Why not bring the most successful education policies from around the world here to the United States? Because it isn't that simple. As we've discussed before, there are reasons why policies that are effective in one environment may not work so well in another. Check out the video above to learn more.
The TIF Tax
On the November ballot, many Clay, Jackson, and Platte County residents will be asked to increase their property tax levy by 8 cents to support the Mid-Continent Library system. We calculate that passage would result in an increase as high as $10 million per year. These counties already have high property taxes according to the Brookings Institution, so a further increase is worthy of examination.
The Mid-Continent Library system spends just short of $44 million each year. As far as we at the Show-Me Institute can tell, they appear to be managing their budgets well. The library itself makes an additional point:
In addition, tax incentives and abatements by local government have impacted the revenue that would generally result from the growth of the Library’s tax base. The Library’s budget has been essentially flat for the past 8 years.
It appears that the cost of those tax incentives and abatements given to private developers—which we’ve discussed elsewhere–amounts to about $7 million a year in lost income to the library. The levy will replace that lost income.
We don’t have a view on whether voters should approve the levy increase, but it is clear that municipal handouts to wealthy corporations such as Cerner and Burns & McDonnell are not free. (To add insult to injury, these same corporations won’t have to pay this increased rate, either.) A levy increase such as this, which seeks to recoup diverted funds, can rightly be described as a TIF tax.
Free to Ride and Free to Earn
I recently spoke to an Uber driver who was arrested and booked for dropping a customer off at Lambert International Airport. Unfortunately, more Uber drivers may suffer the same fate in the near future, and ridesharing could come to a screeching halt in St. Louis.
A forthcoming decision from a St. Louis County Court could restrict the ridesharing company Uber from operating in the region. The Metropolitan Taxi Commission (MTC) is seeking a restraining order against Uber, and Uber claims the MTC has breached anti-trust law. A decision could be issued this month.
In short, the MTC is trying to stifle competition. Firms like Uber and Lyft provide innovative services consumers overwhelmingly prefer to traditional taxis. In an effort to save their own skins, taxi companies are trying to impose on ridesharing firms the same outdated, burdensome regulations they comply with (rather than push for a reform of current regulations).
But the MTC and taxi companies aren’t alone. Some commentators claim firms like Uber (and others in the so-called ‘gig economy’) are bad for consumers and workers alike, threatening not just public safety, but also the financial well-being of ordinary workers. Despite the lack of evidence for either of these claims (see here and here, respectively), there is a more fundamental question these detractors ignore: Why shouldn’t people have the right to choose to ride or work with Uber?
And by the way, if Uber is dangerous, why are Missouri cities without it continually pressuring regulators to bring it to town? If Uber is bad for workers, why is the President of the Saint Louis NAACP urging the MTC to let it operate, so as to provide jobs for those with fewer economic opportunities? If Uber is so terrible that the MTC is trying to bar it from operating, why are consumers calling out for it?
Economists estimate that Uber produces nearly $7 billion in social value annually. It’s time regulators step out of the way and let riders and drivers in St. Louis get a piece of that pie.
The Consequences of Bad Policy
The Kansas City Star recently reported that Urban Summit activists have turned in petition signatures requiring a citywide vote for an additional sales tax to support development on the east side of town. While this effort is the logical conclusion of years of urban neglect and crony capitalism, it will likely do little to help the East Side.
The Show-Me Institute stands arm-in-arm with those decrying the decades of neglect suffered by the East Side. In fact, we authored the chapter that exposed the fact that city economic development policy favors wealthy developers in the Urban League’s “2015 State of Black Kansas City.” Kansas City leaders have for years turned a blind eye to the economic decline suffered by our urban core. Worse still, city leaders have actively pursued development policies that diverted important resources away from schools and libraries in that same community.
Just as Kansas City’s shameful past of red-lining and block-busting a generation ago aided and abetted racial segregation, subsidies for today’s wealthy developers have diverted property taxes away from important city services on the East Side and toward the millionaires and billionaires at Burns & McDonnell, Cerner, and VanTrust.
Kansas City has so hollowed out its tax base through these diversions that the city must borrow money to provide basic services like tearing down dangerous buildings and repairing roads. While Kansas City suffers a two-year spike in homicides, our cash-strapped police force has fewer uniformed officers than it had in 2011.
