Is General Motors Going to Get a Tax Cut Instead of Missouri Taxpayers?

Posted on by Patrick Ishmael

We’re in the twilight of the legislative session here in Missouri, and as tends to happen, it looks like there’s going to be a legislative twist at the end. General Motors, the American car conglomerate, is reportedly considering a $1 billion expansion at its Wentzville auto production facility in the suburbs of St. Louis. The first the public heard about the proposal was on May 1, meaning that if the legislature passes a tax incentive plan of any kind for the company, General Motors will have gone from nothing to likely millions of dollars in hand in the course of only about 18 days.

That’s absurd.

To be clear: the Missouri Senate has put the brakes on all manner of tax relief for Missouri taxpayers—while pulling out all the stops for corporate welfare like the Low-Income Housing Tax Credit—for the last five months. Now that another corporate crony has come with arms outstretched and “jobs” on its lips, the folks in Jefferson City have snapped back to life and are ready to let the money pour from public coffers like they just backed over a fire hydrant with a truck.

Here’s a proposal: Permanently end the Low-Income Housing Tax Credit and save $180 million per year. Dramatically reduce and reform the historic preservation tax credit and save tens of millions of dollars per year. Drastically reduce and eventually end the corporate income tax.

Stop being such an easy mark. Stop just giving away other peoples’ money. And if General Motors needs a tax break, perhaps the people who would be forced to subsidize the company need one too.

 

Good News-Criminal Justice Reform Headed in the Right Direction in Missouri

Posted on by Emily Stahly

A few years ago, Missouri was on track to need two new prisons, potentially costing the state hundreds of millions in tax dollars. But not any longer. From 2017 to 2018, Missouri’s incarceration rate decreased by 7.1 percent, the largest drop in the country according to the Vera Institute for Justice.

This decrease follows some recent reforms, including improving parole and probation practices, expanding community-based treatment for mental health and substance abuse, and raising the age of criminal responsibility from 17 to 18 years. Now, the legislature is considering other reforms. One would amend sentencing guidelines to allow judges the discretion to give an alternative sentence to imprisonment for certain non-violent crimes when appropriate. Additionally, lawmakers are examining regulations regarding occupational licenses for ex-offenders that can shut them out of jobs and increase the likelihood they return to prison. Reforms like these can provide taxpayers with the best public safety return on their investment make a lot of sense.

 

It’s a Head-Scratcher

Posted on by Susan Pendergrass

I just don’t get it. A recent article in The 74 describes how the vibrant charter school sector and strong authorizers have led to a rising tide for both charter public school students and traditional public school students in Washington, D.C. It makes me scratch my head. Why don’t we want that in Missouri?

The article, which cites the dramatic rise in scores on the National Assessment of Educational Progress (NAEP) for both groups of students, concludes with three takeaways that other cities can learn from DC:

  • Cities should embrace charter schools while limiting authorizers to one or two “strong” ones.
  • Cities should welcome the potential positive effects of competition. It’s been a force for positive change across the country.
  • If cities allow that to happen, middle-class families will stay.

This dynamic of charters having a broad, positive impact for everyone is playing out in big cities—Chicago, Indianapolis, Denver, Nashville, Boston—and in small cities.  While we haven’t seen dramatic results in St. Louis or Kansas City, we also haven’t embraced charter schools. There continues to be this odd notion in Missouri that charter schools are an intervention for low performance. Everywhere else they’re an option—often sponsored by local school boards—that parents across all types of communities and backgrounds are choosing.

Here’s the more important point—Missouri has a lot of other cities that would benefit from school choice. The school districts in Springfield, Joplin, Jefferson City, and Cape Girardeau are not exactly thriving. And yet, school boards and state legislators in these cities continue to fear public school choice. This year, the Missouri Senate filibustered a bill that would have made it much easier for charter schools to open in these cities. The Senate floor was held hostage for hours to ensure that the traditional public school monopoly wasn’t threatened by parents who want something else.

How long will Missouri continue to cross its arms and staunchly defend the status quo of thirty years ago? How long will the positive stories about what’s working when it comes to improving public education only be about other states?

 

Missouri’s Municipal Failure

Posted on by Patrick Tuohey

According to the Brookings Institution Metro Monitor 2019, per data from 2016–2017, Kansas City ranked 78th in economic growth out of the 100 largest metro areas in the United States. St. Louis fared a little better at 69th. Kansas City ranked 84th in prosperity (measured by productivity, standard of living, and wage growth); St. Louis ranked 52nd. Missouri’s cities are underperforming.

