HHS Secretary Talks Up Short-Term Medical Insurance Plans

Posted on by Patrick Ishmael

Earlier this year I talked about a proposal in the Missouri legislature that I thought was a great idea: to expand the period of short-term medical insurance plans up to a year. Free of many of the mandates commonly seen in Obamacare-approved plans, short-term medical insurance gives customers an opportunity to purchase coverage at a cheaper price.

The excitement surrounding such a reform is not reserved to Missouri. The Trump administration itself has pushed very hard for such expansions, and central to that push is the secretary of the Department of Health and Human Services, Alex Azar. At a conference late last month, he laid out why this reform is important.

“We believe sensible state regulation of [short-term health insurance plans] is important,” Azar said. “But millions of Americans are in need of affordable insurance options, and states can help build this market outside of Obamacare’s broken regulations.”

As more Americans enter the new economic environment, they find themselves unable to purchase quality health insurance, Azar told the audience. The new policy will give states greater flexibility to create more affordable insurance options for all consumers, especially those workers who do not receive health insurance through an employer, Azar says.

“While these plans aren’t for everyone, we believe they can be an important option for many—people who have been priced out of Obamacare plans, who are between other sources of coverage, or who are independent contractors in today’s gig economy,” Azar said.

You can find out more about short-term medical insurance here. It’s my hope that Missouri makes liberalization of short-term medical insurance one of its highest priorities next year.

Kansas City Star Editorial Board Gets It Half Right

Posted on by Patrick Tuohey

In a recent column, The Kansas City Star editorial board bemoaned the instinct of Mayor Sly James to be opaque and secretive in his negotiations. Specifically, the Star’s piece argued that negotiations over the construction of the new airport terminal and the related community benefit agreements should be open to the public. No one would disagree with that.

The Star’s board is correct to caution against the “troubling, recurring and unhelpful mindset that crucial details of the KCI project must be kept hidden from public view”—recall that the mayor and city manager wanted to skip the bidding process altogether and then require councilmembers to sign nondisclosure agreements. Because of such secrecy and ineptitude, we still don’t know much about the final details of the project.

Consider that the same editorial states that the $1.4 billion projected cost for the terminal is likely to go up, and that we are not sure that the airlines are on board with the project. At the time of the vote in 2017, not only did Kansas Citians not know the details of the contract with Edgemoor, we didn’t even have a basic understanding of what that contract might look like. Yet the Star’s editorial board includes this line in their piece:

It’s been nearly a year since Kansas City voters overwhelmingly approved a new terminal at the airport. That vote proved Kansas Citians are more than capable of digesting a frank conversation about an important public issue.

What exactly was that frank conversation about if it wasn’t about contracts, costs, number of gates, or community benefit agreements? There wasn’t even enough substance to guarantee the airlines were fully on board. What we got from the Star at the time were pie-in-the-sky arguments that contradicted its own journalists’ reporting.

It’s more likely that the vote proved that a well-funded public relations campaign with little to no opposition can convince voters to trust city officials to do the right thing despite those same officials’ hostility to basic transparency.

Back before the vote and even today, the Star has supported the idea of a new terminal, but it doesn’t know the details about the project in question. No one does. That sums up much of our and others’ arguments regarding why the project should not have moved forward.

It may be completely reasonable, once issues such as cost and contract and airline agreements are settled, to support a billion-and-a-half (likely more) dollar new terminal. And the editorial board is correct that cost overruns and delays are to be expected with any project of this size. But up until the point that such information is known, no one knows enough about this project to support it. Instead, the Star has chosen to give carte-blanche to the same officials they criticize for not being transparent.

Unless city officials feel that they are being held accountable—that is, that support for the project could be withdrawn should it turn into the boondoggle that many fear—Kansas Citians are unlikely to see any more transparency than they have up to this point.

Jonah Goldberg on Tribalism, Nationalism, and Liberty

Posted on by Jonah Goldberg

Does Western culture face a crisis because of its failure to defend liberty against ideological forces of the past? In his new book, Suicide of the West: How the Rebirth of Tribalism, Populism, Nationalism, and Identity Politics Is Destroying American Democracy, Jonah Goldberg describes what he calls the West’s suicidal tendency to surrender to tribal and nationalist forces from both the left and the right. In this video, Goldberg argues that a renewed commitment to classical liberal values can preserve the principles that have guided the progress of Western civilization for centuries.

Missouri Tax Credit Program Halted for Now

Posted on by Patrick Tuohey

On Monday, Gov. Mike Parson made two appointments to the Missouri Housing Development Commission, the body in charge of awarding low-income housing tax credits (LIHTCs). However, Gov. Parson also said the commission won’t issue any new tax credits until the legislature has reformed the program. This is good news.

