Immortal COMBAT?

Posted on by Patrick Tuohey

In November, Jackson County voters will be asked to renew a 0.25 percent sales tax used to fund the Community Backed Anti-Crime Tax (COMBAT). The tax has been renewed by voters five times since it was first instituted in 1989. What are taxpayers getting for their money? That’s a difficult question to answer.

Unsurprisingly, everyone on the receiving end of the tax wants to see it renewed. According to a piece in The Kansas City Star,

Renewing the tax is essential for preventing and reducing violence, County Executive Frank White said.

“Anything that we can do to help our citizens in terms of prevention, and being proactive in what we do, is really what this (tax) is about,” he said.

County prosecutor Jean Peters Baker echoed the same sentiment. Yet homicide is up in Kansas City, (home to more than 68 percent of Jackson County’s population) and markedly so since COMBAT launched its anti-violence campaign in 2013. Kansas City’s homicide rate in 2015 was so high as to have made the FBI’s list of cities driving the national numbers. The 2016 homicide rate will be even higher. Exactly how is the tax helping to prevent violence?

As for drug prevention, one of the programs funded by the tax is the DARE program. Yet research has shown for years that the DARE program either does not work or makes matters worse. Exactly how is the Jackson County program making a positive difference on drug use?

Recall too that taxes in Jackson County are not low. The left-leaning Brookings Institution found in 2013 that Jackson County was well above average when it came to property taxes paid and property taxes paid relative to home value. So why the additional tax? As former Star columnist Yael Abouhalkah pointed out in 2009, "Almost no other county in the nation has a special drug tax—and yet communities across the country close drug houses, hire police officers to chase drug dealers and fund drug courts." In fact, these communities appear to be doing a better job of it than Jackson County does.

Good public policy requires more than good intentions; it requires good outcomes. Crime and drug prevention efforts in Jackson County seem to be failing badly—and not because of a lack of funding.

Taxpayers deserve an honest accounting of how the County is spending their money and making a difference for the better.

Two Thumbs Down for MetroLink Expansion

Posted on by Andrew B. Wilson

I had a friend – a newspaper editor and publisher – who mangled many words, sometimes inventing new ones in the process.

Let everyone else sing the praises of a new book or movie. If he couldn’t make heads or tails of it, he told you so in his own inimitable way. He said it was weirt. Not weird, but weirt.

As a one-word critique, his mispronunciation spoke volumes. Weirt was more than passing strange and more than a little peculiar. If something was weirt, only someone with his head in the clouds, or buried in the sand, would think it worthy of serious consideration.

What else is weirt?

How about plans to spend $2.2 billion in taxpayer money to build a 17-mile extension of the Saint Louis MetroLink light-rail system? That works out to more than $100 million per mile, or about $2,000 per foot.

Despite the colossal expense, it’s a must-do, says Mayor Francis Slay. He calls it “a moral and economic imperative.”

If you believe that, you must also believe that more light rail will help to solve a multitude of urban problems – everything from inner city decay and high unemployment to traffic congestion and air pollution.

In fact, in a sprawling metropolis like Saint Louis, there is little light rail can do to ease, let alone solve, any of those problems.

Since the 1990s, MetroLink has soaked up $3 billion in taxpayer money through capital outlays and operating subsidies. What do we have to show for it?

Very little. MetroLink carries less than one-half of one percent of the area’s commuters. Adding 17 miles to the existing 46 miles of track won’t make much of a difference there.

So here’s a better idea, which people who actually ride on MetroLink – as opposed to the downtown political class – would surely appreciate.

Instead of adding a line, give new cars to all MetroLink riders – to include today’s 44,000 daily riders, plus an estimated 15,000 future riders from the planned expansion.

The local/regional share of the construction cost is $1.1 billion, plenty of money ($18,600 per rider) to buy everyone a new compact. Add the matching federal dollars, and you could give new SUVs to all MetroLink riders.

What else could the St. Louis region do with $1.1 billion. It could:

  • pay tuition for more than 27,000 Missouri residents at the University of Missouri at Saint Louis (for their entire degrees)
  • triple Bi-State Transit’s fleet of buses and make other major improvements
  • send out $500 checks to every man, woman, and child in the metropolitan area.

That is not to say that we should do any of those things; it is just to put the magnitude of the proposed expenditure on MetroLink into a broader perspective.

For Slay and others to advocate spending that much money on an underutilized and largely irrelevant light-rail system is beyond weird; it is truly weirt.

How Low Can We Go?

Posted on by Rik W. Hafer

No, this isn’t about the Presidential election. It’s about the Missouri economy’s lack of economic vitality. And what I will show is that the lack of vitality is not a recent development.

The two charts below tell the story. The first chart shows real personal income per capita (hereafter income), measured in 2009 dollars, for Missouri since 1950. In that year income stood at $10,168. By 2015 it had risen to $38,612. That almost-fourfold increase means that individuals today are, on average, much better off than they were in 1950. That’s the good news.

The second chart uses the same data, this time shown using a log scale for income. That means we can look at the slope of the line to better see how fast income has been growing over time. I have picked out what look to me like three fairly distinct stages of decline. The first runs from 1950 through 1979, and is highlighted with a green line. During these three decades Missouri income increased at an annual average rate of about 2.7 percent. The next period runs from 1980 through 1999 and is delineated by the amber line. During this period income in Missouri grew at an average annual rate of less than 2 percent, a notable drop from the previous period. The final stage, shown by the red line, is the period since 1999. So far in this century, income in Missouri has increased at an average rate of just slightly more than 1 percent per year. Income in Missouri today is increasing at about a third of the pace that it did 40 years ago.

