You are invited to join us for a discussion with Rep. McCreery and Sen. Onder on the bills passed, pending, and defeated this past legislative session. Both will be available for questions following their remarks. Register early to claim your spot!
So about that Coronavirus Money . . .
The three coronavirus relief bills Congress passed funneled just under $200 billion into America’s K-12 public schools. This is a huge sum of money, several multiples of what the federal government spends on K-12 schools each year.
As more than a year has passed since the first bill’s passage, and almost nine months have passed since the second, we can start to figure out how the money is being spent. A new report from the American Enterprise Institute crunches the numbers and tells us the answer: it isn’t.
The first relief bill—the CARES Act passed in March of 2020—allocated $13.2 billion for K-12 schools. The Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA), the second bill, was signed into law in December of 2020 and allocated another $54.3 billion. The third bill, the American Rescue Plan (ARP), was passed in March of 2021 and allocated $122 billion.
According to the AEI report, to date only 70 percent of CARES Act dollars have been spent, and a mere 7 percent of CRRSA dollars have been spent. (Not enough time has passed to know how the ARP dollars have been spent.)
Missouri has spent 84 percent of its CARES Act dollars but 0 percent of its CRRSAA dollars. If we combine the total dollars, it means that Missouri has only spent 16 percent of the money it received in the first two relief bills.
As it turns out, reopening schools was not nearly as expensive as some school advocates said it would be. State and local tax coffers were not hurt nearly as much as some had predicted. Some money was necessary, but it was a fraction of what Congress allocated.
And here comes the kicker: The real money is in the ARP, and it is just starting to show up. If schools haven’t spent down the funds from the first two bills, and schools start back up without the need for any additional pandemic-mitigation measures, the money from the ARP is just going to start piling up. Ultimately, the report estimates that between $78 and $123 billion of the coronavirus education funds will be spent on non-pandemic related expenses. And it isn’t just AEI making these predictions—the Congressional Budget Office (quoted in the report) predicted that only $6.4 billion of ARP dollars will be spent in 2021, and the rest will be spent over the next seven years.
The bottom line: If we hear from K-12 school leaders about underfunding at any time in the near future, we should know that they are misrepresenting reality.
“It’s A Mess” Up There in Hazelwood
[vc_row][vc_column][vc_column_text]The saga of the Hazelwood Mills Mall, also known as the St. Louis Mills Mall, is ongoing. The large tax-increment financing (TIF) plan that was proposed to help fund the mall’s development has failed. The nearly closed mall has not been able to pay the bonds it issued. The bonds were backed by the TIF and a transportation development district (TDD). So now the bonds are being paid by property assessments on businesses in the mall (there is nothing automatically wrong with that). But very few businesses are left in the development footprint. One business, the ice rink, says it can’t afford to keep paying off the bonds all by itself (not entirely by itself, but you get the point).
The case is complicated. My purpose here is not to get into the legal minutia of the lawsuit filed by the ice rink owners against the city of Hazelwood. But the broad strokes are important. The suit claims that the city has harmed the owners of the ice rink by taking ownership of much of the property in the mall. With the city owning much of the land, it becomes tax exempt, thereby making the ice rink pay even more of the bond debt. The suit also claims that the City of Hazelwood is dragging its feet on approving a youth sports center proposed for the site, and instead favors building an industrial park. The ice rink owners want the youth sports project to help share in the current tax burden, and clearly don’t want to wait for a possible industrial park years down the line.
The whole thing, as Marty Huggins might say, is a mess. SMI analysts have discussed this failure before and for good reason. The entire project from its inception is a perfect example of why local governments need to stay out of the economic development game, not get more involved in it. The mall is partly within a floodplain, in a struggling area, and was launched when indoor malls were already falling out of favor. The original project building the mall may well not have gone forward if Hazelwood and Bridgeton had not supported it with tax subsidies. If it had gone forward anyway, it would have done so with private money. But no, tax dollars—in the form of subsidies—helped propel this financial failure.
Hazelwood seems to be doubling down on its efforts by taking ownership of the land to promote its preferred use of the land. The city’s track record doesn’t justify such a move. A private entity wants to put a sports complex there now. Unfortunately, this sports complex will be getting some tax subsidies. But those subsidies are coming from St. Louis County, and they’ve already been approved. The best Hazelwood can do at this point is get out of the way and approve the project—more taxpaying entities in the mall will help ease the unfair burden on businesses such as the ice rink. The city doesn’t need to try and do more—it has done enough damage already.[/vc_column_text][/vc_column][/vc_row]
Missouri Special Election Results, Sunshine Trouble in KC and Back to School
Susan Pendergrass, David Stokes and Patrick Ishmael join Zach Lawhorn to recap this week’s special election, shed light on a KC City Council meeting that may have happened in the dark, discuss what to do with unspent stimulus money and school mask mandates this fall.
