SCOTUS, Scooters, and a Gas Tax Holiday

Posted on by Susan Pendergrass

David Stokes, Susan Pendergrass and Abigail Wagner join Zach Lawhorn to discuss the recent SCOTUS decision  upholding a parent’s right to choose a religious private school, even if the tuition is being paid for with public dollars, the idea of a federal gas tax holiday, the ban on electric scooters in St. Louis, and more.

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Even with an Updated Route, MetroLink Expansion is a Waste

Posted on by Quin Rizer

Plenty of federal funds are available after President Biden signed a 1 trillion-dollar infrastructure bill into law last November, and Saint Louis Mayor Tishaura Jones is trying to cash in through an expansive northside–southside MetroLink expansion.

The proposed route received some tweaks earlier this month, and now is set to run from Natural Bridge Road at Grand Boulevard in north city down Jefferson Avenue past the National Geospatial-Intelligence Agency (NGA) headquarters and the site of the new MLS stadium. This new plan has an estimated price tag of between $600 and $800 million and would be financed primarily through federal funds. However, like the ill-advised KC Streetcar expansion, expanding MetroLink would be a waste.

The first and most obvious problem with the proposal is ridership. The project is touting the ability to connect impoverished areas of North Saint Louis with centers of commerce in places such as downtown and the Central West End. However, project leaders have yet to put out research supporting this claim. Considering that fewer and fewer people are commuting downtown for work, there are reasons to be skeptical of this assertion.

As a longtime Saint Louis sports fan, I understand that MetroLink can be a convenient way to get downtown and avoid the stress and costs of parking. However, building an additional stop and line to service the new MLS stadium is completely unnecessary, considering its proximity to Union Station­­­–it is only 0.2 miles away, or a five-minute walk. Instead of changing lines to access the dedicated stadium stop, soccer fans taking the train downtown would be better off exiting at Union Station and making the short walk over.

As with the KC Streetcar expansion I wrote about in a recent blog post, spending hundreds of millions of dollars on a questionable MetroLink expansion comes at the expense of bus systems.  Saint Louis Metro has been forced to cut lines amid staffing shortages, an issue which is predicted to persist into next year. Metro Bus is the primary means of transportation for roughly 22,000 St. Louis commuters, compared to only 4,000 commuters who primarily use MetroLink.

If St. Louis wishes to use federal money to improve public transit, it should improve the bus system and invest in more efficient types of public transportation, like Bus Rapid Transit (BRT). Unfortunately, policymakers’ tendency to chase shiny objects will likely leave Saint Louis with a defunct trolley, an oversized light rail system, and thousands of unhappy bus riders.

A Lesson on Early Literacy from the Magnolia State

Posted on by Abigail Wagner

If I polled one hundred Missourians on which state they thought had the best early literacy policies in the nation, I’m almost certain most of them wouldn’t immediately say “Mississippi.” Mississippi has long been at the bottom of the pack when it comes to reading performance, while Missouri has consistently floated in the middle. However, in 2013, Mississippi brought in a dynamic state superintendent of schools, Dr. Carey Wright, who has emphasized a science-based approach to early literacy and taken a tough stance on promoting struggling readers to the next grade level.

In the years since Wright’s appointment, Mississippi has reversed its last-in-the-nation status with an impressive increase in the percentage of its fourth graders who can read at grade level. In 2013, only 21 percent of Mississippi fourth graders achieved a score of proficient or above on the National Assessment of Educational Progress (NAEP), well below the 2013 national average of 34.8 percent. By 2019, Mississippi had improved that by a whopping 11 percentage points, a magnitude of gain that is rare on NAEP. In just six years, Mississippi fourth grade reading scores were equivalent to that year’s national average of 34.6 percent.

While scores have only just hit the average mark, Mississippi’s literacy growth in 2013 to 2019 exceeded that of every other state by seven points. During the same time period, Missouri continued to tread water. Our fourth-grade proficiency rate actually decreased by one point, from 35 to 34 percent. So, what did Mississippi do differently?

In 2013, along with appointing Wright, Mississippi passed the Literacy-Based Promotion Act (LBPA), requiring third graders not reading at grade level by the end of a school year to remain in third grade for intensive reading intervention. This requirement stems from research showing that students learn to read in kindergarten through third grade, then read to learn from fourth grade onward. Because of this, third graders who can’t read proficiently are four times more likely to fail to graduate from high school than those who can. Mississippi’s retention of students with literacy deficiencies gives them another chance to reach this important milestone and ensures that students are fully prepared to hit the ground running in fourth grade.

Missouri has already made some progress on this issue. Governor Parson signed SB 681 this spring, which requires reading intervention for struggling K-3 students. The new law, however, doesn’t require that third graders who demonstrate reading deficiencies be retained, and early research suggests that Mississippi’s strict enforcement of its retention policy may have played a major role in the NAEP score increase. If that proves true, Missouri lawmakers should consider taking a page out of Mississippi’s book by requiring that students read proficiently before starting fourth grade.

