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Prospects Bleak for MLS Proposal-and That’s a Good Thing

Posted on January 10, 2017May 5, 2026 by Michael Highsmith

Public funding for a Major League Soccer (MLS) stadium has been a hot topic in Saint Louis over the past few months, and Show-Me Institute writers have made their position clear: side with the research. Overwhelmingly, research shows that cities do not see positive returns on stadium financing investments. A potential $120 million in subsidies from Saint Louis and the State of Missouri for a sports stadium is not a wise investment.

Saint Louis appears to have gotten the memo.

Earlier today, Alderman Christine Ingrassia said that a bill that would raise $80 million for a stadium will not be moving forward. City officials have asked the ownership group to lower the amount of money they’re asking for.

And the city’s request is completely reasonable. If stadiums do little to boost local economies, then what is the rationale for using public funds to help build them? This question took center stage last week when Gov. Eric Greitens completely ruled out state funding for stadiums. As a result, the prospect for public subsidies for SC STL does not appear to be good.

Time and again, stadiums fail to spur the economic growth that developers promise. Subsidies can help bring a beautiful new stadium to a city, and people may well attend the events held at the new venue. But much (if not most) of the economic activity taking place at the stadium isn’t actually new; instead, it reflects spending reallocation. In other words, if people purchase game tickets, they won’t eat out as often or spend money on other forms of entertainment.

With two weeks left before the Board of Aldermen’s deadline for approval, public funding for MLS is not completely off the table, but economists everywhere may rejoice to learn that people are acknowledging their research.

Avoiding wasteful spending is definitely a step in the right direction, but we should keep in mind that Ballpark Village recently received $16 million in public funding, the Blues are asking for assistance with $138 million in renovations, and many, many, many non-sports–related projects are in line for similar subsidies. The MLS discussion has engaged many citizens, but the issues with tax subsidies run far deeper than one project.

Who is Betsy DeVos?

Posted on January 9, 2017May 5, 2026 by Michael Q. McShane

This morning, Education Next published a long-form profile I wrote on Betsy DeVos, President-Elect Trump’s nominee for Secretary of Education.

As of right now, her confirmation hearing is scheduled for Wednesday, so if you’d like to know some background before she is questioned by the Senate, check out the article here!

Conservatives on Campus: A Vanishing Breed?

Posted on January 9, 2017May 5, 2026 by Emily Stahly

If I were to ask you to estimate the ratio of liberal to conservative professors on college campuses across the country, what would you guess? A 50/50 split? Two liberal professors to every one conservative? Three?

Nationwide there are six liberal professors for every conservative professor.

This data point was emphasized in a recent Boston Magazine article in which Chris Sweeny records stories of students and professors afraid to express their conservative viewpoints because of the threat of backlash. While there is no single cause behind this fear, the political composition of colleges’ faculties may be a significant factor.

The 6-to-1 ratio comes from the work of Dr. Samuel Abrams, professor at Sarah Lawrence College in New York. Interestingly, this ratio was not uniform nationwide. Of all the factors he examined—religious affiliations, departmental differences, size of college, etc.—the region in which the college is located had the biggest impact.

The West Coast matched the national average of 6 to 1 and the Plains and Southeast had the most balanced ratio, at 3 to 1. Far surpassing other regions, however, was New England—where liberal professors outnumbered their conservative colleagues 28 to 1.

While it is not surprising that university faculty in New England are more liberal than their counterparts in the Plains region, such a large disparity is disturbing. Moreover, it should concern Missourians that the University of Missouri is currently facing some problems that we might expect to see in New England schools, given their apparent lack of intellectual diversity.

In November, Mike McShane wrote about Mizzou being tied for last place on Heterodox Academy’s ranking of the top 150 universities for their policies on free speech and acceptance of different viewpoints. Since then, Mizzou has “improved,” and is now second to last according to the updated rankings. The University of Oregon, scoring 0 out of 100, is in sole possession of last place. Mizzou scored an underwhelming 6.25 out of 100 points, tying them with Georgetown, Harvard, New York University, and Rutgers.

