Other States Are Deregulating. Missouri Should Too

Posted on by Corianna Baier

The COVID-19 crisis has led to rules and regulations being relaxed or even temporarily eliminated in states across the country. Some lawmakers and government agencies are taking steps to make these changes permanent in order to reduce burdens on businesses and workers. There is no reason Missouri shouldn’t do the same.  

One example is Oregon’s Liquor Control Commission, which is taking steps to make the temporary relaxation of some of its rules permanent. Even better, Idaho’s governor is taking action to make a wide array of the state’s COVID-19 deregulation permanent, saying that “if waiving these regulations was deemed necessary to improve public health and welfare during the declared emergency, there is a rebuttable presumption that the regulations are unnecessary or counterproductive outside of the declared emergency.”

Sound familiar?

Show-Me Institute researchers have made this argument many times when speaking favorably of COVID-19 regulatory waivers and when calling for lawmakers to make the waivers permanent. The issue is critical enough that it was included in the Show-Me Institute list of the top issues that ought to be addressed in a special legislative session.

This call for deregulatory action is not a call from left field, nor is it an extraordinary ask. Other states are taking advantage of this opportunity to stay competitive and lessen the burden on businesses and workers. Missouri should too.

 

Parma Scandal Affirms: Mandatory Muni Checkbook Transparency Needed Now

Posted on by Patrick Ishmael

The Missouri State Auditor’s Office has started July off with a bang, publishing an audit of Parma, Missouri, which found that “. . . [m]ore than $115,000 was taken fraudulently over a four-year period from the Missouri Bootheel city of Parma (pop. 713) through payroll overpayments and improper payments and purchases.” As the report notes, [Emphasis mine]

Our audit discovered that for almost the entire time the former mayor and former city clerk were in office, there was a pattern of blatant corruption and cover-up that cost the citizens of Parma more than $115,000,” Auditor Galloway said. “This was a betrayal of the public trust that requires accountability, and my office will continue our partnership with law enforcement to pursue justice for local taxpayers. . . .

The audit also estimated more than $7,000 in improperly recorded utility payments and adjustments to utility bills on the accounts of the mayor, water supervisor, the alderman who is the mayor’s father, an alderwoman, and a church. The city’s electronic utility system was destroyed in the city hall fire, but auditors were able to compile information for the audit from paper reports, bank statements and other documents.

The auditor’s full report can be found here.

We are hearing that among the items legislators are considering for a special session is a “Wayfair fix,” which notably would allow local governments to collect sales taxes on internet purchases. As we’ve said before, any such “fix” should be revenue neutral, but it’s become obvious that there should be another precondition: checkbook transparency. Any government wanting to tax the internet purchases of residents should be required, as a condition of such privilege, to regularly publish their transaction data with the state.

Show-Me Institute researchers have called for this transparency before, but Parma’s scandal reaffirms how pressing the initiative is, especially in these difficult economic circumstances where every dollar counts. If government can take your money through force, it should be telling you where it went. And if governments have to do that, well, hopefully we’ll have fewer Parmas in the future.

 

What Do Parents Want This Fall?

Posted on by Susan Pendergrass

In these uncertain times, few things are certain. But one thing we do know for certain is that parents are anxious about schools reopening this fall. Although very few school districts have released reopening plans, it’s probably safe to say that some will be deemed unsatisfactory by a lot of parents.

That’s because parents want different things. Some are ready to send their kids back to school right now, and may really want or need a full-time in-person schedule instead of an alternating schedule. Clearly some parents want only virtual education—but for differing amounts of time. One in ten parents wants to wait out the whole year. The graph below, from a recent study by the American Enterprise Institute, reflects how parents are thinking differently about school reopening:

Parents poll

Hopefully, policymakers and education leaders in Missouri are hard at work trying to figure this out. One obvious move is to ensure that parents can easily enroll their children in the existing, approved virtual programs through the Missouri Course Access Program (MOCAP). Requiring district permission to do so is ridiculous at this point.

A second immediate need is to let parents seek out and purchase the education that they’re comfortable with this fall. A Learn Safely Scholarship would give parents funds to spend on education resources, like private school tuition, as they see fit. Putting funds directly in the hands of parents would help fill the void in what districts are providing.

