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The Loop Trolley Bailout: A Retrospective

Posted on January 6, 2016May 5, 2026 by Joseph Miller

On December 8, the Saint Louis County Council voted to bail out the Loop Trolley, a 2.2-mile vintage streetcar line currently under construction. Back when the trolley was in the planning phase, Show-Me Institute researchers pointed out that the project was redundant as a transportation option. The trolley’s route, from the History Museum to the Delmar Loop, is served by seven MetroBus routes and the MetroLink.

Despite these objections, Saint Louis regional officials allowed the project to move forward. The trolley, they promised, would lead to development. Trolley planners also assured residents that the money needed would come from a transportation development district (TDD) around the line, along with federal grants. As we pointed out in a previous post, trolley planners originally stated that cost overruns would not be the responsibility of city or county taxpayers.

However, as of late 2014, the Loop Trolley faced cost overruns. Initial construction bids came back $11 million over the project’s $43 million budget. The project was put out to bid once more, and Loop Trolley planners announced the project was within the budget and everything was fine. But actually, the second round of bids still came back $8 million over budget.

Instead of looking to the Trolley’s TDD to cover cost overruns, trolley planners sought regional tax dollars. This included money from Great Rivers Greenway (a sales tax–funded body designed to build recreational trails) and an additional $5.4 million federal grant (which required a local match).

None of these efforts was known to the public until November, 2015, well after the construction of the trolley was underway. The overruns only became public because the Saint Louis County Council had to approve the $3 million needed to match the aforementioned federal grant. That money will come from County’s mass transit fund, which means that more than $8 million is being diverted from transit projects in the County. That $3 million easily could have matched other, similarly sized federal grants for transit projects of the county’s choosing. Now it will be spent on the trolley.

Summing it up, trolley planners sold their project to Saint Louis residents with a budget that would not work and promises they could not keep. When that became apparent, those planners said nothing, quietly committed local residents to pay for overruns, and then started putting rails in the streets. Presented with this fait accompli, the County Council approved what amounts to an $8 million bailout. In essence, the Council rewarded the tactics of trolley planners.

Rebecca Friedrichs’ Supreme Court Case Could Expand Workers Rights in Missouri

Posted on January 6, 2016May 5, 2026 by John Wright

Next week the nation’s highest court will hear oral arguments in a case that will decide the constitutional rights of thousands of government workers. The court will decide whether the constitution protects a government employee’s right not to be associated with, or pay for, speech with which she disagrees.

Rebecca Friedrichs is a public school teacher in California who has long struggled with the California Teachers Association, a union that advocates for policies that run counter to Rebecca’s beliefs. Because a majority of the teachers in Rebecca’s school district at one time voted to elect the California Teachers Association to represent them, every current teacher in the district—including Rebecca—is now forced to pay to support the Association.

Rebecca believes this violates her rights. And she has a pretty strong case.

Rebecca’s case is fundamentally about the right of an individual or a minority in a group to think differently than the majority. The majority of the teachers in Mrs. Friedrichs’ school district support a union with an agenda that she disagrees with. Rebecca stands apart as someone who wants to speak with her own voice.

The court’s decision could affect public employees here in Missouri. If the court sides with Mrs. Friedrichs, it would expand the first amendment rights of thousands of teachers, fire fighters, and other Missouri government workers. As a result, each Missouri government employee could choose whether or not to support the union that operates in his or her workplace.

The Unfortunate Truths Behind Rams’ Relocation Statement

Posted on January 6, 2016May 5, 2026 by Joseph Miller

The Rams' statement on why they want to move to L.A. is self-serving, capped off with an incredibly cheesy quote from the Los Angeles Times. The statement cherry picks articles from the Saint Louis media, not indicative of their full view on the situation, that appear to support a Rams move. The shots at the Dome are overblown, and calling fan support weak is completely out of line when the Rams have been so bad for so long. And, rest assured, remaining in Saint Louis is by no means financially ruinous for the insanely lucrative NFL.