If you are not used to thinking about growth rates of income, you might think that such changes are not really important. But they are, and some context shows why.

The slower the growth rate, the longer it takes for income to double. For the first period, that growth rate implies that income would double approximately every 26 years; for the second period the time to double increases to every 37 years; and the current growth rate means that it would take 68 years for income to double. The slower income growth means that it will take much longer for Missourians’ standard of living to increase.

Another way to think about what these growth numbers imply is to ask “What would income be today if the growth slowdown had not occurred?” Recall that income in 2015 was $38,612. Starting with the level of income in 1979, if Missouri's economy had continued to grow as fast as it had from 1950 to 1979, income today would be over $57,000. Or, suppose we use the 1999 level of income, which was $32,524, and ask what it would be in 2015 if income had increased at its slower 1980–1999 rate. The answer is about $44,300. In either case, income today would be appreciably higher that what it has turned out to be. Slower economic growth translates into lower standards of living.

The upshot is that ever-increasing layers of regulations that have impeded business formation, an increasingly complex tax structure that reduced incentives to work or expand businesses and, perhaps most important, a dysfunctional educational system all help explain Missouri’s slowing rate of income growth. If we continue down a current policy path that perpetuates this dismal performance, we will sentence future generations—at least those that choose to stay—to ever-diminishing standards of living.

Come Together, Right Now, on Charter Schools

Posted on by Michael Q. McShane

When the editorial boards of the  Washington Post and the Gray Lady, as well as opinion pieces in National Review, Reason Magazine, and the St. Louis Post-Dispatch all agree on supporting an issue, you know they’re probably on to something.

What is that issue, you ask? Is it that puppies are cute? That apple pie is delicious? That Ken Bone is the hero we desperately need?

Nope, its Charter schools. Specifically that charter schools help low income and minority children.

The research literature is unambiguous. While suburban and rural charter schools are often statistically indistinguishable from their neighboring traditional public schools, urban charter schools consistently demonstrate significant positive results for their students. Yes, there is a distribution, with some performing far better than others. No, they cannot single-handedly solve every social ill of inner-city communities. But on average and in aggregate, they provide a better education for students than those children would have without charter schools in the mix.

This is why lawsuits trying to stop charter schools are bad for poor kids. This is why limiting charter schools to within the boundaries of the Kansas City and St. Louis school districts is short sighted. This is why major advocacy organizations for African-Americans taking stances against them is potentially harmful.

In a time of deep division, charter schools are an issue where we can come together. Let’s get to it.

Public Pensions Hadn’t Planned for This

Posted on by Michael Highsmith

The last thing a soon-to-retire worker wants to hear is that his retirement plan is in financial trouble.  And the last thing taxpayers want to hear is that they have to make up for any losses.

Last week Missouri’s State Auditor found that, as of plan year 2015, the City of Bridgeton’s Employee Retirement Plan was only 67% funded and had unfunded liabilities of nearly $14 million.  Bridgeton’s defined benefit (DB) plan was retired in 2012, but insufficient contributions from the city and lower-than-expected investment returns coincided with a lack of government oversight (the Finance Commission did not hold a single meeting from 2012–2014) to create the perfect storm.  The plan’s current funding trajectory apparently leaves Bridgeton with two options: reduce payments to retirees, or put future taxpayers on the hook for the $14 million gap. 

Mayor Terry Briggs spoke of the funding crisis, saying “If you were guaranteed that pension, you’re going to get that pension.  We will have to scrape and come up with other means which may be . . . to contribute more money into it.…”  Defined benefit (DB) plans typically guarantee monthly payments for life, so any financial risk falls upon taxpayers.  In Bridgton’s case there may be no legal obligation to pay benefits if the plan’s funds are insufficient, but a recent local hotel tax increase indicates that Bridgeton policymakers acknowledge their obligation to retirees.

Bridgeton is not the only city that has been confronted with unfunded liabilities.  The Pew Charitable Trusts has valued the shortfall between promised pension benefits and available funding at nearly 1 trillion dollars nationwide. 

One alternative that avoids any possibility of incurring this funding gap is a defined contribution (DC) plan.  In a DC plan—think 401(k)—benefits are not paid out indefinitely to retiring employees. Instead, contributions are invested during an employee’s career; upon retirement the funds are made available to the employee.

DC plans can protect municipalities and future taxpayers from devastating budget shortfalls, and protect retirees from the possible bankruptcy of municipalities. Bridgeton moved to a DC plan in 2012 to curtail the growth of its potential liability; other cities in Missouri should consider doing the same.  

Missouri and the Lukewarm, Tepid, So-So, Unexceptional Personal Income Growth

Posted on by Michael Austin

For the state of Missouri, every quarter seems to be an unremarkable quarter of personal income growth. And this latest quarter was just as plain-vanilla. U.S. Bureau of Economic Analysis (BEA) just released personal income growth estimates for the second quarter of 2016 and Missouri was middle of the road with a pedestrian 0.98% growth over last quarter. Missouri’s growth rate was just below that of the nation as a whole, and we ranked 28th out of the 50 states.

If you have a high-skill occupation, you’re probably doing better than the BEA data indicate at first glance. The largest contributor to growth came from professional, scientific, and technical jobs; management of companies; and health care and social assistance jobs. On the other hand, moderate- to low skilled jobs showed little or no growth (see Table 3a and Table 3b on the “Tables Only” link here). While it is understandable that every state can have an unimpressive quarter, those with a vested interest in the state’s economic environment shouldn’t be satisfied with a consistent mediocre performance.

Support Us

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.

Donate
Man on Horse Charging