Legislature Squanders Health Care Opportunity

Posted on by Elias Tsapelas

As has been discussed on this blog multiple times over the past few weeks, Missouri’s 2022 legislative session was largely a disappointing one. For me, the biggest letdown was the legislature’s failure to capitalize on the momentum for health care reform.

Since long before the COVID-19 pandemic began, my colleagues and I have written about the insufficient supply of health care providers in Missouri and offered a bevy of reforms that would help address the situation. Then, once the coronavirus arrived in the spring of 2020, Governor Parson waived a variety of laws and regulations that were needlessly inhibiting health care professionals from practicing in our state. While this was a positive step, waivers only offer temporary solutions to a permanent problem.

For the nearly 20 months after the waiver was first issued, state health care supply grew because of the reduction of unnecessary burdens. Thousands of Missourians tried telemedicine for the first time. Advanced practice registered nurses (APRNs) were allowed to navigate freely across the state to serve patients that needed care. And licensed health care providers from other states were allowed to come to Missouri and easily begin providing care.

While the services described above may not sound out of the ordinary, none of them were allowable under Missouri law prior to 2020. Telemedicine was largely restricted to patients and providers who had met previously in person. APRNs were only allowed to practice medicine within 75 miles of a collaborating physician. And finally, state professional registration boards were not required to recognize the licensure of many practitioners from other states, or at least not without first requiring them to clear too many unnecessary hurdles. Fortunately, Missouri’s legislature acted on that last item and approved interstate license reciprocity in 2020, which drastically improved the licensing process for out-of-state professionals interested in working in Missouri. Unfortunately, easy access to telemedicine and APRNs remained reliant on emergency waivers.

As I wrote less than a month ago, I was optimistic going into the 2022 session that reform was on the way. Missouri was turning the corner on COVID-19, and Governor Parson allowed the emergency order for the pandemic to expire, along with the health care waivers. Rarely is the opportunity for legislative action so apparent and uncontroversial; the legislature simply needed to enshrine the popular status quo from the past two years into law. Instead, health care reform was another victim of this year’s legislative dysfunction, leaving any hope for action once again to the future.

Centene Says the Quiet Part Out Loud

Posted on by David Stokes

There are numerous flaws in the ongoing subsidy-driven economic development strategy employed in Missouri. In this post, I want to focus on one of those flaws. Businesses often overstate the importance of subsidies in their decision-making process. After all, it costs nothing to make such a claim, and if the tax subsidies, credits, and abatements are there for the taking, why not ask for them? All a company has to do is say that “but for” the subsidy, it wouldn’t invest in the area. Easy enough, right?

Analysis of what companies actually do, as opposed to what they say they require, tells a different story. Shockingly—I know this is going to stun many of you—those same companies often don’t need the subsidies as much as they claim. Here is an article that discusses one study out of Texas:

Nathan Jensen, a University of Texas at Austin professor, analyzed businesses’ applications for school property tax relief. His findings suggest that just 15 percent of participating firms needed the incentives in order to make an investment in Texas. Furthermore, many of the other firms were uncharacteristically open that incentives were not a necessity.

Just fifteen percent. And sure, Amazon received substantial subsidies when it decided to build its sought-after second headquarters in Virginia, but it received far fewer subsidies there than had been offered by other states.

Which brings us to Clayton, Missouri and Centene. Several years ago, the City of Clayton passed an enormous incentive package for Centene as part of its major expansion plans within the city. From a St. Louis Post-Dispatch story on the topic:

Clayton and state officials signed off on a sizeable incentives package: $75 million worth of property and personal tax abatement over 20 years in Clayton and tens of millions more in state incentives, most of which would be dependent on the number of jobs Centene would add in the region.

Not surprisingly, “ . . . Centene said then that it could not build the project without public subsidies.”

But that was 2016, when it was time for asking. Now it’s 2022, and it’s time for doing. And Centene has changed its mind. The company is not going to build many of the parts of the proposal that justified the tax incentives, including a civic auditorium in downtown Clayton (emphasis added):

“A civic auditorium is no longer in Centene’s plans regardless of any incentives to proceed,” the company said in a statement to the Post-Dispatch.

Centene almost certainly didn’t need the tax subsidies in the first place, and it threw in the civic auditorium promise as a political victory for the local politicians who like to delude themselves as to their own importance in creating downtown Clayton.

As long as Clayton holds firm and takes back the subsidies now, fairness demands we give the city some credit here. But the precedent has been moved further along by the subsidies Clayton gave out in 2016, and that part of the damage has already been done—all over tax subsidies that were likely not needed in the first place.

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.

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