Desperate for the basic services that the city government should be providing, communities on the East Side have resorted to community improvement districts (CIDs). The Independence Avenue CID charges a one-percent sales tax in order to provide security and beautification—things residents feel they cannot get from the police or the parks department. As a result, families living in the urban core are paying a higher tax rate on food just to feel safe while they shop.
Vernon Howard Jr., senior pastor of St. Mark Union Church, was correct when he told the Star, “City, county, state and federal jurisdictions have not, to date, focused upon the inner city with the kind of zeal, investment, intentionality and creativity as have been vested within mostly white and wealthier neighborhoods and communities.”
I empathize with East Side leaders, but their solution may only make matters worse. Adding another sales tax means poorer residents will be forced to pay more out of their pockets to get services they should already be getting for their earnings taxes, property taxes, (already high) sales taxes, COMBAT taxes, and all the rest.
If Kansas City is to thrive, it needs to dramatically overhaul its taxing and spending policies. We need to limit our profligate spending on touristy frou-frou and focus on providing services quickly, efficiently, and compassionately; we need to stop subsidizing wealthy corporations and luxury high-rises; and we must focus on developing the things that make Kansas City great—rather than merely mimicking Portland or Denver or Dallas. Because as jobs and population numbers attest, we are losing that game.
Analyzing Amendment 3
On November 8, Missourians will be asked to vote on Amendment 3, an initiative that looks to increase tobacco taxes to pay for early childhood education.
At first glance, I can see why folks might want to support such an effort. Smoking is bad, so we should tax it. Preschool is good so we should provide it.
Oh, how I wish it were that simple!
In my new essay, Amendment 3: The Good, the Bad, and the Ugly, I break down all of the intricate issues involved in this proposed constitutional amendment. What is the impetus for this proposal? Is there really a need to be met here? Is pre-K as big of a deal as supporters say it is? Do tobacco taxes have any downside?
I hope that the essay will increase understanding about the possible consequences of this amendment (intended and unintended) and help Missourians cast more informed votes as a result.
About That New Home Addition . . .
Before adding a room onto your house, wouldn’t you ask yourself if the expected benefit of the addition will be greater than the projected cost (in monthly loan payments)? Most rational homeowners would. So why is this simple justification often missing when it comes to public projects such as new bridges or new roads?
The Show-Me Institute has weighed in on such public projects, from the Stan Span to trolley systems in University City and Kansas City. In each instance we asked, just as you would before taking out that home-improvement loan, whether the projected benefit of the project was greater than the projected costs borne by taxpayers. And even if we make the somewhat dangerous assumption that the costs won’t increase as the project goes on, the answer too often is “no.”
Our conclusions are shared by Harvard economics Professor Edward Glaeser. In a recent article that appeared in the City Journal, Glaeser exposes the fairy tale of infrastructure investment as an economic cure-all. It isn’t that he (or we) believes that well-thought-out investment in roads and bridges is unimportant. Quite the contrary. The problem is that the way in which policymakers decide which project goes forward often leads to costly miscalculations that in the end simply do not deliver the promised improvements.
A couple myths about infrastructure that Glaeser dispels are:
- Infrastructure spending stimulates economic growth. Japan, which spent over $6 trillion on “construction-related public investment” between 1991 and 2008, and has arguably one the world’s best train systems, has not experienced sustained economic growth in over two decades. Will building more highways in areas with little population improve economic conditions in U.S. States? It seems unlikely.
- The public benefits, so funding should be done with general tax revenues. It is a near fact of life that funding a project from afar reduces the discipline needed to make sure it is done in a cost-efficient manner, and—perhaps more importantly—makes it less likely that the project will actually benefit the public (and not just those proposing it). Ill-advised, federally funded projects such as Detroit’s People Mover Monorail and Alaska’s Gravina Bridge (a.k.a. “the bridge to nowhere”) serve as cautionary tales. Spending federal funds on local projects like Kansas City’s trolley system is similarly likely to yield little or no economic benefit.
There is much more to Glaeser’s article, and I cannot do it justice in this space. I think you will agree, after reading his article, that maybe that new road or light rail extension being peddled by the local mayor or city council isn’t as critical to the region’s economic vitality as some might have you think.
Unionization-the Wrong Solution for UMSL Faculty
Vicarious embarrassment—it’s the feeling you get when you watch someone else in an awkward situation. It’s the best description of how I feel when I hear my colleagues at the University of Missouri-St. Louis explain why faculty members should unionize. Squirming, stomach churning . . . you get the idea.
