbach, senior policy analyst at Reason Foundation, about declining K-12 enrollment nationwide and what it means for the future of open enrollment. They discuss why enrollment dropped in 40 states since the pandemic, how districts have responded to increased competition from charter, private, and homeschooling options, why open enrollment tends to cause far less disruption than critics predict, the case for Missouri to catch up with its neighboring states, and more.

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Susan Pendergrass (00:00):
Thank you so much. Jude Schwalbach, you’re back, I think for the third time, from the Reason Foundation. We appreciate you joining the Show-Me Institute Podcast once again, taking the time.

Jude Schwalbach (00:09):
Yeah, thank you for having me. I’m always excited to join.

Susan Pendergrass (00:26):
We were chatting for a second before we started recording. I talk about open enrollment a lot in Missouri. We don’t have it. In so many places in this country, kids choose where they go to school. They don’t just look at their utility bill, or their parents make this life-or-death real estate decision where they have to look at all the schools before they buy a house so they can pick where they go. Missouri has been really reluctant to let anybody choose a school over being assigned to one. I’ve been saying for some time that we have this phenomenon happening simultaneously: we don’t have as many kids anymore. I’ve talked to demographers on this podcast. We know that birth rates topped out in 2009, kindergarten enrollment topped out in 2013, and graduating high school seniors topped out a year or two ago. It’s a fact you can see all through the pipeline: there are fewer kids. In my mind, that’s going to make open enrollment more attractive, because we’re going to have districts that, for no explainable reason, just don’t have as many kids. Some of our top-performing districts, like Clayton, used to have 2,500 kids and now have 2,000. I keep thinking districts are going to wake up and realize they either have to fire teachers or get in the open enrollment game and actually have faith that they’ll attract students. You recently wrote about this, and that’s why I wanted to bring you on. Tell me what’s going on nationally with these enrollment trends and how you think that impacts this idea of whether kids should be assigned or allowed to pick.

Jude Schwalbach (01:51):
Yeah, so the latest national data we have on K-12 enrollments is from fall 2024. What we see is that in 40 states, K-12 enrollments dropped, by about 1.4 million students between 2019, right before the pandemic, and 2024. However, 10 states did manage to avoid those drops. In two of them, Florida and Utah, enrollments remained flat, they didn’t gain or lose students. The other eight states, places like North Dakota, Delaware, Alabama, and Texas, gained students. They really stand out because they gained students when literally everyone else lost students. They didn’t gain a ton, those eight states together gained around eighty thousand students, but when everyone else is losing and you’re gaining, you look pretty good. There are probably three factors driving this. As you mentioned, there are just fewer kids. The number of births in every single state except Florida

Susan Pendergrass (02:39):
Right.

Jude Schwalbach (02:53):
had dropped between 2014 and 2019, and those are the corresponding kindergarten cohorts five years later, 2019 to 2024. So there are just fewer kids. There’s also migration. There’s plenty of domestic migration occurring. In some states, especially the ones that gained students, they received quite a few new residents from other states. There’s also states, I think it was North Dakota actually, that lost a lot of residents through domestic migration but received a bunch of new residents from abroad, which reversed their general population decline and had them gain students. Presumably those families from abroad brought students with them, which is part of why they’re not losing students.

Susan Pendergrass (03:41):
Mm.

Jude Schwalbach (03:53):
There are various economic factors driving those things. But another component is that satisfaction with public schools is at an all-time low, especially post-pandemic.

Susan Pendergrass (03:50):
Yeah.

Jude Schwalbach (03:53):
Families are starting to choose schools other than public schools at a much higher rate than they used to, because they have more options. There are states with universal private school choice programs now, which ten years ago were just a pipe dream. You could achieve a small, targeted private school choice program, but not much more. Then there are families choosing homeschooling. This has created a much more competitive education marketplace. And it’s not just states with robust private school choice programs where you see increased private school enrollment. Places like California and New York, which have no private school choice, have also seen their private schools increase in popularity in the interim while public enrollment has been declining. So if you’re going to be in this tighter market with fewer students and increased competition from homeschools and private schools, you’re going to want to provide some flexibility within the public system to make it more attractive to families. Flexibility like open enrollment. Sorry, that was a really long answer.

