Page 258 – Show-Me Institute

Cleared for Landing – KCI and the Billion Dollar Terminal

Posted on September 12, 2017January 13, 2026 by Patrick Tuohey

The Kansas City Council’s Airport Subcommittee has recommended Edgemoor Infrastructure & Real Estate as the developer for a new billion-dollar single terminal at Kansas City International Airport. If the full Council agrees, this would bring to an end the latest chapter of the airport saga, one that Councilman Quinton Lucas referred to as “really weird” and The Kansas City Star editorial board called a “disruptive mess.” Show-Me Institute analysts have been writing about the process since way back in 2013; many would say both Lucas and The Star were being generous in their descriptions.

Four years ago, in our first post on the matter, we detailed the first arguments in favor of such an expense and concluded,

If the Aviation Department and their chorus on the City Council want to tear down a much-loved and nationally recognized airport, the public deserves transparent processes and substantive answers to serious questions regarding the endeavor’s necessity.

We’re not sure either obligation has been met satisfactorily. In fact, the past four years may have only decreased confidence among voters in their elected officials. Telling voters they bear no risk in the scheme is different from telling them the scheme is necessary or even worthwhile. Kansas Citians have seen too many so-called genius ideas become fools errands. The rallying cry for new terminal supporters, “build it and they will come,” is more wishful thinking than sound economic planning.

However the full Council votes on the Airport Subcommittee recommendation, voters will be asked to sign off on the project on November 7. We’ll hear a lot about public opinion polling in the meantime. I hope there will be just as much talk about what ought to be done, the likely benefits, and the most cost-effective way to do it.

MOSERS Pension Buyout Good for Taxpayers, Probably Not for All Workers

Posted on September 8, 2017January 13, 2026 by James V. Shuls

Show-Me Institute scholars have been writing about the perilous position of public pension systems for years. In a 2013 policy study for the institute, Andrew Biggs, a resident scholar at the American Enterprise Institute, called Missouri’s pension systems a “looming crisis.” At that time the Missouri State Employees Retirement System (MOSERS) reported approximately $2.9 billion in unfunded liabilities, or a funded ratio of 73%. Using more conservative assumptions, Biggs calculated the actual unfunded liabilities should be valued closer to $11.1 billion, or a funded ratio of just 42%. Suffice it to say that MOSERS is in trouble. And you don’t have to take our word for it; just look at the recent headlines.

The St. Louis Post Dispatch reports “Missouri mulling pension payouts for some former state workers.” Meanwhile, the Springfield News-Leader writes “Troubled Missouri pension system offers buyouts to former state employees.” In the PD piece, State Treasurer Eric Schmitt, who is also on the MOSERS board of directors, is quoted as saying, “Now is the time to start taking our pension troubles seriously. If we don’t, it will mean less resources for our schools, roads, and health services down the line.”

The buyout for MOSERS employees would provide a lump sum payment, rather than collect pension benefits down the road. The buyout is worth less than the actuarially assumed pension benefits the workers would stand to receive; thus it would generate a savings for MOSERS and it could potentially help some workers.

The treasurer is right. We cannot keep kicking pension problems down the road and this buyout is a smart, common sense strategy for reducing pension obligations. Smart, that is, for the state. Whether it is smart for the workers to take it is another story. Andrew Biggs doesn’t think so. Check out this Twitter interaction between, Biggs, Mizzou economics professor Cory Koedel, and me.

Biggs suggests MOSERS pensioners shouldn’t take the deal. Koedel and I offer responses in jest, as Missouri taxpayers we stand to benefit from MOSERS shoring up its bottom line. Then Biggs offers a startling calculation. He suggests the buyout is worth approximately 39% of the value of the worker’s benefits. I doubt that’s actually worse than the odds on a lottery ticket, but it is certainly not a good payout.

Does this mean no one should take the buyout? Not necessarily. There may be circumstances in which some workers might be interested in having a lump sum of money rather than a pension that pays out over a course of 30 plus years. For instance, if you don’t expect to live that long!