However, as hard as it may be for Saint Louisans to hear, the report had a lot of truth in it, especially regarding Saint Louis’s economic situation. The statement rightfully points out (as we at the Show-Me Institute have written) that, when it comes to population and jobs, Saint Louis really has fallen behind and has yet to turn things around. Saint Louis City has lost much of its population; the city had around 750,000 residents in 1960, and today it’s close to 300,000. From 2000 to 2010, Saint Louis City lost population and Saint Louis County essentially stagnated.

Most of the population growth during that time was in the far suburbs and downtown (which received significant subsidies), and overall, population was stagnant.

The story is equally depressing when it comes to job growth. Saint Louis had anemic employment growth before the recession, and the economy has limped along since then. Despite claims of becoming a tech center, Saint Louis (and especially Saint Louis City) has seen nearly all its employment growth in education and medical services. For these and other reasons, economists (and not just those cited in the statement) forecast continued slow growth in the future for Saint Louis.

The Rams’ statement also claims that the other teams trying to move to L.A. (the Oakland Raiders and San Diego Chargers) would leave healthier economic markets. In this, the team is not wrong. Income and GDP of both Oakland and San Diego are much greater than in Saint Louis. They have more money to spend on tickets, jerseys, and NFL cable packages:

	Median Income	GDP (Millions)
Saint Louis	$54,959	$149,951
San Diego	$63,996	$206,817
Oakland/San Francisco	$80,008	$411,969

In addition to how things stand today, one has to factor in growth. Even accounting for the deindustrialization of the late 20^th century, Saint Louis is growing much more slowly than San Diego and Oakland.

While Saint Louis aspires toward building a tech industry, Oakland is a rapidly gentrifying part of the tech-dominated Bay Area economy, and San Diego has the one of nation’s most important bio-tech clusters.

There are many possible culprits for Saint Louis’s lackluster growth, and few easy answers. However, it’s time for Saint Louis to be honest and acknowledge that, yes, of the four markets in play, Saint Louis is the least attractive for the NFL. We also have to acknowledge that without significant public financial “support,” no existing NFL team would consider locating to Saint Louis. But the city’s economy— not Stan Kroenke—is the real problem. It’s that problem, which affects so much more than sports, that policymakers need to address.

Here’s How Missouri’s Empowerment Scholarship Accounts Would Work

Posted on January 5, 2016May 5, 2026 by Brittany Wagner

A proposed law could expand educational opportunities for students with disabilities in Missouri by allowing families greater flexibility in how they allocate the state’s funding of their child’s education. Missouri’s Empowerment Scholarship Accounts would be an education savings account (ESA) program. A model for this type of targeted program already exists in Arizona.

Before Arizona adopted its ESA program, Salima’s parents were not in control of their daughter’s learning. They wanted a small but inclusive environment for Salima, who has Down syndrome.

“We didn’t feel as though the teacher in the classroom, as well as the administration, welcomed the idea of inclusion,” reflected Salima’s mom.

Arizona legislators recognized that parents know best, so the state adopted the first ESA program in 2011. Salima and 760 other Arizona children received customized educations in 2014. Now, nearly 2,500 Arizona children are enrolled in the state’s Empower Scholarship Account program.

The table below shows how many children are currently using ESAs in Arizona, Florida, and Mississippi. Nevada and Tennessee will launch their programs in January 2016 and 2017, respectively.

ESAs place a student’s funding into a flexible-use spending account, like a health savings account, that families can then use on qualifying educational purchases. Missouri’s ESA program would have a slight wrinkle, as the funding for the scholarships would actually come from private donations to scholarship-granting organizations for which donors would receive a tax credit, but the logic is the same. The graphic at the top of this post explains the process.

A taxpayer makes a donation to a nonprofit organization charged with managing ESAs. That organization then puts money equal to no more than the state adequacy target into a child’s account. For the 2016–2017 and 2017–2018 school years, the state adequacy target has been set to $6,808. Parents can spend the account funds on resources like private school tuition and fees, tutoring, online courses, education therapies, and curricula. Upon graduation, leftover funds can be directed toward postsecondary tuition and fees. The state Department of Economic Development would offer up to $50 million in tax credits to taxpayers who make contributions.

