Charter Schools and Civil Society in Kansas City

Posted on by Michael Q. McShane

After a nine-month tour of America in 1831, French political scientist Alexis de Tocqueville published Democracy in America, a volume that remains one of the best descriptions of American civic and political life.

De Tocqueville focused much of his analysis on America’s civil society, the tapestry of voluntary organizations that citizens put together to unite themselves and solve problems. He wrote:

“In the United States, as soon as several inhabitants have taken an opinion or an idea they wish to promote in society, they seek each other out and unite together once they have made contact. From that moment, they are no longer isolated but have become a power seen from afar whose activities serve as an example and whose words are heeded.”

I have a paper out with Washington, D.C.’s R Street Institute exploring the role the civil society has played in Kansas City’s charter schooling sector. While the traditional public school district has struggled with legitimacy and engagement over the past three decades (enrollment has  been on the decline, and KCPS struggles to recruit enough candidates to make school board elections competitive), charter schools have been an outgrowth of the community, reflecting their needs, values, and desires.

In the paper, I briefly explain the roles of local philanthropists in founding and supporting high-performing charter schools, of civic organizations like the Guadalupe Centers in creating schools geared towards the needs of specific communities, and of parent groups in recruiting potential school operators to create the types of schools that they want.

The charter sector in Kansas City is not perfect, but it is built on a sturdy foundation. Somewhere, Alexis de Tocqueville is smiling.

 

Is There a 1984 in Our Future? A Super Bowl Reflection

Posted on by Rex Sinquefield

What was the greatest Super Bowl commercial of all time?

With Super Sunday just around corner, we will cite the Apple commercial that introduced the Apple Macintosh personal computer in January 1984. It had the punch line: “You’ll see why 1984 won’t be like Nineteen Eighty-Four.”

That was an allusion to the dystopian future described in George Orwell’s book, 1984. The ad opens with a lone woman on the run. She bursts into an auditorium, where Big Brother—speaking not in person, but from a towering television screen—is haranguing a frightened mass of people. Then, spinning like a top, she hurls a sledgehammer at the figure on the screen. It flies high and right. Big Brother is silenced. The voice-over followed.

In this 60-second spot that aired during Super Bowl XVIII, the first Macintosh ad captured the one thing that an all-powerful or monolithic state cannot easily afford to tolerate. That is, any real expression of individual freedom and initiative.

We believe that is a timely message not just on the eve of another Super Bowl, but still more in the context of the current debate over economic and public policies.

Following a long period of stagnation, the U.S. economy has come roaring back to life. We now have full employment, a booming stock market, and rising wages for most workers, including the lowest paid.

How did that happen? Fast answer: Over the past three years, the free market became a whole lot freer.

In its first year in office, the current administration delivered on its promise of sweeping regulatory relief. Suddenly, the regulatory state, which had expanded by leaps and bounds during the previous administration, began to contract . . . and that has continued, as a result of major changes in policy and direction at the Environmental Protection Agency, the Labor Department, the Department of Health and Human Services, and other arms of government.

Then came the biggest tax cuts and tax reforms since the Reagan era. With the passage of the Tax Cuts and Jobs Act of 2017, the administration lowered income taxes across the board and left more money in the pockets of individuals and business entities alike.

So, we are now living in the best of times economically. How could anyone argue otherwise? But they can—and are. Never mind what the numbers say.

Among leaders on the Left, there is a broad consensus that we are living not in the best of times, but in the most desperate of times—almost as if we were back in the early years of the Great Depression, when industrial production plunged, unemployment soared, and more than a quarter of the population was without any income at all.

In the badly mistaken belief that capitalism and free enterprise have run amok, they are promoting economic policies and ideas that are diametrically opposed to those that got us where we are today.

With little disagreement between them, these same leaders want free college, free health care for all, universal child care, and the banning of fossil fuels as part of a many-splendored Green New Deal—and they don’t appear to care what anything costs or what the adverse impact may be on ordinary people.

