Costs of a Cosmetology License

Posted on by Corianna Baier

Would you spend over $14,000 on extra schooling to make barely more than minimum wage? It sounds ridiculous, but that’s what the state requires to be a licensed cosmetologist in Missouri. The title of a recent report from the Institute for Justice is true: State cosmetology licensing fails aspiring beauty workers by making it too difficult and expensive to attain a license.

The Institute for Justice’s report examines the debt and dropout rate of cosmetology students across the country, and the numbers are pretty shocking. To receive a cosmetology license in Missouri, one must complete 1,500 educational hours from an accredited cosmetology program. From the 2011–12 school year to the 2016–17 school year, the average cosmetology program cost $14,629 and students took on an average of more than $7,700 in federal student loans.

That’s not pocket change, but it’s even worse when earnings are considered. In Missouri, the median annual wage of a licensed cosmetologist in 2019 was $23,760. That’s slightly lower than the national average of around $26,000 for licensed cosmetologists and slightly higher than yearly earnings from a full-time minimum wage job. (For reference, earning Missouri’s minimum wage of $10.30 for 40 hours per week and 52 weeks per year equates to yearly earnings of $21,424.) And more than two thirds of students do not graduate on time, increasing their debt burden even more.

So much money is spent to fulfill a state educational requirement, but is that requirement even necessary? Occupational licensing is intended to protect the health and safety of consumers, but recent research indicates that only 25 percent of cosmetology training is health and safety training.

Occupational licensing increases costs to consumers, but the other side of that coin is often overlooked. Licensing requirements dramatically increase costs for the workers who must obtain that license to earn a living. This is especially true in cosmetology, where the costs are directly tied to licensing requirements, but this is also true no matter the cost or resulting wages. It’s time for legislators to reconsider these requirements, regulations, and boards that have burdened workers and consumers for too long. A sunset provision for occupational licenses would be a great step toward reducing burdens and costs for consumers and workers.

Springfield Should Reject Subsidies for Sports Town

Posted on by David Stokes

A version of this commentary appeared in the Springfield News-Leader.

It is important to learn from one’s mistakes, and when it comes to special taxing districts in the Springfield area, there are plenty of mistakes to learn from. Special taxing districts (SDs) are tax districts established to support one specific function or program, such as a school district. In recent years, however, most new SDs have been nothing more than vehicles for corporate welfare, and their use in Springfield has been anything but an example of good government.

Springfield is now considering a gift basket of new tax subsidies for the Sports Town youth sports complex. This included the recent city council approval of a new community improvement district (CID) to use tax dollars to subsidize the private development. First, the city gerrymandered a map to make sure the new CID didn’t include any voters to get around the voting requirements. Next, city leaders decided to give the developers $2 million in upfront subsidies even though the city’s own guidelines recommend against doing exactly that. The upfront subsidy by the city means that all Springfield taxpayers are paying for this project, not just the ones who may use the facility.

Remaining on this expensive list is a request by the developers for $4 million more subsidies from federal stimulus funds. Shockingly, the developers have decided that their project qualifies for federal funding. Maybe it’s for the sewers, or for tourism, or perhaps this project will help fight the COVID pandemic. Youth sports may be infrastructure now. Whatever the feeble excuse is, the lure of “free” federal money is strong. If a private development such as SGF Sports (the company behind Sports Town) cannot succeed without multiple subsidy programs, it’s not the job of taxpayers to ensure it goes forward.

With such a large subsidy upfront, Springfield is basically trying to be a real estate developer. The city should have learned from Greene County that government real estate speculation is a bad idea. That county previously subsidized the private Jamestown development by creating a neighborhood improvement district (NID) to pay off bonds the county issued in support of the proposal. It assumed the future taxes from the NID would suffice to pay off the bonds. It assumed wrong. When the Jamestown project failed, Greene County taxpayers were on the hook for the unpaid debt. Springfield should have learned from this costly mistake.

This SGF Sports CID would be the 17th CID in Greene County, most of them in Springfield, along with at least four more transportation development districts (TDDs). Despite the public-sounding names, many CIDs and TDDs consist of just a few parcels of property with sales taxes imposed on the public for the private benefit of one property owner. These tax dollars are often used for essentially private purposes, such as retail parking lots or landscaping.

How have these other SDs worked out in Springfield? Not very well. Missouri state auditor Nicole Galloway specifically cited Springfield’s HyVee store CID for improperly collecting almost a quarter million dollars of tax money. Galloway also identified Springfield’s College Station TDD downtown for multiple abuses, including failures to notify shoppers of the tax. Based on research on SDs generally in Missouri, the other SDs are likely functioning as corporate welfare schemes here in the Queen City of the Ozarks.

Springfield is a vibrant, growing community that does not need to rely on tax subsidies to boost its economy. If Springfield wants to help all businesses succeed rather than just a select few, it should work with Greene County to lower its commercial property tax surcharge rate, which is high compared to those of other Missouri communities. The CID for Sports Town was not necessary, and $4 million more from federal funds would be an even worse decision. The evidence is clear that these subsidy programs produce more financial mismanagement than economic growth. Springfield should learn from its history and stop repeating the same mistakes.