Parents have become front-line workers in public education, and many are exhausted and anxious from the experience. The time to figure out how to educate every Missouri student is now, not after we see the reopening fallout.

 

Federal Relief Funds: A Tale of Two Counties

Posted on by Jakob Puckett

Neighboring St. Louis and St. Charles Counties are taking different approaches in handling federal coronavirus relief funds, with potential consequences for taxpayer dollars.

St. Louis County councilmembers, in a contested 4-3 vote, forfeited their legislative oversight authority of the federal coronavirus relief funds the county received to the county executive. No spending plan has been released, leading some to question the executive’s spending priorities.

The lack of legislative oversight appears to have contributed to some questionable expenditures. A $1.7 million overflow morgue was constructed which is currently sitting empty and has never held more than 56 coronavirus victims out of a capacity of 1,300. Additionally, a $1 million no-bid contract for a hotel to shelter sick first responders is currently reserving empty rooms. Of the 120 rooms reserved since mid-March, only 52 have been used for an average of $23,000 per person for an eight-day stay. The ten rooms currently in use are housing homeless people rather than emergency responders. As only $9 million of the relief funds have been spent so far, these are not insignificant expenses.

Conversely, St. Charles County councilmembers retained legislative oversight and influence over how the funds will be spent and have released a plan to do so. All money is currently designated for coronavirus-related expenses or reimbursements, as it should be. No spending data has been published yet, so time will tell if additional oversight will aid in more prudent spending.

Having legislative oversight is no guarantee that questionable decisions will not be made, but it can reduce the risk. St. Louis County councilmembers who voted against forfeiting oversight lamented the council’s lack of involvement in the executive’s decisions, noting that other ideas could have resulted in better use of taxpayer money. St. Charles County councilmembers made a point not to take the same route as their neighbors, with the goal of establishing broad transparency over expenditures.

Ultimately, transparency in government spending is for more than just transparency’s sake. Accountability and oversight hold out the promise of more prudent use of taxpayer money, especially as taxpayer dollars will be at a premium for the foreseeable future.

 

Harsh Trade-offs with Medicaid Expansion

Posted on by Elias Tsapelas

Medicaid is breaking Missouri’s budget, and expanding the program would only make things worse. Every additional dollar Missouri spends on Medicaid is one that can’t be spent elsewhere. Visualizations can help illustrate the scale of the problem.

Assuming Missouri’s spending trajectory doesn’t change (a very conservative estimate given the current pandemic), here is a look at the tough road ahead for Missouri’s budget, with and without Medicaid expansion.

This is where Missouri’s tax dollars are being spent this year:

Budget graph

And here is a simple estimate of Missouri taxpayer spending on Medicaid over the next five years:

Medicaid spending

Note: These estimates use a yearly cost inflation factor of 5 percent based off the previous year’s growth. Expansion spending will likely be higher, but for simplicity, the estimate includes new enrollment of 230,000 Missourians with the state picking up 10 percent of their health care costs. The expansion spending also includes a “woodwork effect” of 50,000 new enrollees for which the state would pay the traditional 35 percent.

The table shows that Missouri’s tax revenue collections would have to increase by more than $730 million by 2024 just to cover conservative cost estimates for Medicaid expansion. Simply covering the costs means that no new funds will be available for other state programs over the same period. And any shortfalls will have to be paid for with tax increases or cuts to current programs.

It is important to note that achieving the revenue growth required to avoid these outcomes is certainly not a given. Just last year, state revenue collections increased by $98 million in total, but this year revenue collections are expected to decrease by approximately $600 million.

So, where will the money for Medicaid come from if not from increased taxes or revenue growth? Since nearly 45% percent of all general revenue spending goes toward education, it’s likely the funds will come at the expense of public schools and other state priorities. Here are a few examples illustrating the scale of Medicaid’s cost growth, and how those funds might otherwise be spent.

$730 million translates to:

– $3,500 for each child in poverty receiving a public K-12 education or

– $10,400 for every person in poverty attending a public higher education institution or

– 4,700 miles of interstate highways could be resurfaced or

– More than double the state investment in public safety measures for each of the next four years

Every year that Medicaid’s costs remain unchecked, other funding priorities will suffer. Given the current revenue shortfall, balancing the budget over the next few years is likely going to be a difficult task. Before expanding government programs, voters and policymakers should be aware of the costs and trade-offs expansion would bring.

