Port KC Versus Taxpayers

Posted on by Patrick Tuohey

Steve Vockrodt over at The Kansas City Star has a story about Google wanting to invest $600 million in a data center in Kansas City. If this were the whole story, it would be great news. But the shell game of taxpayer incentives makes this opportunity less than meets the eye. Vockrodt writes:

The Port Authority, or Port KC, ultimately could issue up to $25 billion in bonds over 35 years for the Google data center project, a figure that represents the company’s maximum investment in Kansas City. Think of the $25 billion as a credit limit on a personal credit card. It’s not necessarily an indication of how much Google will invest.

The benefit to Google is that the Port KC can issue Chapter 68 bonds that give Google a property tax exemption for 25 years. Vockrodt goes one step further and makes clear in the story that such subsidies for data centers don’t offer a great return, if any, for taxpayers:

Good Jobs First, a research group often skeptical of corporate incentives, in a 2016 report identified a Google data center project in Oregon from 2006 that received $360 million in subsidies in return for 175 jobs, or $2 million per job. Good Jobs First advised cities and states to treat data center subsidies with caution.

“Internet-based companies have to grow the cloud and they will choose stable areas with cheap electricity,” the report said. “They will barely benefit your local economies because they create so few jobs and often import top-wage labor.”

Once again, Kansas City through its port authority is playing handmaiden to large corporations even when there is so little to gain. (Rest assured, this same story will unfold if/when the USDA considers locations in Missouri.) How is Kansas City supposed to fund infrastructure, education, public safety and all the other basic needs on which we depend if we continually offer exemptions from the taxes needed to provide them?

If taxes are too high for Kansas City to be a competitive place to attract business, then that needs to be addressed fairly for everyone. Offering sweetheart deals to a few while the rest of us pull their weight is no way to operate a city.

Eighty-Three Special Taxing Districts Opted Out of Tax-Free Weekend

Posted on by William Magee

During the season of back-to-school chaos that thousands of Missouri families face each year, the state in recent years has eased the burden by offering tax-free shopping on school supplies during the first weekend of August. But some taxes kept on working through the holiday.

By state law, local taxing jurisdictions can opt out of the annual sales tax holiday. This year, 50 counties, 156 cities, and 90 Special Taxing Districts decided not to give Missouri families a tax break. Of the 90 Special Taxing Districts, 83 were either community improvement districts (CIDs) or transportation development districts (TDDs). But unlike taxes collected by cities and counties, most of these districts’ sales tax revenues help the private interests that set up the districts rather than funding public services. Many of these districts are found in the most popular shopping areas in the state and encompass large retail stores like Walmart and Target. Some examples include the Arnold Retail Corridor, the Delmar Loop, and the Hanley Road Corridor in Maplewood/Brentwood.

These overgrown microgovernments have already taken over a billion dollars in taxes from Missourians to fund the development or redevelopment of commercial districts, with privately owned businesses reaping the benefits. One 3-day weekend without sales tax revenue would hardly put a dent in the millions collected the other 362 days of the year.

Absent any action from a special taxing district’s board of directors, the district, by default, participates in the tax holiday. However, the board of each of these districts—usually elected by a small number of property owners—instead voted to keep charging the district sales tax rather than give Missouri families a break. Unlike state, county, and city sales taxes, the taxes collected from the special taxing districts formed by developers do not contribute to the funding of public services for the average taxpayer. Instead—perhaps due to the lack of accountability and oversight—they go toward subsidies that primarily help big businesses.

So if you found yourself confused by the presence of a tax amount on your receipt this past weekend, thank the misguided laws that govern special taxing districts.

 

Medicaid’s Long-Term Problem

Posted on by Elias Tsapelas

The United States’ population is getting older, and that’s a troubling sign for Missouri’s Medicaid program. Next year’s Medicaid budget is expected to be the largest ever for the state—consuming nearly 40% of all government spending—and the elderly population makes up a significant portion of the expected costs. As life expectancy has increased over the past few decades, so too has the cost of care for elderly individuals. But what does that mean for Missouri, a state already struggling with growing Medicaid costs?

