Good News on Property Taxes in St. Charles and Clay Counties

Posted on by David Stokes

Used car prices have risen dramatically over the past few years. That will hit Missouri car owners hard in the tax column this year. Car owners are used to seeing the taxable value of their used cars decline slightly each year, but with used car values increasing, personal property taxes will rise substantially.

According to information I have received, personal property tax revenues are expected to increase by more than 20 percent in the following counties: St Louis, Jackson, Warren, Lincoln, Cape Girardeau, St. Charles, and St. Louis City. St. Charles County is taking the lead here; the county council passed a resolution declaring its intention to reduce the personal property tax rate this fall (after final numbers are in) to a revenue-neutral level to offset the large increase in assessed valuations. Good for them. Many local governments in Missouri need to follow this example, especially school districts, which receive the bulk of your property tax payments. Increased used car valuations should not be a revenue windfall for local governments.

I commend the St. Charles County Council and the county executive for this move. Hopefully others will follow the example of St. Charles County. I would love to see Hancock Amendment rollback provisions extended to personal property in the future. (Now they only apply to land and buildings.)

On the other side of the state, Clay County is moving forward with the first commercial surcharge property tax reduction in Missouri history. The county commission approved placing it before the voters on the November ballot. Clay County has one of the highest commercial surcharges in the state, and this proposal for a modest reduction to match Jackson County’s level is a smart, reasonable one. (For the reasons why the rate can only be lowered by voters, why Clay County’s rate is so high, and more history of this special tax, please read this.)

I also commend the Clay County Commission and the rest of the Clay County leadership team for putting this proposal before the voters of their community. There are a few other counties that I think need to strongly consider reducing their commercial surcharge taxes—I’m looking at you, Perry County.

“Stop,” or I’ll Yell “Stop” Again

Posted on by David Stokes

A version of this commentary appeared in the St. Louis Post-Dispatch.

When elected officials intentionally ignore the law, we often react with a mixture of anger and helplessness. Abetted by their government lawyers, whose jobs exist at the pleasure of their only client, elected officials invent arguments to justify going around the plain meaning of ordinary words. It’s enough to make the most moderate of political hearts jump online and order home-delivery of pitchforks in bulk.

We have seen too many examples of this recently in St. Louis. For example, the statutory definition of the earnings tax for the City of St. Louis states that it can be collected “. . . for work done or services performed or rendered in the city.” [emphasis added throughout] Yet city Collector of Revenue Gregory F. X. Daly has interpreted those words during the pandemic to include people working remotely from their homes outside of the city for businesses within the city. Such a determination is preposterous.

You don’t like it? You have the audacity to think people should enforce the laws as written? Tough luck. Sue him. War is Peace.

The legislature has failed in an effort to further tighten the law to clarify that it does not include remote workers. That is unfortunate, as it will embolden Daly and others to engage in more of this, and it should not have been necessary in the first place.

St. Louis County Executive Dr. Sam Page is getting a Ph.D. in this line of governing. He took the position knowing the county charter states that “the county executive’s entire time shall be devoted to the duties of the office.” In the vernacular of 1950, when it was written, that passage clearly meant that the county executive could not have a second job, but Page kept practicing medicine part-time anyway. As admirable a profession as medicine is, the charter did not include an exception for admirable work.

Going from the sublime to the absurd, Dr. Page later attempted to appoint former County Executive Charlie Dooley to the St. Louis Regional Convention and Sports Complex Authority. The governing statutes for that board state that nominees “may be appointed by the chief executive of the county with the advice and consent of the county council.” Dooley’s appointment was rejected by the council. (I think he should have been appointed, but that’s another issue.) Page appointed Dooley to the board anyway, with Page’s county counselor justifying it all with legal gymnastics that would have made Simone Biles beam.

You don’t like it? You think the county executive should follow the charter and laws? Tough luck. Sue him (which the council did, in a legislative fashion). Ignorance is Strength.

The county council and county voters have addressed these issues with charter changes, both past and upcoming. But it should not have to come to that.

During his brief time as Governor, Eric Greitens attempted to pay some of his cabinet members more than allowed by state law by quietly funneling the additional salaries through other departments. This was blatantly illegal, but the Greitens administration did it anyway until the legislature caught on and put a stop to it. Until then, it was two plus two equals five.

You think the Governor should follow the law and pay his people within the legal range? Tough luck. Impeach him (which the legislature did, albeit for other, more salacious actions).

