A SCOTUS Victory for Private School Choice

Posted on by Susan Pendergrass

Once again, the Supreme Court of the United States has upheld a parent’s right to choose a religious private school, even if the tuition is being paid for with public dollars. The Carson v. Makin case arose from a town tuitioning program that has been in place in Maine since the 1800s. Town tuitioning allows small, rural towns that don’t have the resources to support their own high school to pay tuition for high school students to attend private schools. Maine parents had been able to choose a religious or a secular school until 1981, when choosing a religious school was banned.

Similarly to the Trinity Lutheran Church case in Missouri and the Espinoza case in Montana, the court held that allowing students to take their public dollars to a religious school of their choice does not establish an official state religion any more than using a Pell grant at a religious university does. The ruling does not require states to fund school choice. But, if they have a school choice program, they may not exclude religious schools from participating.

Beginning this fall, qualified Missouri families can apply for an Empowerment Scholarship Account (ESA) to be used to pay for, among other things, tuition at a private school. Five of the six approved Education Assistance Organizations (EAOs) that will be disbursing the scholarships are religious. The latest Supreme Court ruling should put to bed any questions as to whether anyone should take issue with that.

Missouri Forgot Its Umbrella

Posted on by Elias Tsapelas

Anyone familiar with Missouri weather knows that regardless of the day’s forecast, you should probably still be prepared in case it rains. Well, it’s sunny right now in Jefferson City as Missouri’s government remains awash in cash (as evidenced by the legislature’s recent passage of by far the largest budget in state history), which means this past legislative session would have been the perfect time for our elected officials to prepare for the next rainy day. Instead, Missouri legislators are betting we won’t be needing an umbrella.

As I wrote nearly a year ago, Missouri is not prepared for the next recession, and the inadequacy of the state’s rainy-day fund is a big reason why. That’s also why my colleagues and I included rainy-day fund reform as a top priority in our 2022 blueprint. Missouri’s rainy-day fund has serious problems; it’s too small, too hard to access, and it’s too hard to restore funds once they’re used.

Missouri’s rainy-day fund has two big problems: it ranks in the bottom half of states in available savings, and complicated rules make it difficult to use. As a result, it’s never once been called upon for budget stabilization purposes. When a recession hits, and state tax revenues decline, it’s helpful for governments to have some funds set aside to help plug the immediate shortfall to avoid unnecessary interruption in services until revenues rebound. Today, Missouri’s fund has around $385 million, which would only cover approximately one third of the revenue shortfall our state experienced during the Great Recession of 2008. And without a robust rainy-day fund, states are left to rely on relief from the federal government to keep them afloat.

State lawmakers had a unique opportunity this year to fix what’s been broken since Missouri’s current rainy-day fund was created in 1999. State tax revenues were up and there were more federal relief funds available than could reasonably be put to good use. This meant that for the first time in a long while, there was ample money available to invest in Missouri’s financial future. There were even efforts by the governor and the Missouri House to create a new fund, but they ultimately fell apart toward the end of this year’s legislative session.

Rising inflation and the COVID-19 pandemic illustrate the importance of governments preparing for rainy days, but also the risks associated with overreliance on federal funding to keep our collective heads above water. As the price of gas and other goods continue to soar, economic forecasters are now warning of a potential downturn in the near future. It is unfortunate Missouri’s lawmakers didn’t seize this year’s opportunity to get a better umbrella, because the chances are we’re going to need one sooner rather than later.

As Kansas City’s Streetcar Expands, Its Buses Suffer

Posted on by Quin Rizer

On Wednesday morning, The Kansas City Star published a detailed report on the city’s suffering bus system. Riders complain about a lack of service and dependability and report that buses are often late, arrive infrequently, and sometimes simply do not arrive at all. Kansas City Area Transit Authority (KCATA) officials state that service decreased because of the COVID-19 pandemic and has not returned to its pre-pandemic levels because of staffing and funding concerns, in addition to decreased ridership. The Star piece quotes experts who argue that increased service and dependability are the keys to increasing the usage of public transportation.

Meanwhile, the KC Streetcar Authority has broken ground on a 351 million-dollar expansion, financed by $171 million in federal funds, with the rest coming from a new transportation development district (TDD). This special taxing district will levy a 1% sales tax on areas around Main Street, generating millions in revenue to maintain the streetcar’s “free” admission status.