The most important thing here is for workers to be educated on this option. With that said, I commend the MOSERS board for exploring this option and encourage MOSERS workers to fully understand their options before making any decisions.

Ouch–Missouri Individual Health Insurance Premiums To Rise by Double Digits in 2018

Posted on September 6, 2017January 13, 2026 by Patrick Ishmael

Over the Labor Day holiday, the state released next year’s Obamacare health insurance rates for Missourians in the individual market, and it was a doozy. Not only will participation in the marketplace decline in 2018, but plan prices will increase on average by a whopping one-third, or even more.

Rate proposals released Friday by the Missouri Department of Insurance are on average 36 percent to 42 percent higher than rates for similar 2017 plans….

Both Cigna and Anthem Blue Cross Blue Shield, the two companies returning to sell on the marketplace, listed the uncertainty about cost-sharing payments that help consumers cover the cost of insurance as justifications for their proposed rates.

Cigna has reportedly asked for up to a 73% price hike on at least some of its plans. Meanwhile Anthem will be dropping out of at least 17 counties in the state where the company marketed plans just this year. KCUR has a good national map of the number of insurers in each county in 2018. Particularly in Missouri, the map tells a story of an individual insurance market that for hundreds of thousands is less a market and more a monopoly, duopoly, or oligopoly.

American health care reforms should be based on good policy that empowers people, not government. And these rate hikes are just the latest example of what happens when the center of a health care system is government and its cronies rather than patients themselves. We need change, and we need it sooner rather than later.

The School Choice Segregation Myth

Posted on September 5, 2017January 13, 2026 by Emily Stahly

It’s time to put to bed a nasty myth about school choice (exemplified in this letter from American Federation of Teachers president Randi Weingarten) and segregation that resurfaced this summer. According to the research, there is no evidence that private school vouchers make segregation in schools worse. In fact, according to a Cato Institute review of the literature most studies indicate that voucher programs help facilitate racial integration.

Cory Deangelis of Cato reviewed the eight existing studies on school choice and integration that were conducted using rigorous, empirical research methods. Seven showed that school choice programs were associated with statistically significant progress toward racial integration (the other yielded results that were statistically neutral). These studies looked at voucher programs in Cleveland, Louisiana, Milwaukee, and Washington, D.C.

Attempting to revive long-debunked claims doesn’t help kids get a better education. With clear research on school choice and segregation, discussions of school choice should focus on what will improve schools for all kids.

Is There Really a Teacher Shortage?

Posted on September 1, 2017January 13, 2026 by Michael Q. McShane

A recent Washington Post article making the rounds on social media claims that there are widespread teacher shortages across the country. This argument is not new. It seems like nearly every year around back-to-school time we hear that schools are struggling to find teachers, and that it’s all because of No Child Left Behind, Race to the Top, the Common Core, Republican governors, a lack of respect, or whatever trendy topic is central in the education policy zeitgeist.

Let’s cut through all of that. America has been on a teacher (and other school staff) hiring bonanza for decades. Ben Scafidi of Kennesaw State University has shown that while the total student population in American public schools grew by 100% from 1950 to 2009, the number of teachers grew by 243 percent and administrators and other staff grew by a whopping 709 percent. If that’s not enough, Mike Antonucci wrote earlier this week that since 2008, the American student population has remained essentially stagnant while the number of teachers has grown by 12.4%. He quotes noted researcher Richard Ingersoll stating that the “ballooning” teacher workforce is financial “ticking time bomb.”

Is struggling to keep up rates of teacher growth far outpacing student growth really the same as a “shortage?” I don’t think so.

Since at least the 1950s, America has prioritized reducing class sizes. Pursuing that policy has had consequences. It has meant hiring a lot more teachers, and, generally, paying them less. In other words, the public school system requires more and more teachers each year and has less to offer them. We shouldn’t be surprised when public schools struggle to fill teaching positions. Focusing less on class size reduction and more on hiring the best possible teachers that we can (and paying them accordingly) could help.

