Three Tips for Managing St. Louis Public Schools’ Enrollment Decline

Posted on by James V. Shuls

The St. Louis Post-Dispatch reports that enrollment in St. Louis Public Schools (SLPS) is down by nearly 1,500 students. This should not come as much of a surprise, as enrollment in SLPS has been dropping for more than a decade. In recent years, however, it had leveled off. Now, district officials are scrambling for ideas to cut costs. At the same time, they are facing increasing pressure to give teachers, whose salaries have been stagnant for years, a raise.

While the situation is not good for SLPS, the impact on the budget will not be felt immediately. Missouri’s funding formula allows school districts to receive funds based on their highest enrollment over a three-year period. Assuming continuing decline, this year’s enrollment figures won’t fully be realized until 2018. In the meantime, SLPS officials must begin looking for ways to shore up the bottom line or begin attracting students back to the district.

Here are some options:

1.      Sell vacant buildings: SLPS has a glut of vacant school buildings. The district must make every effort to lease, sell, or demolish the vacant school buildings. Every penny spent on maintaining empty buildings is a penny that cannot be channeled into the classroom and teacher salaries.

2.      Consolidate or co-locate within underutilized buildings: According to the Post-Dispatch, SLPS also as a slew of underutilized school buildings; six with fewer than 200 students and three high schools with fewer than 300. Officials must consider closing some of these schools and consolidating students into the remaining buildings. Of course, this is never easy to do, as citizens fear another vacant building in their neighborhood and parents worry about their children being bussed further away. To prevent blight, district officials could look for alternative uses for these buildings. For example, they could share the buildings with charter schools or private schools in need of space. By allowing these entities to co-locate but remain distinct organizations, underutilized buildings can once again be filled with children and even generate revenue for the district.

3.      Restructure staffing models: Salaries are one of the biggest costs in public education. Now is a perfect time for the district to restructure staffing models. As Mike McShane pointed out, the district can curb administrative bloat and redesign the district’s compensation system. The district can also begin exploring alternative ways to deliver education and expand the reach of great teachers, such as blended learning models. The traditional model of a teacher in front of 18 students hasn’t been working and is incredibly expensive.  

Curbing decades-long enrollment declines is a daunting task, and it will only be more difficult if the district fails to make appropriate changes. Indeed, significant changes to improve efficiency may be the only way to change the district’s trajectory.

Licensing Street Performers: Another Example of Government Overreach

Posted on by Michael Rathbone

Just when you thought licensing hair braiders was the silliest example of government overreach you had ever seen, University City considers doing something sillier. Some in the City Council want to license street performers in the Delmar Loop.

The measure would treat street performers like peddlers and canvassers. Performers would be required to pay a licensing fee and obtain a permit.

Along with the attempt at licensing landlords, this measure is just one of the more recent examples of a government solution in search of a problem. As someone who works near the Delmar Loop and visits there often, I can assure you that street performers are not a nuisance.

Thankfully, a couple of city council members are also skeptical of the need to license street performers. Due to their questioning of provisions within the bill, action on this measure will be delayed until later in the month. The City Council should spend that time reflecting on whether licensing a few street performers is really something that University City should be doing.

Street performers make the Delmar Loop a more vibrant and exciting place to visit. University City should not make it harder for these people to practice their craft. 

Convention Hotel Documents Claim it Will Double Hotel Business

Posted on by Patrick Tuohey

Consultants for the proposed downtown convention hotel are telling us that if we build a new hotel we will almost double our hotel traffic. That may seem crazy, which is probably why the report doesn't make this claim in clear terms, but if you dig though a just-released two-year old report, the argument is clear: build it and they will come.

In Figure 1-5 (page 7) of the report, available below, we learn that at the time of the report, the number of hotel room nights sold owing to the convention center (accommodated demand) was 157,159. On the next page, Figure 1-6 shows the expected annual growth rate for convention-related hotel room business regardless of whether we build a hotel. It ranged from 4% in 2013 to 2% a year in 2018 and beyond. Those assumptions are themselves questionable, as this same report indicates (Figure 1-1) that annual growth rates in 2011 and 2012 were 0.3% and 2%, respectively.

Laying that aside, lets look at how much new business a new convention hotel will bring. In Figure 1-7 (page 9), we see two things: base demand and induced demand. Base demand is the current demand discussed above plus the projected annual increases. This is the growth without a new convention hotel. Induced demand is the projected increase in business due to a new convention hotel. The report does not detail how induced demand is calculated.

