Federal school choice policy has been in the spotlight recently. The Federal Choice Tax Credit program, set to launch in January of 2027, allows individuals to take a dollar-for-dollar tax credit of up to $1,700 ($3,400 for married couples filing jointly) off their federal tax bill for donations to scholarship-granting organizations (SGOs) in states that have agreed to participate in the program. Thankfully, Missouri has already done so.
Federal agencies have begun issuing proposed rules and guidance to structure this potentially enormous tax-credit program. The federal guidance aims to incentivize private donations to SGOs, giving families funds to use for tuition, tutoring, and curriculum expenses. However, the ongoing debate over state participation, eligibility rules, and administrative overhead is reigniting discussions across the country on how tax-credit scholarship models function in practice.
While federal frameworks are just now taking shape, Missouri has already served as a live testing ground with the MOScholars education savings account (ESA) program. This program is also funded through dollar-for-dollar tax credits, in addition to $60 million in state dollars. In the years since its inception, Missouri’s MOScholars ESA program has demonstrated both the potential and the pitfalls of tax-credit scholarship designs.
Key findings include high family demand. Applications from low-income families and students with special needs have consistently outstripped available ESA funds. The demonstrated demand confirms that parents will seek alternatives when traditional residential assignments fail to meet their children’s specific needs. In addition, while the Missouri Legislature has eliminated the restrictive geographic eligibility that initially constrained the program’s ability to reach rural and suburban communities, financial constraints continue to limit the program’s scale.
The MOScholars experience offers a clear roadmap for the federal program. Donor and family access should be simple and straightforward. Overly bureaucratic application processes discourage both donors and parents who need immediate options. The core benefit of educational freedom is programmatic variety, which vanishes under uniform top-down regulations. Therefore, it is imperative to preserve provider independence. Finally, portability of funds should be prioritized. Ensuring that scholarship funds follow students seamlessly across district lines, private providers, and customized therapies will produce the strongest academic outcomes and the most robust supply-side reaction.
Missouri’s ongoing refinement of the MOScholars program proves that while tax credits are an effective tool for educational opportunity, their success hinges on clean legislative design and institutional simplicity.
Thank you so much for joining the podcast. Jason Bedrick of the Heritage Foundation, James Shuls of Florida State University. So you guys have a book that has just come out, The Phoenix Principles, and it uses the word Phoenix in a couple of different ways. But first, Jason, if you could just tell us a little bit about the impetus for the book and this meeting that you guys took part in in Phoenix.
Jason Bedrick (00:24)
Yeah, so a few years ago, we came up with the idea of having something called the Conservative Vision of Education Conference, which we hosted in Phoenix because we felt that conservatives were doing a much better job of articulating what we were against than what we were for. And so that meant we were always on defense, we were always being reactive, right? We’re pushing back against, you know, CRT and DEI and gender ideology and SEL and, you know, whatever new acronym the left is coming up with. But we weren’t articulating why we were against these things. So I spoke to a lot of people who, let’s say, got elected to school board who said that they felt like the dog that caught the car and they didn’t know what to do with it. And so, like, I’m against Common Core. Okay, but what are you replacing it with? Like, what are we actually doing that’s affirmative? And so out of this conference, we had something called the Phoenix Declaration, named not only for the city, but also for the mythical bird that rises from the ashes of its former self. And we called it, you know, subtitle, an American vision for education. So this isn’t just for conservatives. I really do believe this is something that is based in the founding principles of the country, and that those on the right and the left who are committed to the founding principles should believe in it.
And so it’s organized around seven principles: parental choice and responsibility, transparency and accountability, truth and goodness, cultural transmission, character formation, academic excellence, and citizenship. And we believe these are the principles that should orient policymakers and practitioners when it comes to American education.
Susan Pendergrass (01:57)
Okay, great. I do want to go through each of those one at a time. But James, you certainly spend a lot of time these days working on civic education and what kids are or are not learning. And you know, we’ve been talking recently, we actually just talked a little bit about this offline recently, about how, regardless of what the standards are regarding civics, history, government within our education system, according to NAEP scores, eighth graders aren’t really learning whatever it is that they’re being taught. So what do we do about this missing component where on the one side I feel like folks on the left say we are running the school systems as these great generators of democracy and citizens and it’s the great equalizer where everyone learns how to be a good US citizen. But the test scores don’t really show that. So what do we do, what should we do differently there in order to at least just improve what kids are being taught about this country and also how well they’re learning it. Big question, sorry.
James V. Shuls (03:01)
Yeah, well, I think it starts with maybe actually teaching some things. I don’t know. Like that might be helpful. You know, I was saying earlier to you offline that I remember when my kid was entering first grade, the social studies curriculum we were told about sounded like a self-help curriculum. It wasn’t anything related to history and civics, what you and I would normally think kids should be learning about our country. And that’s a significant problem. I mean, kids today are not learning the things that I think that they should be learning. So Jason mentioned the Phoenix Declaration, the set of seven principles that we put together. He didn’t mention that there was a follow-up meeting the next year where they released the Phoenix Declaration. And immediately I said, “We’ve got to do a book,” because the Phoenix Declaration is a short statement of principles. Each one has about a paragraph, something like that. And so now we have a book. And Yuval Levin wrote the chapter on civic education, and the title of his chapter is “The Necessity of Civic Education.” And part of the problem is that we aren’t teaching the founding principles. We’re not teaching the history of our nation. In many places, civics instruction is what’s called action civics, and it’s the idea of let’s teach kids how to use the levers of government to achieve the ends that they want.
And so the very negative view of that is to say they’re teaching kids to be protesters or social agitators or something along those lines. But they might be teaching them about how to organize or how to write letters or how to identify problems and get government to solve those problems. But that doesn’t teach them to ask the question of should government solve these problems? Is this a problem that government needs to be solving? What is the role of government, right?
And those are questions that our founders wrestled with. Right. So when Jason and I talk about civic education, we mean studying the founding principles of our country so that you can understand why we have the government structured the way we have. And you get that when you read both the Federalist Papers and the Anti-Federalist Papers and you see the conversations that people were having. If we want students to be able to engage in our society, in our civic process, they have to understand where we come from. And that’s part of the impetus for this book, is really calling for a renewed emphasis, for one, on civic education.
Susan Pendergrass (05:33)
Yeah, so Jason, let’s go back to the first principle, which is parental choice and responsibility. I appreciate we talked a lot about parental choice at the Show-Me Institute. I appreciate the addition of the word responsibility. But also this book seems to be organized around the idea that parents are the first and primary teachers of their kids. And I feel like that is a principle that’s kind of gotten lost in the shuffle. What do you think?
Jason Bedrick (05:55)
Yeah, so actually that section starts with parents are the primary educators of their
Susan Pendergrass (05:59)
Right.
Jason Bedrick (05:59)
children, right? We have to start with that. And I think too often it’s the case that teachers are essentially taught in the ed schools these days, you know, your job is to be a good social justice warrior and to, you know, break these children, liberate these children from the prejudices of their parents.
And you are acting essentially in place of them, instead of alongside parents and really as an extension of the parents, right? That should be the way schools are oriented, not in an antagonistic fashion, but actually supposed to be working with the parents. And if we recognize that parents are the primary educators of their children, well, first of all, there should be school choice, right? They should have the freedom to choose which learning environment works best for their kids, a learning environment that aligns with their values. The funding should follow it. But we also borrow language from the landmark Supreme Court decision, Pierce v. Society of Sisters, which talked about the high duty of parents to educate their children, right? That this freedom also does come with responsibility. And so we are placing both on the parents. And that means what follows from that is accountability for the schools, which is the second section, transparency and accountability. Accountability really should be bottom-up, not top-down. It’s not what some elected politician or unelected bureaucrat says. That’s what we’ve been doing in a monopoly system. And when we’ve been so accustomed to that system for so long, we have come to confuse real accountability with top-down regulations. But actually, real accountability is when the people who bear the consequences of an institution’s performance are in charge. And that means parents. So if you want to put parents in charge, that means they have to have the ability to choose, but also they need to have the information to choose. So schools have to be transparent about what exactly it is they’re teaching, how they’re performing, so that parents can make an educated decision.