The Kansas City metro area, despite all the talk about innovation and tech jobs, scored 81st in percentage change in jobs at young firms—one of the worst performances in the United States.

Missouri’s top cities spend hundreds of millions of dollars on incentives and subsidies each year in an effort to improve the economy. Exactly what have we gotten in return for all this spending?

Report after report details exactly how St. Louis and Kansas City have given away such a huge amount in incentives. We’ve rebuilt downtown Kansas City, yet haven’t grown or created jobs in any meaningful way. In fact, it appears we’ve actually overbuilt Kansas City. The population of St. Louis is actually shrinking despite all the investment.

Any reasonable person would look at this and conclude that while these incentives and subsidies may make wealthy developers wealthier, they aren’t actually creating very many jobs or doing much to increase investment. That is certainly what the research says.

So why are we still doing it?

 

 

Charter Schools Can Exist in Rural Areas, Too

Posted on by Abigail Burrola

There are 1,300 charter schools in rural and township areas nationwide. Exactly zero of them are in Missouri, and that’s a problem. There are plenty of examples of charter schools serving rural areas very effectively. A recent article from the 74 Million highlights the story of a charter school serving rural, low-income students in Gaston, North Carolina.

KIPP Gaston College Prep opened in 2005. Six years after graduation, 61 percent of graduates from the 2009 class had earned college degrees. The degree-earning rate after six years was 48 percent for the class of 2010, and 62 percent for the class of 2011. The graduating class sizes are small, with 48 graduates in 2009 and 568 alumni so far, but the early returns are very encouraging. These rates are impressive considering only 11 percent of children raised in the lowest-income quartile (annual family income of $37,564 or less) earn bachelor’s degrees within six years. Gaston KIPP families mostly fall toward the bottom end of that lowest quartile.

In the 2016–17 school year, the National Center for Education Statistics reported that over 225,600 Missouri students that attended a public school in a rural or township area qualified for free and reduced-price lunch (representative of a low family income but not necessarily the lowest income quartile)—roughly a quarter of all Missouri public school students. As the achievement gap between high- and low-income students persists, successful efforts to support rural, low-income students should be encouraged.

KIPP Gaston College Prep is just one example of how educational choice can benefit students beyond urban areas. Isn’t it time Missouri expands charter schools to better serve its low-income, rural students?

 

Film Tax Credits Still a Bad Idea

Posted on by Patrick Tuohey

It is appropriate that in the St. Louis Post-Dispatch story on an effort to reinstate film tax credits, the newspaper chose a scene from the movie “Three Billboards Outside Ebbing, Missouri.” The town of Ebbing does not exist; neither do the benefits of film tax credits.

Back in 2010, Missouri’s own Tax Credit Review Commission wrote in their report that the film tax credit should be cut because it “serves too narrow of an industry and fails to provide a positive return on investment to the state.” As my colleagues wrote in 2015, “according to data gathered by the Bureau of Labor Statistics, jobs related to film production decreased during the time the film tax credit program was in place.” What has changed since then that justifies a change in policy? No one is saying.

Instead, the sponsor of the effort to offer yet another state tax credit sings paeans about the work ethic of Missourians, telling the Post-Dispatch:

If given the opportunity for a production company to select anywhere they would choose without having the tax credits being part of the equation, they would certainly choose Missouri more often than other states that don’t have the work ethic and the pride that we have as Missourians.

The characters portrayed in “Three Billboards” and the Netflix show “Ozark” aren’t the examples of work ethic for which any state would want to be known. Furthermore, wasting money on investments that fail to provide a positive return isn’t a good work ethic; it’s careless.

What’s worse, governments don’t even do a good job of picking films anyone will see. A study from the Beacon Center of Tennessee found that “using available box office data, over 40 percent of films that receive grants made less at the box office than they received in incentives.” If we want to promote a good work ethic, let’s stick with rewarding filmmakers who apply their craft well, rather than filmmakers who merely apply for handouts.

It would be laudable if supporters of this proposal argued that Missouri’s taxes are too high, and that there would be more private investment if we lowered them. Instead, they are effectively saying “taxes are too high, and we’d like to lower them for one particular industry that we favor.” That is wrong; government should not be picking winners and losers. It’s just bad policy.

 

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