President Trump routinely ignored the law to do whatever he wished. Spending money on his ballyhooed border wall without congressional approval and imposing a 25 percent steel tariff without any legal authority are just two examples out of many.

You don’t like it? Tough luck. Impeach him (which they also did, twice). Freedom is slavery.

It’s bad enough when the government lies. It’s worse when elected officials demonstrate how little they think of our democracy and the rule of law by flouting the very laws they are supposed to enforce or enact. The regrettable actions described here are part of a process that is degrading trust in our institutions and our democratic process. As a philosophical libertarian, I appreciate a healthy skepticism of government. Seeing government for what it is instead of taking its benevolent facade at face value is fine by me. But we should all be concerned about the breakdown of the basic regard for the law as it is written. If you don’t like the law, don’t ignore it. Change it by engaging in the hard work of democracy.

But while we are doing that, is it too much to ask that we all agree two plus two equals four?

Health Care Price Transparency in Missouri: Part Three

Posted on by Quin Rizer

In the first two posts in this series, I examined the confusing world of pricing in health care. What I found was that the majority of Missouri hospitals don’t appear to be complying with federal pricing rules. At the very least, it’s fair to say that if Missourians want access to their health care prices, more needs to be done to achieve greater cooperation from providers.

To boost hospital compliance, Missouri’s policymakers should consider reforms that would work in conjunction with existing federal rules. As Show-Me Institute researchers recommended in last year’s blueprint, establishing state level requirements for health care price transparency (including non-hospital providers) to publish charges for hundreds of shoppable services in a way that most Missourians can understand would represent a significant step forward.

Additionally, no price transparency requirement is effective if the providers charging those prices won’t comply and there is no effective enforcement mechanism. Under current federal rules, hospitals that fail to disclose prices in a comprehensible way can be fined from $300 to $5,500 a day. It doesn’t appear, however, that fines are being imposed. Missouri policymakers may need to consider noncompliance penalties with teeth for providers if they continue withholding pricing information from patients.

Policymakers should also consider ways to make it easier for patients to access and use these prices. States including Florida, and nine others, have taken the issue into their own hands and created online tools that help patients shop for various procedures. Something similar could be done in Missouri.

While greater transparency in health care will not single-handedly fix all the health care problems in Missouri, the hope is that it will take some of the uncertainty and confusion out of the process. Patients deserve clarity, not mystery, when making decisions related to their health. And until patients can be informed consumers of the care they purchase, we can’t expect to keep the cost of medical services under control.

August Ballot Issue Rundown

Posted on by David Stokes

Next week is primary election day in Missouri. You may have seen some ads for candidates on television, radio, or social media. If so, lucky you.

At the Show-Me Institute, we focus on policy issues, not partisan races. Next week’s ballot is relatively light on policy votes, but there are some interesting proposals before voters nevertheless.

In St. Louis County, there are three charter changes to consider. These changes would establish a salary commission for the county council, give greater protection to whistleblowers within county government, and clarify that county appointments to boards and commissions must be approved by the county council. The last one should not be necessary, as that is the current law, but apparently the current law isn’t enough, hence the proposal to tighten up the wording. I think the whistleblower protections are necessary, and the appointment proposal is much needed as well, albeit unfortunately.

Ferguson and Blue Springs are both considering use taxes. My position on use taxes is that they are fine if they are offset with reductions in other, more harmful taxes. In the case of Blue Springs, the city should use the new money (if the tax passes) to reduce its dependence on special-taxing districts and consider privatizing municipal utilities and golf courses. For Ferguson, a use tax increase could be offset by a lower property or utility tax rate. Either way, if these cities (and others that may have a use tax vote next week) are simply using the use tax as new money, voters should think twice about just granting local governments more money.

In the Holly Hills neighborhood of south St. Louis City, voters are considering a new special business district tax to do things that government ought to already be doing in the first place, such as public security and park maintenance. The existence of this proposal is first and foremost an admission that city government is failing, but creating a new, small, tax-funded agency with limited oversight is unlikely to be the savior supporters think it will be.

Finally, there are numerous school and fire district bond issues and tax increases on the ballot. One that stands out is the proposed tax increase in Hickman Mills School District in the Kansas City area. You can check out the performance of the schools in that district at MoSchoolRankings.org. The school district board is proposing a $1.35 per $100 of assessed value tax increase. That is one of the largest increases I have ever seen. For a $200,000 house in the school district, that is a $513 tax increase. Is that worth it to the parents, voters, and taxpayers of that district? We shall see . . .

Remember, the world is run by the people who show up, so show up.