How we pay teachers matters as well. It similarly should not surprise us that we see schools struggling to find math and science teachers. Because we pay all teachers equally though step-and-lane pay scales, those who can make more money outside of schools (like those with backgrounds in math and science) are forced to take a financial hit when they decide to become a teacher. Allowing for pay variations that take into account the labor market demands for different skill sets is one way we might attract more math and science teachers.

Herbert Stein’s law states that trends that can’t continue, won’t. Continuing to expand the teaching workforce and compensating them through pay schemes out of the 1920s is not going to get us the teaching workforce our children need. Call it whatever you want, but it isn’t good for kids.

Charter School Students Thriving in New York

Posted on August 31, 2017January 13, 2026 by Emily Stahly

Students at the Success Academy Charter Schools in New York City put up some incredible test scores this past year: 95 percent passed the state’s math test, and 84 percent passed the reading test. This is compared to 38 percent passing in math and 41 percent in English in the New York City school district.

Contrary to myths pushed by charter school opponents, Success Academy does not “cherry-pick” or “skim” its student population; about 95 percent of Success Academy’s students are children of color and are from low-income families.

Here in Missouri, we would be wise to take a closer look at what schools like Success Academy are doing to help low-income and minority students thrive. In fact, last November the Show-Me Institute invited Eva Moskowitz, the founder and CEO of Success Academy, to speak at the Show-Me Institute. You can watch her lecture here.

President’s Visit to Springfield Sets Stage for Tax Reform Fights

Posted on August 31, 2017January 13, 2026 by Patrick Ishmael

On Wednesday President Donald Trump visited Springfield, Mo., and delivered a speech on tax policy that, by most accounts, was basically what was expected. The assumption had been that the President would advance a general vision on reforming the federal corporate and individual income taxes, with an emphasis on the former. The President did make clear that he wanted corporate income taxes reduced by about half — a reduction that would move the U.S. from its station in the rareified air of practically punitive corporate over-taxation to being one of the most competitive countries in the world to set up a business. He was more vague on individual income tax reforms.

You can find video of the speech here. While the President’s talk was about federal taxation, I hope that his visit to Missouri will also renew the needed discussion for tax reform at the state and local levels as well. Indeed, 2018 could be a big year for tax reform nationally and in Missouri. Let’s hope.

Evidence from Across the Country: Economic Development Subsidies Don’t Work

Posted on August 30, 2017January 13, 2026 by Patrick Tuohey

The Los Angeles Times’ Pulitzer Prize winning columnist Michael Hiltzik published a piece that observes exactly what we at The Show-Me Institute have been saying for years: economic development subsidies, “often are an unnecessary bonus to companies that already have made a site location decision based on more important factors.” Think of Burns & McDonnell, whose development partner already owned the land adjacent to their existing world headquarters when they sought subsidies to build a new HQ.

Hiltzik even quotes urban economist Richard Florida, whose call to cater to “creative class” millennials was swallowed hook, line, and sinker by Kansas City and Saint Louis politicians. Florida later recanted.

Hiltzik doesn’t pull any punches and ends his column with a repudiation of film tax credits, which Missouri wisely ended in 2013. The whole column is worth reading.

Could Illinois Be Missouri’s Role Model for School Choice?

Posted on August 29, 2017January 13, 2026 by Emily Stahly

Few would have guessed that Illinois would see private school choice before Missouri, but it might happen—and soon.

Illinois may adopt a tax-credit scholarship program this week as part of broader education funding reform. According to early reports, the program would be capped at $75 million in partial tax credits for those who donate towards private school scholarships.

While the plan still has to pass, there are some important lessons here for Missouri: Tax-credit scholarships can be bipartisan and they can help cash-strapped states. In fact, Mike McShane and Marty Lueken found that a tax-credit scholarship program potentially could save the state of Missouri up to $18 million per year.

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