Kansas City Star: Do As We Say, Not As We Do

The Kansas City Star has a fever, and the only cure is more anti-tax cut blogs. This time the Star's editorial board takes aim at a proposal that would extend 2014's tax cuts and, among other things, would decrease Missouri's top income tax rate from 5.5% to 5%. The reform package would be a modest but essential update to the tax code. Missouri has been stranded on first base on tax policy for decades now; it's long past time state legislators got the line moving again on economic growth. 

What makes the Star's prolific blogging against tax cuts so unseemly is that the newspaper is already a tax cut beneficiary—it's just that their cuts have been made only for them. Notably, the newspaper enjoys a tax abatement at its printing facility—one that should have expired last year. Instead, after playing nice with City Hall, the Star now gets hundreds of thousands of dollars each year in what the paper self-described as "tax relief."

Yes, the editorialists at the Star should feel a twinge of shame every time they bash tax cuts in Kansas City, and attempt to deny tax relief to others.

Meet the Teacher Who Gets Paid Like a Pro Athlete

Education blogger Joanne Jacobs flagged a fascinating story on Udemy, an online course provider that offers classes on subjects ranging from playing the guitar to web development. Just this month, they announced their 10 millionth user. Classes are generally inexpensive (less than $250) and are uploaded to the platform by instructors who then get a cut of the revenue.

The eye-popping fact is that the creator of the most popular course has earned $6.8 million for his efforts. Yep, you read that right: $6.8 million. His name is Rob Percival, and he is a British former high school teacher. As TIME points out, he is the exception, not the rule, but he does show the opportunity available for people to take advantage of this new platform.

How often have you heard that we should pay teachers like professional athletes or movie stars? Well, it turns out that we can, if we break down the barriers that have prevented teachers from reaching as many students as possible. Sure, it’s not for everyone. But for the creative course developer, or the working professional rounding out her skill set to make herself more marketable, or the college student looking to learn material without getting up to his eyeballs in debt, it is an incredible opportunity, and one we should celebrate.

Financial Disclosure Provision in Paycheck Protection Bill is Toothless

The House passed a paycheck protection bill on Thursday. The idea behind it—that a worker should be able to choose whether or not to support the politics of his or her union—is commendable. If this bill makes it through the legislative process, it will be a good thing for the public employees covered by the bill.

However, I would like to raise an issue with the language of the bill. The bill includes a financial disclosure provision that appears to require some government unions (fire and police unions are excluded) to make the same sorts of financial disclosures the private sector unions already have to make. As the bill is currently written, these financial disclosures lack teeth.

  • For one, a worker has to request the union’s financials in order to access them. This could paint a target on the back of any whistleblower who wanted to report irregularities in the way union executives are recording their finances.
  • Secondly, the financial information doesn’t have to be reported to any government agency or made publicly available. Private sector unions have had to make public financial filings with the government for decades. Why should public sector unions be less transparent than private sector unions? And shouldn’t the public have a right to know how government unions are spending taxpayer funded dues?
  • Finally, the bill is written in such a way that government union executives can shred their financial documents after five years. Who benefits from this?

Make no mistake: requiring unions to make their financial information available to their members is a good idea. But the financial disclosure provisions in the paycheck protection bill need to be changed, if they are to be worth anything.

***

To underscore the need for financial disclosures, I have included a link (below) showing a list of dozens of federal embezzlement charges brought against the Communication Workers of America (CWA) executives over the past few years. CWA represents some of Missouri’s state employees, and its leadership is vehemently opposed to having to make meaningful financial filings.

https://www.unionfacts.com/olmscrime/Communications_Workers_of_America/embezzlement_charges

Jones Dome Headed for Demolition?

We’ve talked about the fate of the Edward Jones Dome many times on this blog. When the city was planning a new riverfront stadium to keep the Rams, the St. Louis Convention and Visitors Commission (CVC) often talked about how having the football team out of the Dome might be a boon for conventions. The football season made scheduling other events at the Dome difficult or impossible during the season. When the Rams left for Los Angeles, talk of the convention center’s future started almost immediately.

But now that future might not include the Dome. It seems that some members of the CVC think  the Dome is more of a liability than an asset, and demolishing it may be the best option moving forward.

Readers of this blog will not be surprised at the sudden reversal in attitude toward the now-empty Dome. Just last week, we noted:

In 2015, only nine conventions had more than 10,000 participants (accounting for 80,000 room nights). The CVC often blames the NFL schedule for holding down the number of conventions the city can compete for, but in the six months when no games were held at the Dome, nine large conventions was a far cry from busy.

