Five New Year’s Resolutions for Missouri Lawmakers

Posted on by Andrew B. Wilson

A version of this commentary appeared in the Columbia Tribune.

Missouri is considered one of the most “conservative” of the 50 states. Is that a good thing or a bad thing? It depends on how you define the word.

Over the past several decades, Missouri has been going downhill both economically and educationally—as one of the worst-performing states in GDP growth and educational achievement in K-12 public education. Why?

Too often, Show-Me State conservativism has been characterized by a lack of urgency and a satisfaction with the status quo.

As I would define it, conservatism does not begin and end with the preservation of existing institutions, and it most definitely is not about protecting the privileges of the rich by exploiting the poor or being indifferent to the problems of the needy. Where it begins is with the desire to protect and enlarge freedom for all members of society—enabling people to work and live lives of their own choosing so long as they do no harm to others in the pursuit of their own betterment.

Here, then, are five New Year’s Resolutions for leaders in local and state government:

#1: Improve Missouri’s competitiveness; turn the Show-Me State from an economic sluggard into a great place to live, work, and own or operate a business. That means lowering taxes—leaving more money in people’s pockets to spend or invest as they choose. It also means removing obstacles to commerce and opportunity posed by excessive licensing and regulatory requirements.

#2: End crony capitalism—stop providing subsidies and tax carve-outs for politically favored businesses that are not available to all other businesses. In 2019, Missouri reported 524 tax-increment financing (TIF) projects from 100 political subdivisions across the state. These projects are anticipated to have $10.1 billion in TIF-reimbursable project costs. Such subsidies drain money from public services and have a bad track record of failing to deliver promised job, investment, or economic growth. Reductions in tax incentives and spending can provide some of the budgetary space to lower or eliminate individual income and earnings taxes.

#3: Don’t treat small, owner-operated businesses as the designated fall-guys in government-ordered lockdowns—calling them “non-essential” businesses while allowing their big-box counterparts such as Wal-Mart and Target to continue to operate.

#4: Don’t be penny-wise and pound-foolish when it comes to taking care of essential infrastructure on a timely basis. Interstate 70, an economic and transportation lifeline, is falling apart. Numerous other major roads are badly in need of repair. Travel on Missouri’s roads has increased by 12 percent since 2008, but the state’s transportation budget has fallen by 15 percent. According to Missouri’s Department of Transportation, it now gets only enough revenue to cover a little more than half the state’s needed road and bridge repairs. One thing is certain: Postponing needed maintenance on long-lived assets such as roads and bridges is not a smart idea. It leads to escalating costs and catastrophic failure.

#5: Expand educational choice for students and families at all income levels throughout the Show-Me State. There is no worse example of blind allegiance to the status quo than Missouri’s K-12 public education system.

Supported by nominally conservative lawmakers, the state’s educational establishment—meaning school superintendents, teachers’ unions, and DESE (Missouri’s Department of Elementary and Secondary Education)—have blocked almost every initiative aimed at expanding school choice from vouchers and education savings accounts to expansion of charter schools. Despite a long record of poor results in the so-called “Nation’s Report Card,” members of the establishment continue to oppose all forms of competition and choice in public education.

And who is hurt the most by this self-serving obstinacy on the part of the providers of public education? It is of course the users: students and their parents and families, and most especially lower-income families trapped in non-performing schools who cannot afford to move to other school districts or to private schools.

As I see it, true conservatism is really about an allegiance to principles—and to enduring values such as freedom, hard work, and equality under the law—rather than an allegiance to the status quo.

Gas Taxes Around the States

Posted on by Jakob Puckett

Raising enough money to take care of Missouri’s roads has been a challenge. As I’ve written before, the Missouri Department of Transportation estimates that $745 million of high-priority road and bridge projects go unfunded each year.

Missouri’s gas tax—MoDOT’s largest in-state funding source—has not been adjusted since 1996.  Inflation, the rising costs of road maintenance, and increasing vehicle fuel economies have all lowered the value of the static gas tax over time.

However, many states have found ways to keep their gas taxes in line with changing times.

For instance, numerous states have indexed their gas taxes to inflation to keep gas tax levels in step with the rest of the economy. Some states index gas taxes to other metrics. For instance, North Carolina’s gas tax is indexed to account for changes in the state’s population, as well as for inflation. Nebraska’s gas tax adjusts based on a combination of the state transportation budget and a tax that varies based on the price of fuel. Georgia’s gas tax is indexed to vehicle fuel efficiency to keep up with auto industry advances. Other states apply the state sales tax to gasoline on top of a base cents-per-gallon rate, so that the total fuel tax revenue collected varies with the price of fuel.