Apart from the astronomically high price tags associated with all of these programs—which would quickly bring the economy to a shuddering halt if any serious attempt were made to implement them—it is worth thinking about the underlying message that the leaders who are espousing this great agglomeration of multi-trillion-dollar programs want to send to the American people.

The real take-away message comes down to this:

·         “If you or any of your children want to go to college, don’t worry about being able to afford the college tuition. We’ll take care of the problem for you.”

·         “If you’re worried about health care, don’t think you have to buy health insurance or do anything else. We’ll take care of you.”

·         “Got young children at home and want to go to work? We’ll take care of the kids, too.”

 

If all that sounds too good to be true, it’s because it is too good to be true. Someone has to pay for college tuition—and all the other freebies—and that can only mean higher taxes on working people at all levels of income.

As George Orwell, the author of 1984, understood very well, a free people who stop taking care of themselves and rely on the state to do everything for them make a very bad bargain. It is one of the insights you find on almost every page of his book.

When people cease to make their own plans—and trust government to make decisions for them in more and more areas of their lives—they commit the error of failing to make full use of their capacities as individual human beings. In failing to make the most of their own gifts and talents, and their own dreams and aspirations, they sell themselves short . . . and lead less-fulfilling lives.

How prophetic was Orwell’s book? Not that this was the author’s intention, but how well did the book foretell the future of socialism in his native country—this being Britain in the first few years after World War II?

The British elections in mid-1945 marked a major turning point—not only sweeping Winston Churchill and a Tory-led government out of office, but also standing as an unquestioned affirmation of the desire of most of the British electorate to bring a new government to power that was fully committed to socialism.

So how did things work out in Britain during the three and a half decades when socialism, as opposed to free-market capitalism, was the prevailing mode of government—a period lasting from 1945 to 1979, when Margaret Thatcher came to power?

Socialist Britain did not become a police state. But it did undergo a metamorphosis. It changed from a powerful and dynamic country into the perennial “sick man of Europe,” reeling from one financial crisis to another in a sustained period of economic stagnation and decline. It became a country obsessed with issues of job security and income redistribution as different groups competed with one another in trying to wring more favors out of an increasingly improvident state. There was little or no new business formation—none of the spark provided by people like Steve Jobs and products like the first Macintosh computer.

Even the Labor Party could see the futility of its centralized, interventionist approach. Jim Callaghan, the last Labor prime minister before Thatcher, admitted in Parliament: “Let me say that of course there has been a fall in peoples’ standard of life. It has fallen this year and will fall again next year.”

Fortunately, Thatcher supplied the leadership that was necessary to pull Britain out of the decades-long decline that began with the wrong turn that it took at the end of World War II.

Is there any possibility that we as a country could make the same mistake that Britain made in 1945?

The danger is there. It is time to throw another hammer—or sledge-hammer—into the works of another historic wrong turn—this time involving the United States.

This does not require heroic action on the part of a solitary individual. But it does require a willingness on the part of many people to play the same kind of role within their own group of friends and relatives that Thatcher played in Britain—in stressing the paramount importance of individual freedom and initiative in securing the future we want for ourselves and future generations.

The MLS Deal Keeps Getting Better for Taxpayers

Posted on by Patrick Tuohey

Recent news that the owners of a new Major League Soccer franchise in St. Louis will not be getting $40 million in state tax credits is welcome. They may receive a smaller amount, perhaps as low as $5.7 million. While this is still an unnecessary amount of public participation in a private matter, it represents a better deal for statewide taxpayers.

Back in July, my colleague Graham Renz wasn’t thrilled with the proposed deal, but conceded that it was better than what taxpayers had been offered in 2017. That deal involved public subsidies and set-asides worth $120 million; the current deal’s public cost was about $40 million in local subsidies plus the $30 million in state-issued tax credits. If the tax credits are reduced as the St. Louis Post-Dispatch suggests, the total value of all the incentives may be closer to $52 million. That is a lot, but less than what has been considered previously.