Susan Pendergrass (04:59):
No, I think it’s perfect. It makes me think of the cliche of skating to where the puck is going, rather than where it is right now. I feel like a lot of the pushback from folks is they’re just looking at where the puck is right now. They’re like, well, we’ve got lower teacher-student ratios, fewer kids in every classroom, this is great. Or, bringing in a whole new topic here, the federal tax credit that’s looming for private school choice, where people can donate their tax dollars to a scholarship organization, and you have leadership in the teachers unions telling Democratic governors, you better not do this, because the way we’re going to keep the kids in the public schools is to lock them in. That seems so short-sighted to me, when, like you just said, we can look at the enrollment trends and know that while there are fewer kindergartners today, ten years from now there’s going to be another five to ten percent drop-off in kindergartners. Who are we kidding?

Jude Schwalbach (05:58):
Yeah. As that market gets tighter, the funding those students produce is going to become more important to public schools. If you look at California, there’s a report by their Legislative Analyst’s Office that found that districts initially losing students through open enrollment, where students were transferring to other districts with better test scores, or maybe they wanted different academic opportunities like AP classes, those districts reached out to families and said, what can we do to get you to stay? Families said, actually, we don’t want to leave the district, we just want to go to a different school inside our district. Or they said they wanted a language immersion class or something along those lines. The districts responded to families’ frustrations, and not only did some of them stop the bleeding, they actually gained students from other districts because they were doing something good that families wanted. So when you create a more flexible system, you shouldn’t just assume you’re going to lose students. There’s real opportunity to gain students as well.

Susan Pendergrass (07:09):
Yeah, I’ve certainly heard superintendents say it forced them to stop and think about what they offer. What is our mission? What do we offer? When you have a captive enrollment zone, you don’t need to do that. I studied this a long time ago in Massachusetts, and people would say, well, you can’t really prove that districts respond to competition. But I did research on it and talked to superintendents. They said, we moved the date of our orientation so kids would come visit our school first, or we redid parts of the school that parents had been complaining about. There are these little micro-responses, which is to say they realized that this is no longer a guaranteed monopoly. They have to start responding to families. And in the end, everyone kind of wins.

Jude Schwalbach (08:01):
Yeah, another good example that builds on what you were just saying is Minneapolis Public Schools. For the past ten years, their enrollments have been in decline, largely because of competition with charter schools and other public schools in the area. But recently they reversed that ten-year decline and gained new students, because when they were doing school tours, they started following up with parents, saying, we just want to remind you what you thought, and these are the options we offer that other districts nearby don’t.

Susan Pendergrass (08:24):
Yeah. What’d you think?

Jude Schwalbach (08:33):
This is what makes us a unique education option. I think it’s no surprise that families liked that personal touch and started enrolling in Minneapolis Public Schools.

Susan Pendergrass (08:40):
Yeah, we need it. I know you study school finance a lot too. I wonder, in Missouri anyway, certainly within St. Louis County but across Missouri generally, the number of teachers being hired has only continued to increase. There’s this belief that spending on public education should only go one direction, up, regardless of the number of students, and that the number of teachers should only go up. Our state education agency, one of their only five goals is more teacher certifications, more, more, more, as though there’s an ever-expanding pool of students without looking at the reality. Oddly, I just did a podcast on Social Security and they’re doing the same thing. They’re not looking at the reality of the number of workers, they’re just operating on the assumption that there will always be more. Our schools are doing bond referendums to build new schools in Columbia, Missouri, even though the new ones they just opened are under capacity. Their enrollment is down two or three percent and expected to go down more, but

