2018 Blueprint: Certificate of Need

Posted on by Patrick Ishmael

THE PROBLEM: Missouri’s Certificate of Need (CON) law restricts health care competition by requiring many health care providers to get state approval before entering new markets or expanding services offered in existing facilities. This restriction hampers innovative start-ups and market newcomers that would provide Missourians care. It also puts upward pressure on health care prices.

THE SOLUTION: Repeal the Certificate of Need law.

Eliminating CON requirements would allow Missourians to benefit from true marketplace competition in the health care arena.

WHO ELSE DOES IT? California, Colorado, Idaho, Indiana, Kansas, New Hampshire, New Mexico, North Dakota, Pennsylvania, South Dakota, Texas, Utah, and Wyoming have no CON law.

THE OPPORTUNITY: Missouri would join a growing list of states that have opened the door to real health care competition.

KEY POINTS

  • CON laws separate patients who need care from doctors who want to provide it.
  • More competition would create pressure to reduce health care prices.
  • Missouri would be able to compete with nearby states, including Kansas, where smaller hospitals are opening up because they aren’t restricted by CON laws.
  • CON reform is an opportunity to help communities threatened by the loss of existing hospitals.
  • Ending CON would empower patients to make choices that benefit their families, rather than support the government-backed competitive advantages of hospitals.

SHOW-ME INSTITUTE RESOURCES

Essay: Demand Supply: Why Licensing Reform Matters to Improving American Health Care

Blog Post: Missouri’s Certificate of Need Law Needs to Go

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Charter School Expansion

Posted on by Michael Q. McShane

THE PROBLEM: Demand for charter schools in Missouri is at an all-time high. Unfortunately, for practical purposes charter schools are limited to the Kansas City and Saint Louis School Districts. Establishing a charter school is nearly impossible in any district that meets minimum state accreditation requirements. Tens of thousands of students are denied the opportunity for a better education.

THE SOLUTION: Expand charter schools statewide.

Charter schools should be allowed in districts regardless of whether the district meets minimum state accredi­tation standards. Per-student funding should be the same for both charter school and traditional public school students. Demand among families and charter school authorizers like uni­versities should determine where and when charter schools open in Mis­souri.

WHO ELSE DOES IT?

Over 6,900 charter schools operate in 43 states and the Dis­trict of Columbia, serving more than 3.1 million students. States like Indiana place no caps on the number of charter schools and fund charters and traditional public schools at equal or nearly equal levels. Unlike Missouri, almost all other states allow charter schools to operate anywhere.

THE OPPORTUNITY: Charter schools are growing. Over 23,000 students enrolled in charter schools in Missouri for the 2016–2017 school year—an 11% increase from the previous year. University Academy, one of the top-performing charter schools in the state, has a waitlist of 700 students. The demand is there. Simply by getting government out of the way, we can offer students a way out of underperforming schools and into schools they want to attend.

KEY POINTS

  • Thousands of Missouri students are trapped in poor schools due to needless restrictions on school choice.
  • Allowing charter school expansion will meet demand from families, not bureaucrats.
  • School choice has a proven track record elsewhere in the country.

SHOW-ME INSTITUTE RESOURCES

Essay: Expanding Charter Schooling in Missouri

Blog Post: Charter Schools Boost College Completion

Blog Post: No, Charter Schools Don’t Push Out Kids Who Are Too Hard to Educate

Blog Post: The Charter School Discipline Problem That Isn’t

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Course Access

Posted on by Michael Q. McShane

THE PROBLEM: All across Missouri, students lack access to higher-level coursework such as AP courses, calculus, and physics.

THE SOLUTION: Course access.

Course access programs allow students to direct a portion of their annual per-pupil funds to take—and receive college credit for—courses outside of their traditional public school course offerings.

WHO ELSE DOES IT? Eleven states across the country have some form of course access program.

THE OPPORTUNITY: Missouri has much of the infrastructure needed to create a course access program through an underused program known as the Missouri Virtual Instruction Program (MoVIP), which was signed into law in 2006. In addition, the Grandview R-II and Springfield school districts have created their own online programs, but these courses are not available to all students in the state. In all three cases, the course offerings are vetted by the Missouri Department of Elementary and Secondary Education (DESE) and can be credited toward graduation.