In 2021, the base demand is 199,105, roughly 42,000 more than we're getting today. The induced demand is 108,000 room nights. These are both questionable assumptions. Add them together and you get 150,000. The consultants were telling us that if we built a 1,000 room convention hotel we'd almost double our hotel business–from 157,159 room nights in 2013 to 307,105 in 2021. Is that reasonable? Even in the short term, the consultants estimated that by 2017, we'd see an increase of 113,000 room nights over 2013. That is a 72% increase in room nights just because we built a hotel.

Does anyone believe these claims? Are the annual growth rates reasonable? Is the induced demand rate reasonable? On what was it based? Was the previous City Council aware of these reports and projections? Has anyone checked to see if the 2013 and 2014 annual convention growth projections were met? No hotel project should be seriously contemplated until these basic questions are answered.

The Case for “Boutique” Efforts

Posted on by Michael Q. McShane

For my money, one of the most promising developments in American education today is not in public schooling, private schooling, or charter schooling. It is in tiny schooling.

Tiny schools start in a library or classroom with a small group of volunteer students and no more than one or two teachers, usually for a couple of hours on a weekend. For up to a year, the teachers try new methods and get instant feedback, refine what they’re doing, and improve. The students attend voluntarily; they know they’re part of the experiment. If all goes well, after a year, the educators are in a much better place to start a full-fledged school than if they had tried to build a whole school from scratch. What’s more, if the plan doesn’t work, no students are harmed, and very little money is lost.

Spearheaded by 4.0 Schools in New Orleans, tiny schools are a promising response to a stubborn problem—starting a new school is incredibly risky.

Think about it: if you are an aspiring charter- or private school leader and you want to start a school via conventional means, you’re talking about an organization with a million-plus dollar budget, contracts with 10, 20, or more staff and teachers, the rental or purchase of a large building, and the lives of hundreds of children—and that is just the start. This risk explains why even the supposedly agile and entrepreneurial charter school sector has created applications to open schools that stretch into the hundreds of pages. When we’re talking about that much money and that many people, authorizers want as much assurance as possible that the school is going to work. I don’t blame them.

The most common criticism I hear, though, when I get excited talking about small entrepreneurial ventures like tiny schools is that they are simply “boutique” options. They cannot scale. “There are 50 million school children, for crying out loud, and you’re talking about teaching 20!”

Much of this ire has been directed toward AltSchool, a new private school model out of Silicon Valley. AltSchool runs a series of very small schools that personalize education to every (generally wealthy) child who attends them. They made news recently with a $100 million investment from some of the biggest names in technology and venture capital. Their model is intensive and expensive, and most have dismissed it as a viable option for students across the country. They may be right.

AltSchool critics remind me of a blog post written almost 10 years ago by Elon Musk, founder of PayPal, Tesla, and Space X (and promoter of nuking Mars). He too received criticism, particularly from environmentalists, when his first Tesla cars were priced north of $100,000 apiece. “The planet is warming, and you’re building cars only a small number of people can afford!”

Musk’s response to his critics is a good lesson for entrepreneurship in education. In a blog post titled The Secret Tesla Motors Master Plan (just between you and me), he wrote:

Almost any new technology initially has high unit cost before it can be optimized and this is no less true for electric cars. The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model.

Replace “electric cars” with schools, and you’ll see where I’m going.

So many schools today—traditional public, charter, and even private—suffer from a kind of institutional isomorphism: Each one looks like the next. At the same time, we continue to see statistics indicating that students across the board are not prepared for college-level work. When we narrow our focus to low-income or minority students, the picture gets even worse. In Missouri (where I live), for example, only six percent of African-American students scored college-ready in all four subjects tested by the ACT. Six percent. Innovation is sorely needed.

But trying to create large-scale schools with an envelope-pushing model is expensive and risky. As a result, most people tend to stay in the same safe lane and, at best, try and tinker around the edges. This explains why most charter and even “lab” schools look so similar to the average public school and generally perform about as well.

One solution to this is the high-end model of AltSchools, where wealthy families pay for the innovations that might eventually make their way down market. Another is the small, focused model of tiny schools that rapidly iterate and see themselves as a work in progress rather than a finished product. But in both cases, it is the limited scope and tight focus of the effort that enable the innovation to take place.

We should not be so quick to dismiss “tiny” efforts to rethink schooling. A “tiny” effort in automobiles just made a car that broke Consumer Reports’ rating system. These schools may end up being bigger than we think.