Brentwood Considering Mandating EV Charging Stations in New Townhomes and Apartments

Posted on by Jakob Puckett

Brentwood officials are considering a new electric vehicle charging station law that could raise prices for residents either looking to renovate or move into newly built townhomes or apartments.

The rule they’re considering would require electric vehicle charging stations be built with “new and substantial renovations and additions [at least 50 percent of the unit’s final floorspace] on single-family two family and townhomes and new multi-family residential developments.” The Brentwood Planning and Zoning Commission rejected a similar proposed mandate last month, but the Brentwood Board of Aldermen has revived the idea, with the Brentwood mayor indicating they may pass a bill on the matter.

Each EV charger costs an average of $5,000 to install, but it is still unclear who will pay for them. Ameren offers property owners subsidies for EV charging stations up to half the cost, but that still leaves thousands of dollars unaccounted for.

Additionally, their deliberations are vague concerning how many EV charging stations would be required per property. Would it be one per family in the case of townhomes? Would it be a percentage of total parking spaces available, as the new Saint Louis County ordinance requires? Would families that don’t use an EV be paying for their EV-driving neighbor’s charging station?

The board of aldermen’s proposal is not finalized, but the idea should be rejected. Let property owners install EV charging stations at their own pace based on the market demand for them. EV charging stations have grown rapidly across the country for the past several years without mandates like the one Brentwood officials are considering.

In the near future, equipping townhomes and apartments with EV charging stations may indeed make good business sense, either to keep existing tenants or attract new ones. But shouldn’t business and property owners be the ones deciding where to place EV charging stations rather than government officials?

Call for Music Production Tax Credits Sounds Familiar

Posted on by Corianna Baier

Gateway Studios is using a hodgepodge of incentives to build a $130 million music production facility in Chesterfield. The company is also lobbying to create a state incentive program specifically for the music production industry. While I’m not opposed to making Chesterfield the new Nashville, it’s a lofty goal that interested parties want to achieve using taxpayer dollars and government handouts. Is anyone else getting déjà vu? This is sounding eerily similar to the colossal failure that was Missouri’s film production tax credit program.

The state’s film tax credit program was intended to stimulate the film industry by reducing a studio’s tax liability. Thankfully,  the film tax credit program sunset in 2013. The program was a failure. The Tax Credit Review Commission recommended that the tax credit be eliminated because it served too narrow of an industry and didn’t provide a positive return on investment. There was very little evidence that the program delivered on any of its promises. Do we really think the music production tax credit will produce a different result under very similar circumstances?

Show-Me Institute writers have been arguing against the film tax credit program for years (this tax credit program continues to haunt the legislature). What was said about that program also rings true for a potential music production tax program: If this industry cannot succeed in Missouri without government assistance, then maybe it shouldn’t be here.

Missouri certainly wasn’t the next Hollywood, but perhaps there’s potential for us to be the country’s next music capital. But that isn’t for the government to decide. If a private company wants to make it happen, great! Lawmakers, on the other hand, should not be giving out incentives (on the backs of other taxpayers) to artificially boost music production companies. It didn’t work with film tax credits—why should we expect a music production tax credit to be any different?

Why Missouri Should Embrace Retail Electric Competition in One Graph

Posted on by Jakob Puckett

Since 2008, Missourians’ average retail electricity prices have increased the fourth most in the country. The average retail price of electricity jumped 17 percent in our state over this time period after taking inflation into account.

Missourians have little recourse to deal with these rising costs. Missouri’s retail electric markets are monopolized, meaning that each Missourian only has one possible electric service provider.

But it doesn’t have to be this way. As I have written previously, thirteen states and the District of Columbia allow customers to choose between competing electric service providers. Looking at the time since competitive markets matured in 2008, the results have been quite encouraging, as shown in the graph below.

Source: Energy Information Administration

Missourians are losing ground when it comes to overall electric prices, too. In 2008, Missouri’s prices were quite low—43rd-highest overall electricity prices nationwide. Missouri’s prices now sit in the middle of the pack at 29th, due to the rapid price increases shown in the graph above.

Across every sector, competitive states are outperforming monopolized states—and especially Missouri—when it comes to lowering prices. Competition has helped make the electric service industry in those states more efficient and has passed on savings to customers. If lawmakers want to reduce the cost of living for Missourians while enhancing their economic freedom, they ought to consider embracing retail electric competition.

Missouri Parents’ Bill of Rights, Money for Music, and AG Lawsuit

Posted on by Corianna Baier

Corianna Baier, David Stokes, and Patrick Ishmael join Zach Lawhorn to discuss the Missouri Parents’ Bill of Rights, a lawsuit filed by Missouri’s AG against The Springfield School District, an update on corporate welfare around the state, and more.