In other states gas tax increases are revenue neutral, a point which is worthy of consideration, especially this year. South Carolina is in the process of increasing its fuel tax in two-cents-per-gallon increments over six years. However, residents can write off the extra gas taxes paid at the pump from their income taxes. This essentially restructures where the taxes go, as residents don’t necessarily pay more taxes, but more of the taxes they pay go toward transportation.

Lawmakers have already proposed measures to raise Missouri’s gas tax by 10 cents per gallon over five years in the new legislative session. And while gas taxes are not a perfect solution, as they do not always align road usage and damage to payment for their upkeep, they are one option. And as evidenced by other states, Missouri policymakers have options as to how to approach this problem.

Unfocused St. Louis

Posted on by Patrick Ishmael

Some of my colleagues at the Institute have already weighed in on the shortcomings of a draft report promoting regional growth recently published by Greater St. Louis, Inc., with the support of groups like FOCUS St. Louis and other St. Louis–area stakeholders. The report, STL 2030 JOBS PLAN: Driving a Decade of Inclusive Growth, implies and encourages a robust government role advancing a number of objectives cited as important to the authors.

Without unnecessarily repeating my fellow bloggers, the report is both discouraging and concerning. Local government micromanaging of the economy in a vacuum is bad news anyway, but micromanagement for the purpose of dismantling “systemic racism” and promoting “inclusive growth” exemplifies the preference for buzzwords over substance that has saddled residents of the region with ineffective governance and squandered tax revenue for over a half-century.

We don’t need more jargon to fix St. Louis. We need an actual focus on the problems that have bedeviled it. Two years ago I condensed those problems into an op/ed published in the St. Louis Post-Dispatch that focused on the three essential issues that confront St. Louis: public safety, its schizophrenic tax policy, and education. Like the authors of the recently released report, local leaders two years ago seemed most concerned about making St. Louis City the cultural and economic pivot point of the region again, but in both cases that amounts to putting the cart before the horse. As I wrote,

The city’s greatest issue isn’t whether it will be the economic center of the region. Its greatest issue, the one that will determine its long-term viability, is whether it will be a competent steward of public money and the public’s trust—whether the city will address the policy questions that ultimately underpin and promote long-term development and population growth. Doing so will require a meticulous commitment to getting the fundamentals of governance right and eschewing the rest.

It’s said that the best time to plant a tree was 20 years ago, and the next best time is to plant a tree is today. For the sake of its future, now is the right time for St. Louis to address its fundamental and widely recognized issues of governance in a serious and research-driven manner. Until the city gets serious about regaining public trust by getting back to the basics of governance—above all, a full commitment to security, education and the stewardship of the public checkbook—no one should be surprised when more St. Louisans follow their predecessors out the door.

I hesitate to be overly critical of any undertaking that requires significant thought, but the report reads like more of the same from St. Louis’ collective leadership, with little in the way of fresh thinking or, frankly, self-reflection. If the region is going to turn the corner and chart a new prosperous path, local government needs to focus on getting the basics right. Any proposal that would detract from that singular focus by government, especially when advanced by private sector leaders, is unproductive. That is, unfortunately, what I believe this draft of this “jobs plan” is, and I hope that for the sake of the region, it is significantly revised.

Greater St. Louis 2030 Plan Scant on Transportation Funding Mechanisms

Posted on by Jakob Puckett

The first report from the new civic organization Greater St. Louis, Inc. heralds Missouri’s transportation sector as a key to Missouri’s growth.

Over $700 billion of products travel over Missouri’s roads each year, and transportation and warehousing industries support over 83,000 Missouri jobs. These numbers are only expected to increase.

It is surprising, then, that the Greater St. Louis, Inc.’s report’s recommendations for improving our transportation infrastructure contain few details on funding mechanisms given that Missouri is currently coming up short on transportation funding.

Here are a few recommendations for the policymakers reading the report to consider.

People who use the roads in Missouri should, as much as possible, be the ones responsible for paying for the roads. This could mean policies such as adequate fuel taxes or location-specific tolling. If new lanes on interstates are planned—and the plan mentions rebuilding some sections of I-64 and I-70—tolling on new lanes would not require federal approval. Many states operate lane-based tolling, also known as high-occupancy toll lanes.