Both deals were promoted at the time as the best deal taxpayers could get. We know now that wasn’t true. The owners of the new franchise stand to make a lot of money from this deal. While city and state officials should welcome investment in the area, they don’t need to put public funds at stake. Just ask Stan Kroenke, who is investing about $1.6 billion of his own money to build a sports complex in Los Angeles using only privately raised funds.

The lesson here for public officials at every level is that there is almost always a better deal to be had. In fact, if you want to protect taxpayers, the best deal might be no deal at all.

 

Stop the Charade: Public Schools Are Not Value Neutral

Posted on by James V. Shuls

In a recent article on the front page of the New York Times, Dana Goldstein explained how textbook companies selectively omit or add information to history textbooks for sale in Texas and California. Goldstein writes, “The books have the same publisher. They credit the same authors. But they are customized for students in different states, and their contents sometimes diverge in ways that reflect the nation’s deepest partisan divides.”

This occurs largely because California and Texas require school districts to purchase textbooks that have been approved by the state board of education. The Education Commission of the States reports that 20 states have similar policies.

What Goldstein’s article makes clear is that values are transmitted via the texts we assign children to read. In California, the texts are more open to portraying individuals with various sexual orientations. In Texas, they discuss legal and illegal immigration. Far from being value-neutral, the text schools assign children and the lessons teachers teach can be laden with values.

In this case, we can see the values when we compare one state to another. Missouri, however, does not have a state textbook adoption process. As such, schools can choose the books they think best align with state standards. Many are ditching textbooks altogether in favor of teacher curated reading materials and online resources. My 8th– and 9th-grader, for example, do not bring any textbooks home. Everything is online.

In this system, how can parents figure out what values are embedded in the curriculum that is being taught to their children? We can’t.

This is why we need school choice. With a robust system of school choice, which includes traditional public schools, magnet schools, public charter schools, and private schools, we can stop the charade. We can stop pretending that there is such a thing as the value-neutral school. We can be more upfront about what we want for our children and what our school community believes.

 

They’re Back! Film Tax Credits Haunt the Missouri Legislature

Posted on by Patrick Tuohey

Like a horror film bogeyman, legislation creating film tax credits is back! Both HB2027 and HB1767 attempt to set up tax credits to benefit people who make films in Missouri. The bills are not identical in their language, but both vie for the name “Show Missouri Film and Digital Media Act.”

Film tax credits are a bad idea for Missouri, as my colleagues and I have written previously. The Missouri Legislature itself condemned them in 2010, saying the credit serves, “too narrow of an industry and fails to provide a positive return on investment to the state.” A study of film tax credits in Tennessee found “over 40 percent of films that receive grants made less at the box office than they received in incentives.”

Now we have a report from the state auditor of Georgia—the place supporters of film tax credits here in Missouri hold up as a model—and it isn’t good. According to The Atlanta Journal-Constitution, the report states: “The economic benefits of Georgia’s popular and lucrative film tax credit have been greatly inflated, a new audit says, and past estimates have not considered what would have happened if the state had instead spent the money on things such as education or health care.”

The just-released report from the Georgia Department of Audits and Accounts is more specific:

The economic activity generated by the film tax credit does not generate sufficient additional revenue to offset the credit, even after considering tourism and studio construction. In 2016, the film tax credit resulted in a net revenue loss to the state estimated at $602 million. The state’s return on investment for the credit was 10 cents for each dollar, though local governments received an additional return of 11 cents in revenue.

No serious legislator interested in protecting tax funds or reducing waste and fraud ought to consider reinstating film tax credits in Missouri.

 

Prop 13 Comes to Missouri

Posted on by Patrick Tuohey

California’s Proposition 13 was enacted in 1978 as a reaction against high property taxes and some dramatic increases in tax assessments year over year. Prop 13 restricted annual increases in the assessed value of property, and state and local politicians have chafed under its restrictions for years—often blaming the proposition for their inability to raise revenue. Taxpayers, however, still support the measure. Now Missouri is considering something similar.

