COVID Makes it Clear – We Need Educational Options

A universal system of public education would be easy if we all agreed on what it should look like. COVID-19 is making it pretty clear, however, that there is a wide range of opinions among Americans about how schools should operate this fall. Accordingly, we have seen some pretty intense conflicts as school boards make decisions that will impact the lives and livelihoods of every family in their school district. The lack of a one-size-fits-all solution to the problems caused by the pandemic should lead us to rethink the role traditional public school districts play in our lives.

In Springfield, Missouri, for example, school officials announced students would not be returning full-time in the fall. Instead, they will be on-campus two days a week and online the other three. Many parents, especially those whose lives and careers have been greatly impacted by the COVID-induced school closures, are unhappy with this arrangement. Thus far, more than 800 people have signed a petition for the school to offer more in-person learning.

During these strange times, it is clearer than ever that a single school bureaucracy simply cannot meet the varied needs of every student and every family. Should a family with health challenges be left with no virtual option because most of their neighbors want to resume in-class schooling? Should a single mother be forced to choose between putting food on the table and educating her child if schools remain closed?  The obvious answer is a resounding No, but we wouldn’t be in this position if our public education system was set up to fund students instead of systems.

If we allowed people more control over where their educational dollars were spent, we could provide educational options to every family.

There are no easy decisions for school boards when making decisions that affect so many lives. Giving people educational options, however, is a no brainer.

A Fundamental Shift is Happening in Education

Listen carefully. Do you hear that? It’s the ground shifting beneath the public education establishment. Families across the country are getting ready for back to school season, and they’ve had it with the inadequate plans being rolled out by their districts. They’re taking matters into their own hands. And I’m not just talking about the elite parents described in a New York Times article.

I was in the produce section of a grocery store in a fairly rural school district yesterday and overheard two grandmothers discussing what they are going to do. These ladies are the primary caregivers for their grandchildren—not uncommon in rural areas—and they were talking about joining a micro-school being set up by a teacher on their street. Or they may join a group of students that are going to meet at their church. These children from a small group of families will either have a Zootor (A Zoom tutor who facilitates virtual education as the in-person guide) or have a teacher provide instruction in person. Like so many in my nonscientific poll, they said that what the district provided last spring was absolutely terrible. Regardless of their resources, they’re going to figure out a solution that isn’t more of that.

Here is the problem: We have an epic disconnect between how education is funded and how it is being delivered this year. We have about 100,000 school buildings across this country that have been largely unused for the past six months and may or may not be used for the next six. Are we keeping the lights on in them? Are we keeping them cool enough for the minimal personnel still using them? Are we keeping the full staff of bus drivers and custodians? And, given that the answer to all of these questions is probably “yes,” are we then asking parents and primary caregivers to go out of pocket to get an education for their children that is supposed to be provided by their district? Are we willing to even discuss making changes to the collection of property taxes and the distribution of state education funds in this new reality?

One thing that I know to be true—when called, parents show up. Of course, there are far too many children stuck in horrific households and we all need to make sure that they have safe places to be. But on the whole, parents will go to great lengths for their children. The grace given to their school districts last spring is beginning to wear very thin. The daily uncertainty driven by overdue and underdefined reopening plans is causing parents to figure it out on their own or with their friends and neighbors.

The money conversation is sure to follow. While the keepers of the pre-pandemic status quo would like to hold their breath, wait for this to pass, and get back to the way things were, there have been too many fundamental changes in the delivery of public education for that to happen without resistance. A significant amount of power has shifted into parents’ hands and, like it or not, it won’t be long before parents start talking about a shift in funding methods.

It’s been clear to me for decades that parents want direct control of at least some public education dollars. But they’ve been facing an impenetrable wall of the public education establishment that dictates how things “must be done.” Parents are starting to get a peek over the wall, and I look forward to seeing how the rest of that story unfolds.

Let’s Get Real (Time Pricing)

Missouri’s electricity market does not include many free-market principles. Incorporating them has the potential to save customers money.

Electricity prices change as demand fluctuates throughout the day, but customers who pay fixed, per-kilowatt hour rates are shielded from those changes. This price shielding also means consumers don’t benefit from cost-conscious electricity use.

Many Missourians do have access to time of use rates through their utility, which do reflect market principles to a limited degree. Two or three different rates for electricity use are set based on demand at certain times of day. For instance, customers pay a higher set rate between 10 a.m. and 8 p.m. (since demand is higher) than they do during all other hours, yielding some benefits for cost-conscious consumers.

But since electricity prices change by the hour, could this time-sensitive pricing principle be extended further to yield even more consumer benefits? How would that work?