KEY POINTS

  • During the 2015–2016 school year, of the 448 school districts that offer high school in the state, 9% had no students enrolled in chemistry, 42% had none enrolled in advanced physics, 40% had none enrolled in calculus, and 63% had none enrolled in AP courses.
  • Course access allows students a cost-effective way to take courses not otherwise available in their district.
  • Course access increases parent/individual control over education spending.
  • Missouri already has the infrastructure needed to create a course access program.

SHOW-ME INSTITUTE RESOURCES

Essay: Course Access in Missouri: Diversity, Personalization, and Opportunity

Blog Post: Missouri Students Need Access to Advanced Coursework

Video: Course Access: Opening Opportunities across Missouri

Video: Course Access Brings the Classroom to the Student

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Earned Income Tax Credit

Posted on by Patrick Ishmael

THE PROBLEM: State spending is on the rise in Missouri, led by a growth in public welfare dollars. Public welfare spending now accounts for more than 46% of total spending and is the largest driver of general spending growth in Missouri.

THE SOLUTION: Transition toward the Earned Income Tax Credit (EITC).

An EITC is a credit that may be used to offset a worker’s state income tax liability. Proper use of EITCs could slow the growth of public welfare spending while providing material benefits to working families.

WHO ELSE DOES IT? Twenty-five states and the District of Columbia offer EITCs at either the state or local level, although the amounts and refundability of the credits vary.

THE OPPORTUNITY: Moving current public welfare dollars to an EITC will encourage self-reliance among the state’s poor while also restricting growth in public welfare spending. Not only does the EITC help working families make ends meet, but it also encourages recipients and families to find jobs and increase hours worked. Missourians can move up the economic ladder with the aid of the EITC—which can help people get off state assistance entirely, thus bringing down the cost of the credit.

KEY POINTS

  • Aid to our most vulnerable citizens will be better targeted, while still providing the help they need.
  • EITC recipients can build the self-esteem that comes from work.
  • Public money will go toward helping families rise from poverty and escape dependence on government.

SHOW-ME INSTITUTE RESOURCES

Blog Post: Moving Missourians from Welfare to Work

Blog Post: Making Strides toward Welfare Reform

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Economic Development Subsidies

Posted on by Patrick Tuohey

THE PROBLEM: Excessive use of economic development subsidies has diverted much-needed tax revenue to developers and away from schools and other public services. In the past 15 years, Saint Louis City alone has distributed $709 million originally intended for municipal services to developers via tax increment financing (TIF) and tax abatement. Studies from across the country indicate that these subsidies fail to generate promised jobs and growth.

For a project to qualify for some subsidies, the city must declare a parcel of land “blighted,” but the standards for doing so are very low—developers can qualify for subsidies for undeveloped fields or for buildings that are merely vacant. Under the current definition even the governor’s mansion could be blighted!

THE SOLUTION: Economic development reform.

The legal definition of blight should be narrowed to ensure that only truly needy projects would qualify. Other reforms that would help rein in these giveaways include moving TIF decision-making to the county level, providing greater voices for other impacted taxing jurisdictions such as schools, and capping subsidies.

WHO ELSE DOES IT? Various TIF and economic development reform efforts are underway in other states. California, which pioneered TIF in 1952, ended the existing program in 2012 due to the cost.

THE OPPORTUNITY: Focusing state law on addressing actual blight and doing so in communities suffering from high unemployment and poverty will go a long way in making sure that public policy addresses real needs and doesn’t just reward the politically well connected.

KEY POINTS

  • TIF projects active in Missouri have collected almost $2.5 billion since their inception and do not deliver their promised benefits.
  • Many subsidies are not used in the economically depressed areas they were designed to assist. In Saint Louis, less than 25% of TIF spending occurs in the poorer half of the city.

SHOW-ME INSTITUTE RESOURCES

Policy Study: Does Tax-Increment Financing Pass the But-For Test in Missouri?