Only qualified students would have access to the program. Qualified students include students:

Who are identified as having a disability under Section 504 of the Rehabilitation Act of 1973
Who are identified by a district as having a disability
Who receive services from a district under the Individuals with Disabilities Education Act (IDEA)
Who are or have been wards of the juvenile court and have been placed with permanent guardians
Who attended a public school for at least the first 100 days of the prior school year
Who are eligible to begin kindergarten

There are surely parents in Missouri who, like Salima’s, are frustrated with public schools that don’t meet their children’s needs. An ESA would give those parents a chance to customize their children’s educations. For more information about how ESAs work in other states, view the Friedman Foundation’s interactive map.

Comparing Teacher Pay by State Offers Heat, but Little Light

Posted on January 5, 2016May 5, 2026 by James V. Shuls

I’m going to tell you something you already know: Teacher salaries are higher in Saint Louis and Kansas City than they are in the state’s more rural areas. “Of course they are!,” you might say, “It costs more to live in those areas.” That, my friends, is the point. It costs more to live in some areas than it does in others. That’s why the wages are higher there.

That’s also why I do a facepalm when someone compares Missouri’s teacher salaries to the average salaries in other states.

In a recent press release promoting a new study on teacher salaries, Bruce Moe, executive director of the Missouri State Teacher’s Association, said, “Missouri ranks 42nd nationwide for average classroom teacher pay. That translates to $8,896 less than the national average.”

Let’s do a little test. Here is a cost-of-living map from the Missouri Economic Research and Information Center (MERIC). It provides an index for each state. Missouri’s cost of living in the 3rd quarter of 2015 was just 91.2% of the national average. Using just this information, what states would you bet have the highest teacher salaries?

Did you guess New York, Washington D.C., or California? Give yourself a gold star!

According to the Digest of Education Statistics from the National Center for Education Statistics (Table 211.60), the average teacher salary in each of these places was over $70,000. Massachusetts and New Jersey also have average salaries higher than $70,000, but each of these places has a cost-of-living that is much higher than the national average (including 149.3% of the national average in D.C.!).

According to MERIC, “Missouri had the 11th-lowest cost of living in the United States for the third quarter of 2015.” We should expect the average teacher salary in Missouri to be below the national average, because the cost-of-living in Missouri is below the national average.

Just as teachers in Saint Louis and Kansas City make more than teachers in Mt. Vernon and Niangua, teachers in New York and California make more, on average, than teachers in Missouri. This is not a bad thing—it simply reflects that it costs a lot less to live here. Not taking that into account yields wildly skewed results, and the MSTA should know better.

Brenda Talent on Saint Louis Public Radio’s “Politically Speaking”

Posted on January 4, 2016May 5, 2026 by Show-Me Institute Staff

On September 30, Show-Me Institute CEO Brenda Talent was interviewed on Saint Louis Public Radio’s Politically Speaking. Brenda discussed a broad range of issues, including the earnings tax in Saint Louis and Kansas City, education savings accounts, and the stadium proposal for downtown Saint Louis. Listen to the entire interview here.

Taxicab Commission Gets New Year Rolling with Reform

Posted on January 4, 2016May 5, 2026 by Joseph Miller

After an acrimonious showdown with ridesharing company Uber in the middle of last year, the the Metropolitan Taxicab Commission (MTC) is no longer in the public eye. In many ways, things have changed little since October, when Uber began operating in Saint Louis City and County without the MTC’s sanction. Uber is still running (with a car about 4 minutes away from me at the time of writing), the MTC still objects, and lawsuits continue to move forward.

But while the public’s attention has drifted to other issues, the MTC continues to make changes. For one, in late December, the MTC passed a large revision to the taxicab code. Many of the changes are improvements. For instance, airport taxis can now operate as normal on-call taxis on days with particularly high demand. In addition, taxis up to nine years old can now be entered into service (previous requirements held that number to six). The commission also removed the “nighttime taxi” permit designation, which was itself a bizarre response to an MTC-created taxi supply problem.

