Paper Release-Interdistrict Choice for Students in Failing Schools: Burden or Boon?

Posted on by James V. Shuls

Interdistrict-Choice-ShulsToday, the Show-Me Institute is releasing my latest paper, “Interdistrict Choice for Students in Failing Schools: Burden or Boon?” The abstract of the paper is below:

In June of 2013, the Missouri Supreme Court upheld a state law that allowed students in unaccredited school districts to transfer to nearby accredited districts. The student’s home district would be responsible for making tuition payments and providing transportation. Using data, firsthand accounts, and structured interviews with school district superintendents, this paper examines what happened in response to the transfer program. Specifically, it examines how the districts responded. In all, more than 2,000 students transferred from the unaccredited Normandy and Riverview Gardens school districts, roughly a quarter of the total student population. These students transferred to two dozen area school districts. Except in isolated cases, evidence suggests that these students were largely absorbed into receiving school districts without causing much disruption. For the unaccredited school districts, however, the transfer program had a profound impact on school finances.

I invite you to check out the full paper by clicking here.

Missourians Take to the Skies With Increasing Numbers

Posted on by Joseph Miller

In 2014, total airline passengers grew at Missouri’s largest airports by just over 1 percent, reversing the losses over the past two years and giving those airports almost 11.6 million departing passengers (enplanements). This mirrors national trends, as total U.S. airline passengers grew at around 2.5 percent in 2014.

The fact that air traffic grew faster in the rest of the nation than it did in Missouri could be taken as meaning that Missouri is lagging the rest of the nation in growth. But in reality, most of Missouri’s airports—including Kansas City International (MCI), Springfield-Branson (SGF), Joplin Regional (JLN), and Columbia Regional (COU)—grew faster than the national average, in the case of Springfield, Joplin, and Columbia much faster (at 8.4 percent, 11 percent, and 16 percent, respectively). Springfield’s recent growth may be enough for it to regain its small hub airport status, which SGF lost following the recession. The performance of Missouri’s largest airport, Lambert-St. Louis International (STL), dampens the state’s overall numbers. Despite a concerted push to get more flights, STL’s passengers actually decreased by about 0.6 percent last year.

MO_enplane

The poor performance of STL compared to other airports in Missouri and nationally may be in part due to a relatively weak recovery in the Saint Louis area. It is well understood that underlying economic conditions mostly determines total airline traffic in large cities. However, Saint Louis did see some positive economic growth in 2014, along with a large increase in employment.

Another factor that may affect STL’s ability to gain both flights and passengers is cost. STL’s cost per enplaned passenger, at almost $15, is about three times the costs at MCI or SGF. Higher costs can mean fewer or more expensive flight options, dampening demand. STL’s elevated prices mainly stem from massive debt taken on to build a new runway in the early 2000s, planned when the airport was still a TWA hub.

STL’s leadership, unlike those at another Missouri airport, see the airport’s high costs as a major hurdle toward increasing traffic and are taking aggressive steps to bring in more revenue and rein in costs. This includes leasing out unused land to local businesses and attempting to attract more national and international cargo shipments.

Whether or not these strategies will succeed is as yet unknown. But perhaps the lesson from STL’s experience for all Missouri’s cities is that if their airport provides what it needs at a low price, it will be in the best position to contribute to, and benefit from, better economic growth.

Show-Me Forum: Government Unions: Restoring Accountability

Posted on by John Wright

In 2007, the Missouri Supreme Court threw out 60 years of precedent when it decided that the constitution creates collective bargaining rights for government employees. Since then, public agencies, like school districts and cities, have struggled to make sense of their rights and obligations under this rapidly changing body of law.

At this forum, Policy Researcher John Wright discusses some of the key labor issues affecting government workers. He highlights many of the loopholes, oversights, and ambiguities in existing law that harm the transparency of our public institutions and make it harder for citizens to hold their government accountable.

 

More Progress on Ridesharing in Kansas City

Posted on by Joseph Miller

In the last year, Kansas City has been slowly but surely opening up to ridesharing companies. The city government’s initial response to the entry of Lyft last March was negative, with officials acting almost offended at the idea that: 1) existing taxi regulations were not up to date, and 2) a company would dare to start operating without their prior approval.

LyftSince that time, the city has made progress. Officials have given up the pretense that ridesharing companies like Uber and Lyft need only apply for a permit; the city has now overhauled their entire for-hire vehicle code. When Uber and others argued that some new regulations needlessly required city-managed background checks and yearly driver registration fees, the city recently amended the code once more.

This is not to say that the city would not be served by further reductions in regulation. While ridesharing regulations are much improved, existing taxi regulations have been left largely untouched. If Kansas City persists with a lightly regulated ridesharing market and heavily regulated taxi market, it risks the destruction of the traditional taxi business model. However, some taxi industry leaders are behind the most recent compromise, which could mean that taxi companies feel they can compete with Uber given the current regulatory setup. (Alternatively, it could mean that new ridesharing regulations will turn out more restrictive than they now appear.)

These caveats notwithstanding, Kansas City officials deserve credit for their progress on this issue. Their efforts certainly contrast favorably with policies in place at the other end of I-70, where regulators seem committed to keeping ridesharing expensive and unavailable in Saint Louis.