Missouri’s tax credit program is a bloated mess. Whether they are intended to support low-income housing or sports complexes, tax credits are often awarded based on good public relations rather than good policy. Former and present state auditors—Democrats and Republicans alike—have for years argued that tax credits such as the LIHTC have been a bad deal.

Expect localities to rail against even a temporary halt to the LIHTC program, seeking to place blame for their own lack of affordable housing stock on Jefferson City. For example, Flatland—Kansas City Public Television’s digital magazine—recently released a short video on the LIHTC program. In it, Bill Dietrich, the president and CEO of the Downtown Council of Kansas City, Missouri, said (starts at 4:28):

The greatest threat we have right now to being able to add to the affordable housing inventory is the state of Missouri’s ill-conceived policy of no longer allocating for low income housing tax credits.

Really? The greatest threat? The program was fully funded up through the end of 2017. Any current shortage Kansas City has with affordable housing has nothing to do with a lack of state tax credits. In fact, Missouri’s LIHTC program is one of the most generous in the country, according to a previous auditor report (see pages 11 and 19). Most states don’t even have such a tax credit program.

Maybe the actual “greatest threat” to affordable housing in Kansas City is inaction from the Council and city leadership. It is just now, in 2018, addressing the issue. Up to this point, Kansas City leaders, including members of the Downtown Council, appear to have been more interested in subsidizing the construction of luxury housing.  Consider this: in 2017, 91 percent of new apartment buildings in Kansas City were considered luxury. So far in 2018, 100 percent are luxury. 100 percent! (All of St. Louis’ apartment construction in 2017 was luxury, and 81 percent so far in 2018.)

If our municipal goal is to support the construction of affordable housing, we can do better than the LIHTC. But any serious program must start with an actual policy, and it should probably stop subsidizing luxury housing, too.

How Can Missouri Get More Out of Its CTE Programs?

Posted on by Abigail Burrola

It’s an alarming statistic. Even though more than 90 percent of Missouri high school students graduate, the Department of Elementary and Secondary Education (DESE) reports that just 42.5 percent (page 4) are prepared for college or a career after graduation. For students headed to college, this lack of preparation can lead to a rude awakening. But students who are interested in a career that does not require a traditional college degree also face problems when their high school education doesn’t teach them the skills they need to make themselves attractive to employers

Hundreds of career and technical education (CTE) programs across Missouri offer practical training in fields such as agriculture, business, health care, culinary arts, construction, computer science, and others. In many cases, students who complete the required coursework are issued certificates to that effect. But a school-issued certificate alone isn’t always enough to ensure students can access the workforce; they need credentials that carry weight with employers in the world beyond school.

Private-sector employers have everything to gain by ensuring that new graduates are ready to start work right away. That’s why many professional associations issue their own industry-recognized credentials (IRCs), such as Certified Nursing Assistant (CNA) or Automotive Service Excellence (ASE) certification. CTE students don’t have to take IRC exams to graduate, but passing an exam can save students time and money at the outset of their careers. For example, a CNA certificate that could be earned as part of a student’s high school coursework might otherwise require about 5 months of coursework and several hundred dollars in tuition at a community college.

To promote IRC attainment among high school students, several states have begun offering teachers bonus pay for every student of theirs who passes an IRC exam. For example, for every student who leaves high school ASE certified, the auto shop teacher might receive $25 to $50.

Linking teacher bonuses to IRCs has boosted student IRC attainment in states that have adopted the policy. For example, Florida awards a $50 bonus to a teacher for each student who earns an IRC after taking a course that could earn them college credit in the relevant subject, and $25 for each student who earns an IRC after taking only high-school–level classes. IRC attainment has grown from 803 graduates in 2008 to over 86,000 in 2017.

Similarly, since offering CTE teachers bonus pay when students earn IRCs, North Carolina has seen a 53 percent growth in five years. In the 2016–2017 school year, over 160,000 IRCs were earned. By comparison, there were 8,566 IRCs earned in Missouri the same year (according to information provided by DESE), meaning that Missouri has plenty of room for improvement. Unbelievably, just six high school students passed the Masonry IRC exam and just five passed the Construction IRC exam in Missouri last year.

More students getting IRCs could create a stronger workforce for our state. Other states are finding creative ways to make this happen—shouldn’t Missouri?

Let Bryce’s Law Live Up to Its Potential

Posted on by Susan Pendergrass

Parenting is hard. We want to do more than just keep our children safe and happy. We try to give them every possible opportunity to succeed in life, and that effort often begins with finding them the best possible school, or at least making the best of their assigned public school.

Parents of children with special needs face especially daunting challenges. Upon finding out that they will be raising a child with a disability, they must immediately learn as much as they can about their child’s condition. As the child approaches school age, the parents have to think about so much more than just a classroom and a teacher. It’s not surprising, therefore, that parents of students with disabilities have a particular need for more options regarding their child’s education.