Saint Louis to Try, Once Again, to Spend its Way to Prosperity

Posted on by Joseph Miller

A recent article in the Post-Dispatch reported on the city’s plans to spend more than a billion dollars on a new football stadium, a MetroLink expansion, and setting up land for the National Geospatial-Intelligence Agency (NGA). The mayor’s office hopes these expenditures will create:

“anchor investments” to leverage future development, combat crime and wipe out concentrated poverty.

Creating development and wiping out concentrated poverty are lofty goals, but are city’s plans to create “anchor investments” likely to be successful?

History says no. Saint Louis is no stranger to urban regeneration projects, or “anchor investments” for that matter. From 1992 to 2002, the region “invested” almost $1.5 billion (in present dollars) in the original MetroLink and a football stadium (the Edward Jones Dome). Neither of these projects created much ancillary development, and from the 90s to the present day Saint Louis City has continued to lag behind the rest of the nation in population growth and economic vitality. Nor should anyone have expected them to. Economists agree that football stadiums do not boost urban regeneration, and that rail transit provides (at best) incremental improvements in transportation and station-adjacent property values, not civic renaissance.

Saint Louis officials may have learned that they are not one massive redevelopment project from jump-starting an economic revival. Unfortunately, the conclusion they appear to have come away with is that they are many massive development projects away from success. After all,

  • The MetroLink did not go far enough.
  • The Edward Jones Dome has no brew pubs or bike paths.
  • The Arch grounds aren’t pretty enough.
  • There are “gaps” between redevelopment (i.e., tax break) districts. 

Just a few billion dollars more, and the city will finally be business and millennial friendly. All this while city’s business code remains an antiquated mess and the taxicab commission files an injunction to shut down Uber. 

If Apple Were in Charge of Government Transparency . . .

Posted on by John Wright

Ohio is leading the way with a Silicon Valley–like way to track each dollar spent by that state’s government. Since December 2014, Ohio Treasurer Josh Mandel has made every check written by the state available digitally on OhioCheckbook.com. This means that all state expenses, both large and small, are available online in an easily searchable database that includes checks written as far back as 2008.

Huge check to a major government contractor? It’s on there. Relatively small check to reimburse a state employee for travel expenses? It’s on there too. Information can be sorted and exported easily. There are even functions that allow you to contact the government official in charge of the agency that issued the check or share your findings on social media.

This site gives Ohioans unprecedented access to public information about how their government spends their tax dollars. And Mandel is working on expanding the database to include information from local governments as well.

Seriously, go there right now and click around. Neat, huh?

Missourians deserve the same level of government transparency. Imagine if we could search for and view each check paid from state funds, contact the responsible officeholders for inquiries about the purpose of each check, and then email accountable officials or share findings on social media—all from one website.

A tool like this would allow citizens and journalists to better understand how their government spends. And it would give government actors a powerful incentive to think twice about how they spent taxpayer money.

Square Coming to Saint Louis City, but Not to Its Property Tax Rolls

Posted on by Joseph Miller

Square, a tech company founded by a Saint Louis native, has generated significant fanfare by announcing a new office in Saint Louis City. While the growth of the tech industry in the city and region is certainly positive, the incentives city officials granted the company have further damaged the city’s ability to create a business- and resident-friendly tax policy. Because while Square may be coming to Saint Louis, it is avoiding the city’s tax rolls.

For starters, Square’s new office is located at CIC@4240 in the Cortex Innovation Community, which is already a TIF district, meaning that the company will add little if anything to the city’s hollowed-out real property tax base: 

Worse yet, as the Post-Dispatch reported, the city plans to grant Square $3 million in industrial development bonds, which the company will use to buy equipment. This city action means Square will have access to cheaper credit than it otherwise would, and may not have to pay sales taxes on equipment. But it also means that the city becomes the lessor (and Square the lessee) of expensive industrial equipment, allowing the company to dodge property taxes on its equipment as well.

                The effect of these incentives is that Square’s impact on the city budget will be mostly in the form of the earnings tax, the same earnings tax that city officials have claimed they are trying to move away from. This latest tax break is just another in a long line of giveaways that make beneficial reform nearly impossible.

 The city claims it needed these incentives, and all of these incentives, to compete for Square. But how does the city expect to experience broader growth by granting favored companies special dispensations from an uncompetitive and inconsistent taxing system? Is it any wonder that after decades of this policy, the Saint Louis City is still among the slowest-growing large cities in the United States? 