 

SCOTUS Delivers Key School Choice Victory

Posted on by Susan Pendergrass

This morning, the U.S. Supreme Court handed down its ruling in the case of Espinoza v. Montana Department of Revenue. The court held that Montana could not restrict participants in a tax-credit scholarship program from using the scholarship funds to attend private religious schools.

The ruling finally puts to rest whether states can discriminate against religious schools in state-funded scholarship programs. Until now, states have relied upon constitutional amendments—born from an idea conceived by Congressman James Blaine nearly 150 years ago—to prevent any public money from going to religious schools. These so-called “Blaine Amendments” were primarily about discriminating against Catholic schools at a time when the Protestant majority was concerned about Catholic immigration. But no more.

And if you don’t think parents want to be able to find the school that’s best for their children, then you haven’t met Kathy Espinoza. Her years-long fight for her children went all the way to the Supreme Court of the United States. Now it’s settled. But just because the legal question is settled doesn’t mean there isn’t still much work to be done. States still need to act, and lawmakers should recognize that parents want and deserve school choice, regardless of school type.

It’s likely that there will be a lot of unhappy parents this fall as districts begin to release their reopening plans. Missouri has over 25,000 available private school seats; some are in religious schools, and some are in secular schools. This ruling means the Missouri Legislature could let parents access these seats by creating scholarship programs that would allow families to choose the best education for them. As of today, lawmakers are out of excuses.

 

Thomas Sowell, Charter Schools, and Their Enemies

Posted on by James V. Shuls

Not long ago, I was having a civil conversation with a colleague with whom I regularly disagree. (I know, this type of thing is rare these days.) We got to the heart of the issue, which was a disagreement on a fundamental principle that led us in slightly different directions. I told him that I put an emphasis on liberty in policy decisions. He said he put an emphasis on justice, and we didn’t go much further than that. If we had, I’d have pressed him and said you cannot have justice when someone’s liberty has been violated. He’d have probably said the reverse: You can’t have liberty if there is no justice. The point here is not which of us was correct (probably me), but that we were talking about principles. Now, as much as ever, it is a good time to think about the principles that guide us.

As we try to work towards a better future, we must understand what we are aiming for. Noted economist Thomas Sowell makes this point in his latest book, released today, Charter Schools and Their Enemies. He’s writing about education, but his observations apply to so many aspects of our public life. He writes, “Trying to micromanage the future has a very poor track record—and so does simply letting things drift. What we can do is consider in advance what kind of general principles and specific institutions seem promising.”

When it comes to education, Sowell suggests, “Perhaps the most important of these general principles is that schools exist for the education of children” [emphasis in the original].  This is a point we too often miss. Sowell’s focus in the book is, of course, charter schools. He describes how pushes to increase accountability and regulation of charter schools rarely focus on efforts to actually increase the quality of the schools, but are instead intended to stifle and limit the spread of charter schools. Issues surrounding charter schools are too often framed in us-versus-them terms, so that people think they must either support public education or side with the privatizers who want to destroy public schools. Sowell reminds us that this binary thinking is not helpful. Instead, when thinking about charter school policies (and other education policies), the public and policymakers should be asking, “what possible benefit to the education of children can we expect from this?”

When we don’t agree on principles or share basic assumptions, as my colleague and I didn’t, it is difficult to agree on solutions to problems. That is why it is important for us to understand and agree that schools exist for the education of children. They are not designed to keep communities together. They are not built to provide jobs. They exist to educate children. When we agree on this, we pursue policies that put the interests of children first.

Today marks Thomas Sowell’s 90th birthday. It also marks the release of his latest book, Charter Schools and Their Enemies. Check it out.

Missouri Needs a Special Legislative Session

Posted on by Show-Me Institute Staff

Thanks to COVID-19, Missouri policymakers still have legislative work to do before the year is out. From protecting patients to protecting students and entrepreneurs, state leaders should call a special session—and soon—to pass reforms that will ensure Missouri is on firm economic and educational footing heading into the fall.

A list of the most important items to be addressed is available at the link below.

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