Prison Consolidation a Smart Step Toward Better Government

Posted on by Patrick Ishmael

One of the most interesting announcements that the governor made at his State of the State speech last month was the proposed closure of a state prison facility, Crossroads Correctional Center. At first, I thought there would be some political pushback to the consolidation that was suggested, given that every prison is of course situated in several elected officials’ districts and is generally a pretty big employer.

That pushback didn’t materialize, though, because not only would jobs not be lost, but the workers at Crossroads would be employed at a nearby facility. Specifically, when I heard it mentioned during debate on the Senate floor that Crossroads was across the street from the facility it would be consolidated with—the Western Missouri Correctional Center (WMCC)—at first I thought that was an exaggeration. “Across the street?” Really?

But lo and behold, Missouri has had two prisons operating across the street from each other for about 20 years now:

Prison map

Why it took so long to consolidate the prisons, I’m not sure. Because Crossroads is a maximum-security prison, security will have to be fortified in at least part of WMCC, to the tune of about $3 million. Perhaps that was the reason. But that $3 million is a small price to pay for even larger savings, and from a good governance perspective, it sure looks like bringing these facilities together is the right call. Missourinet elaborated on the reasoning for consolidation:

The department has been battling to fill hundreds of correctional officer job vacancies. [State Department of Corrections Director Anne] Precythe says the reorganization plan will create a fully-functioning, safe environment, versus trying to “limp along” with two half-staffed, half-full institutions.

The estimated $20 million savings from closing CRCC is slated to give department employees, minus executive staff, a one percent pay raise for two years of continued service. If Parson’s proposed three percent state worker pay increase happens, then corrections workers would get another raise. Precythe has touted the pay boost as the largest in the department’s history.

This consolidation may have been in the works for a while, but whatever its genesis, it’s an elegant solution to saving taxpayer money and reorienting, if ever so slightly, the state’s criminal justice strategy. If the state can build fewer prisons and push potential inmates back into being contributing members of society, Missourians on the whole will be that much better off.

 

School Choice Cost Savings Isn’t Magic, It’s Math!

Posted on by James V. Shuls

One of the great things about math is it often doesn’t need much defense. The numbers can speak for themselves. In this post, I’m going to provide an example of that. I’m going to show you some math that explains how the state should calculate the fiscal savings in an Empowerment Scholarship Account (ESA).

I’m doing this for two reasons. First, the state’s fiscal note on a recent ESA bill inaccurately accounts for potential savings. The second reason is due to something that was said during testimony about the bill. Scott Kimble, a lobbyist for the Missouri School Administrators Association, mischaracterized how funding works in Missouri. He said something to the effect of, “Districts like Kirkwood only get $500 from the state. If a student left Kirkwood to use an ESA, the state would only save $500.” That’s simply not the case, and it’s similar to the error found in the fiscal note, which uses an “average” expense for each student.

Now, here’s the real math.

In 2018, Kirkwood spent roughly $12,000 in per pupil operating expenses. Over 92 percent of those funds came from local taxes. Meanwhile, just 6 percent came from the state. As such, the state gave the district an average of $728 per student. On its face, it would appear Kimble was correct. However, the state doesn’t fund the average student in each district. The state funds districts through a formula and that formula pays progressively more for each additional student. Let me illustrate (I don’t have exact figures for Kirkwood, these are just illustrative).

This is how the funding formula works. You multiply the weighted average daily attendance (WADA) by the dollar value modifier (DVM, a proxy for cost of living) and the state adequacy target (SAT). Then, you subtract local effort. The end result is how much money the state is supposed to provide the district. Divide that by WADA and you get a per pupil figure.

WADA   DVM   SAT   Local Effort   State Aid State Aid Per WADA
5,760 x 1.094 x $6,261 – $35,260,036 = $4,193,280 $728

What the lobbyist mistakenly did is look at that end result and assume that is how much the state would save if a student left the district and used an ESA.

Here is what would actually happen:

  WADA   DVM   SAT   Local Effort   State Aid State Aid Per WADA
Pre-ESA 5,760 x 1.094 x $6,308 – $35,556,204 = $4,193,280 $728
Post-ESA 5,759 x 1.094 x $6,308 – $35,556,204 = $4,186,379 $726.93

                                                                             Difference=              $6,901           $1.07

Notice what happens. When one fewer student is multiplied by the DVM and SAT, the total state aid required to fund the district drops by the product of those figures. The local effort stays the same in both scenarios. The state doesn’t just save the $728 per student, they save $6,901.

It’s not magic…it’s math!

 

Lies, Damn Lies, and Airport Politics

Posted on by Patrick Tuohey

In November 2017, Kansas City voters overwhelmingly supported building a new single terminal at the airport. Voters were told, time and again, that the airlines would pay for it—that no taxpayer funds would be used. In fact, the ballot language expressly stated, “With all costs paid solely from the revenues derived by the City from the operation of its airports and related facilities.”