Some members of the CVC are apparently coming around to our position on the ability of Dome to attract many new conventions. They point out that the Dome is outdated compared to new competition from other regional convention centers in Denver and Nashville. The most poignant criticism was from the president of the CVC, who the Post-Dispatch reports as saying, “The Dome itself is too high—it feels like a stadium, not convention space.”

The idea of demolishing part or the entire Dome may prove politically or financially unfeasible. However, it’s becoming clear that the Dome is not much better at attracting large conventions that it has been at attracting Stan Kroenke. Twenty years after that stadium opened as a stadium/convention center, it is functionally obsolete for both purposes.

When Dome advocates pushed for state funding more than 20 years ago, they told the state legislature that we couldn’t afford not to build the stadium. Now, it seems like we really could have. 

Geri’s Story: Holding Unions Accountable

Geri Thwing works as a school bus driver. She also pays for representation by a union that she feels doesn’t do a whole lot for her. Most of the time when you decide you don’t want or need a service you’re paying for, you can choose to stop paying and no longer receive that service. Geri doesn’t have that option—her union requires her to pay dues as a condition of employment.

Geri’s father and husband were both union members. And she was initially fine with joining. But now she wants out.

Geri’s situation is worsened by the fact that she has a moral objection to many of the activities of her union. Her union, the International Brotherhood of Teamsters, spends heavily on politics. According to the Washington Times, they spent $5.9 million on lobbying and campaign contributions in 2014 alone. “It breaks my heart,” she told me.

Geri called her local’s business agent to ask about the political spending. She says it didn’t help anything. I also called Geri’s local to ask about their stance on forcing people to join the union. I’m still waiting for a call back. 

Thousands of Missourians are in Geri’s situation—forced to pay for a union’s services while skeptical that the union is actually doing anything for them. Giving workers the freedom to opt out of a union is one way to hold a union accountable. Giving workers a regular secret ballot vote on whether to keep their union is another way to make union executives listen to the concerns of the people they represent.

I had the opportunity to interview Geri; the video is available via the link above.

Earnings Tax Opponents Already Getting Results

On April 5, Kansas Citians will vote on whether to retain the 1% earnings tax. This vote was brought about a few years ago by a statewide petition requiring regular votes on the earnings tax in Kansas City and St. Louis. City leaders and their corporate cronies have bemoaned the effort since it was launched, and regularly resort to ad hominem attacks on one of the lead supporters of the effort, a founder of the Show-Me Institute.

Recently, Kansas Citians have been examining how the city spends their money. They don't seem impressed. This has resulted in petition challenges to the airport, convention hotel, and a crossroads TIF. A KCPT documentary added fuel by focusing on the city's poor record of addressing blight. Voters on the east side—who bear the brunt of the city's neglect—seem fed up with being asked to support every tax, such as the earnings tax, and getting little in return. All this has sent city leaders scrambling to demonstrate that they can deliver basic services. For example, the Mayor has announced a new effort to tear down over 800 dangerous vacant homes in the city. It's not as if the Mayor was just made aware of the houses; he promised to address the situation in his first campaign.

It remains to be seen how the city will define "dangerous buildings" and the degree to which the various agencies make good on their promises. But does anyone doubt that this is happening because city leaders are required to defend the earnings tax and how they spend the proceeds?

 

Intercity Bus Service on the Rise in Missouri, Nationally

I often find myself traveling to Chicago to visit family, and when I do I have a number of transportation options available to me. When it is not possible for me to drive, I could always fly or take the train. But more often than not, when I can’t get a ride, I find myself taking the bus.

And I’m not the only one. According to a new study, intercity bus routes carried more than 60 million passengers in 2015, more than twice Amtrak’s total. And passenger levels have been growing fast. In 2008, total intercity bus passengers were only around 45 million. That means that in just seven years (tough times for other transportation services), long-distance bus passenger levels grew by 36%. That vast majority of the growth is in express services, like Megabus, which went from serving 2.3 million passengers in 2008 to 11.6 million passengers in 2015.