Perhaps the most welcome news of all is that on January 4, 2016, the MTC will finally begin accepting applications for new on-call taxi Certificates of Convenience and Necessity (CCNs). As we’ve discussed before, a CCN is necessary to set up a new taxi business in Saint Louis. The MTC unilaterally froze all CCN applications for on-call taxis back in February of 2013, while the body “studied” taxi supply and demand for cabs in Saint Louis. After almost three years, and no study, the moratorium will finally come to an end.

Finally, Lou Hamilton, the controversial chair of the MTC, resigned on December 15, stating as a reason for his resignation that, “There is only so much fun one person can have.” We wish him an uneventful retirement.

Does It Matter What a Lost Job Would Have Paid?

Posted on January 2, 2016May 5, 2026 by John Wright

In a recent Wall Street Journal editorial, economist David Neumark challenges some of the myths about the minimum wage. From the article:

Economists have written scores of papers on the topic dating back 100 years, and the vast majority of these studies point to job losses for the least-skilled. They are based on fundamental economic reasoning—that when you raise the price of something, in this case labor, less of it will be demanded, or in this case hired.

***

The broader research confirms this. An extensive survey of decades of minimum-wage research, published by William Wascher of the Federal Reserve Board and me in a 2008 book titled “Minimum Wages,” generally found a 1% or 2% reduction for teenage or very low-skill employment for each 10% minimum-wage increase.

That has long been the view of most economists, although there are some outliers.

Neumark himself conducted two policy studies on the effect of minimum wage laws right here in Missouri. These studies (from 2006 and 2012) examined the minimum wage increases being considered at the time. Both studies drew from a large body of existing research that suggests that minimum wage hikes do more harm than good.

Despite all of the research and hard evidence, some politicians and activists still push for minimum wage increases. In fact the “Fight for 15” movement, a campaign funded in large part by service industry unions, is still agitating for a 15 dollar minimum wage in Kansas City and St. Louis.

Let’s not ignore what the evidence says: Unemployment is a clear downside to the minimum wage. And that downside is borne by the people minimum wages are usually thought to help.

New Bill Would Raise Missouri Fuel Tax, Cut Highway Miles

Posted on December 23, 2015May 5, 2026 by Joseph Miller

Recently, we discussed a couple of pre-filed bills that would raise the fuel tax in Missouri to avert a funding crisis at the Missouri Department of Transportation (MoDOT). But raising the fuel tax is not the only proposal on the table, and one bill (SJR 18) proposes a solution that could aid MoDOT’s financial situation over the long term: reducing the size of the state highway system.

SJR 18 has two parts. The first part would increase the state’s regular fuel tax by 1.5 cents per gallon and the state’s diesel fuel tax by 3.5 cents per gallon. This increase has the potential to net MoDOT around $60 million in additional revenue annually, which would put off any immediate funding crisis for the state.

However, SJR 18 is different from other fuel tax increase proposals in that it also contains provisions for transferring responsibility for the state’s “supplementary” highway system to localities. The supplementary system is mostly made up of the state’s letter routes, but also includes urban streets like Gravois Road in Saint Louis and MO Route 283 in Kansas City. We’ve discussed before how these routes eat up a significant portion of MoDOT’s budget. These types of roads are maintained by counties and municipalities in most other states.

SJR 18 would not simply hand off the supplementary highway system to localities without any aid. The state would continue to provide localities with financial support for the transferred roads (fixed at the average spending of the last three years on that road). This means that in the short-term, MoDOT would spend the same amount on these highways as it does today. However, over the long term this spending would be capped, with local governments responsible for increased investment.

SJR 18—which would require a vote of the people before being enacted—is an interesting policy proposal that addresses both short-term and long-term financial problems at MoDOT. It does not encompass a large tax increase, and instead focuses on capping long-term spending as a method of setting MoDOT’s funding on firm footing.

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