The recent spate of dramatic hikes in assessed value in Jackson County, in which Kansas City sits, is the reason for the renewed legislative interest. In addition to an excess of 14,000 formal appeals filed against Jackson County assessments by property owners, the county has drawn separate lawsuits from the ACLU and Legal Aid of Western Missouri.

As a result of this, there have been several bills introduced in the Missouri legislature that place caps on increases to a property’s assessed value. Several joint resolutions were introduced that would amend the Missouri Constitution along similar lines. One initiative petition would eliminate the ability of the state and localities to collect property taxes altogether.

Writers at the Show-Me Institute have written about problems with property tax assessments for years, going back at least a decade. There are many reasons for the situation at hand, including a determination by the State Tax Commission that assessments in Jackson County were too low. Another may be that taxing jurisdictions are struggling to provide services because economic development policies such as tax-increment financing and property tax abatements divert funds away from taxing jurisdictions and toward wealthy and well-connected developers. Kansas City area library systems have sought to increase their levies in recent years to address this. The Kansas City Public School district is uniquely exempt from having to reduce its levy when assessments go up—it will see an increase in revenue due to the new assessments.

Regardless of the cause for the increased assessments, cities and counties are likely to strongly object to any effort to curtail their ability to collect property taxes. They will talk about how doing so will harm their ability to fund basic services such as public safety and schools. Unfortunately, their practice of diverting tax dollars to private interests undercuts that claim. Local leaders must be dedicated to collecting public funds for public purposes or not collecting them at all—lest they face a Prop 13 of their own.

 

Words Matter

Posted on by Susan Pendergrass

Have you ever seen a word that you use all the time without thinking about it and paused to consider what it actually means? That happened to me recently with the word “accredited.” I think it was because I saw a sign saying that the Metropolitan Police Department of the City of St. Louis is “internationally accredited.” I live in the City of St. Louis and, quite honestly, I was a bit stumped by that sign and what it could possibly signify.

I remember having a similar feeling the first time I saw a “fully accredited” banner hanging on a school. It was in 1998 and my 3rd grader’s school had just completed its very first year of standardized testing in Virginia. I was glad to see that her school was fully accredited, but I really had no context for what that meant. Of course the word is now fully embedded in the public education lexicon and parents are used to seeing it. Yet I’m not sure that it conveys any more real meaning to parents today than it did to me twenty years ago.

That is especially true in Missouri.  The Missouri Department of Elementary and Secondary Education (DESE) has made a decision—or set of decisions—that has resulted in 99 percent of Missouri school districts being fully accredited. If a word applies to everyone in a group, then it loses all meaning in distinguishing between the members of that group.

DESE plans to replace the current system of standards and accountability, MSIP 5, with a new one, MSIP 6. There’s an opportunity for the new system to have words that actually mean something—maybe “not meeting expectations,” or “exceeding expectations.” Better yet, the new system could assign letter grades to schools. Most parents understand what an “A” or a “D” means.

Recently, DESE released a 21-page document describing the planned MSIP 6. Unfortunately, clarity and meaningful words do not seem to be a priority in the new system’s design. It contains statements like (italics mine), “Instructional staff [will] design and use appropriate, meaningful, and rigorous learning tasks for each student,” and “School system and building leaders use an intentional feedback system to improve and refine performance,” and perhaps the most perplexing “Educator teams [will] act reflectively.” This is the system that will be used to determine school quality. There’s nothing wrong with any of these tasks, but how is this going to help a parent (or any other stakeholder) learn anything about the quality of their child’s school?

Thinking about the word “accredited” and how confusing it was to me reminded me of this. The more we use words that obfuscate, the more likely that parents will only be able to rely on their gut or the grapevine to gauge their child’s school. DESE has a responsibility to fix that.

 

Dear User Fees: What’s Your Greatest Strength?