As Show-Me Institute analysts have argued in the past, the KC Streetcar has failed to generate economic growth and raise property values and does not improve Kansas City’s transit system as a whole. Throwing hundreds of millions of dollars at expanding the streetcar not only continues to grow a poor transit system but also neglects the more valuable bus system. Between 2016 and 2020, buses were the primary form of transportation for about 8,500 commuters in the Kansas City metro area. In contrast, there were only about 250 commuters in the entire metro area who got to work using the streetcar. In addition, the KCATA has an annual operating budget of $57.6 million, which is only about a fifth of what is being spent to expand the streetcar.

Kansas City’s MAX bus system is supposed to be a form of Bus Rapid Transit (BRT), but with buses only coming every half hour on two of the three MAX routes, it fails in this respect. These routes need more frequent service, which means more buses and more drivers. Instead of continuing to pour money into an overpriced, ineffective streetcar system, Kansas City should consider diverting funds to its buses, which could be improved at only a fraction of the cost of current streetcar spending.

Politicians like grandiose plans, shiny new objects, ribbon-cutting ceremonies, and spending exorbitant amounts of other people’s money. What their constituents need is a bus system that runs effectively so that they can schedule their day properly. Politicians seek the former at the expense of the latter, and it ends up hurting the very people they most often claim to be helping.

Attorney General’s Office Starts a Curriculum Database of Its Own

Posted on by Patrick Ishmael

When I started the Show-Me Curricula Project, I had no illusion that schools and districts would happily provide their teaching materials to me for publication. That clarity comes from experience; similar projects I’ve spearheaded for the Show-Me Institute for city checkbooks and local collective bargaining agreements showed that Missouri’s subsidiary governments were consistent . . . ly disinterested in telling the public how they were using the public’s money and authority.

The reason the state bureaucracy resists transparency is simple: the Sunshine Law in Missouri (and elsewhere) is pretty weak, local government officials know it, and many of our state and local officials are reluctant to share information about government operations if they can avoid it. Mandatory document reporting and spending transparency resolve this kind of problem, offering notice to bureaucrats and penalties for noncompliance. I’ve pushed for that reform for a few years now and will continue to do so until it’s passed.

Of course the ideas of “mandatory reporting” and “mandatory transparency” are predicated on active policing of those laws by public officials, like an attorney general or auditor. So I read with great interest an article announcing that the state attorney general’s office had launched a transparency portal of its own showcasing what the office had found in district curricula:

Missouri Attorney General Eric Schmitt subpoenaed seven school districts Wednesday for information on surveys given to students, and also launched a portal which gives the public access to “objectionable teacher trainings and assignments” uncovered through parent submissions and open records requests. . . .

As part of the Students First initiative introduced by Schmitt in March, the attorney general’s office also launched a transparency portal to compile parent’s submissions and open records requests sent to school districts.

The Students First initiative, launched by Schmitt in March, is designed to “increase transparency in Missouri’s schools” and “ensure a quality education for Missouri’s children by uncovering and eliminating curriculum and policies and practices that prioritize politics in the classroom instead of student education and success.”

You can find the attorney general’s transparency portal here.

It has been remarkable to see how resistant many school districts have been to transparency even when the inquiry has come from a state office, but I think that’s emblematic of a state governing culture that holds good governance and transparency in fairly low regard. That the attorney general’s office has had to sue districts to get documents is a testament to the need for transparency in all facets of government, and I’m glad the attorney general and his office have taken steps to increase transparency while a bumbling state legislature struggles to catch up.

Is a Scooter Ban the Answer in Saint Louis?

Posted on by Abigail Wagner

The St. Louis Post-Dispatch published a piece on Tuesday morning titled “With scooters gone, St. Louis police say weekend was relatively calm downtown.” That headline seems to indicate that scrapping Bird and Lime electric scooters will solve the ongoing issue of violence in downtown Saint Louis, which has recently been linked to large groups of young people riding recklessly through the streets. In response, city officials have gradually tightened scooter restrictions in the area, first instituting a 7 p.m. curfew in May, then implementing a total ban on June 6th.

Saint Louis Alderman James Page suggested in the Post-Dispatch article that the ban may last about two weeks. City leaders should take that time to ask themselves several questions about how best to manage this unique mode of transportation.

First, how will a scooter ban impact law-abiding residents and visitors? The fleets of young people roaming the streets on weekends may be an issue, but they are far from the only ones in the market for cheap, short-range transportation. With gas prices reaching historic highs and continuing to rise, some city dwellers find scooters a less expensive alternative for short trips. For those who rely on public transportation, scooters also address the “last mile problem,” eliminating walks from transit systems to a destination. Some visitors who choose not to drive in the city rely on scooters as well; previous Post-Dispatch articles include photos of businesspeople scooting to conventions.

