The Governor Threatens to Break a Promise

The last day of the legislative session is here, and news tends to progress quickly, but one of the fastest developing items is the state’s low-income housing tax credit (LIHTC) program. The governor apparently intends to restart the program, even without reform. While a charitable read is this is the governor’s way of leveraging the legislature into passing a bad bill, it is still galling.

The reason? It would break one of the first promises the governor made when he came into office. To quote the governor from just nine months ago (emphasis mine):

As a member of the Commission, I am committed to considering current federal tax credit applications, but until substantial reforms are enacted, state tax credits will not be issued.

The legislative session ends at 6 p.m., and the governor’s plans for the LIHTC should be clear shortly thereafter. If the legislature passes a bad bill and he signs it, it will have been a farce of a reform, but the onus of that failure will be shared with the legislature. Alternatively, if the governor does restart the program without legislative action, that’s a very, very different scenario.

The program is shuttered. If the program isn’t significantly reformed, it should remain shuttered. At one point, the governor would have found that uncontroversial, but here we are.

 

What’s the Rush to Restore the LIHTC?

As this year’s legislative session draws to a close, our lawmakers in Jefferson City are again acting as if any unspent money will burn holes in their pockets. Before passing the largest budget in state history, members of the House of Representatives jumped at the chance to potentially restart Missouri’s low-income housing tax credit (LIHTC) program. Despite the LITHC’s heavy cost to Missouri taxpayers, many of our elected officials appear content carrying water for special interests as opposed to truly helping the state’s many low-income individuals.

During the debate on the House floor, several legislators discussed the program’s benefits for communities and low-income individuals alike. It bears repeating that individuals can support increasing the supply of affordable housing without supporting the LIHTC. The LIHTC program is notoriously expensive given its low return on investment. One legislator commented that the last year the Missouri program issued credits, the state’s investment of more than $160 million only resulted in around 1,000 low-income developments. When combined with the federal portion of the credit, taxpayers are on average subsidizing each new development to the tune of at least $320,000. If most Missourians wouldn’t spend that amount on their own homes, why should they be expected to subsidize that amount for others?

Additionally, multiple legislators discussed the reform efforts as a way to improve the program’s efficiency. While it was good to hear legislators admit many of the faults of the program outlined in multiple auditor reports, their “reforms” are not enough. If policymakers accept the program is currently ineffective and inefficient, why not consider a different program that could work even better? As I’ve said before, the LIHTC program is far from the only way to improve housing options for Missouri’s low-income population. And even if it was, why wouldn’t lawmakers discuss including a provision that guarantees the program is revisited in future years to ensure newly added reforms offer measurable improvement?

Of course, the best outcome for Missouri taxpayers would be to leave the state’s LIHTC program dormant. This would save more than a billion dollars over a decade. With such little time left remaining this legislative session, why are lawmakers rushing to restart the LIHTC program when there is still a better deal for taxpayers to be made? Every bad idea deserves an endpoint; let this year be the LIHTC’s.

 

CTE in Missouri Is Not Aligned with Needs of Students or Employers

Missouri students are potentially missing out on thousands of job opportunities because the career and technical education (CTE) programs in our high schools are not properly preparing them. While earning a credential or license can give high school graduates a jump start on college or a career, very few are earning credentials for jobs that pay well or that are in demand.  

During the 2017–18 school year, over 180,000 high schoolers in Missouri took at least one CTE class, but fewer than 28,000 concentrated (taking three or more classes) in any one area. What’s more, fewer than 8,000 students earned an industry-recognized credential (IRC), a signal to employers that the student has mastered some set of skills. Many Missouri students—especially those not interested in going to college—could benefit from earning an IRC and leaving high school career ready. 

A recent report from ExcelinEd shows that there are thousands of well-paying jobs that could be readily accessible to Missouri’s high schoolers if they were earning the right credentials. According to the report, Missouri met only one out of five indicators of a quality CTE program.