Broken Approval Process Slows Development

Posted on by David Stokes

Several disjointed developments in the Cortex and Grove areas of St. Louis nicely encapsulate the confusing involvement of elected officials, appointed boards, and city bureaucrats in city permits and approvals, including both large decisions that should involve elected officials and relatively mundane matters that would best be left to city employees to approve. The Post-Dispatch and St. Louis Business-Journal have both covered the issues closely. To wit:

  • The new Alderwoman for both areas, Tina Pihl (Ward 17) has been more hesitant to grant tax subsidies for projects in her ward. This is a beneficial policy change from her predecessor, and the new Alderwoman deserves credit for this.
  • The quickest way to get tax subsidies in Ward 17 appears to be to agree to make a donation to the city’s new Affordable Housing Trust Fund. This is a terrible policy that reeks of impropriety. “You get your tax deal after my favorite fund gets its money,” is an awful way to run government, and Alderwoman Pihl deserves criticism for this.
  • The St. Louis Land Clearance for Redevelopment Authority (LCRA) board has approved substantial increases in tax subsidies for certain projects in Ward 17 without approval from the Board of Alderman, and against the wishes of the alderwoman. The LCRA took a subsidy package that had been approved by the elected Board of Alderman, changed it significantly, and then approved the larger package of tax subsidies. The LCRA board is completely out of line here and seems to continue to function primarily as a shill for corporate welfare interests. Alderwoman Pihl is correct here in her request that the proposal should go back to the Board of Aldermen, as our game of policy tennis continues.
  • Finally, there are complaints that the alderwoman is moving too slowly in approving various things for her ward and slowing development. Time is money for everyone but the government. The key part here is that some of these projects being held back are over minor issues, such as simple variances, that if the necessary legal conditions are met, should be able to be approved by city departments without the local Alderperson weighing in. From the article:

But for Lengyel — he isn’t seeking tax abatement for the three houses — it was never clear what she wanted. He still has never spoken to Pihl

If a project meets the zoning regulations for the area (or requires only modest variances), and the developer is not asking for any tax subsidies, then why shouldn’t city staff make the approval decision (presumably giving the go-ahead)? Why should the local alderman be involved in the process at all, except in rare instances? In most other Missouri cities, minor permitting issues do not involve elected officials at all. For zoning changes or variances, elected officials would usually just be involved at the end of the process, which makes everything move faster.

The delay in approvals for generally routine matters (which is bad) is being caused by a new alderwoman who wants to be more cautious about tax giveaways (which is good). But the real problem here is the tradition and assumption within the City of St. Louis’s government that a ward’s alderperson is entitled to approve or halt any project, no matter how large, small, unique, or routine the proposal may be. Many of these smaller projects should never go to the alderperson for approval in the first place, and eliminating this unnecessary step is a would benefit the City of St. Louis.

Health Care Price Transparency in Missouri: Part Two

Posted on by Quin Rizer

In my last post, I discussed the push for increased price transparency in health care, and why transparency is good for consumers. For example, if you need a knee replacement, you should be able visit your local hospitals’ websites, find a price estimate for the surgery at each hospital, and make an informed decision about where to have the surgery done. I decided to try this out for my usual hospital of choice, Mercy Hospital in St. Louis. I used the online price estimation tool, and per Mercy’s suggestion searched “knee replacement.” Nothing came up:

I decided to try the same thing out at the flagship hospital for four of St. Louis’s major hospital systems. I found that the price without insurance for a knee replacement was $26,122 at Barnes Jewish and $18,766 at St. Luke’s. Using that search term in the pricing websites for both Mercy St. Louis and SSM Saint Louis University turned up no matches. I then decided to broaden my search to every hospital in Missouri.

I used the rules outlined by the Centers for Medicare and Medicaid Services (CMS) to evaluate how “transparent” each hospital’s pricing was. The rules state that each hospital needs to have a consumer-friendly way to shop for common services, as well as a comprehensive list of all services and charges in a digital file. I found that of Missouri’s 164 hospitals, only 47 fulfilled both requirements. That is a compliance rate of just 29%, which, considering the federal rule is a year and a half old, is pretty terrible.

Many of the 47 “compliant” hospitals, such as Mercy, had some sort of online form to estimate prices but, in my opinion, did not make the system all that easy or intuitive to use. Many of these sites would not accept a general term for a procedure, like “knee replacement”, but instead required a technical procedure name or hospital code. Requiring the average patient to have such specific information is not “user friendly.” Likewise, the digital files many hospitals provided are difficult to read unless you have extensive computer software and coding knowledge. The digital file Mercy provided was one of these difficult file types. After spending approximately 45 minutes using code to read Mercy’s file, I found that it was still missing key information CMS requires about negotiated rates between the hospital and insurers.