Even Disney Magic Is Swayed by Tax Incentives
Missouri’s own Walt Disney and his Walt Disney Company may create theme parks that are the most magical places on Earth, but at its core, Disney is a for-profit company. Like other companies, it can be swayed by lawmakers offering tax incentives or tax breaks. Recently, Disney announced to around 2,000 workers that their jobs would be moving from California to Florida. The reason? The company gets tax breaks for moving these jobs to Florida that could save it about half a billion dollars.
Apparently, getting Disney to move a small chunk of its workforce to Lake Nona (a mixed-use development about 20 miles from Walt Disney World) is worth $570 million over 20 years—that’s what Disney is estimated to receive for this move. That’s a lot of money to pass up, so I can’t blame Disney for making the move. However, lawmakers are taking this money away from taxpayers, and they certainly deserve blame for that.
Clearly, Missouri is not the only state that seems to be addicted to handing out money to “help” large companies make decisions. Lawmakers across the country can’t wrap their heads around this important point: Giving away hard-earned tax dollars (or not collecting tax dollars) to manipulate the market and pick winners and losers is a bad idea. The research shows that the broader economy of an area does not benefit from these types of incentives—but the company certainly will.
Missouri and Missouri cities give out and forgo hundreds of millions of tax dollars annually. We’re not the only ones to do this, but we should be the ones to end it. Perhaps we will soon know the “magic” of actually using taxpayer dollars to provide public services to taxpayers.
The Student Shuffle
Did you buy a house at least in part because of the neighborhood school? Lots of parents do. What would you do if you suddenly learned that your children must now attend a different school in the name of redrawing school boundaries?
It is common that every five to ten years, school districts will redraw school boundary lines due to growth in the district, attendance changes, and other factors. When these lines are redrawn, students get shuffled around. The Columbia School Board recently redrew boundaries for many of its elementary schools and has announced plans to transfer around 900 students for the 2022–2023 school year.
Leaving aside issues of fit, school culture, student friendships, and other factors, some of these transfers don’t seem to be problematic. For example, some students will be transferred out of New Haven (a school with around 40–44 percent of students meeting proficiency levels in math) to Rock Bridge (a school with around 58 percent of students meeting math proficiency). Other students will be transferred from Shepard Boulevard (math proficiency: 31 percent) to Cedar Ridge (math proficiency: 55–59 percent). These could be positive changes for the students.
But other students will be transferred to schools that perform significantly worse than the schools they currently attend. Some Midway Heights students (math proficiency: 70–74 percent) will be transferred to West Boulevard (math proficiency: 35–39 percent). These kids are transferring from a class where 7 out of 10 students are performing at grade level to a class where 7 out of 10 are not. To think that this will not affect these students’ futures is absurd.
The fact that students can be forcibly shuffled to other schools is an artifact of assigning children to schools based on their addresses. While parents can technically appeal a transfer, slots need to be filled, so the success of an appeal is far from guaranteed. Rather than being able to choose the school where their children can receive the best education, parents watch as their children are assigned to the school that matches their boundary lines—lines that can be erased and redrawn every few years.
The current educational system thwarts parents even when they make intentional decisions and sacrifices to live in areas so their children can attend better schools. This injustice illustrates the importance of school choice. Education Savings Accounts, charter schools, and other school choice programs could help families escape situations like this by giving them the freedom and resources to pursue the education they want for their children instead of being stuck inside school boundary lines drawn by bureaucrats.
In-Person Legislative Update 2021 (Columbia)
Please join us Wednesday, August 25 for a legislative update with Representative David Smith and Senator Caleb Rowden. Enjoy a delicious lunch while Rep. David Smith of the 45th District and Senator Caleb Rowden of the 19th District discuss the most recent legislative sessions in the Missouri House and Senate. Both will be available for questions following their presentations. Do not miss this chance to hear directly from your legislators!
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Missouri Special Elections, Medicaid Expansion Ruling and A Job Opening In Lake Ozark
David Stokes and Elias Tsapelas join Zach Lawhorn to discuss next week’s special elections, the recent Medicaid expansion ruling and a drama-filled job search for a new Lake Ozark City Administrator.
Listen: How Many Missouri Schools are Teaching CRT?
Patrick Ishmael joined The Mark Reardon Show on 97.1 FM Talk to discuss what he’s learned after sending thousands of records requests to schools across Missouri.