There are other funding mechanisms for transportation that ought to be avoided. For instance, a new sales tax or earnings tax in the region receiving the transportation upgrades could raise a large amount of money. But these taxes are not connected to how much the roads are being used. Non-users end up subsidizing users.

The consequences of such a funding disconnect would mean that those using the roads are shielded from the true cost of doing so. Not being exposed to driving’s true cost leads to inefficient road usage. This, in turn, leads to higher maintenance costs as well as other hidden costs such as wasted fuel and time, air pollution, and congestion.

While the creators of this plan seem to understand that transportation is critical for Missouri, they don’t articulate how to fix what’s wrong with Missouri’s infrastructure.  What Missouri needs is a plan to address our infrastructure funding issues with real reforms, not just platitudes.

Missouri Auditor’s Office Should Require Muni Checkbook Transparency

Posted on by Patrick Ishmael

For the last couple years, Show-Me Institute writers have led the way on investigating transparency problems in Missouri government. If state and local government can take your money, then it imposes an obligation of transparency.

In fact, checkbook transparency is an issue that multiple branches of Missouri government have consistently recognized since the rollout of the Institute’s Show-Me Checkbook projects. In 2018, the Missouri Treasurer’s office introduced the aptly named ”Show-Me Checkbook,” cataloguing state spending in a comprehensive way that, to that time, had only existed on the Show-Me Institute website. Meanwhile, the Missouri legislature introduced, and the House passed, legislation that would have required city governments in Missouri to report these checkbook records to the state for publication.

But could the Missouri Auditor’s Office get ahead of them all and deliver taxpayers a game-changing transparency win?

Strong municipal transparency laws are few and far-between around the country, but the Auditor’s Office could make the Show-Me State a leader on the issue by leveraging the office’s existing rule-making power. Section 105.145 of Missouri’s Revised Statutes states:

2. The governing body of each political subdivision in the state shall cause to be prepared an annual report of the financial transactions of the political subdivision in such summary form as the state auditor shall prescribe by rule, except that the annual report of political subdivisions whose cash receipts for the reporting period are ten thousand dollars or less shall only be required to contain the cash balance at the beginning of the reporting period, a summary of cash receipts, a summary of cash disbursements and the cash balance at the end of the reporting period. (Emphasis mine)

Put another way, the auditor has the ability to define what will be required of annual financial summary reports submitted by Missouri cities. That summary can, then, be required to include a host of financial information, including a listing of transactions undertaken by a city above a certain threshold; the public contact information of vendors with whom the city does business; revenues received and from what sources; and any other relevant information that would help the auditor do her job. The auditor’s office could then offer an alternative to filling out all of this information in the summary form she prescribes: to simply export the expenditure data from the city’s accounting software in a machine-readable format. Implementing this reform through existing reporting requirements reaffirms that there would be no additional cost to cities to transparently report their spending. With this reform, cities could go through the process of filling out the auditor’s form pursuant to the auditor’s requirements, or they could largely just submit the documents that would have gone into their financial summaries anyway. From there, publication of the checkbooks online by the auditor or other department would be a simple and inexpensive, if not costless, undertaking.

I have been impressed by the Auditor’s work on transparency issues in the past, and I think if her office pursued a project like this, it would serve as a model for transparency initiatives across the United States. Missourians deserve to know what their local governments are spending their money on, and it appears the Auditor’s Office may be able to deliver it to them.

Kansas City’s Dubious COVID Orders Prompt Lawsuit

Posted on by Patrick Ishmael

The decisions reached by policymakers should be based on the facts and grounded in a rational approach to achieving their goals with as little collateral damage as possible. As a general matter, public policy should be narrowly tailored to meet public needs and administered such that the rules apply the same to all.

The problem in Kansas City and elsewhere, however, is that the rules created under the pretense of coronavirus mitigation are not being applied evenly, or perhaps even legally. Enter a lawsuit by The Blue Line, a bar in Kansas City’s River Market district, that takes issue not only with what the city’s emergency orders do, but even how they were imposed in the first place.

According to The Blue Line’s petition, the emergency orders, which KCMO announced Nov. 16 and that went into effect throughout the city and county on Nov. 20, are illegal without approval by the KCMO City Council or Jackson County Legislature and unconstitutional.

According to the lawsuit, The Blue Line said it pays “a premium to Kansas City and the State of Missouri” for a 3 a.m. liquor license and that 40% of its revenue comes after 10 p.m.

That makes the closure of bars and restaurants—while casinos are allowed to continue round-the-clock operations, movie theaters can stay open past 10 p.m., and alcohol sales are permitted to continue at liquor and grocery stores— “arbitrary and capricious,” according to the lawsuit.