That might not be true.

Kansas City Councilmember Scott Wagner appeared on KCMO Talk Radio with host Pete Mundo (Wagner’s segment starts at 5:14) on February 14 and discussed this very point:

Mundo: So [new terminal contractor] Edgemoor is saying that to basically get this deal going in any type of reasonable time frame we need you, Kansas City, to basically loan us money or loan yourself money to get cash on hand to start this project? Is that the deal?

Wagner: Basically that’s the deal and you’ve got really two things. On the one hand [Edgemoor says,] “we’ve got to repay our loan of 23 million dollars,” because they took out a loan to start doing their work. So they’re saying, “We need you to make us whole by giving us $23 million.”

Mundo: That’s absurd, I mean that’s absurd…

Wagner: Well honestly that’s the deal that the city signed last year, which I didn’t vote for, but eight people on the Council did. And they [Edgemoor] were very clear, they said “We’re going to spend $23 million and we expect to be paid for that.”

Mundo: The city put it to a vote, they said there was going to be no taxpayer dollars used for it. And then they agree to this after the vote, that says, “yes we will pay back $23 million?” That’s-that’s not a good look, Councilman.

Wagner: I can’t disagree with what you just said.

Sadly, this sort of bait-and-switch has become commonplace with the new terminal project. As a result, Kansas City is providing a lesson to the country about how not to deal with transparency. Kansas Citians and indeed everyone in the region deserve much better than this.

 

Support for Teachers? Or Just Some Teachers?

Posted on by Susan Pendergrass

Want to lose the interest of a room quickly? Bring up pensions. In the 1980s, most private-sector employees were in defined-benefit plans that guaranteed them a steady income after retirement. Now less than five percent of private-sector employees are enrolled in such a plan. Talking about pensions is like talking about Palm Pilots—for most people their dad or mom might have had one, but they see no reason to discuss them.

Not so in the public sector, where 84 percent of employees can still expect to retire at a relatively early age (55 or so) and get a paycheck (and possibly health insurance) until they die. A bill to allow Missouri public school teachers to decide for themselves whether they wanted a traditional pension or a 401(k) type retirement benefit was filed in Jefferson City last week and immediately attacked by both the Missouri State Teachers Association (the teachers union) and the Missouri Retired Teachers Association.

These two associations claim their main mission is advancing the best interests of teachers. But which teachers? It’s estimated that nearly 4 in 10 Missouri teachers won’t get to the five-year vesting requirement to receive any employer benefits. Furthermore, because Missouri’s system is so backloaded that teachers have to stay in the system for 26 years just to break even, only about 38 percent will even hit that point.

So the Missouri teachers union and the retired teachers association are sounding the alarm about “harmful retirement legislation” being filed. But they apparently are not considering the best interests of young teachers who would prefer contributing 5 percent of their salary towards retirement instead of nearly 15 percent. They apparently are not considering anyone who leaves before vesting and would like to take with them what their employer has been contributing on their behalf for 3 or 4 years. And they apparently are not considering teachers who leave before their breakeven point and end up getting less in retirement than what they contributed.

Defined benefit pension plans are expensive, unsustainable, and antiquated. Yes, they work great for teachers who hit the “Rule of 80”—years of work, plus age (retire at 53 with 27 years of service). What are the chances that our best and brightest college graduates see that as their future? Shouldn’t we at least give them some options? Shouldn’t we let them have some control over their careers and earnings?

 

Will There Be a Cease-fire in Kansas City’s Economic “Border War”?

Posted on by Patrick Ishmael

That’s the billion-dollar question that legislators on both sides of State Line Road are asking themselves. Show-Me Institute researchers have discussed the problem of trading businesses back and forth between Kansas and Missouri, fueled by tax incentives, for years now. Halting these wasteful subsidies, by whatever legal mechanism that can accomplish it, should be a top legislative issue in both Jefferson City and Topeka.

Simply cutting the vast majority of tax incentive spending would accomplish this; the less discretion the states have to spend your money on their cronies, the better. But a secondary option, relating directly to the incentive war itself, would be the establishment of a “truce” between Kansas and Missouri—for both states to largely or completely prohibit the issuance of incentives that would draw businesses from one state to another. What that might look like was outlined in a recent Kansas City Star article: 

Missouri first approved a bill prohibiting the use of state incentives to poach businesses in Douglas, Johnson, Miami or Wyandotte counties in Kansas in 2014.

But to go into effect, the law required Kansas’ governor to enact a similar ban on incentives to lure businesses away from Cass, Clay, Jackson or Platte counties in Missouri.