Susan Pendergrass (07:56)
Yeah, in the last few years quite a few states, including Missouri, have floated this idea of a parents’ Bill of Rights. And in Missouri it hasn’t passed, but as we have discussed at the Show-Me Institute, my reaction was just, to be clear, these are all rights we have as parents. We can delineate them, we can write them down, but the right to see the curriculum your child’s being taught, which in Missouri got pushback, this idea that schools would have to submit their curriculum to parents or put it in the backpack or reading lists, there was pushback, you know, to be clear.
Jason Bedrick (08:23)
Mm-hmm. They’ll say it’s too hard. Yeah. I’ve seen people say, it’s proprietary. It’s like, no, you are a government institution. You cannot be hiding from parents or the public what it is that you are teaching children.
James V. Shuls (08:38)
But Susan, I like that you are basically making a Bill of Rights argument, right? You have them. If we spell them out in a Bill of Rights, we might miss some.
Susan Pendergrass (08:50)
You already have them.
James V. Shuls (08:51)
So that’s funny that you make that argument. But I want to touch on something Jason said, because a friend of mine, when we released the Phoenix Declaration, and he might very well be listening. He listens to the Show-Me Institute podcast.
Susan Pendergrass (09:05)
Hope he is.
James V. Shuls (09:06)
The first line that Jason said was that the parents are the primary educators. And some people hear that and say, not really. Lots of parents don’t actually teach their kids. They send them off to school for eight hours a day or whatever. That’s not what we mean. We don’t mean they’re literally teaching their kids everything. What we mean is that they have the responsibility and it’s their duty, their obligation, to do that. And this stands in stark contrast. When you asked the question, you said this is sort of gone out of fashion. Yeah, it’s gone out of fashion since about the 1800s. The idea behind public schooling and the common school approach was that the state had a primary responsibility of public education. And the state had the ability to direct what your kids learn, and they would build this system of public education that would compel you to send your kids there and they would govern it. And of course, we had local school boards where you got some feedback, but over time that system of public education grew into larger and larger bureaucracies where individuals, as we’re just saying, have less influence over what they’re teaching. And so what we’re pushing or suggesting in the Phoenix Declaration and in our book, The Phoenix Principles, is a return to almost pre-1800s of the understanding that the parents have the right to raise their children.
While we might think of it as intuitive, it has not been intuitive in our public education system. And so we think it’s important for people to understand this idea, and that’s what we’re trying to do in the book is give them the philosophy, give them the understanding, the argument, so that they can really defend that position.
Susan Pendergrass (10:49)
What I think is probably one of the more controversial parts of this book is that you make the declaration that there is truth and goodness and kids should learn it. And I think the public school system, if I could represent them to a certain extent, would say, No, no, no, no, we want them to just have a safe place to explore ideas and there is no absolute truth or absolute evil, and you’re suggesting that that’s not right, right, James?
James V. Shuls (11:17)
Do we make that claim? Yeah. You’re saying it’s true that we make that claim? I mean, that’s
Susan Pendergrass (11:19)
I believe so.
Jason Bedrick (11:20)
Yes, so yeah.
Susan Pendergrass (11:22)
Yes.
James V. Shuls (11:24)
how truth works, right? There are certain things that are true and aren’t true. Now, some things we know, we know, we can prove mathematical truths. There are certain things we know, and there are certain things we debate about whether or not they’re true. But that doesn’t mean that there’s not a truth, right? Just because people debate what that truth is. But part of what we’re trying to get across to people is that education is the seeking of truth. Like that is part of what the process of education is. If there is no truth, then why would we even try to educate children? Like there’s nothing to educate them towards. Do what you want, you know, believe what you want. And so we think it’s an important foundational principle for people to understand that there is a thing that is truth.
We can debate that, but there is something that we call truth. Jason, you want to add to that?
Jason Bedrick (12:22)
Yeah, yeah, look,
Susan Pendergrass (12:23)
Yeah, please.
Jason Bedrick (12:24)
this is the Rachel Cobb has a fan from Belmont Abbey has a fantastic chapter on this, where she argues that look, at its core, education really is about the pursuit of the transcendentals. And you actually have to take as axiomatic that there is something called truth or the entire enterprise falls apart, right? We couldn’t even agree on what color my shirt is. We couldn’t agree on what the rules of traffic are. You know, you say that was a red light, I say it wasn’t. It’s all relative. Right? No, there are certain things that are true. And James mentioned math. If you don’t believe that there is ultimate truth, then you can’t teach math at all. You can’t teach anything really. Now, again, that doesn’t mean that every single thing people are going to agree on, but at its core, we have to agree that there is something called truth, or it’s not even worth having a conversation. There is no intellectual exercise to be had. It is merely the pursuit of power, and isn’t the entire Western way of thinking based on an idea that there is truth?
Susan Pendergrass (13:27)
Well, in that particular vein, in the last, I don’t know, has it been a decade now since there were some alternative theories mentioned about the founding of the United States, right? So the 1619 Project came out and said this is really the reason for the Revolutionary War and really what turned the United States into a superpower was when the first shipload of slaves was delivered in 1619. And there was a lot of pushback on that from folks on the right saying that’s absolutely wrong, first of all, and then Hillsdale or somebody created an alternative curriculum, and I don’t know that we’ve exactly solved this, from the point of view that public schools feel very threatened if you tell them what they can’t teach. You know, we are arguing in Missouri about whether they should be able to use a failed approach to teaching reading called three-cueing, and they are pushing back saying, you can’t tell us we can’t use three-cueing. Because when we’re in the classroom, we sort of are in charge of this whole thing and we can teach what we want. And I guess what you’re suggesting, Jason, is that we cannot allow that to be the case.
Jason Bedrick (14:32)
No, and I think that our system of education is intended to do a lot of different things, but one of them is to produce good citizens. It’s meant to do a lot more than that. But especially if you look at the time of, you know, the founding era when they were talking about education, they were concerned that, you know, if we’re going to have a representative government, if we are going to have democracy, we need to have an educated citizenry. That means that we need to have citizens who understand how the government functions, why it functions the way that it does, what the principles that underlie it are. They need to be familiar with their founding documents like the Declaration of Independence and the Constitution. They have to understand what it means that all men are created equal, where that idea came from. Right? There is a lot that they need to understand. And so that’s why, again, we called the Phoenix Declaration an American vision for education, because all Americans who are committed to that, whether right or left, we want them to be involved in this project. We don’t think there’s any room in the public school system for the 1619 Project that you mentioned, which fundamentally says America wasn’t created in 1776, it was created in 1619 when the first slave ship arrived. And the Constitution, the Declaration, these are just white supremacist documents that the whole system is inherently racist from the top down. We need to scrap it and start over.
Those in the far right who say, Yeah, you know, the founding fathers took a wrong turn with John Locke, and all his ideas that, you know, undergird the Declaration. We need to scrap those and we need to go to a European-style conservatism that is more throne and altar or blood and soil, right? We reject those too, those also don’t belong in the public school system. So we do need, we need to cultivate attachment. We want to develop a civically educated and patriotic citizenry. And we believe that students who are exposed to the American story will naturally develop an affinity for it, recognize the greatness of America, even when we are clear about its flaws. I mean, one of the critiques that we’ve heard is you’re just trying to whitewash American history because you’re talking about patriotism. No. In the Declaration itself it says students should learn the whole truth about America, its merits and failings, without obscuring that America is a great source of good in the world.
So we want children to learn about the horrors of slavery and of segregation and of Jim Crow, and we want them reading Martin Luther King Jr.’s “I Have a Dream” speech. We want them reading Frederick Douglass’s “What to the Slave Is the Fourth of July?” Both of those are liberal critics within the tradition who say, I believe in the Declaration of Independence. And if you really believe in the principles of the Declaration, then you’re going to oppose slavery. You’re going to oppose segregation. So those voices are within the tradition. They should be taught in schools, but schools have no business. You know, college is a different thing. College is where we really should be introducing the critique, but first you have to understand the system. You have to have an affinity for the system. And so in K-12 we don’t really have any space for the 1619 Project or the post-liberals.
