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Kansas City, Economic Development, and Homicide

Posted on February 13, 2017January 13, 2026 by Patrick Tuohey

Kansas City desperately wants to grow, and we’re spending or diverting tens of millions of dollars of taxpayer money each year on economic development, mostly downtown, in order to attract tourists and residents. When pitching the streetcar expansion, the $800 million general obligation bond, or a convention hotel, the Mayor tells us we have to build the city for the next 75 years.

But the Kansas City of right now is floundering. Our population growth is flat and our economic growth is weak. We’re in the midst of a years-long spike in the homicide rate, which is one of the nation’s highest. As The Sentinel pointed out in a recent article, “in Kansas City you were seven times more likely to be murdered than you were in New York City.” Though Chicago grabs headlines for having had an almost-unfathomable 762 homicides in 2016, The Sentinel points out, “Chicago is only 4 percent more lethal. There is no solace in that.”

How did we get where we are? The question seems unanswerable. One answer may be police resources. The Sentinel tells us that New York has “more than twenty times as many police officers to handle those killings. In sum, the NYPD had seven times more officers per homicide than the KCPD.” Meanwhile, the Kansas City police department annual reports show that there are fewer officers in uniform today then there were in 2009. While the new city budget includes an increase for public safety, it is not clear if this would allow for new officers to be hired, or if the police and fire departments are spending efficiently.

To no one’s surprise, The New York Times reports that high crime hinders economic and population growth. New research indicates that:

when violent crime falls sharply, wealthier and educated people are more likely to move into lower-income and predominantly minority urban neighborhoods….

“When cities feel safer, that opens people’s eyes,” Ms. Ellen said of the willingness of new groups to consider these neighborhoods.

All the subsidized coffee shops and condominiums will be for nothing if the city is unable to deal with runaway crime. And tax increases to spur development will likely fail if the basic safety needs of a community are neglected. What Kansas City needs is not more wide-eyed development schemes, but more effort delivering basic services efficiently and effectively, if we are to have any hope at growth.

Medicaid Waiver Request A Great Idea

Posted on February 10, 2017January 13, 2026 by Patrick Ishmael

Although much of the legislative air has been consumed by Right to Work in the last few weeks, two other bills—both dealing in health care policy—are slowly making their way through the legislative process, and chances are good that our readers will hear quite a bit about them in the months ahead.

The first proposal, brought forth in the Senate, would request a “global waiver” from the federal government for Missouri’s Medicaid funds. A global waiver would deliver federal funding to the state’s Medicaid program without all the strings attached. Such a dramatic change in policy would allow for enormous flexibility for state legislators to craft a Medicaid program that can best help our state’s most vulnerable citizens without the similarly enormous burden of federal regulations that currently bedevil the program.

This is how Fox 2 describes the idea:

A Senate committee heard testimony Wednesday on a bill that would direct the state Department of Social Services to seek a “global waiver” from federal Medicaid requirements to remake the state’s program.

Sponsoring Sen. David Sater says the intent is to ask the federal government to provide Missouri’s Medicaid money as a block grant, giving the state greater flexibility over how to spend it. Federal Medicaid dollars currently are provided on a matching basis for each state dollar that’s spent on health care services.

Translation: Missouri would decide how best to serve Missouri Medicaid patients. Crazy, right?

Now if the waiver sounds to our longtime readers a lot like the block grant idea we’ve written about in the past, that’s because functionally, it is. Our full proposal would take the grant money and split it into HSAs for low-income beneficiaries, empowering them to make decisions about their health while simultaneously providing incentive for participants to save money and shop for care. These ideas are largely captured in the second bill I referenced in the introduction. That HSA idea is, of course, just one of many potential reforms to the Medicaid program that could happen under a waiver or block grant, so Missouri’s plan could be different from plans agreed to in Florida, Illinois, or any other state. That’s a feature of the block grant, and given that a block grant proposal is currently being floated by the President, we may soon have the opportunity to see the laboratories of democracy at work in an effort to provide and better-tailor care in the Medicaid program.

But to get there? The doors to those labs need to be thrown open, and that’s where the waiver and block grants come in. I hope these ideas continue to work their way through the legislative process, as they are likely to be front and center during this legislative session—especially, as seems reasonably likely, if the federal government green-lights block granting of Medicaid from its end.