Listen on Apple Podcasts 

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Listen on SoundCloud

 

The Kansas City Star Lies in “Parents’ Bill of Rights” Editorial

Posted on by Patrick Ishmael

In an editorial titled “Missouri think tank’s ‘Parents’ Bill of Rights’ wants us to subsidize private schools,” the Kansas City Star Editorial Board takes aim at our Missouri Parents’ Bill of Rights (MPBR) transparency proposal, claiming that it is intended to sneak money to private schools and “designed to make angry people angrier.”

Both claims are lies.

I know they’re lies because I authored the proposal, and I know why I wrote it the way I did. At no point does the text of the MPBR reference—sneakily or otherwise—expanding Missouri’s educational choice options beyond its current boundaries. A simple call to our office or my personal cell, which staff at the Star have, would have further disabused the editorial writer of the notion. And if, as the editorial stipulates, people are angry about what is happening in their schools, this proposal intends to be a solution that reduces that anger by . . . solving those problems.

Problem solving! How quaint.

Indeed, finding solutions to public policy problems is central to the mission of the Show-Me Institute, and we pride ourselves on pursuing and advancing those solutions with facts and fair arguments. We believe our words speak for themselves and we invite feedback and criticism of those words, but our standing presumption is that our counterparts in the media and elsewhere have adopted a similar approach in their critiques—an approach that relies on facts and advances those facts through fair argument. The Star’s editorial board missed both of those marks here.

No one is hiding that the Show-Me Institute organizationally supports school choice. We do. But the MPBR is not a school choice proposal, nor is it a call to “subsidize private schools.” Affirming that parents have the right “to choose the existing educational option that works best for their children” is important because many parents and children who qualify for that choice under current law have been denied it in the past. It’s mind-boggling that the Star doesn’t know this.

The Star and I agree that “transparency shouldn’t be limited to public schools.” We’ve been working on mandating government transparency for cities, counties, school districts, local taxing districts, the state, and others for years—transparency ideas taken up not only by the Missouri Treasurer’s office three years ago but also by the legislature with HB 271 just months ago. That we’ve finally gotten to curriculum transparency is, if anything, late. The implication that schools are somehow being targeted in a vacuum for transparency is to have sleepwalked through the last half decade of Missouri policy and politics.

Like a parent might be, I’m not mad at the Star—I’m just disappointed. I assume that Star employees still know how to operate a phone or send electronic mail to ascertain and share facts. That they instead chose to share the false idea that the MPBR would subsidize private schools is disappointing.

After all, it wasn’t the Show-Me Institute trying to make angry people angrier.

How to Make School Boards More Responsive with Michael Hartney

Posted on by Susan Pendergrass

Susan Pendergrass speaks with Michael Hartney. 

Michael T. Hartney joined the Boston College political science faculty in fall 2017. Previously he was Assistant Professor of Politics at Lake Forest College. Professor Hartney’s main research and teaching interests include: state and local government, interest groups, and public policy.

Listen on Apple Podcasts 

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Listen on SoundCloud

A Truly Terrible Idea for West County

Posted on by David Stokes

The title of this article in the Post-Dispatch says everything one needs to know about the focus of far too many businesses in Missouri: “New Chesterfield music production development eyes legislation to bolster industry.” How do you increase profits? Well, first you need to get special legislation passed.

This new business, which has just opened in West St. Louis County and has already received millions of dollars in state and county tax subsidies, is all set to go with a plan to increase profits. Is it going to focus on customer service? Hiring a better sales team? Increasing business efficiency? Apparently not. It is going to focus right away on hiring lobbyists and getting the Missouri Legislature to pass a new, special state tax incentive program for its industry. From the article (emphasis added):

Gateway Studios in August hired Bardgett and four lobbyists from his firm. Kerr said the company is hoping to win support for an incentive program tailored to the music production industry. Pennsylvania has its own program for the industry, which helps draw production companies and acts to the state.

What Ludwig Von Mises said in 1944 in his famous book Bureaucracy is becoming reality in our state with tax subsides (emphasis again added):

Such executives did not care a whit for the company’s prosperity. They were accustomed to bureaucratic management and they accordingly altered the conduct of the corporation’s business. Why bother about bringing out better and cheaper products if one can rely on support on the part of the government? For them government contracts, more effective tariff protection, and other government favors were the main concern. And they paid for such privileges by contributions to party funds and government propaganda funds and by appointing people sympathetic to the authorities.

The tax subsidies this particular business has already received are bad enough. The idea that a special Missouri state tax incentive would be created to benefit one particular business in Missouri is appalling. There is no evidence that supports the idea that subsidy-focused economic development plans are successful, especially in a growing, thriving area like Chesterfield. Economic development officials and politicians cannot predict the future, and their choices are often based on political favoritism. Furthermore, chasing subsidies often leads businesses to make sub-optimal choices, such as locating in a less productive place to qualify for tax money, or focusing resources on lobbying instead of business improvement (the latter of which, unfortunately, does pay off far too often).

There has been progress made on some fronts in this fight, but creating a new incentive program just because an exciting and hip new business asks for it would be a terrible step backward.

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