To put in perspective what kind of opportunities students are missing out on, let’s take a look at careers in just two industries. In 2018, some 617 students in Missouri earned an Automotive Service Excellence Certification. But there were over 3,600 job postings requiring that credential, and these jobs paid over $15 an hour last year. The unmet demand is also apparent in digital designing. There were over 3,300 job postings for Adobe Certified Associate and Adobe Certified Expert credentials each—again, these jobs pay at least $15 an hour—yet there were only 146 Missouri high school students who earned an Associate credential, and none received the Expert credential. Perhaps not enough students are interested in these careers to meet the demand, but are they even aware of these opportunities?

One way to improve awareness and options for students is through teacher bonus pay. If CTE teachers have skin in the game—for instance, $50 for every student of theirs who earns an IRC—they would have an incentive to get more students that could excel in a particular field working towards earning an IRC. Florida has such a program and students there earned over 140,000 credentials during the 2016–17 school year. Overall, one in six Florida high school students earned a credential, compared to just one in twenty high school students in Missouri.

Like many states, Missouri has a workforce problem. But with some simple changes, which other states have implemented successfully, we could increase the number of students earning credentials, while aligning those credentials to the job market. Good information paired with the right incentives can help move Missouri’s CTE in the right direction. 

Course Access is Finally Available

After almost a year of waiting, course access for Missouri students is finally in sight. The Department of Elementary and Secondary Education (DESE) has published a list of approved education providers and classes students can take through the Missouri online course access program. In May 2018, the legislature passed course access for Missouri students and the governor signed it into law. Now, students can take classes online that would otherwise be unavailable at their school.

The combined course list shows courses available on a wide range of topics including foreign language, different types of science and even audio and visual production classes. Some of the classes are even available at the AP (Advanced Placement) level. The education providers include Mizzou, K-12, Edison Learning, and others.

Show-Me Institute analysts have written extensively about the need for course access in Missouri, and seeing it signed into law was exciting. Although DESE did not produce the list of approved providers and courses as promised at the end of 2018, we’re glad to see that it is finally available on the Missouri Course Access and Virtual School Program (MOCAP) website.  

The law also requires districts to inform parents and students about MOCAP, but not all districts are compliant yet. For example, the North Kansas City School District has a MOCAP page on its website, but the Adair County R-I School District does not. As DESE is implementing course access, districts should be informing their students about the opportunity.

Not every student has access to opportunities like AP or foreign language classes in their home district. Now, students should be able to take the classes they need to build their future without being constrained by the offerings of their local school district. As the 2019-2020 school year approaches, we look forward to seeing students enroll in MOCAP classes as they customize their education and prepare for the future.

 

2,532nd Best

Two college towns, about 300 miles apart. Both are proud to have their state’s flagship university. In addition to their college students, there are undoubtedly professors and other campus staff with students in the local school district. But Fayetteville, AR, can also boast about having the seventh-best high school in the country (according to the U.S. News & World Report rankings released last week), while Columbia, MO, will have to settle for the 2,532nd best.

At Haas Hall Academy, a charter public high school in Fayetteville, 100 percent of the students took at least one AP exam, and 95 percent received a passing score on the exam that could be translated to college credit. At Rock Bridge Senior High in Columbia, just 44 percent of students took an AP exam and only 38 percent received a passing score. A high school in a college town with fewer than half of their students enrolling in college-level coursework. Hmmm.

Are the students in Fayetteville smarter than the students in Columbia? I don’t think so. Here’s the difference: Arkansas doesn’t use charter schools as punishment like Missouri does. They have charter schools in urban, suburban and rural settings. Missouri only has charter schools in two failed urban districts.

I’m sure that Haas Hall Academy offers a challenging curriculum that isn’t a good fit for every student. But students are welcome to take on that challenge, if they so choose. Students in Columbia are stuck in a public-school system designed in the early part of the last century—draw a circle around a school and everyone in that circle has to go to said school. I’m completely convinced that if a school like Haas Hall Academy opened in Columbia, it would end up with a waiting list like the one in Fayetteville. Too bad Missouri legislators won’t allow it.

 

Let Missouri’s Low-Income Housing Tax Credit Rest in Peace

Why are Missouri lawmakers considering reauthorizing a program they know doesn’t work well? Yesterday, the Missouri House of Representatives approved new measures to reform the state’s low-income housing tax credit (LIHTC) program, but the efforts at reform do not go far enough to justify restarting the program. Jefferson City could better serve the taxpayers by saving them the $168 million cost of the program this coming year, and should instead consider market-based reforms that will more efficiently and effectively serve low-income housing needs.

