On Thursday, February 22, Show-Me Institute CEO Brenda Talent appeared on KETC’s Donnybrook to discuss controversies in Jefferson City, the effectiveness of the St. Louis Regional Chamber and Growth Association, and the recent public relations efforts of the St. Louis City Police Department.
Springfield Policy Lunch: Legislative Update
In this policy lunch, Rep. Crystal Quade (D-Greene County) and Rep. Elijah Haahr (R-Springfield) provide an update on the current legislative session in Missouri’s House of Representatives. Afterward, they take questions from the audience.
Charter Schools 101: What Is a Charter School?
It’s hard to believe that after nearly 30 years charter schools are still a mystery in some parts of the United States. But I still get the question: What is a charter school?
Charter schools are public schools, but instead of being governed by a local school board, they are governed by a document—their charter—that lays out how the school will operate and the metrics by which its performance will be judged. The charter is granted to the group of individuals who seek to open and run the school, and it has an expiration date of three to five years, at which point it needs to be renewed or the school is closed. The charter is awarded by an authorizer, or sponsor, who is responsible for making sure that the school stays on track, both academically and financially, and who makes the renewal or closure recommendation.
A little history might be helpful in understanding how the charter school movement began. It started in the late 1980s as an idea to let teachers, parents, or community leaders open and run a public school outside of district oversight. Credit for the idea usually goes to Al Shanker—head of one of the two major teacher’s unions in the United States. In 1988, Shanker offered an idea for reinvigorating public education that was inspired by a visit to a school in Cologne, Germany the prior year. He argued that we should allow teachers to create innovative, autonomous public schools, and that these chartered schools would serve as laboratories from which effective ideas could be replicated.
Around the same time, political economists John Chubb and Terry Moe argued that the institutional structure of public education wasn’t working. they found that autonomy was the one indispensable requirement for an effective school. And, they concluded, the existing structure of public education limits and undermines school autonomy. In their book Politics, Markets, and America’s Schools, Chubb and Moe proposed building an entirely new structure for public education that would withdraw authority from existing institutions and place it directly in the hands of schools, parents, and students. School districts could continue to operate their existing schools, but they would have no authority over the “chartered” public schools.
In 1991, bipartisan support for Al Shanker’s idea led to the passage of the first charter school law in Minnesota. The law was groundbreaking, and in 1992 eight chartered public schools opened in Minnesota that were autonomous, student-centered, results-oriented, and designed and run by teachers. The following year California followed suit. At the start of the 2017–18 school year, there were over 7,000 charter schools in 42 states plus the District of Columbia, serving nearly 3.2 million students. Charter schools now represent seven percent of all public schools and enroll six percent of public school students. Today, one in five public school students attends school in a district with at least 10 percent of its students in charter schools.
A $200,000 Retirement Benefit and a $250,000 Salary? Deal!
Ah retirement . . . that glorious time at 57 years of age when you can begin drawing roughly $200,000 annually for the rest of your life while simultaneously continuing to work and earn an additional $250,000.
What, that’s not the norm? Well, it is exactly what the “retiring” Pattonville superintendent will be doing soon.
The Kansas City Business Journal is reporting that the longtime superintendent will be retiring from Pattonville this year and taking up the superintendent position in the Shawnee Mission School District in Kansas. This move will allow him to retire from the pension system in Missouri and begin drawing his guaranteed benefit while also earning a salary in his new district, because the two school districts are in different pension systems.
According to the St. Louis Business Journal, the Pattonville superintendent earned $267,232 in 2016–17. In Missouri’s Public School Retirement System, members can earn 75% of their final average salary (defined as their three highest consecutive years). This would easily put his annual retirement benefit over $200,000, because the listed salary does not include other benefits, such as medical, which are also included in the final average salary.
There are three important things to take away from this.
First, we have to ask if it is wise to have a system that pushes effective leaders out at a relatively early age. This superintendent, who might likely work for another decade or more in Kansas, will begin drawing his retirement immediately and will draw it for the rest of his life. Indeed, there is a tremendous incentive for individuals to retire at this point in their career.