Every day, 10,000 baby boomers in the United States (individuals born between 1944 and 1964) reach retirement age, and a new study estimates that 75% of them will need nursing home care at some point. The majority of Missourians reaching retirement age do not currently qualify for Medicaid, but with nursing home costs in Missouri averaging more than $5,000 per month, the longer individuals reside in such facilities, the more likely they are to become eligible for Medicaid. In fact, Medicaid pays the highest share of nursing facility costs in the country, totaling 65% of all expenditures at Missouri’s nursing facilities in 2016.

So what should Missouri do to prepare? For starters, policymakers should reform the state’s Medicaid program. Medicaid is an enormously expensive program with very little evidence showing it actually improves health outcomes for participants. One way to provide better services at a lower cost would be to change the payment model for various services to ensure it is incentivizing desired outcomes. Reforming the way Missouri pays for long-term care would be a good place to start.

Missouri’s nursing home reimbursement rates are per diems based on each facility’s historic costs, which includes construction expenses, and are not adjusted according to the level of care each resident needs. Rather than base payments off the quality or quantity of care delivered, the size of the per diem nursing homes receive is simply based on the number of patients they have. This discourages nursing homes from moving patients out of their facilities and into more appropriate and less restrictive environments. As a result, Missouri spends a lot of money on nursing home patients who could receive the care they need in a different environment and at a lower cost to taxpayers.

Missouri’s seniors should have access to the best possible care, in the most appropriate setting, and, for those who need government assistance, at the best possible price for the state’s taxpayers. Though there is no magic bullet that could fix Missouri’s Medicaid program, increasing the value received from each provided service would be a welcomed change.

 

Getting Sent Back to School

Posted on by Susan Pendergrass

What a mixed-up world we live in. In order to keep her daughter in the school she has chosen, a school that is working wonderfully for her daughter, Renita Jones has to do the impossible. She has to sell the home she has owned for fifteen years and quickly find an affordable apartment in Ladue, a wealthy suburb of St. Louis. If not, her daughter will be sent back to a failing school in her home district of Normandy.

Jones is part of a student transfer program that was created when the Normandy schools were so low performing that an emergency exit was created that allowed students to enroll in other districts. Now, the “system” that the Missouri Department of Elementary and Secondary Education (DESE) uses to rate the performance of school districts has somehow declared that Normandy, a district in which just three percent of 7th graders were proficient in math last year, is good enough. The transfer program is over, and the exit has been closed.

But let’s look at the bigger picture. Parents (and I can’t believe how often I have to say this) want to have choices when it comes to their child’s education. Of course parents in one of the lowest-performing districts in the state jumped at the chance to leave when it was offered. But guess who else chooses something other than their neighborhood school? Parents of bullied students, parents of students who are assigned to a big school but would do better in a small school, parents of students who want or need a particular curriculum such as fine arts or the classics and parents of students with disabilities who find a program that connects to their child’s needs. This list could go on and on.

So now the media is highlighting the tragedy of Tyler Ratlif Woods, who was on the path to college. Woods just found that he will not be attending high school in Ladue, where he went to elementary and middle schools. Instead he must return to his low-performing and potentially dangerous neighborhood high school in Normandy. One article quotes a transfer student’s father, Paul Davis, who called the transfer program a “gift from God.”

These stories are upsetting. It seems unfair. Forcing these children to return to their crumbling district isn’t going to help that district much, but it is going to hurt those children. In this case it’s obvious. But let’s not forget the less obvious—school-aged children are not the property of a school district by virtue of their address. They are individuals with individual needs who should have options when it comes to their education.

 

Fall 2019 Internships

Posted on by Show-Me Institute Staff

The Show-Me Institute is pleased to offer internship opportunities for Fall 2019.

  • Internships are open to current undergraduate and graduate students, as well as recent graduates. 
  • Internships last approximately ten weeks. The exact starting and ending dates are flexible, but we anticipate that each internship will run from September 16 until December 6.
  • Fall interns will work a part-time schedule.
  • Interns will be involved in many aspects of the Institute’s operations. Interns will work closely with senior staff on a wide variety of projects. They can expect greater responsibility and personal attention than they would receive at larger organizations.
  • Interns will assist staff members with a variety of tasks. These may include researching public policy topics, assisting with social media, organizing events, and writing and editing op-eds, newsletter articles, studies, and other documents. Some administrative and clerical tasks will also be required.
  • Policy internships as well as communications and development internships are available.
  • A Show-Me Institute internship is an excellent opportunity to improve your research and writing skills. Each intern will produce regular blog posts and an op-ed on a public policy topic of interest to him or her. Each intern will receive feedback and assistance from staff members throughout the process.
  • Internships are offered in both the St. Louis and Kansas City offices.
  • Interns will be paid on an hourly basis.