Policy Study: Tax-Increment Financing and Missouri: an Overview

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Education Savings Accounts

Posted on by Michael Q. McShane

THE PROBLEM: Missouri students are underperforming. On the 2015 NAEP exam, only 31% of Missouri 8th-graders were found proficient in math and only 36% were found proficient in English. For the Class of 2016, only 22% of Missouri ACT test-takers scored “college-ready” in all four tested subjects. Many students from poor or middle-class families are trapped in failing schools because of where they live and have no opportunity to pursue a better education.

THE SOLUTION: Tax credit–funded education savings accounts.

Education savings accounts (ESAs) are flexible-use savings accounts used solely for education purposes. Individuals or corporations would donate to organizations that manage these accounts, and families could use the funds to purchase school supplies, tutoring services, or even private school tuition.

WHO ELSE DOES IT: Six states have ESA programs, and 17 states have tax credit–funded scholarships.

THE OPPORTUNITY: Missouri is one of the last states without some kind of private school choice program. It does, however, have a large stock of private schools, and through the Missouri Virtual Instruction Program we have a vetted set of online courses that are ready for Missouri students to use. The supply is waiting; we just need to connect it to the demand.

KEY POINTS

  • Many Missouri students are not being prepared for success.
  • As educational options for students expand, parents should have the flexibility to customize their children’s education.
  • ESAs are popular. According to polling by the education organization EdChoice, 49% of Americans support ESAs, and only 27% oppose them.
  • ESAs have the potential to save both the state and school districts money.

SHOW-ME INSTITUTE RESOURCES

Essay: Estimating the Fiscal Impact of a Tax-Credit Scholarship Program

Blog Post: ESAs Can Help Missouri Students with Dyslexia

Blog Post: Empowerment Scholarship Accounts Would Be a Boon to Missourians

Video: ESAs Empower Families in Arizona

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Higher Education

Posted on by Michael Highsmith

THE PROBLEM: The University of Missouri system, and higher education in the United States in general, are at a crossroads. Tuition is rising, resulting in over $1 trillion in student loan debt nationwide. At the same time, students who fail to secure high-paying jobs are facing serious financial problems. In the Show-Me State, enrollment at the University of Missouri–Columbia continues to drop. The current freshman class is about 14 percent smaller than the previous year’s and is the smallest incoming class in almost 20 years.

THE SOLUTION: Higher education reform.

Reform in Missouri should focus on reduc­ing costs through innovation to attract more students. Universities could help reduce costs by encouraging competency-based education (CBE), which can reduce the time that students must spend in the classroom by granting ac­creditation when a student shows that she has mastered the subject matter. These programs allow students to pursue a degree while simul­taneously protecting them from excessive costs and loan defaults. At the same time, the state could promote income-share agreements (ISAs), which provide an alternative to student loans whereby a student agrees to pay a percentage of future income in exchange for present financial aid.

WHO ELSE DOES IT? Schools across the nation, such as Texas A&M, Purdue, University of Michigan, and University of Wisconsin, offer CBE degrees. Purdue has a self-funding ISA program in which it loans money to current students and then reinvests returns into future student borrowing.

THE OPPORTUNITY: Recent upheaval at Missouri’s largest university has given us a chance to step back and evaluate how best to improve the higher education environment and provide cost-effective options to students. The University of Missouri system made progress in protecting free speech this past summer; now it should focus on reducing costs to help draw more students to our public universities.

KEY POINTS

  • Higher education can greatly increase a student’s financial prospects, but not everyone who spends money at a university comes out in the black.
  • CBE programs can reduce tuition costs and the time a student must spend in class.
  • By reinvesting earnings, ISAs can fund future de­grees.

SHOW-ME INSTITUTE RESOURCES

Essay: Stuck in the Middle with Mizzou: Examining the Effectiveness and Efficiency of the University of Missouri

Case Study: Moving Mizzou Forward: Reform Ideas from Around the Nation

Op-Ed: Reaping the Whirlwind in Columbia

Blog Post: Mizzou Enrollment Shrinks to a New Low

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Highways/Transportation Infrastructure

Posted on by Patrick Tuohey

THE PROBLEM: The Missouri Department of Transportation (MoDOT) will likely face funding shortfalls in the near future. New revenue will be needed, and it should be generated in a way that is both economically sound and fair to all Missourians.