MetroLink Underperforms, but It Is Not Underdeveloped

Posted on February 9, 2017January 13, 2026 by Graham Renz

The Post-Dispatch’s Tony Messenger claims that MetroLink, Saint Louis’s light rail system, is “underperforming and underdeveloped.” He’s half right. Today, MetroLink carries roughly as many passengers as it did in 2005, prior to the last expansion. In fact, all modes of transit underperform in Saint Louis. A lower percentage of Saint Louisans ride the entire rail and bus system today than rode the pre-MetroLink, bus-only system. Even some transit activists admit the system has been underperforming for years.

But is MetroLink underdeveloped? One way to answer that question is to ask whether the existing supply of light rail meets demand. Based on ridership trends, the existing supply of light rail may actually exceed demand. Ridership plummeted during and shortly after the recession in 2008 and has failed to pick back up even while economic conditions have improved in Saint Louis.

Another way of determining if MetroLink is underdeveloped is to compare it to other light rail systems. The table below lists light rail systems from across the country, and looks specifically at the length of each system, as well as the population and geographic size of the urbanized area (UZA) where the system is located.

Note: Track miles are compared to UZA and not ‘Service Area’ (SA) because SA includes modes besides light rail (e.g., buses) and is a direct correlate of track miles. Thus, SA is simply a function of track miles, and not a measure of the metropolitan area a system serves. See National Transit Database Glossary for more.
Source: Track miles from agency websites, and UZA data from National Transit Database.

Given this perspective, we can see that in terms of track miles, Saint Louis has a rather robust light rail system compared to other cities. While there is variation across systems, Saint Louis has more miles of track than the average and the median system. In fact, of these 18 systems, Saint Louis is the 7th-largest (and if we excluded systems with heavy rail, the 5th-largest). MetroLink is even larger than some heavy rail systems, such as Metrorail in Miami-Dade County (24.4 miles), and is just about as large as Atlanta’s system (47.6 miles).

However, what matters is not just the length of a system but also the length of a system relative to the size of the area it serves. To measure this, we divide the size of an area by the miles of track its system has—the figures in the fourth column. (For a more complete picture, I’ve also included population as the last column.) In short, the lower the number in the fourth column, the more miles of track per square mile of land, and so, the more developed a system is. By this measure, Saint Louis has one of the more developed systems in the country and compares well to many cities, with a system that is far more developed than the average. Saint Louis even compares favorably to Los Angeles!

Based on this analysis, Saint Louis’s light rail system does not appear underdeveloped. It may even be overdeveloped (or, perhaps, it developed too quickly or along poorly chosen routes). Before pushing for another expensive MetroLink extension, shouldn’t officials ask if we already have more than we need (and can afford)?

Course Access in Missouri, Updated

Posted on February 8, 2017January 13, 2026 by Michael Q. McShane

A little more than a year ago, Brittany Wagner and I published a paper titled “Course Access in Missouri: Diversity, Personalization, and Opportunity” wherein we looked at programs that allow flexibility in the funding that states send to local school districts to allow students to better customize their school schedule.

As part of that paper, we looked at the current state of course access in Missouri, and used Department of Elementary and Secondary Education (DESE) enrollment data to try and determine which districts did not have any students enroll in advanced classes like Calculus, Physics, or AP courses. We looked at this question because there is evidence that many rural districts struggle to offer these classes.

To investigate, we reached out to DESE and asked for enrollment data in Chemistry, Physics, Calculus, and AP courses from the 2014–15 school year. We counted up the number of districts that had zero students enrolled and then subtracted it from the total number of districts. Here is the figure from the report.

We wanted to update these data for the 2015–16 school year, so we again contacted DESE for the enrollment numbers. This is what course access looks like in 2015–16:

The numbers for the 2015–16 school year are still striking. In percentage terms, 9 percent of districts that offer high school did not have a single student enrolled in Chemistry, 42 percent did not have a single student enrolled in Physics, 40 percent did not have a single student enrolled in Calculus, and 63 percent did not have a single student enrolled in an AP class.