Utilities in many states offer customers “real-time pricing,” which grants residents the ability to pay market rates for electricity that change hourly based on demand. Transparent real-time prices allow customers to plan their electricity use and save money accordingly. For example, real-time pricing customers of ComEd, Illinois’ largest utility, saved an average of 15 percent on electricity supply charges between 2015 and 2018 compared to what they would have paid under a fixed-rate plan. Ameren Illinois’ real-time pricing customers also saved 10 percent during that same period.

Logistically, utilities offer websites publishing day-ahead hourly electricity prices for their customers, who are equipped with an advanced meter to measure their hourly electricity use. No cost estimates for implementing a real-time pricing program in Missouri exist, but the only equipment needed is a low-cost meter upgrade. Enrollees in Ameren Missouri’s time-of-use program pay a $1.50 fee per month to use an advanced meter. If this is any guide, costs incurred should be low and only charged to customers applying to the program.

Ultimately, while Missourians have access to a watered-down version of real-time pricing, introducing more market-based principles into electricity markets has the potential to bring more consumers benefits.

KCMO Vs KCK: Aaron Renn Joins the Show-Me Institute Podcast

On the most recent Show-Me Institute podcast, Dr. Susan Pendergrass is joined by Aaron Renn and Patrick Tuohey. They discuss Aaron’s recent paper published by the Institute. The report analyzes the economic conditions of Kansas City, Kansas versus Kansas City, Missouri.

Aaron Renn is an independent researcher and was formerly a senior fellow at the Manhattan Institute.

Patrick Tuohey is currently a fellow at the Show-Me Institute, where he formerly served as director of municipal policy.

Listen to the podcast here: https://soundcloud.com/show-me-institute/smi-podcast-kcmo-vs-kck-aaron-renn-and-patrick-tuohey

Read the full report here: https://showmeinstitute.org/publication/employment-jobs/kansas-city-missouri-vs-kansas

Districts Denied Once Again

Unfortunately, it seems unlikely we’ll get reform for community improvement districts (CIDs) and transportation development districts (TDDs) this year. The governor has vetoed House Bill 1854, which passed the legislature earlier this year. There were a wide variety of measures in the bill (and not all were good), so I won’t speak to the bill in its entirety, but the section relating to CIDs and TDDs would have been a win for taxpayers.

As the process currently works, CIDs and TDDs are approved by a vote of only people within the proposed taxing district. This bill would have subjected CID and TDD approval to a vote of the people in the city in which the district is located. This would have solved one of the biggest problems with these taxing districts: Many are not subject to a broad-based, representative vote for approval. Some districts can even be approved by only a handful of property owners if the district is small enough, yet the costs are externalized to all taxpayers who spend within the district.

As Show-Me Institute researchers have mentioned before, special-taxing districts like these are on the rise. According to financial reports received by the Missouri State Auditor, there are 495 CIDs and 237 TDDs in Missouri. CIDs collected over $56 million and TDDs collected more than $73.5 million in 2018. Hundreds of districts are taking millions away from Missourians, and they may not have had a say in it.

The problems with CIDs and TDDs are clear, and lawmakers should act. There is still an opportunity to give taxpayers increased representation in a special legislative session, but it seems that for now, the problems with CIDs and TDDs will continue.

Call it What it is: Medicaid Expansion

Supporters of Medicaid expansion have long played loose with the facts of the program, and this year is no exception. Earlier this year, my colleague Elias Tsapelas scuttled the notion that Missouri would “save money” by expanding Medicaid. Expansion backers have now pivoted to an oldie-but-goodie talking point: that Missouri would be “bringing home” their tax dollars from Washington.

It was nonsense five years ago when they made the argument to the legislature, and it’s nonsense now.

I won’t republish my entire Forbes piece here, so click the link above if you’re interested in the original editorial. But plainly, the expansion does not operate like the public is now being told it does in TV ads.

  • There is no federal pot of money divvied among participants when other states don’t join the expansion. If only one state expanded Medicaid, that one state wouldn’t then receive the funding of the 49 non-participating states. It’d receive money for its program and no more.
  • Missouri already receives more in federal support than our federal contribution warrants. We rely more on federal money than most other states, and we’re already getting more than our “fair share” in federal cash even without expansion.
  • But perhaps most importantly, there are no “tax dollars” being “sent back” to any state, especially these days. We are in a period of extraordinary deficits, and that means every new dollar spent by the federal government is from debt, not from taxes paid.

Medicaid expansion is debt, plain and simple, and yet it will still require redirecting existing state money currently earmarked for education, public safety, infrastructure, and other priorities to feed the Medicaid program’s insatiable appetite.

It’s Medicaid expansion debt. Supporters should be honest with the public and call it what it is.

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