Susan Pendergrass (17:55)
So James called this the Phoenix project, the idea of Phoenix rising from the ashes, which I guess implies that our public school system is in the ashes, maybe. But we get to this one point on academic excellence, and this is where I spend a lot of my time, both on parental choice and academic excellence, because I think some of these principles that you’re talking about, Jason, it’s like, yeah, but our kids can’t read. And our kids can’t do math. And so you get this UCSD story about their incoming freshman class needing elementary school math. And in Missouri, forty percent or so of our fourth graders are below the basic level in reading. It’s almost functionally illiterate. So, James, how do we get all of this sort of elevated stuff happening in our school system when it is no longer doing the basic functions.
James V. Shuls (18:43)
Yeah, so Robert Pondiscio wrote our chapter on academic excellence. And I love what he does in there because he basically says, I mean, the chapter is called “Excellence as Equity: Why Rigor, Knowledge, and Character, Not Fashion and Ideology, Define a Just Education.” Part of what he does is he explains why excellence, academic excellence, is important. I think part of what we’ve seen over the past, you know, decade, maybe two, is a shift away from excellence towards other aims like equity. And I know a lot of people on the right, we have a knee-jerk reaction against equity. We hear it, it’s like a boogeyman or something, we’re scared of it.
But the truth is, equity is not bad unless you define it badly, unless you define it poorly. Equity, the idea that you want to care for poorer individuals or people with disadvantages, there’s nothing wrong with that. Most of our faith traditions actually encourage us to have that sort of compassion. And even in Missouri, I studied school finance there for a long time. We have equity principles within our system. So Normandy gets more money from the state than Ladue and Clayton do because it’s a poorer place and we try to give them more funds to raise it up. That’s an equity principle. And there’s nothing wrong with an equity principle in some cases.
But if you apply it wrongly, you start crushing excellence. So if you want to solve financial equity in Missouri, and you put things in place that take money away from Clayton, Ladue, the wealthy school districts in the state, so that you keep them from raising money, so that you can close the gap between the bottom and the top. Well, you’ve just done a terrible disservice to this state.
Susan Pendergrass (20:34)
Right.
James V. Shuls (20:35)
You’ve closed gaps in spending, but you’ve done it at the cost of taking finances away from higher spending districts. That’s essentially what we’ve done in many cases in terms of education when we’re thinking about academics. So we haven’t seen this as much in Missouri, but we’ve certainly seen in other places closing of gifted programs, taking away opportunities for high performing students in the name of equity to try to raise up the lower performing students. But we’ve also seen, in schools throughout the state, ridiculous programs that try to target low performers with the idea that you’re going to bring them up. So for example, I taught first grade in Missouri, and they would pull students out of my classroom to give them extra reading instruction, which sounds great. We should certainly do that. But we sometimes might do that and take them away from other important things, maybe they’re missing a history lesson or maybe they’re missing some arts enrichment or whatever. And so we’re giving them more reading instruction under the guise of equity while we’re handicapping them in another area. So the point that I’m getting at here is that when you make equity the aim and simply closing gaps is the goal, it sometimes leads you to do really stupid things. And so that’s why we’re trying to put the emphasis back on excellence, excellence for all students. At the top, at the bottom, we should be aiming for excellence. We should be aiming for challenging students. And what Robert lays out in the chapter, this means, for one, a content-rich curriculum, that we should be teaching students stuff. All right. You know, when I was a teacher, I would hear people say all the time, we gotta teach kids to think critically. And I would say something like, you know how scientists think critically? It’s because they know stuff about science. I can’t think critically about nuclear fission because I don’t know anything about nuclear fission, right? You can only
Susan Pendergrass (22:40)
No.
James V. Shuls (22:41)
think critically when you know stuff. So you gotta teach kids content, especially in the early grades. We have to have curriculum. This goes back to your three-cueing and your reading practice. We have to go
Susan Pendergrass (22:53)
Right.
James V. Shuls (22:54)
with tried and true practices that actually generate learning gains.
Rather than following fads. And that’s one thing again you hear in education all the time: this too shall pass. These fads, teaching practices, come and go all the time, but there are practices we know work and we need to pursue those things. So that’s when we say, you know, excellence has to be our goal, trust the tried and true, content-rich curriculum, read the chapter and find out more.
Susan Pendergrass (23:24)
No, it’s a really good chapter. Robert does a great job. And I just, you know, want to circle back a little bit, Jason, because we started the conversation about this and that, and I get stuck on this when I’m hearing about the rise in the popularity of socialism, the decline in people’s feelings about capitalism. You know, Pew’s been doing surveys, Gallup’s doing surveys, it’s definitely out there, and certainly there are candidates winning primaries that are winning it on socialist principles. And I think that when some of the same surveys that find those attitudes also find that forty percent of Americans don’t know how many branches the federal government has or don’t know what we just celebrated the 250th birthday of, then it makes me kind of want to just toss the survey, like, okay, they feel that way about socialism and capitalism, they probably don’t know a lot about it because they don’t know the basics. And so I know that when you have that vacuum of knowledge, it does bring the opportunity for somebody else to fill it with something incorrect, right? So you’re like, this must be great. I don’t know what it is, but it sounds really good. You know, and I wonder if you think that is happening, or why are so many people who are just coming out of the school system, people under the age of thirty, having this change of heart about the economic system of this country.
Jason Bedrick (24:46)
Well look, certainly there’s, what we might term the purple-haired teacher problem, which is the teachers that are coming out of ed schools that, you know, they’re not reading Doug Lemov’s, you know, work on, you know, how to run a classroom. They’re not actually content experts in their particular fields. You know, they’re reading, you know, Pedagogy of the Oppressed, and they’re essentially having their heads filled with left wing indoctrination and then they’re bringing that into the K-12 classroom. But actually, I mean, for the most part, the problem is that we aren’t even teaching any of this stuff at all, right? So the kids just aren’t… not even that they’re being indoctrinated to be left-wing, they’re not learning anything substantial about the founding. You know, maybe they’re learning about the Revolutionary War and, you know, the Declaration is sort of in the background, you mention, okay, they declared independence, they might read it once, but then they move on. What the Phoenix Declaration calls for is that students should develop a deep understanding of and respect for a nation’s founding documents and the ideas they contain about ordered liberty, justice, rule of law, limited government, natural rights, and equal dignity of all human beings. And so if students are actually studying that, and if they’re studying history, they’re studying American history, if they’re learning particularly about the 20th century and the various experiments with communism around the world, then I think that is going to inoculate them against becoming a radical, either a right-wing or a left-wing radical for that matter.
And I should mention this is another critique that we often hear: you’re just trying to indoctrinate the students, right? And that’s not actually what we’re trying to do. We do recognize and criticize the problem of left-wing indoctrination, particularly in district schools, but that doesn’t mean we want to replace it with right-wing indoctrination. And so what do we mean by indoctrination? Indoctrination is the idea that students should be presented with only one point of view that they should accept unquestioningly and uncritically. And that’s not what we want. In our section on cultural transmission, we say students should study the best that has been thought and said, engaging in the great conversation among competing viewpoints that comprise our intellectual heritage, so that they may freely make the best views their own.
and Plato. Let’s have that conversation. Let’s hear about what great minds on different sides of an issue had to say. That is real education, not indoctrination.
Susan Pendergrass (27:30)
Alright, so James, you’ve got your Phoenix principles written down. You’ve had a lot of smart people write full chapters about them. Where do you go from here? How do you turn this into action?
James V. Shuls (27:43)
That’s one of the criticisms, I think, that we had from the get-go. When we put out the Phoenix Declaration, people said, that’s a nice list
Susan Pendergrass (27:50)
Great.
James V. Shuls (27:51)
of seven principles. What is it gonna do? Well, then what happened is the Florida Department of Education adopted the Phoenix Declaration as a
Susan Pendergrass (27:59)
wow.
James V. Shuls (27:59)
resolution, which again people said, Well, big deal, what’s it gonna do? That doesn’t mean anything. Nothing comes from it, there’s no teeth in it. But these were a set of ideas, and that’s the point Jason and I have been trying to drive home with people, is that ideas matter.