THE SOLUTION: User fees.

User fees are about having the people who use things pay for them. That means the people driving on the roads are the ones who pay for the roads. Raising Missouri’s fuel taxes—which haven’t been raised since 1996—to account for inflation would raise hundreds of millions of dollars to help MoDOT maintain the state’s road system in the near term. But other, long-term solutions, such as tolling on major interstates and bridges, can help keep infrastructure funding sustainable. Public–private partnerships (P3s) could also help raise funds. Furthermore, expanding MoDOT’s use of design-build (a project delivery method in which a single contracter both designs and builds and improvement, reducing costs and time to completion) could save roughly 20% per project.

WHO ELSE DOES IT? Various forms of tolling are either planned or implemented in many states. Dozens of projects are funded by P3s in more than 10 states.

THE OPPORTUNITY: Missouri has the 3rd-lowest gas tax and the 3rd-lowest diesel fuel tax in the country. Adjusting these fuel taxes to inflation—raising them by less than 10 cents per gallon—would provide the funding necessary to keep Missouri’s infrastructure in good repair. With I-70 soon requiring a full rebuild, simple tolling infrastructure and a design-build workflow could be implemented to help increase available capital and reduce costs.

KEY POINTS

  • A robust and well-maintained transportation system is vital to a strong Missouri economy.
  • User fees are the most fair and economically sound way to fund major projects.
  • Design-build and public–private partnerships bring the strengths of the free market to public infrastructure investment.
  • User fees could prevent unfair special taxing districts from forming to fund wasteful projects.

SHOW-ME INSTITUTE RESOURCES

Policy Study: Funding the Missouri Department of Transportation and the State Highway System

Blog Post: With MoDOT’s Tank Nearly Empty, a Fuel-Tax Increase Might Be the Answer

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

2018 Blueprint: Income Tax Reform

Posted on by Patrick Tuohey

THE PROBLEM: Missouri’s economy has been stalled for almost two decades, as startup growth has slowed and entrepreneurs and taxpayers are leaving the state. Missouri’s economy is shrinking relative to other states, ranking 48th out of 50 states in real GDP growth between 1997 and 2015, and 44th between the third quarter of 2009 and the second quarter of 2016. Individual and corporate income taxes are destructive to the state’s economic growth, productivity, and wealth, encouraging taxpayers to move their work or investments out of Missouri. This not only lowers economic output for the state, but also destabilizes revenue for state and local governments.

THE SOLUTION: Reduction or elimination of the individual income tax.

Lowering or eliminating individual income taxes allows Missourians to increase their take- home pay, increase business investments, and encourage population growth through in-migration.

WHO ELSE DOES IT? Seven states (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming) currently have no income tax. Two other states (New Hampshire and Tennessee) levy income tax only on dividends and income from investments.

THE OPPORTUNITY: Income tax reductions could be achieved in several ways. Reductions in tax incentives and spending can, for instance, provide the budgetary space to cut taxes. Whatever the pathway, reducing an obstacle to state and personal income growth should be a high priority if we want to jumpstart Missouri’s economy.

KEY POINTS

  • Missourians work hard for their money and deserve to keep what they earn.
  • Income taxes penalize and discourage work.
  • If you include the 1 percent earnings tax in our two biggest cities, Missouri has a top income tax rate of 7 percent, which is more than all but 17 states. Our top income tax rate equals or exceeds those of all but one of eight neighboring states.
  • A real reduction in individual income taxes raises take-home pay and encourages more consumption of Missouri goods and services, making Missouri more competitive with other states in the nation.

SHOW-ME INSTITUTE RESOURCES

Essay: The 49th State: Revisiting Missouri’s GDP Sector by Sector

Essay: Taxes Matter and They’re Too High for Missouri

 

For a printable version of this article, click on the link below. You can also view the entire 2018 Missouri Blueprint online.

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