Those wishing to be considered for an internship should submit the enclosed application and the requested supporting materials. The deadline for applications is Friday, August 30, 2019.However, we will begin conducting interviews as applications are received. Applicants can expect a decision in Early September.

What Works Better-Markets or Government?

Posted on by Susan Pendergrass

This past summer, my family and I spent the Fourth of July at the beach on the Outer Banks of North Carolina. For the celebration, my daughter suggested we try a new recipe she found for the “Best Mojitos Ever.” In addition to the usual ingredients, these mojitos have coconut water, coconut seltzer water, and Velvet Falernum—a fancy Caribbean liqueur.

The idea sounded good to me—so off we went to get the ingredients. But to no avail. You see, the North Carolina state government controls the entire liquor industry in the state. Alcohol can only be purchased at the state-run Bureau of Alcoholic Beverage Control (ABC) stores. Their inventory and prices are decided by the state and, not surprisingly, inventory is minimal and prices are high. There’s certainly no Velvet Falernum, and thus no Best Mojitos Ever in North Carolina.

Recently, it seems “privatize” and “for-profit” have become code words for evil and greedy. But the private sector does many things quite well. My daughter’s Denver neighborhood has multiple boutique liquor stores that would absolutely have Velvet Falernum. Consumer demand is met by commercial supply. In North Carolina, purchasing liquor is similar to getting a driver’s license—strictly on the government’s terms. Do we really want more government control and fewer private markets?

Would the Fourth of July have been better with the Best Mojitos Ever? If you spend it in North Carolina, you’ll never know.

 

Charter Schools Are Working in Kansas City

Posted on by Abigail Burrola

Charter schools are making strides across the nation, and Kansas City’s own charter schools are no exception. New research from the Center for Research on Education Outcomes (CREDO) at Stanford University shows charter school students in Kansas City are learning more math and English than their traditional public school counterparts.

The study examined student’s academic growth on the state assessment in math and English for the 2014–15, 2015–16 and 2016–17 school years. CREDO compared traditional public school students in Kansas City to Kansas City charter school students, and then compared both of those groups to the state average.

In order to compare student growth, CREDO uses a “virtual twin” method, taking into account seven student characteristics such as previous academic achievement and income level. CREDO matches each charter student with several traditional public school students who are similar on the seven characteristics and averages the test scores of these students to create each charter student’s virtual twin. The traditional public school virtual twin for each charter school student differ in only one way— what type of school they attend.

Using this model, Credo found that Kansas City charter school students had more academic growth in both math and English than their traditional public school student twins in every year studied. And by the 2016–17 school year, charter school students had more growth than the state average in both subjects.

Although the results of the research are measured in standard deviations, the researchers converted these to days of learning. A typical school year has about 180 days. CREDO found that during the 2016–17 school year, Kansas City charter students received nearly 60 additional days of learning in math than Kansas City traditional public school students and about 30 more days than the state average. Charter school students also showed more growth in English, receiving about 90 extra days of learning compared to the traditional public school students and more than 30 extra days compared to the state average.

When CREDO researchers analyzed student subgroups, they found that Black, Hispanic, English language learner students, special education students and students in poverty all had more days of learning in charter schools than traditional public schools in both math and English. Notably, special education students in charter schools had more than 120 extra days of learning in English and over 90 extra days in math in one school year than special education students in traditional public schools.

While the evidence that charter schools are capable of producing great academic results continues to mount, Missouri remains steadfast in refusing to expand educational opportunity for students. Why doesn’t Missouri want to give kids all across the state the option to attend these high-performing schools?

 

Support Us

The work of the Show-Me Institute would not be possible without the generous support of people who are inspired by the vision of liberty and free enterprise. We hope you will join our efforts and become a Show-Me Institute sponsor.

Donate
Man on Horse Charging