Jakob Puckett, Corianna Baier, and David Stokes join Zach Lawhorn to discuss changes to a St. Louis EV charging station law, the upcoming April 5 elections and the idea of a gas tax holiday in Missouri.
A Criminal Justice Reform in Occupational Licensing
Criminal justice reform has been a popular topic in the policy world for the last few years, but before we look too far ahead to the next reforms, it’s worth reminding ourselves that Missouri lawmakers actually passed some good criminal justice reforms fairly recently. Along with the highly praised licensing reciprocity legislation, Missouri lawmakers instituted the Fresh Start Act of 2020.
Back in 2019, Institute researchers highlighted Fresh Start Act legislation that other states had passed before Missouri passed its own version the following year. The Fresh Start Act modifies occupational licensing regulations for workers with a criminal record to make it easier for the formerly incarcerated to find gainful employment.
What does that matter? Well, strict occupational licensing rules for those who have criminal records can make it harder for those with a checkered past to find work. Not only can that impede successful re-entry efforts, but it limits the supply of workers. The Fresh Start Act does not allow criminal records to disqualify an individual from receiving an occupational license unless the criminal conviction directly relates to the occupation (an individual with a conviction relating to children would not be able to obtain a teaching license, for example). But for the vast majority of former inmates, relaxing licensing rules is a good thing.
Licensing burdens are, of course, a problem for many seeking work, but those with criminal records are particularly at risk for being written out of entire sectors of the economy. State legislatures have started addressing this problem; since 2015, 38 states, including Missouri, have reformed their occupational licensing laws to make it easier for ex-offenders to find work in industries in which the state requires an occupational license to operate.
The Fresh Start Act may seem like a small thing, but for the formerly incarcerated, it could mean the world. More should be done on licensing in general—including the regular sunsetting of all licensing regimes —but this legislation was a good step.
Missourians to Vote on New Use Taxes
Thanks to recent changes in state and federal law, local use taxes have become topical in Missouri. Many Missouri cities and counties have them on the ballot on April 5.
With offsetting rate cuts, use taxes are a positive policy change for Missouri. Without them, they are just another tax increase.
Missouri Use Taxes Should Expand the Tax Base, Not the Size of Government
Use taxes in Missouri are simply sales taxes on goods delivered to your home from out-of-state sellers. Local governments have been authorized to collect use taxes for a long time—predating the internet, even—but they have not been widely adopted. Collecting sales taxes on Sears catalog purchases was a lot of work for little revenue. The internet has changed that. The recent Supreme Court decision in the “Wayfair” case, changes to state legislation, and, most obviously, the tremendous increase in e-commerce during the pandemic have all combined to greatly increase the need or desire for governments to tax online sales.
For purposes of comparison, e-commerce now makes up over 12% of total sales in the United States according to the U.S. Department of Commerce. For cities and counties in Missouri, 12% is a lot of sales not to tax. To address that, at least four counties and dozens of cities have placed use taxes on the April 5, 2022, ballot. Expanding the tax base with a use tax, if done in conjunction with a reduction of other, more harmful taxes, could be a beneficial change. But let’s be clear: if there is no corresponding reduction in other taxes, this is a tax increase on residents.
It is a central tenet of tax policy that a tax base should be as broad as possible. The more expansive the tax base, the lower the rate that must be imposed to fund the functions of government. Exact use tax revenue amounts are hard to predict, but the revenues for each city will not be insignificant. Local governments have received federal COVID-relief and stimulus funds, home values have risen substantially, and tax collections during the pandemic were not down as much as initially feared. As a result, many of these cities and counties do not need this new tax revenue to meet vital needs. The use tax could be approved by voters to responsibly expand the tax base and equalize the competition between online and physical stores, but it should not be approved simply to grow government revenues. Imposing a use tax in a revenue-neutral manner is not a new idea. It is exactly how the Missouri Legislature addressed this issue with the state’s new use tax law in 2021. St. Francois County officials have publicly stated they will lower their county property tax if the use tax is approved.
For cities and counties in Missouri proposing to impose their own use taxes, the simplest way for them to offset the revenue increases from the use tax would be to lower their property taxes in a revenue-neutral manner. Other options for various local governments if the use taxes are approved include eliminating more harmful taxes, such as the paradoxical local sales tax for economic development. Reducing the local utility tax rates would be another good exchange for cities that do not levy property taxes.
The imposition of a use tax for these Missouri cities and counties could be a positive policy change. It could also be an easy way for politicians to just raise taxes one more time. By having various city officials pledge to enact offsetting revenue reductions, local officials can amplify the public benefits while curtailing the tax impact on residents and businesses. That is a plan I think most taxpayers and voters could support. Without such a commitment, though, the use tax is just another tax increase.
Municipal Advocacy With Your Money?
A recurring issue in local government in Missouri is when cities, school districts, and other entities improperly use taxpayer money to advocate for tax increases on the ballot. Now, of course, they don’t say they advocate. They say they are only giving out neutral information, which can be allowed. But there are plenty of examples of what appears to be outright advocacy. When you read pieces like this, do you really think the language is unbiased and that an ordinary voter would not take the information as supporting the tax increase? From the piece:
How can a Use Tax benefit my community?
As internet purchases increase, local revenues decrease. Funds generated from the Use Tax can be used to pay for vital municipal services including Police, Parks, and Public Works services.