I agree with the bar that these rules are arbitrary and capricious. Casinos have not acquired a special immunity to coronavirus that would permit them to remain open in ways competing bars and restaurants cannot—though I’ll note that my solution isn’t to shut down casinos, but rather to leave bars and restaurants alone or otherwise subject to the same set of rules these big businesses get to abide by. What’s good enough for Walmart is good enough for everyone else; likewise, what’s good enough for big entertainment venues like casinos is good enough for the corner bar and grill.

We know that state laws protecting gun stores from being shut down during emergencies work, with local shops and big retailers having demonstrated throughout this crisis that they can remain open and operate safely regardless of their size. The Missouri Legislature must pass a law to ensure that all businesses similarly situated are able to enjoy similar protections to ensure that small operators don’t have to sue local governments to be treated fairly by them. Until that happens, I hope The Blue Line’s lawsuit helps establish a red line against unequal treatment and cronyism that local policymakers will be more hesitant to cross in the future.

Living in Chiefs Kingdom Doesn’t Make You Kansas City’s Peasant

Posted on by Patrick Ishmael

While 2020 has been a year of often-obscured bright spots, the Kansas City Chiefs have stood apart as a fairly enduring point of municipal pride for Kansas City, the capital of the team’s colloquial and regional “Kingdom” of supporters. Starting the year with a Super Bowl win and ending it with a solid regular season certainly tends to raise a city’s spirits, and if you’re a restaurant or bar in Chiefs Kingdom, the Chiefs’ strong showing during the coronavirus pandemic has certainly been a welcome relief for business.

But that hasn’t kept Kansas City and other local government from bah-humbugging it, flying the banner of coronavirus prevention as it dumps coal in the stockings of local proprietors in the food service industry. In November, city officials shut down The Corner Bar and Grill in the historic 18th & Vine District during a Chiefs game when a “field supervisor noted multiple violations of the mask and social distancing rules” set out by the mayor. In fact, until relatively recently, Kansas City proper was requiring all bars and restaurants to not only close by 10 p.m. to mitigate the spread of COVID-19—because it’s, what, not communicable during the day?—but force all of the patrons out by that time, or else be sanctioned by the city.

The Corner Bar’s closure and the city’s draconian time restrictions meant that when the Chiefs played the Denver Broncos for the league’s Sunday night game on Dec. 6, Kansas City bars were forced to turn patrons away due to capacity limitations and to warn patrons who were allowed inside that they’d be kicked out of the bar before the late game had finished. This isn’t hearsay either; this happened to me. However, not all places of imbibing and engorging for the game were closed. I eventually found myself at, of all places, a local casino that is not only open 24 hours a day, 7 days a week, but whose social distancing norms are, shall we say, necessarily loose.

Having the right to leisurely eat, drink, smoke and gamble at 10:30 p.m. on a Sunday from the comfort of a barstool in the middle of a pandemic would feel a lot more liberating if you do these things at any establishment of one’s choosing, pandemic or not. But on this Sunday night, the patrons of the Argosy Casino had acquired an immunity to coronavirus (or, rather, to government-imposed coronavirus restrictions) that the small businesses and patrons in downtown Kansas City had not yet achieved. Shortly after that weekend, Kansas City officials “clarified” that the city’s bar and restaurant patrons could now remain in their seats and finish their meals, even past 10 p.m., but couldn’t order food or drink after that hour and had to be out of the building by 11 p.m.

It’s tempting to accept the clarification of mandated closure times as an improvement, and in technical terms, it is. After all, requiring establishments to close in the middle of a sports event is bad for business. But local officials are merely returning rights to taxpayers that I believe should never have been taken to begin with and where in other local businesses like casinos, the same rules aren’t being applied. That’s before addressing whether these new rules should be applied at all, and on what actual scientific basis they’re being pursued.

But I’ve said this before and I must say it again, especially now that we’re close to the 2021 legislative session: If a rule is good enough for big businesses, it’s good enough for the small ones too. That applies to all of “Chiefs Kingdom,” both in Kansas City itself and outside it. If casino patrons can live it up safely and watch the Chiefs beat the hated Broncos late at night, so too can supporters of local bars. If Chiefs fans can socially distance at Arrowhead, so too can fans of Blue Springs High School. And in the coming weeks, state legislators must start the process of reining in the excesses of local governments. Kansas Citians may live in Chiefs Kingdom, but they aren’t the subjects of their elected officials.

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