Second, if new city­-level regulations are under consideration, will they be the best solution to the youth scooter problem? Lee Foley, Lime’s director of community and government relations for the Midwest, has already put forward several possible restrictions the company could implement on its own units. These include requiring ID to restrict rider age, reducing maximum speeds, and limiting the Group Ride feature that allows one rider to activate multiple scooters. City leaders already plan to discuss solutions, likely including these options, with scooter companies in the weeks ahead.

Saint Louis officials are right in that they cannot continue to allow roaming youths on scooters to monopolize downtown police attention. However, they might want to consider the negative impacts of a long-term ban and the possibility of private solutions before instituting any new and permanent regulations.

More of the Same in Springfield’s New Buc-ee’s CID

Posted on by Abigail Wagner

The Springfield City Council just repeated an all-too-common Missouri mistake. The council passed a bill creating a new community improvement district (CID) off I-44. Bill 2022-124 subsidizes the construction of a new Buc-ee’s gas station in the area by hiking the sales tax Buc-ee’s consumers pay by 0.625%.

Like most special taxing districts in Missouri, the Buc-ee’s CID will use public funds for private infrastructure. The new sales tax rate at Buc-ee’s will only benefit the company itself—the tax dollars collected at the gas station will mostly go toward constructing the building, access road, and parking lot. From its first day of operation, corporate welfare will support the business one Springfield resident referred to as “a beaver Walmart.”

Most residents of Springfield will have no say in this matter. The city drew the boundaries of the CID in such a way that all voters are excluded—only the city council got to vote on this. Show-Me Institute Director of Municipal Policy David Stokes called this “tax gerrymandering” in his testimony on this issue. In addition, four out of the five members of the Buc-ee’s CID board are listed as “Owner Representatives,” leaving only one seat for a citizen to provide a public perspective. Even once the CID is in effect, most of Buc-ee’s customers will likely have no idea about the extra hit to their wallets, since the CID Act doesn’t require any posting of added sales taxes.

Years of writing and research from Institute analysts on CIDs prove that proposals such as these are nothing new. Private developers use the public’s money to subsidize corporate interests with almost no public input. This process with special taxing districts has played out countless times before, both in Greene County and around our great state. You can see for yourself just how widespread CIDs are in Missouri by following the link to this interactive map from the Missouri Department of Revenue. Hopefully Springfield, and cities across the state, will soon learn that this isn’t a mistake worth repeating.

Corruption Allegations: Disappointing but Hardly Surprising

Posted on by David Stokes

A version of this commentary appeared in the St. Louis Business Journal.

In 1977, the Chicago Sun Times newspaper bought a bar. They didn’t just buy it to serve people drinks. They bought it—under a fake name—for the purpose of loading it up with video and audio recording equipment to expose the rampant political corruption in Chicago. For months, as the bar went through the standard process of getting permits, licenses, and so on, the operators recorded the unending stream of bribe requests, kickback demands, and more that were (and arguably still are) commonplace in Chicago.

Even though news of corruption in Chicago was hardly earth-shattering, the series of stories released in 1978 caused a sensation. Rarely had the political cancer been so clearly documented via media, and the constant brazenness of the corruption startled the people of Chicago, who until then may have thought they’d seen everything.

Which leads us to last week’s news about the federal indictments of three St. Louis City aldermen on corruption charges. I may work at a think tank, but I know a little about bribery attempts. Back in 2001, I got a first-hand look at an attempted bribe for then-County Councilman John Campisi. He had just finished a meeting with a taxicab operator who, as he departed, left a brown paper bag on the Councilman’s desk. Suspicious, Campisi asked me (at the time a council aide) to come to his office so that we would both be present when someone (me) opened the bag. Sure enough, the bag had a bribe in it. The next year, that taxicab operator, another councilman who had arranged the meeting, and a few other county employees involved in the racket were convicted of bribery. That was the biggest scandal Clayton had seen until Steve Stenger decided to turn the 9th floor of the county building into a live-action RICO performance.

A part of me is delighted with the bribery charges. I have spent years decrying (including in the pages of this newspaper) the abuse of precisely the two things that appear to be at the heart of the corruption charges: tax abatements and the city land bank. Rest assured, I am going to update my talking points on these two issues, and trust me when I say that audiences pay a lot more attention when the lead is “politicians take bribes” than when the lead is “studies show . . .”

But on a more serious note, a much larger part of me is angry and depressed over the allegations. While everyone is innocent until proven guilty, the main question I ask is not about the guilt or innocence of these three politicians, but whether we have a system that enables corruption in St. Louis and the rest of our state (paging Tom Pendergast, please). I have to think the answer is a very dispiriting “yes, we do.” The ease with which tax subsidies, abatements, and so on can be handed out has long made them susceptible to this risk.

