Kevin M. Murphy, Professor of Economics at the University of Chicago Booth School of Business, discusses the economics behind the rise in income inequality and what it tells us about the forces driving modern labor market outcomes.
What Happened to Course Access?
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.
Patrick Tuohey on KCPT Infrastructure Panel
On Friday, April 28, Patrick Tuohey appeared on KCPT’s Public Works? The Cost of Our Aging Infrastructure . Tuohey appeared as panelist to discuss the current state of Kansas City’s infrastructure and the recently passed general obligation bond.
Session Notes: ESAs Clear the Senate!
Yesterday afternoon, the Missouri Senate passed Senate Bill 313, which would create a $25 million tax-credit-funded education savings account (ESA) program for students with special needs, children who are wards of the state, and children from military families. The bill passed 20-12, and not on strict party lines, as is common with so many votes in the Missouri Legislature. Both Senator Maria Chapelle-Nadal and Senator Jamilah Nasheed joined 18 of their Republican compatriots in supporting the bill.
In the process of the bill working its way through the Senate, several additional provisions were added to it. If passed, the bill would also authorize the Department of Elementary and Secondary Education to accredit individual school buildings in Jackson and Saint Louis Counties. If those schools did not pass muster, students would have similar transfer rights as currently exist in districts that lose accreditation. The bill also takes steps to rectify some of the problems that have developed with the school transfer program and specifies several interventions to be taken in schools in Saint Louis and Kansas City around literacy instruction in early grades.
Generally, I favor “clean” bills that tackle one topic at a time. I also realize that policymaking requires compromise, and that some of the additions to this bill deal with issues that people in the state have been trying to address for years. While I immediately recoil at the legislature trying to dictate pedagogical decisions for individual school districts, I recognize that making sure a wider set of views are represented during its enactment can make the ESA program more durable and ensure more buy-in at the state and local level. That seems like a compromise worth making.
The main obstacle ESAs now face is Missouri is the calendar. With only two weeks left in session and budget that still must be agreed upon, time will be short. We will be following this closely and will report back with news.
Join the Pension Discussion!
Pension discussions are all the rage these days. Don’t believe me? Just check out the Post-Dispatch.
A few days ago, an op-ed by a retired teacher made some inaccurate claims about Missouri’s teacher pension system. Today, the Post-Dispatch graciously ran a letter by yours truly in which I rebut them. Primarily, I discuss the pension system’s underfunding, the potential for retirees to lose some of their income, and who would benefit from changing the retirement plan.
Additionally, David Nicklaus, business columnist for the Post-Dispatch, has an article in which he highlights my forthcoming paper in the Journal of Education Finance. Nicklaus writes:
Teachers love their pensions. A generous monthly check at the end of one’s career helps make the important, and sometimes underappreciated, profession worthwhile.
I wonder if teachers in Missouri’s lower-paying rural districts realize, though, that their pension contributions help subsidize the retirements of their better-paid counterparts in districts like Rockwood and Clayton.
It is great to see all of this attention going to an important topic that affects so many hard working Missourians.
Resolution for Article V Convention Deserves Serious Consideration
It’s been said that you can’t teach an old dog new tricks, but can you remind an old dog of long-forgotten tricks? That theme (and variation) are relevant to a bill currently being debated in the Missouri legislature that would amend the U.S. Constitution and rein in federal power through a little-used section of Article V.
How would legislators do it? As our readers may know, the most commonly attempted way to amend the Constitution has been via a two-thirds vote of Congress and ratification by three-quarters of the states. But perhaps less known is that two-thirds of the states themselves can call their own constitutional conventions for the purpose of independently proposing amendments to the Constitution. As the National Archives notes, “None of the 27 amendments to the Constitution have been proposed by constitutional convention.” That no amendments have been proposed in this way, however, doesn’t mean amendments can’t or won’t be, and if supporters of a Missouri Senate resolution have their way, the 28th Amendment will be the first of its kind to have been initiated by the states themselves.
There’s a lot in the resolution itself about what it intends to do and how, but here’s the heart of the resolution:
Now, Therefore, Be It Resolved by the members of the Missouri Senate, Ninety-ninth General Assembly, First Regular Session, the House of Representatives concurring therein, hereby apply to Congress, under the provisions of Article V of the United States Constitution, for the calling of a convention of the states limited to proposing amendments to the United States Constitution that impose fiscal restraints on the federal government, limit the power and jurisdiction of the federal government, and limit the terms of office for its officials and members of Congress;
Later provisions lay out the precise nature of the convention and what it may consider—it’s worth your time to read—but the key reform elements of the bill are clear enough: federal fiscal limitations, federal power limitations, and federal term limitations. Beyond that, the exact reforms are open to debate, albeit circumscribed by the reform language of the bill itself to prevent a runaway convention. Resolutions like this one have passed in ten other states and may also pass later this year in North Carolina, as well, so it’s certainly an active idea nationally.