This leads us to our second point, pushing out effective educators may not be an effective strategy if we want to improve the quality of education. This superintendent will take his services elsewhere, but many terrific teachers, principals, and superintendents are pushed out of education all together.
Finally, when people ask why the pension system is underfunded, this should be one of the prime examples you give them. The problem is that individuals like this superintendent often do not contribute enough to the system to cover their pension benefits. He is a big time pension winner, who will be receiving much more in benefits than he contributed to the system.
Don’t get me wrong: I applaud the superintendent’s decision. It’s a smart one, and we should all be so lucky. The problem is that we can’t all be so lucky. Lavish benefits like this must be paid for by someone. As I have shown before, they are paid by teachers who leave money in the system, by low-paid teachers in other districts, and ultimately by taxpayers.
Superintendents and others like Pattonville’s are not simply getting what they put into the system; they are getting much more. Let me ask you which system seems fair: this one, or a system in which retirees receive benefits that are in line with their contributions? If you ask me, the answer seems obvious.
The Power & Light District Still Hasn’t Delivered
On Ruckus last week we discussed the city’s debt and its profligate spending on the Power & Light District downtown. In the segment, I asserted that ten years ago, “Kansas City fell all over itself to try to build an entertainment district. It hasn’t created any new jobs; it hasn’t created any new businesses.” How can that be—isn’t it evident that downtown has seen a rebirth?
As I’ve written before, most of these taxpayer subsidies result only in economic diversion. They don’t create anything new; at best they just move development to different areas. The H&R Block headquarters for which taxpayers paid didn’t create the new jobs that were promised; it merely consolidated jobs from across the area to one place. Likewise, as the chart below shows, the Power & Light District didn’t create new jobs or businesses, but instead simply relocated them from elsewhere.
The number of bars and restaurants (and their accompanying jobs) remained flat in Kansas City for years after the Power & Light District opened. If the Power & Light District had been the success that city leaders claimed, you’d have seen an uptick in employee liquor cards and licenses. But citywide, the numbers were flat at best. This means that any new jobs and businesses downtown merely came at the cost of jobs and businesses elsewhere in the city. Nothing new was created. Only now, as the economy improves, are those numbers going up.
Focusing on reviving downtown Kansas City might be a worthy goal. As I wrote last year,
Policymakers are free to argue that diverting economic activity from elsewhere in Kansas City to the downtown area is good policy. That would be a welcome policy debate worthy of consideration. But supporting policies that merely move activity around and then pretending something new has been created is not only disingenuous, it is unsustainable.
The rest of Kansas City has needs, including basic infrastructure and greater police presence. Focusing on downtown hasn’t provided any net benefit, and it has cost us dearly.
Map: Medicaid Spending and Enrollment by County in 2016
Recently, Patrick Ishmael, Show-Me’s Director of Government Accountability, pointed out that Medicaid spending is increasing in Missouri at an alarming rate. Even though some downplayed the 6.2 percent growth in spending, there is cause for concern. The Medicaid budget increased by nearly $570 million from FY2016 to FY2017. Additionally, Ishmael notes that Medicaid’s share of the budget has risen from 18.4 percent in FY2000 to over 37 percent in FY2016.
Since Medicaid is such a large part of state spending, it is worth taking a closer look at where and how this money is being spent. Below is a map that shows the percentage of counties’ populations enrolled in Medicaid, also known at Mo HealthNet. The data table, provided by the Department of Social Services, can also be sorted by expenditures, enrollees, and percentage of the population for each county.
The data displayed are from FY2016; in FY2017, another $570 million and 26,948 enrollees were added to these numbers. This information could help provide a clearer picture of Medicaid’s costs and the variation in participation rates across counties. With such information, lawmakers and taxpayers can better understand how changes—whether cuts or expansion—to the program would affect the state.