Preschool: Silver Bullet?

Posted on by Brittany Wagner

Former St. Louis Mayor Vince Schoemehl recently penned a letter to the St. Louis Business Journal about the benefits of investing in early childhood education. He wrote:

“The benefits read like a laundry list of personal responsibility: more employment success, higher earnings, better health, greater education attainment, lower chances of incarceration, reduced likelihood of dropping out of high school, fewer teen pregnancies, and on and on.

Early education is good for business as well. Pre-K graduates show up on time, ready for work and with a temperament essential for work place success. They also possess confidence, curiosity and a greater sense of purpose, all of which will help the private sector’s bottom line…”

In short, next time I’m running late, I’ll just tell my boss, “Sorry, I didn’t go to preschool.” That ought to get me off the hook.

Preschool supporters like Schoemehl have good intentions, but often make the mistake of talking about preschool as if it’s some kind of cure-all. That just isn’t the case. While it’s true that preschool can offer some benefits for low-income students, creating a quality program is difficult. When preschool programs are constructed, they usually import some of the worst problems of our public K-12 system.

In a recent study, Vanderbilt University’s Peabody Research Institute performed an independent evaluation of the state’s Voluntary Prekindergarten program (TN-VPK). TN-VPK offers a full-day prekindergarten option for four-year-olds. The program focuses on the neediest children in the state.

Despite previous findings that showed that the Tennessee prekindergarten program was successful in producing improvements in academic skills by kindergarten, Vanderbilt found that there were no statistically significant differences between TN-VPK participants and nonparticipants by the end of first grade. Brookings Institution senior fellow Russ Whitehurst called the results “devastating for advocates of the expansion of state pre-K programs.”

In his letter, Schoemehl wasn’t necessarily advocating for a state-based program, “If we want our children to grow into responsible adults, then our kids need better options and those options need to start at birth,” he said. Schoemehl is right about one thing—options are key.

A targeted, market-driven program could deliver at least some of the results Schoemehl discussed, though no preschool model is a silver bullet. Missouri already has a large private preschool market. A voucher program that allows parents to choose the option that makes sense for their work schedules and children’s needs is a far better method of expanding access to early childhood education than simply adding a grade to an already struggling public K-12 system.

Stadium Planners Sweeten the Deal . . . for Billionaires

Posted on by Joseph Miller

Recently, the governor’s stadium task force announced a provisional agreement for the naming rights of a proposed riverfront stadium. The deal would lease the naming rights for 20 years at a price of $158 million. The proposed name: National Car Rental Field.

With the stadium expected to cost the public around $400 million, one might have hoped that planners would dedicate the $158 million to paying off the public portion of stadium debt. After all, economists agree that stadiums do not generate much return in terms of development of tax revenue, so the lower the public subsidy, the better. Unfortunately, the benefits from the sale of naming rights, like the benefits of the stadium in general, will likely redound to the NFL and Rams ownership, not Missouri residents.

Stadium backers fear that $400 million in public dollars might not be enough to keep the Rams in town, so the stadium task force wants to sweeten the deal for the Rams, or whatever team is willing to play in Saint Louis. As the Post-Dispatch reported:

“Regional leaders here expect it could be an enticing carrot for a team owner seeking to defray his own portion of stadium construction costs…It doesn’t mean the state or city will have to pay less for the stadium, Peacock [the head of the stadium task force] emphasized. “It provides certainty around the project, more than anything…”

This is what happened when Saint Louis lured the Rams two decades ago, turning over 75% of naming rights proceeds to the Rams (along with personal seat licenses, the relocation fee, etc.), even though the Edward Jones Dome was built entirely at the public’s expense.

The use of naming rights revenue to placate the NFL, rather than Missouri residents, makes some sense. After all, the governor and the Missouri Development Finance Board plan to unilaterally spend around $300 million in state funds on the stadium, without the vote of the legislature or the people. As for the city, an ordinance requiring a vote on public financing for stadium projects was struck down in court (but the mayor says they’ll get a vote on the next stadium). The only group left that might vote no, and can vote no, is NFL ownership.

 As University of Chicago economist Allen Sanderson said, talking about the riverfront stadium plan:

“The NFL, first of all, is a monopolist. And monopolists don’t leave much money on table.”

 Missourians might soon have the disadvantage of rediscovering just how little money that will be. 

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