In the process of updating these numbers, I realized that I made a coding error in the data set upon which the figure in the original paper was based. Careful readers of the paper will see that we subtracted our enrollment numbers from 507, even though there are 518 school districts in Missouri. We did this to try and exclude from our analysis school districts that didn’t offer high school because there is no way they could offer these advanced classes. According to DESE’s 2017 “Fast Facts” page, DESE lists 448 districts that offer high school, not 507. After chatting with the good data folks at DESE, we confirmed that in the 2014–15 school year, Missouri also had 448 districts that offered high school. Accordingly, Figure 1 from our Course Access essay (which is also Figure 5 in this essay), should look like this:

My apologies for our original miscalculation, but our argument still stands (the figure with 2015–16 numbers uses the correct total number of districts—448). In too many school districts across the state, too few students are enrolling in higher-level coursework, and course access programs can help fill that gap.

Two notes regarding the graphs above: When counting Physics courses, in both years, we excluded a class called “Physics First,” as this is a course for 9th-graders, not what we would consider an “advanced” course for high school upperclassmen. In calculating the 2015–16 figures, we counted any AP courses both for the AP column and for the respective subject matter column.

Pension Reform in Missouri

Posted on February 8, 2017January 13, 2026 by Michael Highsmith

“The bottom line is this: Our state has a serious pension problem, and we need to start talking about how it can be fixed before it’s too late.”

With that statement, Missouri State Treasurer Eric Schmitt described our state’s severe underfunding of public employee retirement plans. To put an issue that Show-Me Institute writers have been highlighting for years in simple terms, when initial contributions to a retirement plan are too low or don’t grow as fast as projected, spending promises can’t be kept. Either retirees are hung out to dry, or taxpayers must step up and pay what a plan cannot.

Addressing our current spending issues is essential to improving our state’s fiscal health, but if we fail to consider Missouri’s long-term pension obligations the results could be disastrous.

As any savvy investor knows, the power of compounding can make a huge difference when it comes to saving. If our investment assumptions today are even slightly different from what actually happens in the market, this difference can grow rapidly over time. A widening gap between assumed and actual returns is especially troubling, because most economists agree that estimates for pension investment returns are often too rosy.

In 2015, Andrew Biggs of the American Enterprise Institute estimated that Missouri’s public pension plans had a total of $57.3 billion in unfunded liabilities (which are calculated as current assets minus the net present value of what will need to be paid). If plan investments fail to grow enough to cover promised benefits, then a bill much larger than even $57.3 billion will hang over the budget discussions Missourians have years from now.

So how can we fix this problem? Reforms that help Missouri transition away from plans that promise payments for life and toward plans that incur their costs up front can protect our state from investment risks. Schmitt illustrates this perfectly when he says “Our goal as a state should be to fully fund our obligations as they are incurred instead of putting the burden on the backs of our children and grandchildren.” Policymakers should consider adopting this goal—the sooner, the better.

Where Are the Certificate of Need Bills?

Posted on February 7, 2017January 13, 2026 by Patrick Ishmael

Last month I had the opportunity to go back to my alma mater, Saint Louis University, and share with a crowd of medical students my thoughts on the future of health care in this country. We had a great conversation about where we’ve been when it comes to care provision, the failures of the system, and where we ought to go, but what I emphasized again and again was the importance of expanding health care supply. That can happen in a lot of ways, including through the reformation of licensing, scope of practice, and insurance laws. But I also emphasized the importance of a supply reform I view as low-hanging fruit for legislators—abolishing Certificate of Need (CON) laws for Missouri hospitals.

CON laws create barriers to opening all sorts of medical facilities without undue interference, supposedly to protect health care access. The research says these laws do the opposite, which is why support has grown for their repeal nationwide. But in contrast to previous sessions, it doesn’t seem that there’s legislation moving to the forefront yet that would unwind Missouri’s CON law. Frankly, that’s mystifying.

Over the last few years we have talked a great deal about the importance of CON reforms. We even included it as an item in our Blueprint. But apart from our work on the subject, the potential impact of CON reform on patient care is made clear by events taking place right now in the Kansas City area. Kansas doesn’t have a certificate of need law; Missouri does. Unsurprisingly, and as reported by the Kansas City Star, a network of microhospitals is sprouting up all over the Kansas side of the metro area. And as the Star notes, the same sort of innovations aren’t happening in Missouri.

