Our 2017 Missouri Legislative Recap Telephone Town Hall on May 17 included discussion of the bills passed and defeated in Jefferson City and what the recently concluded legislative session means for our state going forward. Click above to listen to the recording.
Another Stadium Subsidy Bites the Dust
Missouri taxpayers dodged a bullet last December when state funding for a soccer stadium in downtown Saint Louis was opposed and not pursued by then Governor-elect Greitens. But some policymakers in Jefferson City were determined to spend state taxpayers’ money—during a time of budget cuts—on a different sports arena in Saint Louis: the Scottrade Center, home of the Saint Louis Blues.
Senate Bill 469 (SB 469) would have allowed for up to $6 million a year in state funding for renovations to the hockey arena. All in all, proponents of the bill were asking state taxpayers for $70 million. Fortunately for taxpayers across Missouri, the bill didn’t make it to the governor’s desk.
SB 469 was poor policy. It would have forced all Missourians, from Maryville to Branson to Kirksville, to subsidize an arena benefiting wealthy team owners. While proponents touted a variety of economic benefits, from construction jobs to gushing tax revenues, they failed to acknowledge decades of economic consensus: stadiums and sports teams don’t grow the economy. As Dennis Coates and Brad Humphreys put it in their 2008 Econ Journal Watch paper:
No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.
Does SB 469’s demise mean the Scottrade Center will fall into disrepair? Almost certainly not, as local policymakers in Saint Louis have already committed 64 million in taxpayer dollars to the facility earlier this year—without a public vote. And since the facility is abated from all property taxes, it should have cash on hand to make some of the upgrades it wants.
But just because SB 469 wasn’t codified into law this legislative session doesn’t mean a similar bill cannot or will not be introduced next year. Before state policymakers conjure up another package of subsidies, they would do well to take a sober look at the research on sports stadiums.
(For more on the economics of stadium subsidies, see here, here, here, and here.)
Show-Me Now! Are Tax Dollars Sinking In Flood Plains?
Policymakers are incentivizing projects all around the state in areas prone to flooding. Should taxpayers be on the hook for these financially risky investments?
Who Wants to Talk About Failure?
It was the Irish Playwright Samuel Beckett who wrote, “Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better.”
This admonition is often forgotten in the world of education reform, where advocates wade hip-deep into the trenches of political warfare, researchers build staffs that require ever more philanthropic dollars, and writers make the TED talk circuit. Saying “I was wrong” can be seen as suicidal.
But it doesn’t even have to go that far. Policy ideas like charter schools, teacher evaluation, and high standards first exist in the abstract. When they are actually implemented, they look quite different from state to state or district to district. What one state calls “charter schooling” might look different from charter schooling in another state. So, if charter schools struggle in one state, it isn’t necessarily an indictment of the idea a whole. It might just be that the implementation didn’t match the specific environment where it was tried. In an ideal world, we’d learn from that, and do better.
But we don’t. When a new study comes out that says a policy has “failed,” we man the ramparts. Opponents (who were against the policy before any data was available) come out and tut-tut at advocates, telling them to “follow the data” or not to “cling to ideology.” Advocates circle the wagons. They spin the findings or pettifog the implications. They counter with personal stories or impugn the motives of critics. Rinse and repeat. (By the way, much of this is covered much more in depth than I can manage here in Rick Hess’s great new volume Letters to a Young Education Reformer).
Now I’m not naïve. Part of this is the way of the world. We live in a dynamic, diverse, pluralistic, democratic republic; the politics that define us, as the old saying goes, ain’t beanbag. I’m hard pressed to advise one group or another to unilaterally disarm and allow people who aren’t dealing in good faith to seize the high ground. Still, if we want to be better, we’ve got to do better.
For our part, Jay Greene (head of the University of Arkansas’ Department of Education Reform) and I are co-hosting a conference in Kansas City on May 22 where top education researchers are going to talk about failure. We have recruited a rock-star set of presenters who will discuss papers that are slated for publication in the near future by Rowman and Littlefield as an edited volume. Local education figures will serve as discussants, preventing any conversation from being too theoretical.
Authors will tackle many of the major topics of education policy of the last quarter century: Test-based teacher evaluation, technology in classrooms, teacher Preparation, No Child Left Behind, and more. But rather than trying to make some kind of global statement about whether or not something like evaluating teachers based on performance or having the federal government intervene in low-performing schools is a “success” or “failure,” authors will dig into specific examples, what went wrong, and most importantly, what we can learn from it.
Anyone who has spent more than a day in front a classroom knows that failure is an essential part of learning. You’ve got to let a student get a math problem wrong so they can learn how to avoid that mistake in the future. You wouldn’t tell her that she should never try and solve for a missing side of a triangle using the Pythagorean Theorem. You’d help her figure out how she applied it incorrectly, or if it was a right triangle in the first place. That’s how children get better. It’s how adults get better too.
We have to be humble. We are going to get stuff wrong. The more honest we can be about that, and the sooner we can admit we made a mistake, learn from it, and fail better, the better our overall system will be.
Keep the Line Moving: Looking Beyond the 2017 Session
The Missouri legislative session ended May 12th, and there are enough storylines of intrigue, failure, and victory to fill a season of Game of Thrones. There was shouting and foot-dragging and name-calling, but by the time the session ended at 6:00 pm last Friday, several substantive reforms had gone to the governor for his signature. Right to Work, the elimination of Project Labor Agreements, minimum wage harmonization, TNC reforms, and the success of Article V convention legislation all qualify as important advancements for the state. That the state has fully funded the formula for K-12 schools also deserves recognition.
