Union President Agrees That Union Elections Lead to Greater Accountability

Posted on by John Wright

Bradley Harmon, president of CWA Local 6355—a union representing state government employees—recently testified before a legislative committee against a union election bill. Although he was there to offer his opposition to the bill, he ended up admitting that the elections he opposes actually make unions more accountable to the workers they represent. See the clip, recorded by Progress Missouri, above.

Holding elections for government unions is one of the most exciting labor reforms discussed in Missouri right now. Currently, if you work for the government and you’re represented by a union, you’re pretty much stuck with that union. If you can organize, gather signatures, and then win a “decertification” election, you may force the union out. But barring this, government employees, like teachers, social workers, and firefighters, are pretty much “married for life.”

Holding regular union elections addresses this issue. When employees of public institutions get the option to vote for their representatives every few years, union representatives are forced to be accountable to their members. When workers get a vote, a union executive’s job depends on representing workers well.

You can read more about government union elections in Missouri here, here, here, and here.

The Convention Hotel’s Tax Breaks and Gimmes

Posted on by Patrick Tuohey

Reviewing the Memorandum of Understanding (MOU) between the city of Kansas City and the developers who want to build a convention hotel, I see that the developers are asking to be exempted from all sorts of taxes. You can read your own copy of the MOU here:

It appears that, unlike most TIF projects, the developers want 100 percent of incremental economic activity taxes, including sales taxes and the earnings tax. Page 11 of the MOU states,

The City will . . . redirect through its annual budget the City’s portion of the Project TIF for a period of 23 years and Super TIF for a period of 30 years generated from the Project’s tax revenue sources . . .

In  other words, they want the half that they get from the TIFs directly, and then they want the city to give them the rest through the appropriations process. Here is the tax revenue the developers want to keep:

  • Tax Increment Financing (TIF): as mentioned above, all economic activity taxes collected by and for the county, school district, library district, and the zoo will be redirected back to the project for 23 years.

  • A Super TIF that collects for 30 years the tax not captured in the TIF above, including the convention and visitors tax, and redirects it to the developers.

  • A 100 percent exemption on sales taxes on construction materials and real/personal property taxes.

  • The creation of a 1 percent Community Improvement District (CID) tax that will then be redirected back to the developers.

Here are some extra freebies the developers want:

  • A cash contribution of $35 million.

  • The city’s portion of the land, valued at $13 million.

  • Fees generated by zoning, permits, inspections, etc., capped at $800,000.

  • A management fee to the hotel for catering amounting to $62,363,816 over 15 years. Should the event fees be insufficient to cover this, the city will pay, “from any legally available city funds,” just like we do with the Power & Light District.

Here are some possible problems for the city, based on past issues:

Not mentioned in the MOU is any exemption from the streetcar Transportation Development District (TDD). Apparently, funding the downtown streetcar is more important than funding the city, county, schools, libraries, and zoo. What does that say about the City Council’s view of the rest of Kansas City?

Kansas City’s Convention Hotel Memorandum

Posted on by Patrick Tuohey

The City Council of Kansas City is considering subsidizing half of a $300 million downtown convention hotel adjacent to Bartle Hall. There is a lot to be considered in the deal, the least of which being whether the city should be using taxpayer dollars to build hotels when the city seems unable to provide basic services.

As we examine the deal, we wanted to share the Memorandum of Understanding with our readers. You can find a copy of it here.

KC Convention Hotel Memorandum of Understanding (Text)

Next Gen Event: The Uber Effects of Ridesharing

Posted on by Joseph Miller

When it comes to ridesharing companies like Uber and Lyft, too often our policymakers and the media highlight conflict: fights with existing cab companies, battles over regulation and deregulation, disruption between ridesharing companies and drivers, and safety and privacy issues for consumers.

The immense opportunity that ridesharing, as a technology for transportation, provides for cities both in terms of added mobility and new employment, however, gets short shrift in these conversations. In cities that allow ridesharing, getting around town has become significantly easier (and in some cases cheaper). Plus, ridesharing has provided hundreds (if not thousands) of new jobs in these cities, all by making better use of the resource most Americans already own: a personal vehicle.

On June 18, I’ll detail the current impact of ridesharing companies on urban transportation, their future potential, and some of the roadblocks preventing Missourians, and Saint Louisans in particular, from taking advantage. Come for the talk, stay for the BBQ:

Next Gen Invite

Highway Dollars: Does Washington Give Missouri Its Fair Share?

Posted on by Joseph Miller

Often, when discussing the impending funding crisis at the Missouri Department of Transportation (MoDOT), many residents are skeptical of the need to increase state user fees like the fuel tax. Why should Missouri raise fuel taxes or implement tolling when the federal government takes money from the state? The argument is that if the federal government just returned Missouri’s share of federal fuel tax revenue (among other user fees), the state would have more than enough money.

