A New Convention Hotel Is Not Necessarily a Success

Posted on by Patrick Tuohey

Ronnie Burt, head of VisitKC, the convention and visitor’s bureau in Kansas City, was quoted by The Kansas City Star complaining about an effort by activists to require a vote on the proposed convention hotel. He said, “I think it’s irresponsible for a small group of people to try to derail so much success in this city.”

Success? How does Mr. Burt define success? According to his LinkedIn account, Burt was the vice president of Sales and Services at the Baltimore Area Convention and Visitors Association from March 2005 through December 2008. During that period, Baltimore taxpayers subsidized a new Hilton Hotel to the tune of $300 million. It opened in August 2008. Attendance at conventions in Baltimore has remained flat, and according to The Baltimore Sun, the convention center lost over $5 million in 2014 and again in 2015. The President of the City Council suggested selling the hotel, saying, “The hotel has been a drain on the city since it opened. We floated $300 million in bonds for it, and since it opened, we’ve been constantly losing money.”

Would Kansas Citians consider that a success?

From January 2009 through August 2010, Burt joined the Indianapolis Convention and Visitors Association as the senior vice president of sales and services! Indianapolis also expanded their convention center during that time. According to the Indianapolis Business Journal, the project has failed to meet expectations.

Attendance for state and national conventions in 2009, before the construction was in full swing, was 459,944. Attendance in those two categories in 2012 was 483,164, a slight increase from three years earlier—before the expansion.

Is that success?

From August 2010 through June 2014, Burt was vice president of sales and services for Destination DC, the “the official destination marketing organization for the nation’s capital.” DC was also in the process of building a hotel: the 1,200 room Marriott Marquis adjacent to the Washington Convention Center. It opened in April, 2014 and convention-related hotel room nights in 2014, 2015 and 2016 are all lower than the peak of 512,000 in 2011—before the hotel opened.

More success?

People who crisscross the country spending taxpayer dollars may think that every new construction is a success. But that is not the case for the taxpayers and city councils left holding the bill for underperforming hotels and convention centers. Kansas City’s own past is littered with unfulfilled convention promises, yet each one was supposedly a success. Taxpayers have every right to wonder how much more of this kind of success they can afford.

Michael McShane on Course Access

Posted on by Michael Q. McShane

Show-Me Institute Director of Education Policy Michael McShane is co-author (with Max Eden) of an article on course access that appeared today on the RealClear Education website. The piece explains some of the advantages of course access, a widely popular measure that would make advanced-level coursework available in rural school districts that cannot afford to offer such courses on their own. Click on the link to read the entire article.

House Vote The First of Many Important Health Care Milestones

Posted on by Patrick Ishmael

Today the U.S. House of Representatives passed an amended draft of the American Health Care Act, described by Congressional leaders as the first phase of a replacement package for Obamacare. Its passage was not without drama, obviously, as the vote had to be put on hold earlier this year when consensus language couldn’t be reached in the lower chamber. The conflict was driven both by substantive policy differences and by concerns that if the entire Obamacare law wasn’t repealed in the AHCA, that it would never be repealed. I share concerns in both categories; I am disappointed that the reform continues to track with insurance as a primary vehicle for health care, and I am hesitant to believe politicians when they say they’ll finish the job of unwinding Obamacare.

But as has been said, a journey of a thousand miles begins with a single step. The House’s action today is an important step of a longer journey, not only at the federal level but among the states as well. From licensure reciprocity to direct primary care promotion to Medicaid reform, the list of projects to be undertaken by free marketeers at the state level is a lengthy one that would never be accomplished in a single law, federal or otherwise. Indeed, ours is a policy journey that will span years and even decades to reach anything resembling completion.

That said and with the initial passage of the AHCA, I am hopeful that the federal government is commited to taking that long and important policy trip with us.

Why Subsidize It Once When You Can Subsidize It Twice?

Posted on by Graham Renz

There is so much demand for hockey in the Saint Louis region that officials and special interests want to subsidize not just one, but two new ice facilities. That’s right; even though the Hardee’s Iceplex in Chesterfield is going out of business, officials want taxpayers to help pay for two new facilities in its place.

One facility, planned for construction in the Chesterfield valley, would include $7 million in taxpayer handouts from a special sales tax district known as a transportation development district (TDD). If the TDD is approved (by the less than 1% of households in Chesterfield who get to vote), anyone who shops in the valley retail area will pay extra sales taxes to help subsidize the private venture. The other facility, which would double as a new practice facility for the Saint Louis Blues, would entail $6 million in taxpayer help from the City of Maryland Heights and 40 acres of free land in Creve Coeur Lake Park from Saint Louis County.

At least two aspects of these proposals warrant further discussion.