My colleagues and I have repeatedly outlined problems with the LIHTC program, detailing how bad of a deal it is for Missouri’s taxpayers. Three previous auditor reports have outlined the inefficiencies of the program and offered changes that could increase the return on investment. A little over two months ago I wrote about how the current bill “reforming” the program was insufficient. While the changes approved by the House could improve the program’s transparency and accountability, the fact remains the program is too costly, highly ineffective, and has no real measures to ensure improvement if reinstated.

Proponents of the LIHTC often characterize the decision to restart Missouri’s program as the only way to address the state’s affordable housing needs, but that couldn’t be further from the truth. Missouri already receives over $168 million from the federal government each year for the same low-income housing projects.

Only 14 other states match federal dollars for the LIHTC program, and before Missouri halted its program in 2017 it was one of the most generous. This means that 35 other states are addressing the housing needs of low-income individuals in different ways. Since the issue of affordable housing isn’t limited to Missouri, perhaps lawmakers could look to other states for examples of how to do a better job of providing housing at a better price for taxpayers.

There is now only one week left in this year’s legislative session, and many policy priorities remain. Shouldn’t lawmakers spend their time moving Missouri forward, not restarting a program that has been shown to be a bad investment? Missourians deserve their tax dollars be put to good use, and it’s hard to see how underwriting the interests of real estate developers qualifies as good use.

Cycling Down the Rabbit Hole

I did not intend to spend so much time looking into BikeWalkKC’s proposal to spend around $400 million in taxpayer money on bike lanes in Kansas City. But when so many of the assertions made by BikeWalkKC crumble under the most cursory examination, it’s troubling. Consider this:

  • The plan will likely not save 36 lives a year, as claimed.
  • The plan will likely not create 12,600 jobs, as claimed. In fact, the as yet unfinished paper on which they base this claim doesn’t even make that claim itself.

If the plan won’t deliver on those prominent promises, will it even increase cycling?

According to traffic counts conducted by the Kansas City Public Works Department, cyclists constitute a negligible amount of street traffic. One-day traffic counts at a few intersections along Armour Blvd. in 2016 show that cyclists account for between zero to 0.06 percent of road traffic. Counts at similar intersections along Armour in 2018 and 2019 show the percentage of cyclists ranging between 0.02 percent to 0.16 percent of traffic.

Nationwide, the percentage of people who bike to work fell over 3 percent from 2016 to 2017. In Kansas City it was never high to start with. In 2014, 0.1 percent of Kansas Citians in the metro area commuted to work by cycling, and these recent Public Works numbers suggest it is even lower than that today.

The director of community planning for BikeWalkKC indicated by email that the organization conducted manual bike traffic counts in October 2016, but lost them. The traffic counts must not have been impressive, because BikeWalkKC chose not to include them in the Bicycle Network Demand Analysis they published the very next month. In fact, despite the promise of the title, there was no analysis of bicycle demand in the report at all. Quite the contrary, the report argues on page 8 that traffic accounts aren’t valuable anyway:

Observations of where cyclists are riding today can provide valuable insight, but cyclists counts cannot be a direct proxy for latent demand because they have already internalized all of the physical barriers and constraints that impact a cylist’s [sic] decisions.

The following bicycie [sic] infrastructure demand analysis is not intended to be a trip projection like those described above. The goal of this analysis is to determine where people would ride bicycles if facilities made it convenient and comfortable to do so. Therefore, latent demand is considered separately from the barriers and constraints of the physical environment.

In other words, don’t bother conducting an assessment of demand, just build it and they will come. The bike activists just assign scores to routes they think people would travel if there were bike lanes.

Certainly cities should ensure the safety of cyclists and motorists alike, and be supportive of growth in new types of travel. But biking to work in Kansas City is not a significant form of commuting and does not appear to be growing. Spending hundreds of millions of dollars because a few people hope it may help increase cycling is not sound public policy—not when Kansas City has so many other more significant needs.

 

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