While it is unlikely the ratio between liberal and conservative professors will become more balanced any time soon, universities can implement policies to protect the viewpoints of students and faculty. The University of Chicago’s commitment to Freedom of Expression is one such policy Mizzou should adopt.

In their recent paper, Mike McShane and Michael Highsmith wrote:

Freedom of speech and debate is at risk and can be protected. It seems that not a week of the school year goes by without some story emerging about efforts by a student council, residence hall, professor, or school administrator to stifle the speech of students. If we do not impress upon our students the importance of free speech and defend it vigorously, we risk creating a citizenry that does not value one of the foundational values upon which our nation was built. Luckily, institutions like the University of Chicago offer a great blueprint for fostering debate and protecting speech. Mizzou would be wise to study that blueprint carefully.

Even in an environment where conservative students and faculty are in the minority, their rights and contributions can be respected.

A Critical Review of the SC STL Proposal

Posted on January 6, 2017May 5, 2026 by Michael Highsmith

“Game-changing” projects that require taxpayer assistance have become the norm in Saint Louis, as public subsidies are granted to wealthy developers despite opposition from local residents. The trend was set to continue for construction of a Major League Soccer (MLS) stadium until Governor Elect Eric Greitens voiced his objections.

Right now, because of reckless spending by career politicians, we can't even afford the core functions of government, let alone spend millions on soccer stadiums.

The project’s ownership group, SC STL, has taken Greitens’s words seriously and delayed a request for $40 million in tax incentives from the state. In addition to this $40 million are plans for Saint Louis City to pay $80 million, but before any public funds are awarded we should ask what return the city will see on its investment. Are there benefits to owning a stadium? Here are some claims that SC STL made in its written proposal to the state:

Claim 1: Publicly financing an MLS stadium will help make Saint Louis a “first-class city” and will “complete one of the great corridors of sports, culture, and entertainment in the nation.”

What being a “first-class” city means is ambiguous, and Saint Louis taxpayers have heard this song before. The $3 billion spent on MetroLink (thus far) was supposed to make the city first-class. Today, MetroLink trains carry less than 1% of metro-area commuters and have failed to spur significant economic development. In the 1990s, the Edward Jones Dome was pitched as a way to grow the economy and revitalize downtown; it failed on both fronts. Exactly how another professional sports team will help Saint Louis climb the urban ranks, and how that ascension justifies a massive subsidy, is unclear.

Claim 2: SC STL has made “significant effort to minimize the public financing component of the project.”

It is, at best, unclear what efforts SC STL has made to minimize the need for public subsidies. SC STL originally estimated that the expansion fee for joining MLS would be $200 million, but MLS recently announced that the fee would be only $150 million. One might expect that the $50-million cost reduction would be passed along to the city and the state, but SC STL made clear it would still ask for the full $120 million. Can SC STL really claim they have made “significant effort to minimize public financing?”

Claim 3: The recent departure of the NFL Rams reduced tax revenues for the city, and an MLS team would help recover some of those lost revenues.

This is a little like a doctor prescribing more of the same “medicine” that made the patient sick in the first place. Pushing for a stadium deal to help make up for revenue shortfalls caused by a previous stadium deal lies at the border of questionable and crazy. Of course, the proposed MLS stadium deal isn’t 100 percent identical to the deal city officials offered the Rams, but we won’t fix the outcomes of poor policy with more of the same bad policy.

Claim 4: Taxpayer subsidization is justified because a stadium will spur economic growth.

The Missouri Economic Research and Information Center (MERIC) conducted a study concluding that an MLS stadium would generate $24.5M in net state general revenue over 33 years, but this study deserves some scrutiny. Economists overwhelmingly agree that benefits from stadiums are overstated due to studies failing to take into account that spending is taken away from other businesses. Moreover, these studies rely on a controversial economic concept known as a “multiplier effect,” which is a measure of the overall impact of money in a local economy. In short, studies assume a multiplier effect far higher than most economists believe exists, and so, project rosy but unrealistic, outcomes. This is why, despite studies claiming stadiums will be boons for the economy, history and economics show promised economic benefits don’t pan out as projected.