Twelve states aren’t enough to initiate a convention, of course; to initiate it, thirty-four states will have to pass similar resolutions. But the objectives of the resolution here are worthwhile enough, and its prospects plausible enough, to highlight here. If the bill passes the House, Missouri would become either the 11th or 12th state to sign on to this initiative. We’ll keep you posted if that happens.
Session Notes: House Sends PLA Reform to the Governor
Yesterday the Missouri House of Representatives passed SB 182, the Senate version of project labor agreement (PLA) reform. PLA reform was a top issue this year for the Show-Me Institute that we featured in our Blueprint and testified on earlier this year. We have written about the issue on the blog, and spoken about it on the airwaves and elsewhere, so I won’t rehash the importance of PLA reform. Suffice to say, I am happy to see progress on this labor legislation and hope that it will be just one of many market-oriented successes we’ll see this year.
Show-Me Now! TDDs: Public Money, Private Gain
The truth is out: special taxing districts have been receiving billions of public dollars under the taxpayers’ radar for decades. A new report by Missouri’s State Auditor sheds much-needed light on the abuse of transportation development districts (TDDs) and offers some ideas for protecting taxpayers. Click above to watch.
WRONG WAY: Anti-Tolling Group Gets It Wrong
Some of Missouri’s roadways are in critical condition. Interstate 70 is half a century old in many places and needs to be rebuilt from the ground up. Other roadways aren’t far behind. But even with an improving economy, the Missouri Department of Transportation (MoDOT) doesn’t have the funding to take on the multi-billion-dollar task of reconstructing I-70.
Show-Me Institute researchers have analyzed numerous roadway funding policies, ranging from general revenue diversions to fuel taxes to tolls. We’ve concluded that the best policies are those that let the free market work and impose the costs of roadways on those who use them. That means tolling and fuel taxes should be the way forward for funding Missouri’s road system.
Not everyone agrees. An anti-tolling group is calling for a constitutional ban on tolling in Missouri, claiming that tolls are unfair and economically pernicious. The group claims to be committed to “solving Missouri’s transportation crisis,” but I can find nothing on their website about how the rebuilding of Missouri’s interstates should be funded. The group offers an abundance of negatives about tolling, but many of their claims are incorrect or misguided. Let’s break some of them down here and set the record straight.
- Tolling is double taxation. We already pay for roads with fuel taxes, so we shouldn’t have to pay tolls, too.
MoDOT cannot cut its way to a new I-70. Over the past six years, it has reduced costs by $605 million, but that’s not money for new projects—that’s money to keep shop open. So, for I-70 to get the attention it needs, new revenues will need to be generated. Whether those revenues come from tolls, fuel taxes, general taxes, or some other source, they will be new; they will be on top of existing taxes. One might worry that tolls constitute double taxation, but do tolls differ that much from a higher fuel tax or higher (or diverted) sales taxes? Is paying two taxes, $1 and $1 each, really any different or worse than paying a single $2 tax?
Important to note too is that discussions about tolling I-70 have mostly focused on tolling only new, additional lanes, not the existing lanes. That means only the drivers who use the new lanes would be tolled, so if you didn’t want to pay a toll, you wouldn’t have to.
- Tolling will hurt businesses near tollbooths and hamper the freight industry’s growth.
This argument is another way of complaining that businesses near interstates will not be subsidized. When driving is made artificially cheap through general taxation (e.g., through sales taxes as opposed to fuel taxes or tolls), land near interstates becomes more valuable because of the higher consumer traffic. On the other hand, if drivers must pay to use the roads, the consumer traffic on interstates could be lower, reducing the value of nearby land. In short, a toll-free road means all Missourians are paying to create demand for a select few businesses along the interstate.
Some worry that tolling, which would show drivers the true cost of driving, would deter consumers from businesses along the interstate. While it’s true that tolling may hurt some businesses near interstates, it does so only by unburdening taxpayers in general. If roads are paid for with tolls, that means other taxes previously dedicated to roads can either stay in taxpayers’ pockets or be spent on other public services.
And just as taxpayers shouldn’t have to subsidize businesses near interstates, they shouldn’t have to subsidize trucking companies (many of which do not employ Missourians). Heavy trucks do well over 90% of the damage to our roads, so why shouldn’t they should pay for rebuilding them (via tolls)?
- Toll roads are poor investments, and when they fail, taxpayers are on the hook.
Some proposals to toll I-70 call for private firms to invest in the roadway in exchange for tolling concessions. Such an arrangement would let firms try to make a profit from tolls, but only by assuming the risk of major capital investment. Like other enterprises, toll roads run the risk of going under. But contrary to what anti-toll crusaders claim, taxpayers do not bear the risk of toll roads. Firms are required to invest in the roadway before collecting tolls, so the public gets a new road regardless of whether the company makes a profit. If a firm goes under, its assets are repossessed, but that just means a different firm owns the road—the new road the public gets to enjoy.
Tolling is by no means the only way forward, but it is a way forward. Dozens of states across the country have successful toll roads and bridges, and Missouri can, too. Banning toll roads won’t solve Missouri’s transportation woes; in fact, given policymakers’ reluctance to increase fuel taxes, it would cut off yet another free-market policy solution.