But the law cannot change unless there is legislation to change it and champions to see it through. There is still time for bills that can expand the supply of health care facilities, of physicians, of care, and all the rest. That said, time is running out. If CON reform is going to get done, it needs legislative champions. It remains an open question who those will be in 2017.

Most Teachers Lose in Current Pension System

Posted on February 7, 2017January 13, 2026 by James V. Shuls

Over the years, I and others at the Show-Me Institute have written about the need for public pension reform. Inevitably, we hear the following response from a pensioner or someone who works for a pension organization: They want to take your retirement money. However, for those who are paying into Missouri’s teacher retirement fund, it’s much more likely that their money is being taken away by the pension fund itself.

In a recently released report, “(No) Money in the Bank: Which Retirement Systems Penalize New Teachers?,” Marty Leuken, Ph.D. examines how many years an individual will have to pay into the retirement system before their benefits are worth more than their contributions. The study analyzed the largest public school district in each state. The results reiterate exactly what we have written before at the Show-Me Institute: Most teachers are paying more into the pension system than they are getting out of it.

Nationally, teachers with a defined-benefit pensions must work, on average, 27 years before their pension is worth more than their retirement contributions. This is incredible when you consider that 72 percent of teachers don’t even make it to 20 years of service. In other words, our pension systems benefit less than 30 percent of all teachers.

In Missouri, the study included the Springfield Public School District. Teachers here must work 26 years before they finally break even.

Missouri’s defined-benefit pension system for teachers is a good fit for those relatively few teachers who work their entire career in one pension system. Most Missouri teachers, however, would be better off if the state moved away from the current pension system. The current system punishes individuals who don’t stay in the system for a full career by transferring some of their retirement wealth to those who do stay.

Pension reform is not an effort to take someone’s retirement money away. Rather, it is an effort to allow individuals to actually keep their own retirement contributions.

Done: Missouri Becomes 28th Right to Work State

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

After years of trying, Missouri’s legislature has passed and our governor has signed SB19, Right to Work, into law—the product of countless hours of work and dedication from its supporters.

Its passage was also long overdue, as many of the state’s geographic peers have long crossed that bridge of worker choice. Before Governor Eric Greitens’ signed the bill into law, Missouri was surrounded on all sides by Right to Work states here in the Midwest, with the exception of Illinois. Or, if you view Missouri as a southern state, Missouri was the lone holdout among the members of the NCAA’s Southeastern Conference. Missouri becomes the 28th Right to Work state, joining the majority of states who have adopted this common-sense reform.

Right to Work is a victory that empowers workers, but legislators should not rest on their laurels while the list of other opportunities in labor reform remains long. I look forward to the upcoming debates about Paycheck Protection, prevailing wage, project labor agreements and union transparency.

The GO Bonds Will Cost You Much More Than You’re Being Told

Posted on February 6, 2017January 13, 2026 by Patrick Tuohey

March 6, 2017: update

Everyone paying attention to Kansas City politics knows that we’re facing an $800 million bond vote on April 4. Previous blog posts here have made the case that the city’s representation of it as a 20-year bond is inaccurate. Now let’s consider the costs.

Anyone who has borrowed money understands that there is a cost to doing so—interest. This additional cost is a consideration in deciding whether to borrow in the first place. So how much will it cost Kansas City taxpayers to borrow $800 million over 40 years? According to the city’s Finance Department, when the debt is finally settled in FY2055, taxpayers will have paid out over $1.28 billion. The city’s own spreadsheet is available at the link below.

Kansas City’s own website also offers the following infographic, in which the “average annual” cost to someone who owns a $100,000 house is only $6.

That seems like a bargain! However, the graphic is incomplete as it only represents the cost of a single 20-year, $40 million bond. The April 4 election would approve 20 such bonds, issued each year until FY 2036. Start stacking these per-bond costs and you’ll get an idea of the cost to taxpayers. After the last 20-year bond is retired in FY2056, the total amount of taxes paid would be $2,400, not $120.

The city’s infographic is telling 5 percent of the story. The timeframe of the debt is 20 times longer than what the graphic shows, and the cost to taxpayers is 20 times greater. Voters need to know this before being asked to hand over more than a billion dollars.

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