The bottom line is that Missouri hospitals, by and large, are not following the plain intent of the rules, which makes it difficult for patients to know how much their care will cost and to effectively compare prices. If you would like to try to research the prices of procedures for yourself, I have included an Excel file at the bottom of this post that has URLs for every hospital’s pricing information.

 

 

 

 

The $20,000 Discount: Municipal Checkbook Hall of Shame

Posted on by Quin Rizer

Arbyrd, Missouri is a town of just over 400 people in the southwest corner of the Missouri Bootheel. Many small towns, and not just Arbyrd, have few if any full-time government employees, and often they do not have any digital records. What is unique about Arbyrd is that the city was prepared to charge the Show-Me Institute tens of thousands of dollars to see how it spent taxpayer money.

That’s right. Last week, the Show-Me institute began an updated municipal checkbook project, which entailed obtaining the spending records of every city in Missouri. Every city that had available contact information was sent a request under Missouri’s Sunshine Law. Many cities had data already organized and were happy to share, all of which is available here. Some cities, especially those without already-digitized records, requested a fee before they would gather their data. This is allowed under law, but fees are supposed to reflect only the cost of labor and copying involved, and usually did not amount to more than $100. Arbyrd’s fee was a little more than that. According to the response I received from the Arbyrd City Clerk, our request would “require a significant amount of time and resources to complete and therefore we charge $40 per page with a minimum of 500 pages. This amounts to $20,000.”

Twenty thousand dollars! With no details explaining how a single page of paper could cost $40, Arbyd was prepared to charge us tens of thousands of dollars for information about where the city is spending taxpayer money. This clearly goes against both the letter and the spirit of the sunshine law and was met with a swift reply from Institute staff.

Unsurprisingly, days after our reply explaining that what they were doing violated the Sunshine law and that we would be contacting the Attorney General’s office, Arbyrd backed down. The mayor sent a revised offer, promising a digital copy of their spending information at no charge (we received their information on July 19). As it turns out, Arbyrd’s spending data was available in digital form, but for whatever reason their response to our initial request was to decline to provide it.

The bottom line is that all citizens, not just the most dedicated or persistent, should be able to see how their tax dollars are being spent. Cities should strive to make this information easy to access, without the need to resort to state law. Taxpayers should not have to fight for a $20,000 discount to have transparency in government.

Health Care Price Transparency in Missouri: Part One

Posted on by Quin Rizer

What makes health care so different than any other thing you might shop for? Well, it’s different in that you don’t know how much anything is going to cost until after you buy it—it would be like a grocery store without any prices on the shelves. This is obviously ridiculous, so why do we tolerate such practices when it comes to our health?

Health care price transparency was added to the Show-Me Institute’s 2022 blueprint because of its potential to dramatically improve the lives of Missourians. Price transparency arms the health care consumer with greater knowledge about what exactly procedures will cost, what prices insurers negotiate with hospitals, and how the cost of a procedure differs from hospital to hospital. This information should be easily accessible so that someone could do accurate research before ever scheduling a hospital visit.

The main benefit of price transparency is that more information is available to patients, insurers, and employers to aid in decision making. Insurers can use the information to better negotiate prices with hospitals, while patients and employers can use the information to make more informed decisions when purchasing health plans. A price tag attached to a procedure makes it much easier to weigh the costs and benefits of a service, so you know exactly what you are putting in your healthcare shopping cart.

In Missouri, the strictest price transparency rules come at the federal level. Under the guidelines of a Trump administration 2019 executive order, hospitals are required to publish a list of standard charges for 300 common procedures in a user-friendly, shoppable display. In addition, hospitals must publish a complete list of charges in a machine-readable format. “Machine readable” simply means the information can be downloaded off the hospital website into a file format that your computer could understand—like a Microsoft Excel file, as one example. The files need to include the gross charge, a discounted cash price, any payer-specific negotiated charges, and both the highest and lowest negotiated charge for any given service.

While price transparency reforms such as this one are potentially very beneficial for patients all across the nation, there are problems with compliance. The Wall Street Journal reported that, as of last December, many of the nation’s largest hospital systems were not complying with the 2019 rule, without any penalty from the Centers for Medicare and Medicaid Services. In the next post, I take a deep dive into Missouri hospitals and their compliance (or lack thereof) with price transparency rules.

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