Fortunately, four years ago the Missouri legislature recognized this need and passed Bryce’s Law, named for Rep. Dwight Scharnhorst’s grandson, who was born with severe autism. Bryce’s Law allows parents of children with autism, Down Syndrome, and several other disabilities to seek scholarships through certain scholarship-granting organizations to attend private schools.

Unfortunately, the legislative process resulted in a final bill that was materially different than the one Scharnhorst proposed. The final version of the law was structured in such a way that not a single child has received a scholarship. In fact, not even one of the contemplated scholarship-granting organizations has even materialized. Imagine the hundreds or thousands of children who have missed out on scholarships because elected officials in Jefferson City failed to draft an effective means for providing those scholarships.

The law will be up for renewal in 2019. Isn’t it time for the state of Missouri to put real funding behind Bryce’s Law and ensure it is a functioning program that can help Missouri students with special needs?

There were concerns in the past with “public” funding going to “private” (often religious) schools, but the recent Supreme Court decision in Trinity Lutheran v. Comer, from right in our back yard in Columbia, would seem to permit such funding so long as it was generally available to religious and nonreligious schools alike and that religious schools were neither favored nor disfavored in the application process.

If directly funding Bryce’s Law is a bridge too far, allowing the contributions to scholarship-granting organizations to be tax credits instead of tax deductions (as Rep. Scharnhorst had originally intended) is also a possibility. In that case, it would be the contributions of private citizens rather than money from the public treasury that would fund the scholarships. The state of Missouri already offers a raft of pro-social tax credits for everything from child advocacy and crisis pregnancy centers to food pantries to youth development and crime prevention programs. Scholarships for students with special needs are an equally worthy cause.

Note that families don’t have to attend private schools. If they are being well served by their assigned public school, they can stay there. If, however, that public school is not meeting their child’s needs, they would have a chance to give another school a try.

There is a bitter irony to having a law on the books that could do so much for children with special needs, but cannot deliver the promised benefits because it fails to provide a viable funding mechanism. The time is ripe for the Missouri Legislature to fix its past mistakes and put Bryce’s Law to work for the families it was intended to help.

The Risk of City-issued Bonds

Posted on by Patrick Tuohey

Kansas City leaders tell us that the bonds issued by the Kansas City Industrial Development Authority to fund the construction of a billion dollar new terminal at Kansas City International Airport pose no risk to taxpayers. Repeatedly we are assured that if the project fails to generate enough revenue, the loss will be borne by private bondholders, not taxpayers.

Tell that to Platte County.

The Zona Rosa shopping district there cannot meet its bond obligation, and so the County has been considering covering the debt. In a March piece in The Kansas City Star, Platte County Commissioner Dagmar Wood said the effort amounts to “basically bailing out bondholders.”

According to The Bond Buyer magazine, the county board considered not making those payments, and as a result,

[S&P Global Ratings] slashed the rating on the Platte County Industrial Development Authority bonds for Zona Rosa deep into junk Sept. 7, to B-minus from A. The bonds were originally rated AA-minus based on the strength of the county’s guaranty subject to annual appropriation.

Let’s consider that “guaranty subject to annual appropriation.” It does not mean the County is bound to make up the difference; just that it will consider doing so each year as funds are available. The 2007 financial deal itself makes very clear that the county is not on the hook for the bonds (emphasis in the original),

THE BONDS DO NOT CONSTITUTE A GENERAL OBLIGATION OF THE AUTHORITY, THE DISTRICT OF THE COUNTY AND DO NOT CONSTITUTE AN INDEBTEDNESS OF THE AUTHORITY, THE DISTRICTS, THE COUNTY, THE STATE OF MISSOURI (THE “STATE”) OF ANY POLITICAL SUBDIVISION THEREOF WITH THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER PROVISIONS OR LIMITATION.

Despite this, and because the County is considering not making such an appropriation, there may be considerable repercussions not just for the Zona Rosa project, but for Platte County and for the state! The Bond Buyer continues,

“S&P reports that the county is in strong financial and economic condition, but MMA assumes catastrophic downgrades for all Platte County securities should the IDA bonds default,” MMA wrote in its weekly commentary. “Further, MO appropriation bonds generally could see weaker price trends, particularly if market wide yields begin to rise.”

One can easily imagine a situation wherein a weak air travel market generates lower-than-expected revenue at KCI—below that needed to meet debt payments to bondholders. Just as with Zona Rosa, one can see that a rating agency might threaten to lower ratings for Kansas City despite the specific terms of the bond. Would Kansas City leadership then argue that taxpayers need to bail out the airport to avoid a reduction in our city bond rating?

The lesson for Platte County is that no publicly financed development is without risk to taxpayers. As Kansas City’s new terminal project lurches forward from error to error, it is lesson we ought to remember.

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