Kansas, under then-Republican Gov. Sam Brownback, balked at the plan. He came back with a proposal of his own two years later, but it ultimately yielded no agreement.

The Missouri law expired in 2016. A bill filed this year by Sen. Mike Cierpiot, R-Lee’s Summit, would renew it through 2021 to open the door for further discussion.

Extending the period for the truce to be offered is an altogether reasonable proposition, one that I would hope the state of Kansas would consider. In an ideal world, Missouri wouldn’t be doling out vast amounts of money on special projects; bad policy is still bad policy, and tax credit reform that puts a hard cap on incentives should still be the ultimate goal. That said, an all of the above approach that includes a “truce” is nonetheless appropriate as the state’s overall tax credit problem is whittled down.

Go On Take Your Money and Run

Posted on by Patrick Tuohey

Some time ago I relied on the song “I’d Love to Change the World” by Ten Years After to tell the tale of the wealthy fleeing Connecticut’s high income taxes. Now New York is feeling the same pinch because the wealthy are, as Steve Miller might say, starting to take their money and run.

New York Governor Andrew Cuomo, who makes his livin’ off of the people’s taxes, held a press conference to bemoan the $2.3 billion drop in state income tax revenue in December and January alone. Cuomo suggested that this was the result of the 2017 tax reform bill which reduced the amount of state taxes one can deduct from one’s federal tax burden. As a result, states with high income taxes, like New York and California, fear that their wealthy residents will flee to lower tax states like Florida. As Steve Miller might say,

They got the money, hey, you know they got away
They headed down south and they’re still running today
Singin’ go on take the money and run

This should serve as an important reminder to public officials at every level, including the Missouri General Assembly and policymakers in St. Louis and Kansas City, that people do make choices based on tax burden. The San Francisco Chronicle is reporting that 53 percent of Californians want to leave the state in part due to the high cost of living, impacted by high income taxes.

As we’ve noted numerous times before, taxes in Missouri are too high. If Missouri wants to attract residents, employers, innovators—or anyone—policymakers must be better stewards of taxpayer dollars and provide basic services at the lowest possible cost.

 

Why the “Green New Deal” Will Not Fly in Missouri

Posted on by Andrew B. Wilson

How well prepared are different players in Missouri’s highly diversified economy to join the “Green New Deal” proposed by Congresswoman Alexandria Ocasio-Cortez (D-NY) and endorsed by several presidential contenders?

Are businesses and people in our state ready to make the jump from an economy that is heavily dependent on fossil fuels to one that would “meet 100 percent of power demand in the United States through clean, renewable, and zero-emission energy” over the next ten years?

Let’s start with Missouri farmers. Are they ready to switch to electric tractors, trucks, and combines in order to reduce their carbon footprint to the vanishing point over the course of a single decade?

We can answer that question with an unequivocal “No.” Here’s why.

Begin with the fact that there are no—repeat, no—Tesla-like, battery-powered farm vehicles on the market today that could begin to replace most of today’s diesel-powered vehicles in doing the heavy-duty, energy-intensive work involved in ploughing fields and gathering harvests. The battery-powered substitutes for today’s machines don’t exist, and – even if they did – other problems would prevent their instant and widespread use.

Did any of the utopian thinkers who devised the Green New Deal stop to consider that most farms are wired in much the same way as most homes. That is to say, they are not wired for industrial use – which is what would be required to bring about the presumed greening of agriculture through electrification.

The problem here cannot be solved by putting up hundreds or even thousands of new wind turbines to supplement the 500 now in use in Missouri – which provide an average of two megawatts of power per turbine, and then only when the wind blows.

As Blake Hurst, the president of the Missouri Farm Bureau, points out, the electrification of Missouri agriculture would be an immensely expensive undertaking. It would require nothing less than “totally rebuilding the electrical grid” in order to deliver far greater quantities of electric power to farms in thinly populated areas around the state. The grid, along with charging stations and other supporting infrastructure, would have to treat every farm with a fleet of one truck, one tractor, and one combine or cotton-picker as if it were a town with 10,000 or more inhabitants.

To understand the physics, consider a conservative estimate of the electrical requirements posed by a hypothetical electric combine that replaces a typical grain combine. The latter weighs 15 tons, consumes approximately 15 gallons of diesel fuel per hour, and is often used about 16 hours a day during harvest. At 40-percent efficiency, its diesel engine delivers about 244 kW of power.

To do the same work, the electric combine would need to carry the equivalent of about 3.5 Tesla batteries (4,400 pounds) for each hour of continuous use. It would therefore need approximately 28 Tesla batteries to go eight hours without recharging. The combined weight of all of batteries would be 17 tons, making the electric combine significantly heavier than the piston-driven combine. While battery technologies are improving, it will be some time before any dramatic changes in energy to weight are likely to take place.