It’s not that I’m anti-union—I’m simply anti–bad ideas.
I grew up in a union household. My dad was a union carpenter until the day he retired. The union helped secure a good income for him, along with great benefits and a healthy pension. It also provided many wonderful memories for me. I can vividly recall the union picnics where the RC Cola flowed like wine and my brother and I cleaned up at all of the games.
It wasn’t until later that I realized what a union was or why unions were formed. For my dad and other laborers working on rooftops, in factories, or in situations where working conditions were hazardous, unions provided a means for increasing safety and improving working conditions. As I sit in my air-conditioned office, I see little in common between my father’s work environment and mine. Moreover, I see little reason to believe unionization could cure any of the ills we see at UMSL.
It is no secret that times have been rough on our north St. Louis County campus. Student enrollment is down and state appropriations for operating expenses have yet to rebound to pre-recession levels. These circumstances helped to create a multi-million-dollar budget shortfall that forced university officials to lay off dozens of staff and adjunct faculty members.
My colleagues who wish to organize point to this and a host of other issues as reasons for unionization. They argue that salaries for adjunct instructors are too low, salaries for non–tenure track professors are too low (and such professors don’t get tenure), faculty salaries are too low, and we haven’t been able to hire new faculty for two years because of a hiring freeze. Regardless of whether these things are true, unionization is hardly the answer.
Unionization doubles-down on rigid policies that will not work, and it stifles the type of creativity we need. It would create more bureaucracy through collective-bargaining processes and stifle the entrepreneurial spirit by locking individuals into rigid pay structures. This system will not help us, because faculty members and adjuncts are not widgets; we are not interchangeable. The various members who make up the faculty and adjunct ranks at the university are unique professionals with varying skill sets. We are professionals and our individual interests can hardly be represented by a single bargaining entity.
Don’t get me wrong: we do need to rally together as faculty—we need to rally in support of innovation. We need to organize in favor of creativity and efficiency. The problems we face at UMSL are not unique. Throughout the country institutions of higher learning are experiencing the same crisis. While we complain about our salaries, college tuition costs continue to rise faster than costs for medical care. Meanwhile, technology is creating competitors we never dreamed of. We cannot continue to do business the same way and expect the same—let alone better—results.
Despite the challenges we face, many great things are happening at UMSL. The campus itself is being rejuvenated with new buildings at every corner. The new Recreation and Wellness Center is top notch. The Science Learning Building and Anheuser-Bush Hall will provide wonderful learning opportunities, and the new Optometry Patient Care Center will allow us to serve our community better than ever before.
All of this construction has brought new life to campus. Our challenge is to do the same thing for our programs. Unionization can’t do that, but we can.
Patrick Tuohey discusses KC Streetcar on KCPT’s Ruckus
On Thursday, October 6, the Show-Me Institute’s Patrick Tuohey appeared on Kansas City Public Television’s Ruckus to discuss the Kansas City Police Department's 90-day trial of body cameras and efforts to extend the streetcar line. Click on the link to watch the entire show.
Making Health Care Better Through Licensure Reform
Today the Show-Me Institute released our latest health care policy paper, "Demand Supply: Why Licensing Reform Matters to Improving American Health Care." The paper looks at supply-side health care reforms, particularly those dealing with physician licensure.
Making health care more available and affordable requires attention not only to health insurance and care demand; it requires that we also take a hard look at provider supply, and try to find ways to expand the care opportunities available to patients that are currently obstructed, unnecessarily, by government.
Physician licensure reform is an important step toward that end. There are over 900,000 state-licensed physicians in the United States, and yet today only about 3% of those doctors can substantively see Missouri-based patients, thanks to the way our current physician licensure system works. The paper's argument is straightforward: if you are a medical doctor who is licensed and in good standing in your home state, Missouri should not be stopping you from practicing in our state and helping Missouri-based patients.
With the maldistribution of primary care physicians we see both nationally and at the state-level, there are many underserved communities in Missouri that would benefit from the opportunities of interstate licensure, especially in the telemedicine context. Importantly, rather than pursue a system like the Interstate Medical Licensure Compact promoted by many state medical boards, policymakers should look at the Nurse Licensure Compact as a guide to making care by a physician more available and affordable to Missouri patients.
The paper builds on our previous work with the direct primary care and Medicaid reform issues.