The accomplishments of the session still leave Missouri far from where it needs to be. And certainly we would offer our 2017 Blueprint as a baseline for the sorts of reforms our state needs going forward. That menu of reforms includes the elimination of the state’s Certificate of Need laws; expansion of school choice through education savings accounts, charter schools, and course access; and substantive transportation and labor reforms to make sure that the state can compete for jobs and capital, whether already in the state or currently outside of it. Alongside the policy, we need procedural reforms in the state Senate where an historic number of bills languished and died; indeed, a filibuster on the last day of session nearly killed the state’s minimum wage reforms.
Still, there is ample room for optimism. The governor’s Committee on Simple, Fair and Low Taxes seems well-positioned to make 2018 the year of serious tax reform. Those reforms should include advancement of an earned income tax credit, the reform of state and local tax incentives, and the reduction of taxes on individuals and businesses in the state. Moreover, the passage of some priorities this year obviously clears space for the passage of other priorities in education, labor, and other areas that didn’t make it to home plate as the 2017 session closed.
The key, as some Kansas City Royals fans might put it, is to “keep the line moving.” The legislature doesn’t have to hit a home run every time it steps up to the policy plate; it just has to keep hitting singles with increasing frequency. And as baseball fans would tell you, if you do those small things right, chances are good that big things will eventually come.
While we would all have loved to see a towering moonshot of a legislative session, the Legislature ultimately hit enough singles to merit a cheer from free marketeers. Missourians had a good inning; we’re looking forward to seeing bigger and better things happen in the next one.
Session Notes: Electrician Licensing Reform Passes
Congratulations to Missouri’s electricians who, thanks to legislation that passed the House yesterday, will soon have greater flexibility in where they can work around the state. As we’ve written before, Missouri’s patchwork of local electrician licensure laws has acted as a barrier to employment for electricians—and as a barrier to service for consumers—preventing qualified tradesmen and women from easily plying their trade around the state. The bill now goes on to the Governor, who is expected to sign it into law.
As McGraw Milhaven, tongue in cheek, asked our own Brenda Talent earlier this week, “Is electricity different in South County [Saint Louis] than it is in North County?” Of course not, and it’s good to see the Legislature take action to pursue a state licensing policy that reflects that truth.
Session Notes: Article V Convention Resolution Passes
The House has passed SCR 4, a resolution that adds Missouri to a growing list of states calling for a Constitutional convention to rein in government. As we wrote last month, the Convention — if officially called — would focus on implementing “federal fiscal limitations, federal power limitations, and federal term limitations.” Such limits do not appear to be forthcoming from those presently in federal office today or any time soon, so it’s appropriate for states to step into their Constitutional roles to advance those important interests directly. Missouri becomes the twelfth state to pass such a resolution. Congratulations to everyone involved.
What’s the Matter with Connecticut?
In 1971, the band Ten Years After released the song “I’d Love to Change the World” in which they bemoaned society’s troubles and offered some possible solutions, including:
Tax the rich, feed the poor
Till there are no rich no more?
More than 40 years after that song was released, the state of Connecticut is learning a lesson from policies that heavily tax the rich. According to the Associated Press:
New figures released last week show tax revenue from the state’s top 100 highest-paying taxpayers declined 45 percent from 2015 to 2016. The drop adds up to a $200 million revenue loss for the state…
This latest drop in tax revenues paid by the wealthy, a problem for the past several years, has exacerbated Connecticut’s current budget woes. The projected deficit for the new fiscal year beginning July 1 has now jumped from about $1.7 billion to $2.3 billion, while the deficit predicted for the second year of the state’s two-year budget is now about $2.7 billion. The state’s main spending account, the general fund, is roughly about $18 billion annually.
As the headquarters of several hedge funds, Connecticut is especially sensitive to changes in that industry. Recent fund failures have meant that investors have sought to protect themselves from risk, meaning less profit and a double whammy for the Nutmeg State.
The commissioner for the state’s Department of Revenue Services conceded to the AP that “part of revenue decline can also be attributed to ‘a handful’ of wealthy individuals who moved to more tax-friendly states.” Imagine that. If your state levies higher taxes on the wealthy than other states do, the wealthy leave. The AP story also cites a similar example in New Jersey last year.
Soak-the-rich tax policies may seem great on bumper stickers and in song lyrics, but they are no way to run an economy. As we have written, in Missouri and elsewhere governments must compete against one another. Rather than penalize producers to cover for profligate spending, government should only tax what is needed to provide basic services effectively and efficiently.
To their credit, even Ten Years After wasn’t convinced of the merits of their proposal, ending with the refrain,
I’d love to change the world
But I don’t know what to do
So I’ll leave it up to you
Session Notes: Minimum Wage To Be Set By State Alone
The debate was lengthy, but after a raucous couple of hours the House and Senate both voted to preempt local minimum wages in Missouri in favor of the minimum wage set by the state itself. Show-Me Institute writers have long raised the negative consequences of minimum wage laws and their levels — levels often set by political will rather than good economics. We’ll have more to say later. Congratulations to the reformers.