And so these ideas are in place, and now what’s happening is they’re influencing policy in Florida. So Florida has revised the teacher preparation standards in Florida. And now if a college has a program and they want their teachers to be certified, there’s a set of three courses they have to include. One of them is on Western civilization, right? And the Phoenix principles or the Phoenix Declaration, the language you can see in some of the documents that the Florida Department of Education has put out.
So it’s having a real impact in Florida, and it can happen in Missouri and other places too, if the Board of Education adopts it. So one of the things we did in the book is at the end of the book, we put a series of questions that school board members could ask. And so the idea is that you can go through that list and ask if you’re on the school board, or even if you’re a concerned parent, go to the school board meetings. And ask these questions, and Jason probably has them pulled up in front of him, but the time you spend asking those questions helps drive the agenda rather than spending time on something else. Jason, you want to list some off?
Susan Pendergrass (29:22)
Throw some out.
Jason Bedrick (29:24)
Yeah, so I don’t actually have it open literally in front of me, but just, if you’re talking about cultural transmission, okay, so what is it in terms of content that we are trying to transmit? What kind of teacher preparation do we have to make sure the teachers know what they’re supposed to be transmitting? You know, how are we measuring performance? Like, do we know that the kids are actually learning the things that we want them to learn? Same thing when it comes to say character formation, right? So, you know, what virtues are we trying to cultivate, and are the teachers prepared to cultivate them? How are we measuring it? And so for each of the seven principles, we have a whole series of questions that in particular it’s aimed for school board members to use to ask principals and superintendents that are coming before their board. So it’s like, look, here are the things that we care about. We have adopted the Phoenix principles now in our school district. We’re gonna hold you to it. Here’s a series of questions that we want you to have answered by our next meeting. And like James said, every minute that the principal or superintendent is spending on implementing this agenda is a minute that they’re not implementing DEI or, you know, SEL or any other, whatever the next acronym the left comes up with. They’re focused on doing these things. So it’s not meant merely to be a symbol. It is meant to be a symbol that then orients practice in the school systems.
Susan Pendergrass (30:54)
Okay, so The Phoenix Principles: Toward a Rebirth of American Education, edited by Jason Bedrick and James Shuls. It’s available everywhere you get books, I’m sure. So I really appreciate you guys coming on to talk about it. I’m sure a lot of people will be interested in reading it and finding out more. And, you know, I’m hopeful that we’re at some sort of an inflection point. Certainly COVID spurred it on, where parents and school board members and teachers and school leaders are ready to talk about these things and think hard and long about what we’ve been doing because the results haven’t been great. So I think it’s time for a book like this. So thank you so much for coming on.
Susan Pendergrass (00:00): Thank you so much for joining us on the podcast this morning. Salim Furth, you’re the director of the Urbanicity Project, the Mercatus Center.
Salim Furth (00:06): Urbanity Project.
Susan Pendergrass (00:08): Urbanity Project. And I’m gonna give you one second to explain the difference. At the Mercatus Center at George Mason University in Virginia, what is the Urbanity Project?
Salim Furth (00:20): So that’s just our housing and land use research group. We tend to make things into acronyms, so we wanted a one-word name so that they couldn’t turn it into an acronym.
Susan Pendergrass (00:32): Nice.
Well, we haven’t talked about housing on the podcast any time recently, but, and I will say that I think a lot of the problems with housing policy that are in areas with too many people don’t necessarily apply in Missouri because that is not really our problem. But we certainly have the need for better housing policy in the state, and
And so I really liked your recent report on housing reforms that could happen in twenty twenty-seven and I think many of them apply to Missouri. So I appreciate the report. But just basically, why, you know, affordability and the cost of housing is certainly front and center in the media these days. Why is that a problem that we can’t seem to resolve? Why is it that, like, young people are like, rent’s doubled and I can’t afford to buy a home? Like
Why is that continuing to happen?
Salim Furth (01:33): Great question. So
Susan Pendergrass (01:34): Thank you.
Salim Furth (01:35): Yeah, Missouri, I mean, I just pulled up the data before this. Missouri has had the 16th highest increase in home prices since the sort of the month before the pandemic is kind of our usual baseline. So it’s not extreme, it’s kind of in the middle of the distribution, but above average.
Susan Pendergrass (01:53): Yeah.
Salim Furth (01:54): Prices average, according to Zillow, was about 170, 175 in January of twenty twenty, and now it’s about two seventy-five.
And, right, so, you know, incomes have certainly risen. A lot of that is just overall inflation that affects wages, affects prices of everything, and is not unique to housing.
But a lot of people haven’t had wage increases that big. And in general, nationwide, housing prices have risen a good deal faster than inflation. So that’s the kind of the backstory. People feel like it’s expensive because it’s gotten a lot more expensive recently. And, you know, I went to graduate school in Rochester, New York, which I actually bought a house for $28,000, in not a great location, but a perfectly fine house. And, you know, I think houses on that
Street sell for something like a hundred thousand now. So it’s gotten a lot pricier. And people feel that, right? If you live in an area where you’re accustomed to the idea that housing shouldn’t be a big chunk of your paycheck, one of the things that happens, I mean, you talked about states that are, you know, have relatively few people. If you’re either declining or in a rebound mode, prices can move a lot
before supply moves.
Susan Pendergrass (03:10): So basically, like, if you think about the “build baby build” Bryan Caplan approach of just letting a million more houses or units get built, that’ll solve the problem of affordability. Is that what you would recommend as well?
Salim Furth (03:26): So yeah, that’s what states with really high demand need to do, right? So Texas has really high demand, prices remain within reach of middle-class people because they just build a lot. They build tons of subdivisions, they build tons of apartment buildings, they build tons of townhouses, they are doing, you know, everything on the menu as much as you wanna eat.
If you go to California or Massachusetts, it’s the opposite.
Susan Pendergrass (03:47): Yeah.
Salim Furth (03:50): They do none of that well. They don’t build a lot of apartment buildings. So it isn’t, sometimes I think culture warriors want to make this a, well, it’s, you know, urban versus suburban. But the reality is the states that build a lot of urban housing are the states that build a lot of suburban housing. And the states that don’t build urban housing are the states that don’t build suburban housing. Now, states like Missouri are kind of in a weird position. You’re not getting a lot of people who are moving out of
you know, Florida or California because of high prices are moving to Missouri. There’s a few, but not a ton. You’re not, you know, experiencing really high demand like Texas is. But I’d say there’s two ways that the same logic applies to a state in Missouri’s position. One is just, you know, the housing growth rate is not zero, right? There are still new homes being built and the builders need to recoup their costs.
There isn’t a lot that you can do from a regulatory or government perspective on the cost of labor or the cost of materials. The main thing the government controls is the cost of land. And they do that via regulation. How much land are you required to build a house? There’s also an infrastructure component, but that kind of cuts both ways, and we could get back to that in a little bit if you want. But saying, hey, if you want to build a new home in Missouri, you shouldn’t need to have a large piece of land if you’re connected to an existing sewer system, especially in a place that has fewer people using those sewers. The infrastructures there allow people to build on a small piece of land. They can save a modest amount of money. The land is probably 10 to 30 percent of a home in Missouri, whereas in Los Angeles, it might be 80 percent of a home. So there isn’t nearly as much savings possible, but there’s still some savings possible. So the one reason is, you know, you look for your keys under the light because that’s where you have a chance to find them. The analogy breaks down, but, like, you’re gonna find the things that you can find in reforms to permitting processes, which is time, and then land use policies, which is land. So governments affect how long it takes to build and how much land you need. They don’t affect so much on the other stuff. So do what you can. That’s half the answer. Then the other half is you want to be ready for when demand turns around.
You know, lots of places have counted themselves out. Massachusetts was in a half-century-long economic depression for the first half of the 20th century because it was a water power state. It has a lot of little tiny waterfalls, which made it just a fantastic place for the early stages of the industrial revolution. Every little town had a water-powered mill, and hundreds of thousands of French Canadians moved down from really crappy farms in the frozen north to work in these mills. And then guess what? Electricity.