Patrick Tuohey Joins Ruckus Panel To Talk Kansas City Debt and State Tax Cuts
On Thursday, February 8, the Show-Me Institute’s Patrick Tuohey appeared on KCPT’s Ruckus to discuss Kansas City’s $1.5 billion dollar debt and $811 million employee pension fund shortage, the Greitens tax plan and other big news stories of the week.
Map: Missouri State Government Spending in FY2017
Last month the Show-Me Institute published an extensive dataset of state spending from the Office of Administration, stretching back to FY2000 and through FY2017. You can find the spreadsheets, broken down by quarter, here. Given the success of the Municipal Checkbook’s app, we decided to render one for the state for the past fiscal year. You can find it below.
Users can scroll through the vendors with whom the state did much of its spending, zoom in on a map of vendors to see who does a lot of business with the state in your neighborhood, and look at spending and transaction patterns between the state and vendors over the course of the year.
Have a thought or suggestion about future visualizations? Leave a comment below. And be sure to give the app a minute to load; after all, it’s processing over a million transactions.
A Streetcar Undesired
As Omahans consider spending hundreds of millions of dollars for a streetcar system, proponents point to Kansas City as an example of a successful system. But the claims about Kansas City’s success are grossly overstated, and voters reject the system almost every time they are given a chance. I hope Omaha can learn from our misadventure.
It is noteworthy that in the age of driverless cars, some want to look backward to the inflexible fixed-rail technology of the 19th century. In Kansas City, when we get icy weather, the streetcar system is shut down and replaced with buses. And when even a single streetcar is involved in an accident or breaks down, the whole system is shut down. Streetcars cannot reroute themselves; they cannot drive around an accident. As neighborhoods grow over time, fixed rail routes cannot shift as demand shifts. Streetcars are literally and figuratively stuck in a rut. And on top of this, streetcars cause traffic congestion because they are so large and slow moving. Streetcars also fail to remove cars from the road. Research shows that streetcars really just move people away from buses, not out of their cars.
Because streetcars are such an inefficient and expensive transit option, proponents instead point to the economic development they purportedly create. Every new development is met with satisfied nods as evidence of the streetcar’s success. The research around the country and our experience in Kansas City tell another story. It’s not the streetcar that drives development, but all the taxpayer money handed out to encourage construction along the route. Abatements, cash handouts, tax credits and tax increment finance subsidies litter the streetcar route here.
On top of the subsidies, there’s the price tag on the streetcar itself. The cost of a streetcar is many times the cost of simply adding a new bus route. It is almost humorous that Kansas City raised taxes to fund a large portion of the approximately $110 million cost for 2.2 miles of track, then lowered taxes for developers to entice them to invest along the route. Imagine what would have happened if the city had skipped the streetcar and instead lowered taxes for everyone!
Omahans should be aware that Kansas City voters have been rejecting streetcars for decades. Due to an odd artifact of Missouri law, small groups of citizens can create transportation development districts and tax themselves. As a result, fewer than 400 votes cast in the district committed all of Kansas City to supporting a $110 million project. In response, activists circulated a petition requiring a city-wide vote before the Council could spend any tax money on streetcars. The petition collected the necessary number of signatures, was verified, and was passed by a vote of the people in August. But our Council declared the petition unlawful and appropriated more funds to the streetcar anyway.
Before the Obama Administration, few if any federal funds were available for streetcars. Since then, however, the spigots have been flowing—and the result has been a boom in streetcar spending in cities across the country. In several cases the percentage of people who use transit in those very cities has actually dropped.
Streetcars do look fun, however. One pundit in Kansas City refers to ours as a party bus. It’s free to ride, looks sleek, and is something new on the street. But it doesn’t help the city grow or efficiently move people where they want to go. It requires a lot of money to build and operate and requires even more subsidies along the route to create the illusion of economic growth. In Kansas City, the few (if any) benefits of a streetcar have not been worth the significant cost. Omaha taxpayers should be wary.