Since recharge time has to be short for economic reasons (a farmer racing against time to bring in a harvest can’t afford to spend several hours a day twiddling his thumbs), suppose that the electric combine “fast charges” in 20 minutes, an optimal time suggested for electric cars. The charging station and related infrastructure (i.e., generation and power distribution) would have to be capable of supplying in the vicinity of six megawatts of power during the recharge period! Let us pause to consider what that means.

Recharging a single combine requires the same power output as three of today’s wind turbines. According to government data, 1 megawatt of power capacity will supply 750 homes. Looked at in this way, the infrastructure necessary to recharge just one electric combine in 20 minutes would also be capable of supplying electrical power to the equivalent of 4,500 homes.

Suffice it to say: If you multiply that one combine by the total number of big combines and other heavy-duty vehicles used on Missouri farms today, you arrive at a very big number.

Even if we, as a state, were prepared to pay the huge costs of participating in a federal government-led crash effort to transition from diesel-powered to battery-powered farming, it is doubtful that our farmers would thank us. Apart from the inevitable adjustment problems in the introduction of new equipment, the electric combines, tractors, etc. would be more likely to bog down in muddy fields because of the extra weight of carrying a multitude of Tesla-like battery packs. And that’s not all. Barry Bean, a large cotton grower in the Bootheel in southeastern Missouri, shudders at the thought of the long lines of farmers with their tractors and cotton-pickers at charging stations at the end of a long day: “We all work the same hours and we’d all be coming in at the same time.”

*****

Let us turn then to freight transportation, another area important to Missouri as a crossroads between East and West, North and South. If, in the year 2030, all of the heavy trucks passing through Missouri were battery-powered, what would it take to charge them? We could not answer that question without a good deal more research. But we can say what it would take to open a single recharging station to handle a tiny fraction of the heavy-truck traffic that flows through the little village of Kingdom City, lying at the intersection of Interstate 70 and U.S. Route 54, on a daily basis.

Using the same analysis as above, to support a single service station at this site capable a) of recharging a Class 8 truck in 20 minutes that has been on the road for eight hours, and b) of handling 10 such trucks simultaneously, we have estimated that the supporting electric infrastructure must be capable of supplying close to 40 megawatts. That is the equivalent of about 20 2-megawatt windmills just to serve one refueling station. That same infrastructure would serve the needs of about 30,000 homes, or a decent-sized town.

*****

All this brings us to a final consideration. Where does Missouri’s electrical power come from? According to the U.S. Energy Information Administration, we get more than three-quarters of Missouri’s net electrical generation from burning coal, and another five percent from natural gas-fired plants. Oh, yes, our one nuclear power plant in Callaway County is good for another 10 percent, not that the Green New Deal manifesto is calling for more nuclear power.

Even in the act of saying “sayonara” to the use of fossil fuel in just two sectors of the state’s economy – agriculture and freight transportation – we would have to fall back on fossil fuels to provide additional electrical generating capacity.

Giving Ex-Offenders a Fresh Start When Looking For a Job: Part One

Posted on by Emily Stahly

High recidivism, or the rate at which ex-offenders return to prison, is a problem in Missouri and a major factor contributing to our high incarceration rate. According to the Missouri Department of Corrections, nearly half of ex-offenders in Missouri return to prison within five years of being released.

Whether it is for a technical violation of the terms of their parole or because they committed a new offense, having so many people return to prison is expensive. The average cost to incarcerate just one person for one year is $21,000. Multiply that by thousands of people serving years-long sentences and the cost of recidivism for Missouri taxpayers is in the millions.

While there are several important factors that may contribute to recidivism rates, research has found that finding employment upon release strongly affects whether someone will end up back in prison. This study from the Justice Center at the Council of State Governments explains why employment for ex-offenders is important:

Employment can make a strong contribution to recidivism-reduction efforts because it refocuses individuals’ time and efforts on prosocial activities, making them less likely to engage in riskier behaviors and to associate with people who do…Employment also has important societal benefits, including reduced strain on social service resources, contributions to the tax base, and safer, more stable communities.

Last year, Show-Me Institute’s Patrick Tuohey testified on a bill that would have removed the restriction on anyone convicted of a felony from obtaining a license to sell lottery tickets—a law which essentially prohibited them from working at convenience stores or gas stations. While this bill wasn’t adopted, other states have taken an approach that Missouri should consider.

Instead of considering different licensed occupations piecemeal, Fresh Start Legislation adopted in other states requires a comprehensive review of licensing boards’ restrictions on ex-offenders. Such a review can help ex-offenders by removing unnecessary barriers to employment. Part two of this blog post will dig more into what a Fresh Start law would look like and how it could help Missouri reduce its recidivism rates.

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