You will note there is no opposing argument mentioned. If you read this and truly think it is neutral, I imagine you are the type of person who really tried to remain friends with your ex-girlfriend when they dumped you in order to “just be friends.” Hint: the pieces aren’t neutral, your ex really didn’t want to be friends, and it really was you, not them.
Show-Me Institute researchers have filed Sunshine Law requests with two cities that have use taxes on the ballot on April 5: Chesterfield and Town & Country. These two cities are using tax dollars to expend money to promote passing use taxes. They have information on their websites now and it appears more is coming between now and the election. We are hoping to learn about the process to determine the validity of the cities’ expenditures in favor of providing neutral information about the use tax. Chesterfield and Town & Country are certainly not the only two cities doing this.
For the record, there are arguments in favor of use taxes. You can also make the case that, absent alternate tax cuts, they are a tax increase. Either way, using public money under the pretense of “providing information only” has got to stop. Much more to come on this from Institute analysts in the coming days.
Major Confusion About Missouri’s EV Charging Station Bill
Judging by numerous articles I’ve seen recently, there is major confusion about House Bill (HB) 1584 that could use some clearing up.
HB 1584 stipulates that any municipality requiring property owners to install EV charging stations pay for those installation costs. Some municipalities in Missouri created requirements for property owners to build EV charging stations on new construction and major renovations—this law would ensure that private property owners aren’t forced to bear the costs of government-mandated construction.
Retrofitting an existing parking space with EV charger equipment can cost thousands of dollars per space, so sorting out who pays for what is not unreasonable. Despite what some opponents claim, this bill doesn’t “block” EV market growth; it simply ensures that private property owners aren’t told where and when to spend more money.
Another objection to this bill is related to costs. It costs much less to outfit a parking space with EV charger equipment during construction than after. Some estimates say installation during construction rather than after could cut costs by 75 percent. And with thousands more EVs hitting the road each year, opponents of the bill claim it would be better to require building charging stations as cheaply as possible to accommodate EV market growth.
This gets it backward. It may indeed be cheaper to install chargers during original construction, which is something property owners can take into account if they wish to respond to a growing EV market. Accommodating an emerging class of customers is standard business practice and doesn’t require any mandates.
Lost in the discussion surrounding HB 1584 are several better policies state and local policymakers can pursue to improve the EV market. For charging stations, municipalities can streamline their zoning rules to allow EV chargers in all zoning districts, review EV charger installation permits in days rather than weeks, and make information about the permitting process much more transparent. To make it easier to purchase EVs, state lawmakers can allow Missourians to buy EVs directly from manufacturers rather than forcing them to go through a franchised dealership (which many new EV companies do not have).
HB 1584 is a step in the right direction, but it’s a narrow bill that only deals with protecting private actors from an onerous government mandate for EV charging station construction. I’m hopeful that future EV policy discussions can turn from talks of fines and mandates to free markets.
Podcast: The Roaring 2020s with Mark P. Mills
Susan Pendergrass speaks with Mark P. Mills , a senior fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering and Applied Science.
Russia, Ukraine, and the Impact on The United States with Senator Jim Talent and James Jay Carafano
On March 17, 2022 Senator Jim Talent and Heritage Foundation’s James Jay Carafano joined us for a virtual event to discuss the impact of the Russian invasion of Ukraine and what it means for The United States, China, and more.
Download the podcast version of the event:
The Missouri House Has Taken a Stand for Parents
It’s past time the Missouri Senate steps up to the plate and delivers for Missouri Parents. The House has done its part—two very important bills that support the rights of parents to choose how and where their children are educated have passed through House committees and a full House vote. They’re now in the hands of the Missouri Senate, which has been debating and arguing about education issues since early January, but not passing legislation for the governor to sign.
House Bill 1552 will finally fix the glitch in funding for public school students who choose a charter school rather than their assigned public school. Now known as the Charter School Funding Act, this bill would give charter school students access to the same funding streams as their non-charter school peers. In addition, it would send state aid to charter schools directly from the state, rather than routing the state money through the district in which a charter school is located. This funding change becomes critical when a district’s state aid amount is insufficient to cover the number of students in charter schools, as is currently the case in Kansas City. Charter schools can’t open or expand if the pot of money is limited. St. Louis is getting close to that point but isn’t quite there. The bill gives St. Louis Public Schools five years before the funding changes take effect.
House Bill 1814 would allow Missouri families to choose a school in a district other than the one in which they live. If a family owns property (such as a second home or a farm) in a separate school district from the one they reside in, the family can send up to four children to that district. More importantly, the bill also allows families to cross district lines for any reason, provided that the district they seek agrees to accept transfer students. Not only does this greatly expand options for Missouri students, but it also gives districts an incentive to work to attract students and their state aid dollars. Many states have similar policies and the data show that it is most often rural students that take advantage of such programs
Missouri families have had a rough couple of years. In person versus virtual, mask and vaccine requirements, curriculum content, to name just a few issues, have parents wanting more than just one assigned choice of school. It’s time for the Missouri Senate to follow in the House’s footsteps and put these options on the governor’s desk.
An In-depth Look at Missouri’s Rural High Schools
In this report, Susan Pendergrass presents a detailed look at Missouri’s rural high schools, with information about student demographics along with key indicators like student/teacher ratios, teacher experience, and per-student expenditures. Perhaps most importantly, the report compares schools across several measures of academic performance broken down by subject matter, school locale, and income level of students. Click here to see the full report.
Find more on the performance of schools in Missouri at MoSchoolRankings.org