Happened. And, like, these mills were not efficient uses of space and kind of like industrial layout for electricity. And the place got hammered. Its port became irrelevant in the railroad era because of distance from U.S. internal markets. And so it went through a major depression from, you know, roughly 1910, 1920 until 1970 when high-tech and the sort of the advantages of having the strong university legacies brought it back to being a boomtown.
And guess what? In that period, it did not align its regulations to say, hey, if we ever become a hot place to live again and ever experience high demand, we should be ready for it. And so they were not, and they have experienced extremely high growth in housing costs as a result. So some places like California have always been, right? California’s got fantastic weather, that doesn’t really change. And so there’s always been a lot of demand, whether it’s retirees or, you know, the aircraft industry or war workers during World War
Two or Silicon Valley now, one thing after another. But a lot of places, Seattle, I keep a sign in my office that says, “Will the last person leaving Seattle turn out the lights?” That was a billboard some real estate agents paid for back in the 70s when it seemed like Seattle was going the way of the Rust Belt. So you might come back. Be ready for it.
Susan Pendergrass (07:52): Didn’t. Yeah. Yeah, I have a sister in Portland, Oregon, and, you know, they have that green zone, brown zone thing, which just drives prices up. Although right now people are leaving Oregon, but, you know, it artificially inflates prices. I feel like in Missouri, our state legislature, to the extent that they get involved in it, the fix is to try to build more low income housing. And then building at the bottom will somehow
fix the market, which I think it’s not really proven true. And we also do it through low income housing tax credits, which is probably one of the worst policies because they turn into chips that get traded. But so we don’t even end up with more low income housing. And then at the same time, what I perceive of anyway in Missouri is fewer builders are going after, like, the starter home market. So you’re either building housing specifically for low income residents or you’re building four thousand square feet
three car garage houses and there’s not really a lot happening in between and then we still have unaffordable housing.
Salim Furth (08:58): Yeah, that’s right. So the problems facing low income people in housing are obviously cost, right? Even in a very cheap housing unit, it costs a certain amount to keep the lights on, right? Utilities aren’t cheaper.
Just because you have a, well, they’re somewhat cheaper if you have a small house, but not radically cheaper. You’re still using similar amounts of water, et cetera. And so the cost of keeping the building, especially if it’s an old building, the landlord has got to cover the cost of maintenance, or at a certain point he’s gonna walk away. So it’s really hard to have high quality housing in a soft market for people who don’t have much money.
Low income housing tax credit, it’s a federal policy, there’s no way you can change that at state level. But yes, it’s a terrible idea, partly because the way that states might what you can actually change, the way that states choose to administer it is to spread it really thin. Like you’re out of peanut butter and you’re trying to give everybody a peanut butter sandwich, and so you just put a tiny bit on every piece of bread. And what that means is for a relatively small amount of subsidy that each project is getting, you’re paying a lot for lawyers.
Because the lawyers, again, they don’t get spread thin. They take their full cut to do the deal, whether it’s a big deal or a small deal. And so it ends up, as some professors have calculated, that only about 30 cents on the dollar reaches the final recipient. Because most
Susan Pendergrass (10:20): Mm-hmm.
Salim Furth (10:21): of it is lost in all of the white-collar professions along the way that each take their cut. And, you know, again, I think it’s a really flawed program.
What states could potentially do is really push for flexibility to try to put as much of their funding as they can into fully subsidized. So say we’re gonna put, we’re gonna make one really good peanut butter sandwich, and even though that uses up most of our subsidy, that’s better than spreading it really thin and paying a lot of lawyers along the way. So that is one possibility that the state can do.
The other thing, look, to the point of people building 4,000 square foot houses would be different. 4,000 square foot houses. One place in your region that’s actually breaking the mold here is Wichita, where they are building a ton of starter home duplexes.
It’s
Susan Pendergrass (11:11): So smart.
Salim Furth (11:12): about 40% of new production in the last five years. And those are they’re not
You know, they’re not gonna win architectural awards and, you know, they’re probably not the forever home for somebody who is upwardly mobile. But for 180K, you can get that starter home, which is gonna be probably, you know, three bedrooms, two baths, has a garage on the front side, minimal amenities.
Probably not your home forever, but it lets you get that first step of homeownership, have your first kid or two, get that raise and move up, start building equity. And, you know, there’s a debate going on in Wichita, are we building too many of these? And, you know, I don’t want to second guess the market, but zero is probably too few. And, you know, if your city is building zero homes in the $180,000, $200,000, $220,000 range,
then probably you’ve got regulations that make it so you can’t build a duplex on a small plot of land. Because that’s what Wichita is able to do, is that on something like five thousand square feet, you can put a duplex, which means that each homeowner is only paying for twenty five hundred square feet of land, only paying for about twenty five feet of frontage on the road. So if you think about every road needs pavement, sidewalk,
sewers underground, like all those linear costs, you’re paying less of that because you’re using less land. And, you know, I know the St. Louis area has lots of smaller municipalities. I would bet most of them do not allow for
Susan Pendergrass (12:44): My bad.
Salim Furth (12:45): a home to be on 2,500 square feet of land and 25 feet of frontage. And if you want affordability, those are the kinds of edges you need to start shaving.
Susan Pendergrass (12:54): What about just wondering, like, if this isn’t a topic that you research, feel free to tell me. But, like, modular homes, insofar as I know that the technology exists where we could be knocking out a lot of homes in a factory and delivering them. And is there cultural bias against it? Is there actual regulatory bias against it, or why don’t we see
You know, Amazon selling houses on their website. Like,
Salim Furth (13:24): Right, right, right.
Susan Pendergrass (13:25): Why don’t we see more Amazon houses just showing up? Because that to me would, number one, allow for just a lot more housing, and you don’t have to stick build it on site. And why don’t we see more of that?
Salim Furth (13:38): I lived in a Sears Roebuck house, actually, at one point. A kit that was delivered
Susan Pendergrass (13:40): Nice. In Rochester? Yeah.
Salim Furth (13:43): around 1910 in Arlington, Virginia. So, so, great question. So, first of all, it took me probably several years of working in housing to fully disentangle all of the terminology. The primary type of housing that is built in a factory is what I think we should best call HUD code homes, because
They get called mobile homes, but they’re not really mobile. They get called manufactured homes, which is true, but they are not all of manufactured homes. And the key difference is, where does the inspection happen and who does it? So a HUD code home is built to a federal building code that is required to be the same across the nation, so states and localities cannot add or subtract from it. There were just some changes made to that via legislation, bipartisan legislation that passed this summer, and those changes should take a few thousand dollars off the cost and allow more creative uses. So, like, stacking, you know, two manufactured homes vertically, for instance, which could legally be done, but could not pragmatically be done before. So
That’s the cheapest and best and clearest form. That’s the dominant form of homes that are built in a factory. They are small, they tend to be used in rural areas. So a lot of them get installed either on manufactured home parks or, if somebody owns 25 acres in a rural area and they’re remote and, you know, building is expensive in their area, so they just buy one of these, and it might be 125,000, 150,000, and it’s delivered to the site. Historically, they’ve all been delivered on a steel chassis. The change is that they can now be removed from the steel chassis after transportation with a small lift that allows the chassis to be reused. That’s where the savings come from. Every state is going to need to actually implement this. So Missouri should make sure to implement the legislative changes at the state level to enable those savings to go from the federal down to the Missouri consumer.
There are lots and lots of local regulations against these. Part of that is historic bias. People don’t want cheap housing. And part of that is a different sort of a category mismatch. Because HUD code homes are inspected in the factory as they’re built by a federally certified inspector, they come all put together, right? So the wiring is hidden. The wiring is in the wall, the way it will be when you move in. That means that the local inspector cannot see the wiring and cannot inspect the house. So a lot of states, I believe, including Missouri, have laws saying that at least in theory, localities cannot discriminate against manufactured houses or HUD code homes. But if the assumption is, well, we don’t know how to even approve you unless you pass local inspection, then it’s not gonna work. Because you can’t go, you can’t deliver the thing and then start ripping it up to look at the wiring and the plumbing and everything else that needs to be inspected. That was all inspected before, it’s got a stamp on it. And so I think states probably need a stronger preemption law that says not only can you not discriminate, but you in fact can’t require local inspections. You have to allow the entire top-to-bottom process of installing a HUD code home. And you can’t require things that then contradict the HUD code. So you can’t say, sure you can put a HUD code home here, but only if the roof pitch is X.