Jude Schwalbach (09:50):
Yeah, I think state policymakers should take steps to encourage districts to be more thoughtful about how they’re using taxpayer dollars. Indiana, where I live, did something a couple of years ago where districts have to prepare for permanent closures if one of their school facilities has lost ten percent or more of its students over a five-year period. It’s basically saying, look, if you’re not able to attract new students, if your local enrollment is declining, we shouldn’t be keeping these facilities open and draining taxpayer dollars. To be fair, this is a really painful decision for communities. No one likes to close schools, no one likes to rearrange staff. But it’s not fair to taxpayers to keep funding and maintaining buildings that are really only educating a small fraction of students. Florida also publishes a report on school facility capacity, but most states don’t even make this information public. A good first step is just making this sort of data available so families and taxpayers, when they get approached about bonds or hear about decisions to hire more staff, can ask, if your enrollment is declining and your buildings are half empty, why are you doing this? This sort of information helps hold district administrators accountable.

Susan Pendergrass (11:13):
Yeah, and the way schools are funded, and have been for at least a hundred years, these are very long-term commitments, because school districts are in the real estate business. They buy the land, build the building, fund it over fifty years rather than leasing, like a lot of charter schools do. They’re in the business of buying land and building buildings. And teachers, that’s a twenty-five or thirty-year commitment too. That’s also hard to adjust down. There are ways to do it, but districts are making these long-term commitments without paying close attention to the trends happening right under their nose. It’s a very odd situation to me, because you can see this coming, and we’re not getting a response out of the system. And to your earlier point about school choice programs taking students, they’re taking the blame. They’re blaming school choice for the fact that they have to close schools when that’s not actually the reason.

Jude Schwalbach (12:15):
Yeah, there’s a really interesting paper, I think published by Thomas Dee from Stanford in the last couple of years, where he looked at why 1.8 million students left the public school system since the pandemic. He looked at increased competition from private school choice, homeschooling, and changing demographics, whether it’s families moving across state lines or lower birth rates. What he found is that he couldn’t explain why one-third of those students exited the public school system. It’s just unexplained. There are demographic factors, there’s increased competition, those certainly matter, but they aren’t the only reasons. We don’t even fully know why some of these students are exiting the public system. But you can’t change the fact that they are.

Susan Pendergrass (13:00):
And you don’t address it by locking the door. They want to close the gate and lock it to stop it, and that to me is the most short-sighted approach.

Jude Schwalbach (13:09):
Yeah, I think locking students within a particular system without allowing them any agency in school selection is really unfair. If states are going to require you to go to school, you should have some agency in what that school is, because education is a really personal experience.

Susan Pendergrass (13:27):
Mm-hmm.

Jude Schwalbach (13:28):
Maybe you don’t get along well with a particular teacher, or their teaching style isn’t a good fit for you, or maybe you’re being bullied at school. But where you go to school shouldn’t ultimately depend on your parents’ largest financial investment, which is very much constrained by their income. Increasing open enrollment options, where if there’s space available,

Susan Pendergrass (13:45):
Yeah, yeah.

Jude Schwalbach (13:50):
we’re not talking about building new facilities or hiring new teachers to accommodate these students, these are spots that are actually open right now, and allowing students who don’t live in that district or attendance zone to attend that school, I think that’s just a common-sense reform.

Susan Pendergrass (14:05):
Do you think declining enrollment is going to spur that into action more? Is it going to have an impact on whether states like Missouri consider open enrollment?

