Inflation? Try an $800,000 Price Hike

Posted on by Patrick Ishmael

As we reboot the Show-Me Curricula Project, it’s been interesting to compare the differences in responses between last year and this year. One difference this year is that we’ve received many more responses within the three-day window required by Missouri’s Sunshine Law. You can find those responses here.

However, the most obvious difference between the 2021 and 2022 requests isn’t the quicker time frame and greater participation. It’s higher prices—far higher prices. If we had paid for every school to respond fully to our request in 2021, the total bill would have come out to $59,980.63. In 2022, we would have paid $908,192.38. The average requested cost was $3,332.26 in 2021; it was $26,711.54 in 2022.

A significant amount of the massive price increase can be attributed to a group of three schools in the center of the state that each charged over $100,000 (I’ll discuss these schools in more detail in a later post). Still, ten other districts raised their estimates by at least $1,000, with the largest increase coming from rural Neelyville, which asked for $56,218.95. In 2021, Neelyville said it had no responsive documents to our request and did not bill us.

It’s not clear what is driving the huge price increase from Neelyville. Given that we have received underwhelming and disappointing responses from both small districts and large districts, it would seem the differences in curricular openness depend mostly on whether there’s a “culture of transparency” at a school, not whether critical race theory is present in the curriculum. (Just ask Kansas City Public Schools, which readily provided its school’s curricula and posts supporting these ideas in response to our request last year!) If nothing else, it would seem Neelyville’s “culture of transparency” has declined in the last 12 months.

In the end, schools choose whether their cultures will include transparency or not, and the estimates we’ve received in our curriculum requests show a troubling trend toward noncompliance.

 

Where Is Robertson Fire District, and Why Do They Take So Much of Hazelwood’s Tax Money?

Posted on by David Stokes

Over the past two decades, a smoldering fire has been slowly burning in North St. Louis County. No, I’m not talking about the Bridgeton landfill fire; I’m talking about the Robertson Fire District (Robertson).

A few decades back, the City of Hazelwood annexed some adjoining land into the city. That land was previously unincorporated and had been served by the Robertson Fire Department. Because of an arcane and misguided law applicable in St. Louis County (RSMO §72.418), Hazelwood was required to pay Robertson the property tax revenue in the annexed area for Robertson to continue providing service there, even though Hazelwood was entirely willing and able to provide fire services in that area via its own municipal fire department at lower cost. As part of the agreement reached after the annexation, the residents of the area pay a portion of the property tax (as is normal), but the city itself pays anything above the initial tax level. Since that agreement was reached a long time ago, voters in Robertson have approved extremely high property tax rates, which is easy to do because the city—not the property owners—is responsible for the increased property taxes for the portion of the fire district that lies in Hazelwood. Confusing? Yes, it is, and that’s the point. Fragmented government, low-turnout elections, obscure special taxing districts, politically active public-employee unions: taken together, they create the perfect environment for government mismanagement and abuse.

The situation has gotten so bad that Hazelwood is saying it may have to declare bankruptcy. Some residents of Hazelwood have put together a citizen’s group to demand change, and they have successfully placed a recall election for the Robertson board on the November ballot. Average citizens are now engaged in this issue, and that is what the Robertson board should fear the most.

What is the solution here? Well, there are several options. There is the political solution, which will be addressed in the upcoming recall vote. Then there is the direct policy solution, which is to repeal RSMO §72.418 and allow municipal fire departments to serve annexed areas. But there is a bigger issue here, and that is the political influence of the firefighters union and its ability to dominate independent fire districts (and some municipal fire departments, too, no doubt). From this Post-Dispatch story:

Also opposed is Local 2665 of the International Association of Fire Fighters. Only a handful of districts in St. Louis, St. Charles and Jefferson County—including the Northeast district—have fire boards controlled by directors whose campaigns weren’t backed by the union.

The Robertson issue is just one local example of this larger debate. I saw what happened when local politicians in University City tried to oppose the fire union, and it wasn’t pretty. I commend the Hazelwood elected officials for their stance here, but to stop the abuses of firefighters unions in our area many more voters and local officials will need to get involved.

Election Results, Health Care Prices, and Spending Your Taxes

Posted on by David Stokes

David Stokes, Abigail Wagner and Quin Rizer join Zach Lawhorn to discuss the recent election in Missouri, price transparency at hospitals in the state, and the latest data from The Municipal Checkbook Project.

Listen on Apple Podcasts 

Listen on Stitcher 

Listen on SoundCloud

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.

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