Susan Pendergrass (17:05): Mm-hmm.
Salim Furth (17:06): Because it has its own roof pitch requirements and if they don’t match, then you can’t change the HUD code. They’re not gonna build you homes that don’t match the HUD code to match your local roof pitch or your local,
Susan Pendergrass (17:15): Right.
Salim Furth (17:16): you know, requirement for multiple exterior materials or, you know, things like these aesthetic requirements that people think make housing more beautiful. They never work for me, but, you know, some people like these.
So, you know, I think there’s a role for the state to say, no, no, no, we really mean it. This is the cheapest form of housing. People everywhere in our state, if you can build a house here, you can install a house that was federally certified in a factory according to that whole top to bottom process. That’s a little bit tricky, and some states I think have kind of cracked the code, but I would say most probably have not.
Susan Pendergrass (17:51): That’s a shame. Okay, two last things. I know that these are not the biggest topics in your study of what states could be doing in twenty twenty-seven, but they are intriguing to me. The first is, can you explain to me the single stair multifamily building issue?
Salim Furth (18:11): Yes. So this is actually really tricky to explain to somebody who is not from the US. Because outside of the US and Canada, basically every apartment building in the world is built with one staircase, an elevator if it’s above some number of stories, and it’s usually built out of concrete. In the US, multifamily buildings are built out of softwood lumber.
And they usually have multiple staircases and then a central hallway connecting those so that everybody in the building has two ways of egress. And those reflect different choices that were made early in the 20th century when fire safety was really, really poor and a lot of people died in house fires, or then everybody had, you know.
oil burning lamps and coal burning stoves and a lot of actual fire in their homes. And so the rest of the world said, well, we’re not gonna build with wood because wood burns, and so we’re gonna use more expensive materials and get safety that way. The US said, well, we have so much wood, this is super abundant here, and we’re gonna keep building with wood, but we’re gonna require multiple ways of egress. Fast forward a hundred years, we do not have fires in our houses on a daily basis. And if you, you know, have a candle in it
starts a fire, you very likely in a building that size have sprinklers. You know, all the sort of passive forms of fire suppression have made it so that a modern multifamily building, even one built out of softwood lumber, is by far the safest place that you can live. So you are maybe in a single family home ten times more likely to die in a fire than in a multifamily building because multifamily buildings have fire suppression built in.
Which means that the double egress thing is actually basically irrelevant because these things basically never catch fire in a serious way. And so we have this kind of now redundant requirement that made sense when it was passed as a choice of how to get safety without compromising too much on cost.
And so, but functionally, because you have to have two staircases, it means you’re losing space where it costs, staircases are quite expensive to build. They’re fairly complex units within a building, and that cost has to then be passed on to the rentable or sellable square footage of the building, which means everybody has to pay a little bit more. It also means that functionally you need to have a central corridor, which means that small buildings just aren’t gonna ever work.
So a lot of US cities, we’re seeing Texas cities do this on their own, we’re seeing states do this. The Minnesota Department of Building, or whatever it’s called, did, I think, the gold standard study of safety and said these things are great. A single stair building is actually safer than a two-stair building because it is usually so much smaller.
And so it’s really about unlocking the possibility of building multifamily the same way we build it in most other places, except on smaller pieces of land. So I think of, you know, especially the legacy cities in Missouri, right? So have lots of vacant land. I was just reading about Kansas City, has had a downtown revival. Part of a barrier to
Susan Pendergrass (21:21): They’re trying.
Salim Furth (21:24): bringing people back downtown is that the types of building that make sense with our current building codes and economics are usually really big. You need an acre or more to build a multifamily building. But if you have an old downtown, it’s usually chopped into pretty small parcels because that’s what made sense, you know, back then. If you could build a six-story multifamily building on a quarter acre, then all of a sudden a lot of these vacant parcels or empty parking lots that are not serving the tax rolls, not contributing to their neighborhoods, those could make sense as multifamily units. So part of the benefit is on reuse of land. The other part of the benefit, and I think this is probably less relevant to Missouri relative to higher cost places,
is that it makes for nicer family style apartments. So if you’re gonna build three bedroom apartments in the two-quarrid model, it’s really hard to do that because they only have light on one side. Right? So if you’re quartered on the center of the building, you’re only getting windows on one side. It’s really hard to kind of do the apartment layout so that everybody gets a bedroom window without having some rooms, whether it’s your living room has no windows or something like that.
If you have a small footprint apartment, or small footprint building, then again, this is what most of the world has, two, maybe four units on each floor, which have light on two or three sides each. So, you know, if you’re in São Paulo, Brazil, if you’re a middle-class family, most likely what you have is a condominium on some floor of a five to twenty-story building that has light on, you know, depending on the size of the building, either you’re on a corner and so you have two sides
light or you’re kind of a wrap around half of a floor and you’ve got three sides light. And it’s much easier to lay out a house so that it feels like a house where you can have, you know, bedrooms for two children and have everybody have light in their homes. Again, in the Missouri context people have lots of options for single family homes or town homes even close to the urban core.
That are not too expensive. So the promise of we’re gonna let you live in the city on a fourth floor is probably not so relevant. But that’s the other thing that people get really excited about is we could have urban style family living and not force people into this choice of either you have a 45-minute commute or you have a crappy unit that’s, you know, not fit to your family’s needs.
Susan Pendergrass (23:50): Yeah, and it’s also just an example
of regulations that are making it more difficult, making it more expensive, and adding to the housing affordability issue, right? Like we need to go back and revisit and certainly Missouri state legislature could go back and get rid of that regulation, or even municipalities could do it. Finally, there was a tornado a year and a half ago in St. Louis and the Show-Me Institute building was fairly destroyed in it and
Salim Furth (24:18): Yeah.
Susan Pendergrass (24:19): And it is rebuilt and ready to go. But the issue that we’re having is our elevator. And I know that you mentioned elevators, and I don’t understand why the elevator industry has also become a bit of a chokehold on the system.
Salim Furth (24:30): Mm-hmm.
Susan Pendergrass (24:32): Are these like lobbying groups or what’s going on where we have these seemingly, we’re not, well, go ahead. Explain to me what the elevator issue is in the United States compared to the rest of the world.
Salim Furth (24:45): Great. Well, if you want to know a lot about elevators, you should have Stephen Smith from the Center for Building in North America.
Susan Pendergrass (24:48): Okay.
Salim Furth (24:51): He wrote an 80 page report called Elevators and knows
Susan Pendergrass (24:56): Nice.
Salim Furth (24:57): far, far more than is healthy for one individual. So
Susan Pendergrass (24:58): Well, just, we’ll cover the surface for us.
Salim Furth (25:01): the surface. So lack of competition creates bad industries.
Susan Pendergrass (25:06): Yeah, of course. Yeah.
Salim Furth (25:07): If you don’t have a lot of players, then you don’t have the pressure to do better, to offer better service, to innovate, to keep costs down. And the US is a classic case of a market with too few companies, and the result is that we have by far the fewest elevators in the developed world relative to our size. So
Like relative to, for a thousand people of population, Spain has something like ten times the number of elevators that we do. Greece, which is, you know, much poorer than our poorest state, has far more elevators than the US. And the result is that for especially in an aging country where more and more people are, thankfully, living a long time but also living years when they don’t have
their strongest mobility, right? Whether they’re in a wheelchair or it’s just physically a little bit tricky to go up and downstairs. It can be really nice to have a small elevator in a three-story building. A lot of countries do that as just a matter of course. Of course there’s an elevator. Maybe not a big one, but just, you know, if you need to move something heavy, right, it’s there.
Susan Pendergrass (26:12): A lift. Yeah.
Salim Furth (26:15): Or if you are, you know, slow moving on steps, you can just take the lift. And I think fundamentally it’s lack of competition. And so the US is one
you know, kind of world of elevators, and the rest of the world is a world of elevators. So everywhere else in the world has basically adopted what started as European standards. And so if you want to sell elevator replacement parts, you can either sell to the US only, which doesn’t have a lot of elevators, or you can sell to the entire world. And
Susan Pendergrass (26:45): Ha ha ha.