Jude Schwalbach (14:17):
It seems like it could go either way, honestly. If there’s declining enrollment, that means there are spots available and districts would have an incentive to try to attract new students from other places. But on the flip side, individuals don’t always see the opportunity, they only see the cost, which is, we could lose students. What’s interesting is that when you look at open enrollment programs across the nation, especially the largest ones with the most established data, places like Wisconsin, Colorado, or Florida, you don’t see massive enrollment fluctuations when these programs are launched or even soon afterward. Instead you see small, incremental change, which means districts have plenty of time to adjust. In some cases it could mean they actually reverse course and start gaining students. I know in Missouri there’s a lot of concern in rural areas that they’ll only lose students. But the irony is that if you look at Wisconsin, which also has a lot of school districts, around four hundred, their rural districts actually gained students on net in their most recent open enrollment report. Sure, they lost some students, but they ended up attracting more students from their suburban counterparts. I think rural districts can absolutely compete successfully

Susan Pendergrass (15:22):
Yeah, we have over five hundred.

Jude Schwalbach (15:44):
in a more competitive education marketplace.

Susan Pendergrass (15:47):
We actually just released a report saying exactly what you just said, by my colleague Dr. Cory Koedel, showing that there isn’t a massive, or really much of any, enrollment disruption in the first three or four years after these programs pass, in states that have had them for a long time or even a short time. There really isn’t a disruption in the way that, when a bill gets a committee hearing in Missouri, folks from the school boards association or superintendents association say, oh my god, we won’t be able to keep up, the kids will be coming and going, it’s going to completely throw off our enrollment. But we’ve found there really isn’t a massive disruption. On the one hand, you have a pretty low cost to districts. On the other hand, as you mentioned, there’s a really large benefit possible for an individual family who has a child they have to force onto the bus every day because they dread going to school due to their teacher, bullying, or whatever. It’s a big benefit at the individual level for those families, and the cost is really quite small or very dispersed.

Jude Schwalbach (16:49):
Yeah, one thing I’ll note is that it benefits districts as well. In California there are small rural districts that actively rely on K-12 open enrollment to keep their doors open. One administrator basically said, look, this doesn’t let us hire new staff, we’re not making money off this program, but we aren’t letting staff go either. We’re keeping our doors open and the lights on in our schools. If they didn’t have open enrollment, that would not be happening. They’d have to shut the school or let go of staff. It’s really important to remember this is a real opportunity for districts to gain students.

Susan Pendergrass (17:30):
Yeah. As Cory points out all the time, if you have a fourth grade classroom with ten students and you can add two or three more, your marginal cost is almost zero. You probably already have the textbooks, the computer, the desk is sitting there, it’s literally idle assets. And those three students, even if they don’t bring a lot of money with them depending on how the funding follows the student, that’s a very low marginal cost for some marginal revenue. I think the more districts see it that way, because I don’t think in Missouri that funding for education is going to continue to just go up. We have a tight budget and we know enrollment is going down. That’s going to be a whole new horizon for folks to accept. And partly, similar to the findings across those forty states, we have more old people. We have fewer young people, more old people, and older people are expensive and need a lot of services. So schools and assisted living facilities are going to be competing against each other in a sense, and I think the trend would suggest assisted living wins out because there’s more of those people and fewer children. Some of these trade-offs are going to have to be considered in a way that no one

Jude Schwalbach (18:44):
Yeah.

Susan Pendergrass (18:48):
seems to want to do. So is open enrollment growing across the country, stagnant, or on the decline?

Jude Schwalbach (18:49):
Yeah, I think that’s certainly correct. Since 2021, eighteen states have strengthened their open enrollment policy in some capacity.

Susan Pendergrass (19:06):
Okay. I know our neighbor Kansas did, right? Oklahoma too, our other neighbor.

Jude Schwalbach (19:10):
Yeah, Kansas did it, Oklahoma too. Several of your neighbors have improved their open enrollment policies.

Susan Pendergrass (19:17):
Well, Oklahoma has complete universal school choice. If you move across our northern border, you can pick public or private. If you move across our western border, you can pick any public school. The big pushback on that was that the highest-quality, most desirable districts would see a rapid influx, and they haven’t. In Oklahoma you can either pick a public school or take a tax credit for private school. Then we have Arkansas as a neighbor, and they’re also universal. We’re kind of getting surrounded by it and we’re just holding out as the last bastion

Jude Schwalbach (19:43):
Yeah.