Why someone might opt to use Megabus or other express services is easy to understand. Compared to flying, it may take much longer, but the bus is considerably cheaper.  Compared to the Amtrak, travel times can be near equivalent. And in terms of cost, despite massive subsidies for rail, taking the bus is still generally cheaper than riding the train:

SAINT LOUIS to CHICAGO

Service

Number of Departures

Travel Duration (hours)

Price

Train

7

5.5–6

$27–$52

Bus

7

5.75–6.25

$20–$24

Airlines

17

1.25–1.5

$102–$224

 

Megabus and companies like it have upped the game for intercity bus travel. Not only do they provide competition to air and rail services, but they have also forced legacy services like Greyhound to match their speed and onboard amenities. In the end, it’s market innovation creating benefits for travelers in Missouri and across the country. 

Soccer Mania Strikes Saint Louis County

Soccer, professional and otherwise, is big business across the country and around the globe. The MLS is even considering putting a team in Saint Louis. And now Saint Louis County has decided that it wants to get involved in that business. That’s why late last week county officials announced they reached a deal with the city to spend $14 million on new soccer fields at Creve Coeur Park in hopes of bringing youth soccer tournaments to the Saint Louis region.

The idea of building new soccer venues in Saint Louis County is not a new one. Multiple projects were in the works during Charlie Dooley’s term as County Executive. But there’s always been the question, which has yet to be satisfactorily answered, of whether Saint Louis County ought to be getting into the soccer business. The new agreement with the city will allow some of the hotel/motel tax revenue the county uses to support the convention center and stadiums downtown to fund soccer fields in the County. Officials claim this will allow the County to get the fields without using any “new” taxes.

For anyone who reads this blog, alarm bells should be going off with any mention of the hotel/motel tax. The fact is, the hotel/motel tax revenue stream drives the most expensive shell game in the Saint Louis region. These taxes supposedly support the America Center, the Edward Jones Dome, the Convention Center Hotel, and Busch Stadium, among others. But the yearly revenue stream from both the city and county’s hotel taxes (less than $20 million) is nowhere near enough to cover annual cost of all these projects (more than $30 million). And that’s before considering the estimated costs of rehabbing the Dome, renovating the convention center, and improving the Scottrade Center. Restaurant tax and general revenue in the city, along with sizable state subsidies, cover the funding gap.

So why would the Saint Louis Visitors and Convention Commission (CVC), which coordinates these expenditures, allow money it does not have to go toward new fields in the County? According to the Post-Dispatch, this may be part of a larger deal. About half of the County’s hotel taxes currently go to pay debt on the Dome. Both that debt and the tax that supports it are set to retire in the next few years. The idea is that promising money for something the County government wants may induce County officials to keep the hotel tax in place—and its revenue flowing to the CVC. In essence, spending money on soccer fields is about being able to spend more money on convention centers.

While the idea of the County going all in on soccer and convention center gambits is unappetizing enough, it gets worse. According to the manager of a similar set of soccer fields in Kansas City, the County’s $14 million cost estimate is much too low, and the plan is “a drag-a-long, tag-a-long boondoggle that will end with county taxpayers funding the difference between the projected and real cost.” Not like we haven’t seen that before.

So Long, Farewell . . .

Every year since 1993, Atlas Van Lines has analyzed interstate moving patterns among U.S. households. Their Migration Patterns report shows which states are experiencing net inflows and outflows of households. The latest report rehashes a familiar story: In 2015, more Missouri households moved out (1,068) than moved in (918).

When I say the story is familiar, I’m not kidding. Have a look at the table at the end of this post, which reports household migration data for Missouri and its neighboring states since the end of the Great Recession. An outbound figure over 50 percent indicates that there are more moves out of than into the state.

Not only has Missouri experienced a net loss of households over the 5-year period, but it did not have a single positive year during that time. In this context, consistency is hardly a virtue.

The Atlas report provides the newest evidence of the difficulty Missouri has had in keeping residents here and attracting people from other states, but Atlas’s data makes up just one voice among a growing chorus. Others include data from the Census Bureau, the IRS’s Statistics of Income, and even data from another moving company (United Van Lines).

In an earlier analysis, Michael Rathbone and I found that all of these studies sing a song we should be tired of hearing: Missouri households are voting with their feet and seeking other, more attractive economic environments.

 

Average for 2011–2015

State

% Inbound

% Outbound

Arkansas

48.0

52.0

Illinois

41.3

58.7

Iowa

46.7

53.3

Kansas

45.9

54.1

Kentucky

51.0

49.0

Missouri

45.7

54.3

Nebraska

42.5

57.5

Oklahoma

52.2

47.8

Tennessee

56.8

43.2

Source: Atlas Van Lines Migration Patterns, 2016.

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