Salim Furth (26:46): So the main step that the US needs to take is to start to allow
the kind of the global elevator industry to penetrate the US market. And then that
Susan Pendergrass (26:56): Okay.
Salim Furth (26:57): would, you know, this isn’t just like, well, we’re gonna give up on American producers. Once that competition is there
There would be an evolution where American producers would then start selling not only to the US but to the world. But it’s pretty tricky, right? When you’ve got all these existing units, right, that are all built to one standard, it takes a long time and it’s tricky to produce for both of those. So we’re a little bit of Yeah. Yeah. So
Susan Pendergrass (27:20): ‘Cause our elevators have to be bigger, right? Generally.
Salim Furth (27:23): that so we have a bunch of requirements like that. Our cabs have to be bigger, they have to carry someone in a stretcher.
The stretcher size just got increased for kind of a reason that nobody really understood because they were like, well, it should be a little bit longer. What if we had a really long stretcher? And then there’s just layered on top. So the state of Maine made some really small changes that were positive last year. They had adopted what were the newest industry standards, which said every elevator cab needs this really fancy audiovisual equipment built in.
In case someone who is both deaf and blind is stuck in the elevator. The odds of that happening are extremely, extremely slim. To our knowledge, not one life has ever been saved by this audiovisual equipment. And by the way, virtually everyone is carrying around equivalent audiovisual equipment in their pockets today, so it’s less needed than ever.
But it was gonna add thousands of dollars to the cost of every new elevator in Maine. And they realized this is a terrible idea. And so they did that, and there was one other
requirement that I think had to do with the firewalling around the hoist system. Again, fires are so much rarer that we are, you know, double and triple and quadruple solving what was originally a real problem. Fires in buildings were a very serious problem for the history of the world. We have mostly solved the problem of fires in new buildings. New buildings are extremely safe, and adding yet another fire requirement around elevators was gonna increase the cost without bringing the benefits that would justify that cost compared to, hey,
people who have mobility problems cannot access a whole bunch more apartments or can’t visit this home or this building. And so yeah, enabling more cheap elevators
So those main reforms are like little ones that are not gonna solve the underlying issue, but at least keep it from getting worse. There’s a bigger conversation to be had with Stephen about how to really
Susan Pendergrass (29:22): Yeah.
Salim Furth (29:24): reorient the US towards a competitive elevator market, which would make our building system, you know, much, much more accessible to our population as we all get older.
Susan Pendergrass (29:34): I think there’s probably lots of opportunity to increase the amount of competition in the building industry. But what I appreciate about your report, which is available at the Mercatus website, is that you have like 18 options that state legislatures
Salim Furth (29:48): That’s right.
Susan Pendergrass (29:49): can look at. So then people go, what to do about the cost of housing? Like, here’s 18 things you could start with, and some of them are big and some of them are just elevators, you know, or a second staircase, or just really thinking through that there are things that could be done that would at least bring the industry up into the twenty-first century and make it more feasible for folks to build housing across the board, just build more housing. Very interesting. Thank you so much for joining us. I really appreciate it. It’s a great report and certainly a topic that’s of a concern to a lot of people these days. So thank you so much.
Salim Furth (30:25): Thanks for having me on. It was a pleasure.
This is a missed opportunity. Meaningful teacher evaluations would not only be valuable for helping teachers, but it also would enable policy solutions such as merit pay or targeted pay incentives to teach at high-need schools—i.e., the types of policies we need to modernize the teacher labor market.
Our state could benefit from using an effective evaluation model like the Tennessee Educator Acceleration Model (TEAM). TEAM provides meaningful differentiation, helpful and specific coaching, and gives teeth to the tenure process. When TEAM was first introduced in 2012, only 38 percent of Tennessee teachers believed that it would improve teacher performance. That number quickly rose to over 75 percent.
Recent research found that TEAM strongly improves student performance through a combination of helpful feedback and employment incentives. For example, rather than granting all (or virtually all) teachers tenure after three years, Tennessee requires teachers to be highly rated in their fourth and fifth years of teaching to earn tenure. Teachers who score poorly in consecutive years can lose tenure.
An evaluation system like TEAM in Missouri could also help recruit the best teachers to where they are needed most. Districts like Riverview Gardens and Hickman Mills struggle with very low academic achievement and filling teaching vacancies. In the 2024–25 school year, only 5 percent of Riverview Gardens’ students scored proficient in mathematics. Offering targeted pay incentives to highly rated teachers willing to work in Riverview Gardens or Hickman Mills could create an advancement opportunity and encourage top teachers to move to struggling districts.
However, absent high-quality, differentiated teacher evaluations, these types of reforms are not possible. If we want to get serious about fixing our problems with the teacher labor market, we need a better teacher evaluation system.
In short, the report claims that the stadium will generate $1.4 billion in tax revenue through 2059 to cover the city’s $600 million commitment. That is the top-line claim, but the report is worth looking at past just the summary.
The report predicts that the ballpark itself will only generate $462 million—a third of the total amount. The largest share—$688 million—comes from the 1,726 existing businesses elsewhere in the four-square-mile impact area. That area runs from State Line on the west to Brooklyn Avenue on the east, and I-670 on the north to 31st Street to the south. It includes neighborhoods such as the Crossroads area, the Westside, and Union Hill. Even part of the West Bottoms is in the impact area.
In other words, the Royals will be hoovering up tax revenue that will have little to do with the team’s presence, much like the 300 square mile footprint of the STAR bond district Kansas is anticipating for the Chiefs. If nothing else, it is a concession to the argument that these projects don’t pay for themselves, so legislators need to invent a much larger area from which to redirect taxes.
Hunden’s own numbers show as much. One table in the report tests what happens if fans spend more. Raising their food and drink spending by two thirds, from $18 to $30, adds less than 1% to the impact area’s revenue. Raising the assumed growth of existing sales from 1% to 3% adds $198 million. The money to pay for this deal comes from the ordinary growth of neighborhoods already there. Tax revenue that might otherwise repair roads or pay police will instead pay for the Royals’ stadium.
But there’s more! The largest line in the impact area is not restaurants or shops, but taxes on utility bills. So when Evergy or Spire raise rates, the added tax is considered a result of the stadium—starting in 2027, at least three years before the park is supposed to open.
University of Colorado-Denver professor Geoffrey Propheter told The Kansas City Star: “There’s no way you could draw something this large and with a straight face say, ‘I’m only targeting people who are here because of the stadium.’ Now, if that was true, your TIF would be only the stadium footprint. Even then, that’s not precise.”
And as must be said every time, the spending at the new park is not new spending—it’s just spending in a new place as the Royals already play in Kansas City. The report counts a million new visits to the businesses near the park, yet it does not subtract the number of visitors, or their spending, who will no longer attend games a few miles away at Kauffman Stadium.
Hunden Partners was the same firm that prepared the economic impact claims that Springfield used to convince voters to support an increased hotel tax to build a new convention center. Voters rejected that in November 2025 and again in April 2026 by an even wider margin.
As if it were a sufficient defense, Kansas City leaders point out that the Royals impact area is much smaller than the one Kansas is considering for the Chiefs. That is true. But it’s a weak argument and a low bar. Both plans admit that these facilities do not pay for themselves. That Kansas City is making a slightly less bad financial deal hardly feels like a win.
Unfortunately, this deal is a foregone conclusion. Reports such as those provided by Hunden are not good faith efforts to weigh the cost benefits of such deals. They are generated to give political leaders the cover they need to do as they please. And as we’ve seen for years, elected leaders on both sides of State Line are falling over themselves to give public money to wealthy businesses. The details are a distant consideration.
Private electricity grids, also known as consumer-regulated electricity (CRE), are a free-market policy idea that allows private entities to meet the demand of new large-load users like data centers entirely off the ratepayer-supported grid.
Private electricity grids can benefit average ratepayers, developers, and government institutions like the Missouri Public Service Commission (MPSC) by shifting some of the risk and need for new electricity onto private investors, while also giving those investors the benefit of reduced regulation and quicker speed to operation.