Susan Pendergrass (19:51):
of assigned public schools.

Jude Schwalbach (19:52):
Yeah, I think Illinois and Kentucky are about on par with Missouri, but I think their programs are actually slightly better. Not by much, but

Susan Pendergrass (20:03):
We sort of write off Illinois, like, at least we’re not Illinois, but they have a lot of public sector problems. Yeah, we have no open enrollment, very limited charter schools, and a very small scholarship program. So ninety-five percent of our kids are going to their assigned public school with no other option besides virtual.

Jude Schwalbach (20:23):
Yeah. But to answer your question, I think there’s a real opportunity for open enrollment to continue to grow, especially in states, I think Nevada is a good harbinger of what could be coming. They passed a strong within-district open enrollment policy last year, and that was a bipartisan bill, championed by the governor and Senate leadership that was Democrat. I think part of the reason they wanted to do that was to strengthen their public school system, to ensure that students had a reason to invest in their public schools, especially low-income ones, and one of the ways they wanted to do that was through creating flexibility within the public system.

Susan Pendergrass (21:12):
Yeah.

Jude Schwalbach (21:12):
That was one of the compromises that occurred there. You also see that in Kansas. That was an earlier reform, but also a compromise. That one was passed by increasing funding for public schools, and Republicans got increased flexibility within the public school system for students.

Susan Pendergrass (21:18):
Yeah. I mean, when you poll parents it’s ridiculously popular. Everybody clearly wants to pick.

Jude Schwalbach (21:37):
Yeah, families really want these policies. I think residential assignment works for some people, that’s the form of school choice they like. They like being able to purchase a home in a district and be guaranteed a spot. But if there are extra seats, there should be students who can fill those seats, especially when funding is flexible and portable.

Susan Pendergrass (22:03):
I believe declining enrollment is going to motivate open enrollment. I have a very optimistic view of this: superintendents and school boards are going to wake up and say, our enrollment is declining, the only way we can turn this around is to try to get kids from across the lines. In St. Louis County we have more than a dozen school districts within one county, for reasons that would take a two-hour podcast to explain. It’s very easy for a child to just cross the street and be in a different district, and I feel like districts are going to have a wake-up call and start trying to get those kids from across the street rather than making their parents move. Because it’s going to be that or lay off teachers. You can only keep your teaching staff for a limited amount of time if your enrollment is going down and your schools are staying open.

Jude Schwalbach (22:58):
I think you’re right, Susan. When you look at the NCES projections, which are a little dated at this point, they anticipate losing millions more students by 2031.

Susan Pendergrass (23:08):
Yeah, yeah. So our heyday in Missouri, you could kind of say we had a million students, we had about 952,000 or so. If you wanted to round up, you’d say Missouri has about a million students. Now we have, depending on how you count pre-K and ungraded, somewhere between 830,000 and 850,000. And the NCES projections you just mentioned project that Missouri will be below 800,000, more like 785,000. We can’t even round up to a million anymore. We’re going to be more like 780,000. That’s more than a twenty percent loss, and that’s a lot.

Jude Schwalbach (23:58):
Yeah, enrollment declines aren’t new to the US. This happened in the seventies and eighties, but it took almost two decades for districts to recover their lost enrollment. That’s a long time, and it means you can’t hang on to buildings or staff in that interim when you don’t have the enrollment to justify them.

Susan Pendergrass (24:19):
Yeah, and I think in Missouri, good.

Jude Schwalbach (24:19):
I don’t think they returned to 1970 enrollment levels until 1997, if I remember correctly. There’s the baby bust,

Susan Pendergrass (24:31):
Wow, because the baby boom went through and then there’s a baby bust. But we don’t have a baby boomlet on the other side. There’s no evidence of one right now based on global trends.