The tax subsidy rot is not limited to the minnows. Never forget that, for all Governor Eric Greitens’s flaws and self-inflicted wounds, the tax-credit industry apparently mobilized a political hit squad for him after he had the audacity to kill their golden goose in the low-income housing tax credit program. And while large-scale developers around the state may be smart enough to ensure their payments to elected officials are done as perfectly legal political donations instead of unreported cash-in-a-bag, one strongly suspects that the abuse of tax-increment financing (TIF), special taxing districts, and other forms of corporate welfare is greased by the legal version of just what got the three aldermen indicted. I have no doubt that some of the people at St. Louis’s country club bars who are most appalled by bribery charges in the city are standing next in line to get their own special tax credits or floodplain TIF deals.

The stench of corruption, both now and in the past, carries with it very real harms for our region. So back to Chicago: Studies have shown (see, I can’t avoid that phrase) that corruption costs Illinois $550 million a year. That represents the cost of not only the direct bribery, but, much more so, the decreased economic growth and lost investment that result from the fear of corruption. Ask yourself: would you think twice about investing in Mexico now? Of course you would. The endemic violence and corruption would make any rational person think twice. The same thing is true for cities and states known for corruption in our own country. Under Steve Stenger, some bidders undoubtedly thought twice about bidding on St. Louis County projects, knowing as they did that a winning bid was not going to be finalized until the county executive received a large campaign donation. Accounts of corruption in the City of St. Louis give residents and investors one more reason to keep themselves and their money out of the city. That’s the last thing the city needs right now, but that’s what it has.

As is often said, when the business of buying and selling is controlled by the legislature, the first thing to be bought and sold will be the legislators. Good government types (of which I am one), must do more than simply call for “electing better people.” We need to remove the incentives and opportunities for corruption. In the latest instance in the city, we should respond by completely eliminating the ability of politicians to dole out tax subsidies, credits, and abatements. Gambling addicts shouldn’t hang out in casinos and hope they aren’t tempted. The problem of corruption in our community will continue until we reduce the involvement in government in our daily lives and shrink the number of things that can corrupt politicians in the first place.

 

Part 5: Does Kansas City Have an Affordable Housing Problem?

Posted on by Elias Tsapelas

(You can read part one, part two, part three, and part four in this series here.)

How affordable is housing in Kansas City? The answer depends not only on how you define “affordable” for individuals, but also for a city or region as a whole. Earlier posts in this series discussed housing affordability for individuals, and how factors other than income can affect what housing is attainable. But when it comes to regions, the question of affordability becomes much more complicated.

For most people, when they say housing is unaffordable, they mean that it’s too hard to find a suitable place to live in an area they want for a price they can afford. For a region, the affordability discussion can take many different shapes. Are there enough places to live? Is the cost of renting or purchasing housing too expensive everywhere, or in specific areas only? How many people are struggling to find affordable housing? What is causing the unaffordability? And what could be done to address the issue?

A few months ago, I wrote about a report that tried to assess the housing affordability situation in St. Louis, and the results were illuminating. Like Kansas City, St. Louis and the surrounding region score fairly well on most affordability metrics. Nevertheless, this particular report gave St. Louis a “C” grade. According to the report, the way to determine whether a region has an affordability problem is by taking the number of people earning different incomes and comparing that to the number of housing options that would be affordable for them. The idea seems straightforward enough, but the grades require a bit of nuance because of the way housing affordability is defined, which is residents spending 30% or less of their income on housing.

The middling grade for St. Louis was not a result of the region having too few places to live. In fact, there are more places to live in St. Louis than people to live in them. Nor was the issue that those earning around the area median income were having too hard of a time finding affordable places to live. The problem was specifically an inadequate supply of housing with low enough rents to be affordable for people making less than 30% of the area’s median income, which for St. Louis represents a family of three making less than $23,000 per year. To put that in context, affordable housing for this specific family would mean a 2–3-bedroom residence that costs (with utilities) less than $560 per month, which is understandably hard to find.

So, when does a region have a housing affordability problem? Tying the definition of “affordable” to the income of residents assures that some amount of housing will always be considered unaffordable to someone. Ultimately, when you’re not talking about places like San Francisco or New York City, the answer for most regions is likely a subjective one that local officials and their communities may be best equipped to handle. Regardless of what’s decided, it’s important that elected officials have a good idea of what they’re trying to solve and how they’re going to solve it before they start enacting policies or throwing tax dollars at the apparent problem.

The next post in the series will discuss some of the ways in which the government has tried to address housing affordability.

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