Posted on by Jakob Puckett

Show-Me Institute analysts have written for years on the benefits of user fees in funding a transportation system. User fees ensure that the people who use things are the people who pay for those things.

But what about the benefits of different types of user fees themselves? Gas taxes and tolls are the two main transportation user fees, and each has different advantages.

The biggest advantage of a gas tax is that it pays for the upkeep of all roads in the state, whereas tolls only fund the road the toll is located on. In Missouri, any purchase of fuel to drive on any road helps fund the maintenance of all of them. Proportionally, 70% of gasoline taxes fund state highways, while the remaining 30% goes to local and county governments for their own road upkeep.

An additional benefit of a gas tax is that it is already in place in Missouri, in contrast to tolling.

The benefit of tolling is that it matches the amount of road damage a vehicle does to the amount the driver contributes to the road’s upkeep. The heavier the car is (heavier cars do more damage to roads), the higher the toll. Additionally, drivers pay comparable amounts regardless of the fuel economies of their vehicles, since the cost is based on the wear of the car on the road.

Tolling can also help relieve traffic congestion. Congestion is estimated to cost Missourians up to $575 million per year. Tolling can save time and fuel wasted from idling while also decreasing air pollution. Most congestion pricing programs use electronic tolling, and as some drivers will choose not to pay the fee to drive on a busy road, average road speeds increase leading to clearer road conditions and better use of fuel.

The benefits of user fees are clear. Matching the costs of services to their use is an effective way to make sure our roads and bridges have the funding they need to stay in shape.

 

Medicaid’s Value Problem

Posted on by Elias Tsapelas

Missouri’s Medicaid program is getting a poor return on each taxpayer dollar, and that is a serious problem. A report commissioned by Missouri’s Department of Social Services concluded as much, stating: “Dollars spent in the program are not well aligned with value received from the delivery system.” As Medicaid costs are expected to rise again in the coming fiscal year, it is imperative that Missouri’s policymakers reckon with the audit’s conclusions and ensure each tax dollar devoted toward the program is being spent wisely.

What’s driving Missouri’s Medicaid value problem? To answer that, it’s helpful to start with the basics and look at who the program is covering and how the cost of care is being paid for. Missouri’s Medicaid program is responsible for the health care costs of more than 850,000 of the state’s most vulnerable residents. The way in which those health care services are provided is called the delivery system. In Missouri, the two primary methods are fee-for-service and managed care delivery systems.

When a Missourian enrolls in Medicaid, their eligibility criterion largely determines which delivery system will be used for their coverage. Individuals classified as aged, blind, or disabled are covered under fee-for-service, while everyone else is enrolled in managed care.

The fee-for-service system works the way it sounds; each time an eligible recipient receives a Medicaid-covered service, the provider of that service is reimbursed by the state at a previously agreed upon rate. Managed care works differently; instead of paying for each individual service, the state pays contracted health insurance companies a monthly rate, and the insurance company then negotiates a rate with providers to reimburse for each service its enrollees receive.

The division of recipients may play an integral role in explaining the existing systemic failure. The current arrangement puts the relatively healthier populations into plans that require monthly payments whether care is provided or not. And the populations with the most complex medical needs  are placed into a system where the state is left deciding rates and reimbursing for each expense.

There’s little evidence to suggest this is the best possible division, or that either of the current systems can increase the value received for each tax dollar spent. Another conclusion from the report mentioned above stated: “. . . methods to pay providers lack incentives to contain costs or enhance quality.” This is another way of saying that reining in Medicaid’s costs or improving the program’s efficiency is unlikely unless policymakers consider reforming the state’s delivery systems.

In other words, the current system is failing in important ways, and that failure cannot be reversed without substantial changes in the way the system is run. In future blogs I’ll expand on the problem and suggest solutions. For now, I’ll ask this question: When will there be a real concentration of effort in Jefferson City to address this problem? Will it receive the attention it deserves in the 2020 legislative session—or will the can be kicked down the road yet another year?

 

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