Jude Schwalbach (24:39):
Yeah, it was fifteen years later before they even saw that sort of resurgence in births. They didn’t know either, and we don’t know either.

Susan Pendergrass (24:47):
Yeah. Yeah. I like that, that’s hopeful, that’s true. It just frustrates me, because if Missouri wants to hold out as the last residential-assignment state in the era of declining enrollment, I just feel like, there’s a professor from SLU, Ness Sandoval, who talks about Missouri demographics a lot, and he’s not optimistic about where we’re headed. One thing I think we could do to turn it around is throw open the doors on school choice to try to get families to locate here, but we’re kind of doing the opposite. Well, thanks so much. I appreciate you coming on and explaining it. I think it’s pretty interesting stuff, and I think we’re going to have to talk about this more as more enrollment numbers come in and we see how folks respond. I’m hopeful that Missouri legislators will get it and will press for it in the 2027 session. We’ll be pressing for it at the Show-Me Institute, but maybe I’ll use all of your data, Jude, and hope they read it and see what’s on the horizon. That would be awesome. Thank you so much, I appreciate it.

Jude Schwalbach (25:47):
That would be great. Thank you, Susan.

Produced by Show-Me Opportunity

The post Declining Student Enrollment and a Growing Opportunity with Jude Schwalbach appeared first on Show-Me Institute.

Imagine getting a large one-time bonus, then using that money to buy an expensive new car. There are some obvious parallels to Missouri’s budget.

Shortly before the June 30 deadline, Governor Kehoe signed Missouri’s more-than-$50-billion budget for fiscal year 2027, which began on July 1. He also issued about $53 million in vetoes and more than $400 million in spending restrictions. While the vetoes are generally in line with recent years, the expenditure restrictions are much larger than have been necessary in more than a decade. The restrictions also indicate that the governor believes the legislature approved roughly $400 million more in spending than projected state revenues can support.

Unlike a veto, a spending restriction doesn’t permanently eliminate an appropriation. Instead, it temporarily withholds the authority to spend it. Missouri’s constitution requires the governor to keep the budget balanced throughout the fiscal year, so if projected revenues won’t support all the spending approved by the legislature, the governor must reduce authorized spending through vetoes, restrictions, or a combination of both. The difference is that vetoes are permanent unless the legislature overrides them, while restrictions can be lifted if revenues improve. The governor then decides which restricted appropriations, if any, are ultimately released.

Perhaps the most interesting part of the governor’s budget signing was the explanation he provided for this year’s actions. Kehoe reiterated something he’s said before: Missouri has a spending problem rather than a revenue problem. He also said the state needs to reduce its reliance on what are called general revenue pickups. General revenue is the state’s primary operating fund, supported largely by income and sales taxes. A general revenue pickup occurs when a temporary funding source disappears, leaving general revenue to cover an ongoing expense. That’s exactly how temporary spending becomes a permanent obligation.

The governor’s explanation reflects two concerns I’ve written about repeatedly. First, Missouri’s spending has been growing faster than its revenues. As the auditor has highlighted, between fiscal years 2020 and 2025, general revenue collections increased 45.8 percent. During that same period, general revenue spending increased 53.4 percent, more than double the rate of inflation.

Second, lawmakers treated the surge in temporary federal COVID relief and an extraordinary period of state revenue growth as an opportunity to expand ongoing commitments. As those temporary dollars disappeared, the state became increasingly reliant on general revenue pickups, shifting costs that had once been covered by other funding sources onto Missouri taxpayers.

Remember the car? If soon after your purchase you found you couldn’t afford your new car, nobody would say you had an income problem. They’d rightfully say you spent too much. Missouri’s budget shouldn’t be viewed differently. The good news is that Governor Kehoe’s actions indicate he has correctly identified the problem. Now it’s up to lawmakers to get serious about solving it.

The post New Budget, New Problems appeared first on Show-Me Institute.