Unfortunately, the idea that Missouri is getting the short end of the stick on federal fuel taxes is mistaken. In fact, since 2000, Missouri has gotten more from the federal highway trust fund than it put in. The latest official data shows that in 2013 Missouri got back about $1.17 for every highway user dollar it sent to Washington. In fact, in 2013 only one state (Texas) did not receive what amounts to a federal subsidy for its highway spending, as the map below demonstrates:

map13

There have been years, specifically in the 1990s, when Missouri put more into the federal highway trust fund than it got out. But, since the inception of the state highway system in 1956, Missouri has gotten back about $1.06 for every $1.00 it sent to Washington in terms of fuel taxes and other user fees. Only Texas, Indiana, North Carolina, and South Carolina can claim to have given more than they have gotten back over the last 60 years. The map below shows this in detail:

map56

Simply put, the federal government cannot be accused of precipitating a funding crisis at MoDOT and will not be able to solve Missouri’s problems by remitting fuel tax dollars. The fact is that Missouri already receives federal subsidies for its highways, and any more assistance likewise would be a subsidy to highway users.

House Bill 42, You Can’t Please Everyone

Posted on by James V. Shuls

Nearly everyone recognizes that the transfer program, which allows students to transfer from unaccredited school districts, is unsustainable. If the law is not changed, it will likely bankrupt the Normandy and Riverview Gardens school districts. That is why the legislature has worked for the past two sessions to “fix” the transfer program. Last year’s attempted “fix” was vetoed by Gov. Nixon, primarily because it contained a small voucher component. This year’s bill, House Bill 42, does not contain a private school option. It does, however, expand charter schools. Immediately after the bill’s passage, education groups began urging the governor to veto the bill. Some have even gone as far as saying the bill makes matters worse.

So, why has fixing the transfer program become such a complicated mess? The problem is that we cannot agree on what problem needs fixing. Some want to end the transfer program altogether, some want to simply make the program sustainable, while others want to expand options for students. These three things are not all compatible, and they cannot all be accomplished. For example, Missouri’s commissioner of education wants to rein in tuition costs by instituting a cap. That would help make the program more sustainable.

That proposal is met with opposition from superintendents, such as David McGehee of Lee’s Summit School District. His argument is that it forces taxpayers in the receiving district to subsidize the education of the transfer students. (Never mind that the marginal cost of the additional students is extremely low, but I digress.)

McGehee and many other public school officials would like the transfer program to end all together. They simply do not believe that allowing students to leave their district is the right answer. Of course, others believe that students should not be trapped in underperforming schools.

Lawmakers have had to navigate this field and try to come up with a bill that satisfies all. Once again they have failed, not for lack of effort, but because it is impossible to satisfy everyone. The question then is whether, on balance, the bill does more good than bad. Those who oppose school choice would say, “No.” Those who support choice would say, “Yes.”

For more on the transfer program, I suggest you read my latest paper, “Interdistrict Choice for Students in Failing Schools: Burden or Boon?”

Medicaid and Why We Can’t Have Nice Things

Posted on by Michael Rathbone

Have you ever been in Best Buy (or, for you millennials, on Amazon) and looked at a nice 70-inch 4K Ultra HD television that made you desperate to buy one? I know I have, but the thing that stops me from splurging is the knowledge that I would like to eat this month, pay rent, and heat my home. Now, a lot of government spending isn’t like buying a nice television, but the analogy holds. It’s like what people tell their kids: Sometimes you face a choice of either buying what you want or what you really need. Wonder why we aren’t fully funding the foundation formula or why spending for corrections is relatively flat (after adjusting for inflation)? The explosive growth in Medicaid might not be the sole reason why, but it’s probably playing a big part.

For this upcoming fiscal year (which begins on July 1), the state has appropriated close to $9.4 billion to Medicaid. This includes more than $1.86 billion in general revenue (state funds that include your income taxes and most of your sales taxes). This is an increase of close to $200 million ($110 million in general revenue) over this year. That sounds like a lot of money, and it is, especially considering that Medicaid continues to take up a larger portion of the state’s budget.

The two charts below show the effects of Medicaid growth on state general revenue expenditures:

Inflation3 Inflation5

 

As you can see, as Medicaid grows, other programs like higher education and the foundation formula shrink as a portion of the budget. That isn’t to say that such shrinking is good or bad, but since the state has a balanced budget amendment, appropriators don’t have much choice in the matter either way.

With Medicaid costs growing, one would understand a desire to get costs under control. However, there is a concerted effort in this state to actually expand Medicaid. My colleague Patrick Ishmael has highlighted several reasons why this would be a bad idea, but solely from a budget perspective, expanding the program would be disastrous.

We need to reform Medicaid, not expand it. Ishmael has laid out ways to improve our Medicaid system. If the state can save more on Medicaid or at least stop its growth, it would grant financial flexibility to policymakers to either spend on other important items or return more money to the people who pay the bills, taxpayers.

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