The current proposal for publicly subsidizing an MLS stadium in Saint Louis is heavy on optimism, but that optimism isn’t justified by research or by past experience. Taxpayers should be wary of doubling down on a bet in hopes of paying off the debt we’re already stuck with.

Kansas City’s Intermodal Strength

Posted on January 6, 2017May 5, 2026 by Patrick Tuohey

The announcement a few months ago that Amazon would be opening a fulfillment center in Kansas City, Kansas was great news. But it wasn’t just an accident that Amazon chose the Heartland for its center. As Wendell Cox pointed out in his recent paper for the Show Me Institute, the Kansas City metropolitan area is well positioned for just this type of industry. Hopefully, regional leaders keep the area’s relative strengths in mind when setting policy. Cox writes,

Kansas City’s pivotal position in the national highway system and its strong rail hub enable it to be one of the nation’s leading intermodal markets. Intermodal freight transport refers to the transfer of shipping containers from one mode to another (such as truck to rail, or air to truck).

In addition, Cox writes that land costs in Kansas City are low because the city has avoided costly land use regulation policies. Affordable real estate at a desirable location seem to have appealed to Amazon. But the essay—and the reality of the new Amazon center—suggest that there are other, similar opportunities to be had. Kansas City leaders need to stop importing policies from far off cities and design economic policies that take advantage of Kansas City’s great strengths.

Employment and Payrolls in Missouri Lag Nation

Posted on January 5, 2017May 5, 2026 by Rik W. Hafer

Since the end of the Great Recession in 2009, the Missouri economy has recovered slowly relative to the nation as a whole. This is nowhere more in evidence than in the employment and payroll numbers. Using data released in December by the Census Bureau we can get a picture of how successful Missouri has been in creating jobs and raising payrolls relative to the national average. The data cover the period from 2010 to 2014, the most recent year available. Instead of looking at just the aggregated numbers, the table below breaks down these figures by size of firm.

Employment in small firms—those with fewer than 20 employees—declined in Missouri following the recession. The U.S. overall eked out a only small increase in this category. For all other firm sizes, employment in Missouri establishments increased at a pace slower than the national average.

Payrolls in Missouri generally rose at a significantly slower rate than in the nation overall. This holds true across all sizes of firms. Only for large firms—those with more than 500 employees—was the increase in payrolls similar in Missouri and the nation.

Percentage Changes in Employment and Payroll, 2010–2014
Firm Size by Employment	Employment		Payroll
	Missouri	United States	Missouri	United States
<20	–2.48	0.55	5.49	10.45
20–99	4.96	8.45	11.89	16.60
100–499	2.01	7.67	14.53	20.73
500+	8.17	10.89	22.70	23.51

A Lesson in Tax Efficiency for Missouri

Posted on January 4, 2017May 5, 2026 by Michael Austin

Colorado has taken a step toward combating tax losses from online sales, and other states may take note. The U.S. Supreme Court declined to hear a challenge to a Colorado law requiring online sellers such as Amazon to let customers how much they owe in taxes, and to provide this information to the state as well. Accordingly, the United States 10th Circuit Court of Appeals decision that the State of Colorado can address use-tax noncompliance through notice and reporting obligations stands.

With the increasing prevalence of online retailers, Colorado’s use-tax revenues have become more volatile, and Colorado’s brick-and-mortar stores have been getting an increasingly unfair shake because they have had to collect and remit sales tax, whereas out-of-state stores have not. Why not?

A simple way of understanding the difference is that vendors located in Colorado have a legal duty to collect sales tax from purchasers on sales in Colorado. The average sales tax in Colorado is 7.52%. But what happens if a person in Colorado makes a purchase from out of state? If the person does not pay any sales tax to another state, the person may owe use tax to Colorado for that purchase. While the use tax is complementary to the sales tax, Colorado cannot require a vendor who has no presence in Colorado (or no “nexus”) to collect the use tax from the purchaser. Instead, the purchaser is supposed to self-report and remit the use tax if purchases exceed $500. Compliance with this law is not believed to be strong.