Power Play: State to Give Special Electricity Deal to Favorite Business

Posted on by Michael Rathbone

Have you ever taken a look at something and thought to yourself, “Wait a minute, I don’t think you’re using that right”? Kinda like that scene in Tin Cup when Kevin Costner uses a shovel instead of a 3 wood when golfing. Well, it appears that the Public Service Commission (PSC) has decided to get in the economic development game.

The PSC serves to regulate utilities in the state so that Missourians receive safe and reliable services while the utility companies charge rates that allow them to earn a reasonable rate of return on their investments after they recoup project costs.

However, the PSC recently instructed its staff to prepare an order granting Noranda (an aluminum company in Southeast Missouri) a reduced rate on the electricity it consumes. The reasoning behind this decision is to allow Noranda to save on costs so that it can improve its financial position and avoid financial difficulties in the future.

This is yet another attempt by the state to help improve Noranda’s bottom line. Noranda already pays the lowest electricity rates in Missouri. Since it is the largest consumer of electricity, I can understand why that would be the case (bulk discounts for large purchases aren’t uncommon). However, the state also specifically passed legislation that allows Noranda to shop for its electricity provider. No other person or business in the state has such a privilege.

Now the state wants to lower Noranda’s rates even further. Why? That’s simple: to save jobs, which is a noble sentiment, but this is not the role of the PSC. This order amounts to the government picking winners and losers, just through a different means than what we’re typically used to seeing.

I want Noranda to stay in business, but it’s not the PSC’s job in order to guarantee that. If we work to keep the cost of doing business low in Missouri, everybody, including Noranda, will benefit.

Traffic Fine Law on the Verge of Passing

Posted on by Joseph Miller

On April 22, SB 5, which greatly strengthens a law that limits how much revenue a city can raise via traffic fines, passed the Missouri House.

The bill has changed somewhat since it was introduced in the senate. Starting in 2016, the cap on how much a municipality can raise from traffic fines will fall from 30 percent to 20 percent of general revenue, unless the municipality is within Saint Louis County, where it will fall to 15 percent. These provisions are somewhat weaker than the original bill, which would have brought the cap down to 10 percent in populous counties. The amended bill includes more provisions that make courts transparent and protect people arrested due to unpaid fines.

The bill’s text still includes the enforcement provisions that the existing law, known as the Macks Creek Law, lacks. No enforcement has meant fines have become a significant revenue stream for cities, especially in Saint Louis County.

nstl

If this bill passes, revenue from fines and fees will be well defined, reporting requirements will be strict, and penalties for failing to comply are significant, including triggering a vote on disincorporation.

Many municipalities still object to the law, claiming that this prevents them from enforcing the law. But as we wrote before:

This argument falls flat because revenue collected in excess of SB 5’s provisions is simply remitted to the state, which in turn gives that money to the school systems in the county of the municipality in question. If police in local cities need to fine people to protect health and safety, they can still do so. But SB 5 takes away the narrow financial interests of the city government.

If the senate agrees to the house’s alterations to the bill, SB 5 will only require the governor’s signature to become law.

Missouri Bureaucracy Seeks to Tie Yoga in Regulatory Knots

Posted on by John Wright

The Missouri Department of Higher Education is seeking to regulate yoga teacher training programs (YTTs) as “vocational schools” under its Postsecondary School Certification Program. From the Yoga Alliance:

Regulation under this program means that YTTs must comply with extensive requirements and pay expensive fees. We share the concerns of Missouri yogis that regulation of YTTs in this manner is not only unnecessary, but harmful to the yoga community and small businesses in this state.

Other states, including New York and Minnesota, have attempted to license yoga teachers as well.

Yoga is an old practice, and it has done just fine without state occupational licensing. I don’t think we need the state to start tinkering with it now.

I hope Missouri government bodies have the common sense not to butt in here—like they have with African hair braiding and massage therapy.

Of Stadiums and Economic Spillovers

Posted on by Joseph Miller

Recently, we wrote a letter to the Post-Dispatch that criticized the idea that new tax revenue from a riverfront stadium would “pay” for $405 million in public subsidies. In response, one Saint Louis County resident claimed that: 1. spending on the Rams is not diverted from other areas; and 2. he trusts the governor and his numbers, not the Show-Me Institute’s.

First, we’ll address the substitution effect, or the idea that money spent on the Rams does not necessarily mean new economic activity. Our critic claims that if the Rams leave, he and many others would not be spending their dollars downtown. The problem with that reasoning is that it conceptualizes the Saint Louis region as municipally balkanized, and not as part of a regional or state economy, which in fact they are. Thus, if he and other county residents stay in the county on Sunday and spend money there, the regional and state economy is unaffected, along with the regional and state tax base.

Addressing the second point, if our critic does not believe Show-Me Institute’s numbers, why not the Brookings Institution, which wrote:

A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. . . . No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus . . . most tax collections inside a stadium are substitutes: as other entertainment businesses decline, tax collections from them fall.

Or our critic could also read a review of the economic literature, which finds:

Because sports facilities are not expected to generate additional net output in a metropolitan area and no systematic empirical analysis ever finds evidence that they do, sports facilities cannot be counted on to augment tax collections.

Put simply, the evidence on whether sports stadiums generate economic growth or sufficient tax revenue to justify large subsidies is overwhelmingly in the negative. Our findings accord with these prior results, the governor’s and Post-Dispatch’s do not. I’ll leave it to the reader to decide whose heart is leading whose head.

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