This has been an idea I have been beating the drum on for a long time. But recently, private electricity grids have started to be used in practice.
In Ohio, the Socrates South natural gas plant began operation in the summer of 2026. This 200 MW private power plant was built by a natural gas company to serve a Meta-affiliated data center entirely off the grid. It was put online in an astounding 17 months. That is business speed, not bureaucratic speed. Cato Institute Director of Energy Travis Fisher and his colleague Michael Abi-Nader report that the typical permitting timeline for natural gas projects in that regional grid system is 7.4 years.
For data centers and other large-scale electricity users, speed matters. The sooner the necessary power infrastructure is in place, the sooner these companies can begin or expand business operations.
Private electricity grids can have quicker timelines because they are exempt from a plethora of public utility regulations that are used to protect captive, residential ratepayers on a shared, regulated grid. Ohio passed legislation allowing off-grid plants to avoid the huge waiting list for grid connection.
Missouri should stop trying to attract investment with generous taxpayer-supported subsidies and instead turn to the free market to help give industrial developers something increasingly valuable: electricity.
Nikole Hannah-Jones made headlines with her personal confession in The New York Times Magazine: “In Fighting for Every Black Child, Did I Betray My Own?” A decade ago, driven by an ideological commitment to public education and integration, she enrolled her daughter in a struggling Brooklyn public school. Now 16, her daughter delivered a painful verdict. She believes her mother made the wrong choice, sacrificing her academic potential for an institutional ideal.
The core tragedy running through Hannah-Jones’s retrospective is the permanent loss of time. Systems can endure decades of failure and survive in a way that children cannot. For example, once a student falls behind in reading by third grade, catching up becomes an uphill battle that can alter the trajectory of their entire life. And, sadly, that is what happens for over 40 percent of Missouri 4th graders.
In Jefferson City, legislative debates over school choice often turn into battles between special interest groups, union lobbyists, and trade associations. Lost in the technical jargon of funding formulas and accreditation benchmarks is the actual student sitting in a classroom where they are not learning.
Hannah-Jones’s daughter saw clearly what many policymakers ignore. Adult political battles should never be waged at the expense of vulnerable children. When people demand that families stay put to support a district’s balance sheet, they are asking children to bear the burden of systemic dysfunction.
Missouri has a constitutional and moral obligation to ensure its youth are educated, but that obligation is owed to children, not the brick-and-mortar buildings. Universal education savings accounts (ESAs), robust charter expansion, and interdistrict open enrollment are practical policy tools that can help deliver that promise.
Parents know when their children are struggling, when a curriculum is failing, and when a school culture is detrimental. Missouri lawmakers must heed the quiet truth behind Hannah-Jones’s words and not force another generation of Missouri parents to look back and wonder if their loyalty to a system cost their children their future.
Loneliness is increasing in America. A 2023 report by the U.S. Surgeon General’s office documented the decline in social connections between people in recent decades. From 2003 to 2020, every measure tracked showed an increase in isolation and a decrease in personal interactions. For example, “social engagement with friends” decreased by 20 hours per month for the average American during the observation period. The trend started before 2003, though. Robert Putnam first documented these changes in a 1995 essay that in 2000 was expanded into the book Bowling Alone, about the increasing disconnection in American communities.
I don’t know if Kathy Kite, of Harrisburg, Missouri, ever read Bowling Alone, but she clearly noticed the decline in social connectedness in her community. And unlike most people, she decided to do something about it. After the restaurant she worked in closed, Kite noticed that the restaurant regulars had nowhere to meet up in their town. In May, she began offering a free breakfast to any neighbor who wanted to stop in, talk, and eat. She never charged any money; she never told anyone it was a restaurant; she never pretended that she had passed any inspections. She just served her friends and neighbors a meal that allowed them all to converse about anything, everything, and nothing all at once while breaking bread together, as has been done since the beginning of humanity.
At the Columbia/Boone County Health Department (CBCHD), they apparently don’t care about what the Surgeon General, Robert Putnam, or anyone else thinks about the benefits of breaking bread together. There are rules, and those rules require permits. Kite has been informed by the health department that her work qualifies as a restaurant, and she needs to install a commercial kitchen and pass regular inspections if she wishes to continue. That would cost her thousands of dollars.
The voluntary tip jar Kite has set out was cited by CBCHD as evidence that she is operating a restaurant, but is that jar any different from your friends bringing a bottle of wine to your house when they come over for dinner? How is the bottle-of-wine thank-you gift any different from voluntarily leaving a few dollars? The only difference between what Kite does and you having your friends over to your home for dinner is the frequency of the gatherings. Do we want CBCHD or other health agencies to be able to tell us that one gathering a month at your home is allowed, but once a week means health inspections are required?
Fortunately for Kite (and for all Missourians who think this is ridiculous governmental overreach), lawyers with the Goldwater Institute have agreed to represent her and fight the regulatory requirements as interpreted by the health department.
The recently released fifth report in my Free-Market Municipality series for the Show-Me Institute covers public health and sanitation and discusses food-service codes and regulations. As the actions by the CBCHD demonstrate, these local rules have gone too far, and you need not be a radical libertarian to think so. People know the difference between a restaurant and food at your neighbor’s house. Nobody is claiming that a restaurant or food truck shouldn’t have to pass a health inspection. But the confusing array of regulations and permit requirements needs to be reined in. The beloved school and church bake sales of a time not long ago have been (mostly) regulated away. Raw milk can be sold directly from a farm or via delivery, but it can’t be sold at a store. Food trucks (which are regulated, as they should be) are banned by some cities and allowed in others. Missouri’s “cottage” food law allows home sales of some foods like baked goods, but not most others. (CBCHD cited the cottage food law in its letter to Kite, saying the food she was serving was not allowed under the law, even though she isn’t selling anything.)
Local public health departments have an important role to play in public safety, but we saw during COVID how some of them were only too happy to strictly regulate our daily actions. If Kathy Kite needs a permit to serve her neighbors food, then there is no limit to what the CBCHD might try to regulate next. The isolation and loneliness spreading around America has dangerous implications for health, too—specifically with mental-health issues like depression. Kathy Kite tried to do something about that, but local government is determined not to let her.
Missouri lawmakers frequently talk about the importance of rooting out waste, fraud, and abuse in state government. But identifying problems is only useful if state agencies actually fix them.
A new report from the Missouri State Auditor shows there is still plenty of work to do. I’ve written before about recurring problems in Medicaid, including state computer systems that can’t communicate, eligibility redeterminations that should be happening but aren’t, and an automated check for recipients who have died that’s not functional. The latest audit found these issues remain largely unfixed, and a new issue involving nearly 10,000 recipients simultaneously enrolled in two eligibility systems.
These problems can result in benefits going to people who no longer qualify or the state paying more than it should, which could amount to hundreds of millions of wasted dollars if not corrected. Of the 16 findings in this year’s audit, nine had been reported previously. To its credit, the Department of Social Services (DSS) agreed with many of the Medicaid findings and says fixes are coming, including information technology improvements that should help address some of these problems.
The response from the Department of Health and Senior Services (DHSS) is much less encouraging. In the Child and Adult Care Food Programs, 50 of 58 DHSS monitoring reviews in which errors were quantified found improper payments, with net over-claims equal to at least 12% of the claims tested. In two cases, every claim tested for the month resulted in an overpayment. Yet DHSS did not expand its review to determine whether those problems extended to other months.
And just like the DSS audit findings, this is not the first time auditors have raised concerns about DHSS oversight of federal food programs. A separate audit last year identified problems in the Child and Adult Care Food Program and the Summer Food Service Program, including providers that were later federally indicted for submitting millions in fraudulent claims. Yet DHSS continues to disagree with the auditor’s recommendations, arguing that its procedures meet federal requirements and that additional monitoring would create an “undue burden” on participants and providers.
While there may be legitimate trade-offs between preventing improper payments and creating costly administrative burdens, when every payment tested is wrong, further investigation seems like a reasonable response. Auditors can identify problems and recommend solutions, but agencies still have to act on those recommendations. If Missouri is serious about reducing waste, fraud, and abuse, next year’s audit should contain fewer familiar findings.
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