In fact, Colorado state officials estimate that Colorado is losing as much as $172.7 million a year in unreported/unpaid use taxes. Obviously, stores located in Colorado are at a competitive disadvantage if purchasers can buy the same product for 7.5% less simply by ordering the products from out of state

The Colorado law recently upheld by the U.S. 10th Circuit Court may be a model other states follow as they consider the revenues lost because of the different collection obligations for sales versus use taxes. The 2010 Colorado law imposed three obligations on out-of-state retailers that do not collect sales taxes.

Send a “transactional notice” to purchasers informing them that they may be subject to Colorado’s use tax.
Send Colorado purchasers who buy goods from the retailer totaling more than $500 an “annual purchase summary” with the dates, categories, and amounts of purchases, reminding them of their obligation to pay use taxes on those purchases.
Send the Colorado Department of Revenue an annual “customer information report” listing their customers’ names, addresses, and total amounts spent.

As in Colorado, Missouri’s brick-and-mortar stores are likely at a disadvantage against online retailers because many Missourians are probably unaware of their use tax responsibility. If noncompliance is widespread, then the issue is whether Missouri has a sensible and fair tax policy. At a minimum it would seem that the state should not have a tax system that is honored more in the breach than in the observance.

Kansas City’s Remarkable Transportation System

Posted on January 4, 2017May 5, 2026 by Patrick Tuohey

Wendell Cox recently published a paper for the Show-Me Institute on Kansas City’s competitive advantages. One of the things that sets Kansas City apart from many of its peer cities is its amazing transportation system. Cox writes:

The metropolitan area is served by a comprehensive freeway network and a good arterial street and boulevard network. Only two of the 50 largest U.S. urban areas have lower traffic volumes per freeway lane mile than Kansas City. This provides Kansas City with a considerable advantage in both personal and freight mobility.

Cox writes that according to Tom Toms Traffic Congestion Index, “Kansas City ranks as the least congested metropolitan area, overall, in the world among the 146 it ranks.” This is not because there are fewer people on the roads in Kansas City or because a larger percentage of people use transit. “Driving alone is by far the most important means of travel to work. In 2014, 82.6 percent of Kansas City commuters reached work driving alone,” writes Cox. Driving to work alone is not the sole dominion of wealthy workers, however:

Automobile usage is so pervasive that it is little different among low-income employees than among the overall work force. In Kansas City, only 3.0 percent of low income employees commute to work by transit. This is more than the share of the overall workers using transit, but still very small. Cars are much more important to low-income workers. This small difference is less than might be expected in light of the perception that low-income residents depend substantially on transit for their mobility. In 2013, 76 percent of low-income Kansas City workers drove alone to work, nearly as high as the approximately 83 percent of all workers who drove to work.

The next time you hear someone wax rhapsodically about the need for an expanded streetcar system in Kansas City so we can be like Denver and Portland—or because they think it will help poor people better get to work—direct them to Cox’s paper. Kansas City is not like those places—certainly not when it comes to density or traffic congestion.

Policy Breakfast: Stuck in the Middle with Mizzou

Posted on January 4, 2017May 5, 2026 by Michael Q. McShane

The last year and a half has been a tumultuous time for Mizzou and the University of Missouri system as a whole. The appointment of a new president and the desire for a new direction for the university system give us an opportunity to step back and look at how well Mizzou is performing—how it stacks up to schools across the state, region, and nation—and to offer ideas to help make it stronger. This presentation will begin with a discussion of data on the university’s performance and will also offer reform ideas from other universities.

The work of the Show-Me Institute would not be possible without the generous support of people who are inspired by the vision of liberty and free enterprise. We hope you will join our efforts and become a Show-Me Institute sponsor.