  1. Proponents of both projects claim there is high demand for hockey and ice time in the Saint Louis region. This may or may not be true (though a recent market analysis concluded it is not). One would think the closure of the current ice complex in Chesterfield is telling of the market for hockey and ice time. But, suppose it isn’t, and that subsidy proponents’ claims are true; let’s say there is genuine demand for ice time in the region. If so, why does the public need to subsidize private ice facilities? If Saint Louis (or Chesterfield, or Maryland Heights) is a “hockey town,” and if these facilities will be such powerful economic engines, why are project boosters panhandling? If a project is meeting a real demand, it shouldn’t need taxpayer help.
  2. One facility is leaving the market, and two are trying to take its place. This would be fine—if no public money were involved. Subsidizing a private business (especially in a depressed market) is questionable policy, but it is even harder to justify asking taxpayers to subsidize competing businesses. Suppose one facility puts the other out of business. What then? Are taxpayers left holding the bag as their “investment” in one facility goes down the drain? It should go without saying that it isn’t the taxpayers’ responsibility to subsidize one facility to siphon business away from another taxpayer-subsidized facility.

The region dodged a bullet when cash-hungry millionaires were denied $60 million in public funds for a professional soccer stadium in downtown Saint Louis. But some local officials, along with those on the receiving end of subsidies, still appear to have taxpayer dollars in their sights. Policymakers who want to know where demand exists for ice time (or anything else) would do well to listen to the market instead of special interests.

Statewide Electrician License Advancing in the House

Posted on by Patrick Ishmael

From hair braiders to physicians, Show-Me Institute analysts have supported a lot of important licensure reform initiatives over the years, but one area we haven’t addressed recently is the licensure of electricians. Unlike many other states, Missouri does not have a statewide license for its electricians, which—given our skepticism of many state licensing regimes—would seem at first glance to be a good thing for free marketeers.

The problem is that in the absence of state action, local governments have imposed their own licensing regimes on their respective electricians, effectively requiring already-qualified electricians to re-license if they want to practice in, say, Springfield, if they aren’t already licensed there. In that respect, the plight of Missouri electricians parallels that of doctors who can’t easily practice across state lines: Onerous licensing requirements create barriers to entry that negatively impact practitioners and also reduce options (and increase prices) for local customers who would benefit from greater access to these services.

That regulatory tension may be relieved if a Senate bill currently before the House becomes law. SB 240 would allow local municipalities to continue licensing electricians, but it would also require them to accept a statewide electrician license without also requiring the local licensing requirements be fulfilled. Moreover, the bill would grandfather many electricians operating already under a local license into the statewide licensing framework. That means that a longtime electrician with a local license could access a statewide license, and with that statewide license, she could access other municipalities—whether a city had its own licensing regime or not. Also worth noting: the bill passed the Senate unanimously. Given the slow pace of other legislation through that chamber this session, unanimous passage of this bill is amazing in its own right. 

Whether the bill passes the House remains to be seen, but electrician licensure reform certainly deserves consideration. Our ongoing skepticism of state licensing remains in effect, and as time goes by, regular audits of the effect of electrician licensure would be necessary to ensure it does not fall victim to regulatory capture. Future legisuatures should also consider national reciprocity measures for these licenses so that Missouri electricians and customers are able to work where they want, and hire who they want at the best price. That said, the proposed reform—which ultimately simplifies life for Missouri electricians and customers alike—would be an improvement over the current licensing system in effect in the state.

What Happened to Course Access?

Posted on by Michael Q. McShane

In the early days of this legislative session, course access seemed primed for success. Both the House and Senate held hearings for course access bills for which there were zero witnesses in opposition. The Governor made it clear that it was a priority of his office as well. One version of the bill passed the House, and the other made it out of committee in the Senate. And then . . . nothing.

It is no secret that the Missouri Senate is a tumultuous place in these waning days of the legislative session. But as the final days of the calendar tick away, it’s looking increasingly likely that course access isn’t going to happen this year.  This would be a shame, for several reasons.

First, a course access program would address a serious problem in our state. As we have reported for some time now, hundreds of districts in our state have zero students enrolled in AP classes or advanced math and science classes. Other districts lack access to quality career and technical education because they simply don’t have the capacity to offer such programs. Course access could help solve this problem and amplify what smaller schools and school districts are doing to try and meet the needs of their students.

Second, it would help bridge the urban/rural divide. Education policy debates in the state often break along urban and rural fault lines. Rural folks think that the state is too narrowly focused on Kansas City and St. Louis, and to be honest, this is often a fair assessment. A program designed specifically to help rural school districts (though urban and suburban students would benefit as well) could help establish common ground across the state.

Finally, passage of course access legislation would be an example of bipartisan comity that the education policy community could build upon in the future. In our polarized times, there is less and less that unites people across the political spectrum. Education policy is not spared from this trend. Course access is an issue to which legislators on both sides of the aisle have contributed their support. It would be awful to squander that.

All is not lost. The legislature, and particularly the Senate, still has time to consider the course access bills before it.  Here’s hoping they make use of their final days to score a big win for students, our state, and our political culture.

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