Illinois Makes Union Fees Voluntary for Government Workers

Posted on by John Wright

illYesterday, the governor of Illinois signed an executive order making union fees voluntary for government employees. Government unions are likely to challenge the order, but it is a significant gain for workers who do not want to pay for representation by an association to which they do not belong.

Why doesn’t Missouri follow suit? In our state, government workers, such as police and firefighters, are often required to pay for union activity, whether or not they want to be a member of a union. Many police and firefighters in this situation gladly accept representation by their union and would be happy to pay voluntarily. However, the government should not force workers to pay for services they don’t want.

Sometimes workers end up paying for two unions at the same time. In Saint Louis, the St. Louis Police Officers Association (SLPOA) has mostly represented white police officers, while the Ethical Society of Police has historically acted for African-American police. Recently, SLPOA won a union contract that allowed it to force payments from all rank-and-file officers. This action forced members of the Ethical Society to choose between leaving the employee association that they wanted to represent them or paying dues to two unions at once.

Illinois’ new order is a serious gain for liberty. Missouri could enact similar reforms. Indeed, doing so would protect the rights of police and firefighters who do not want to be forced into paying for the services of a group that they haven’t voted for and don’t want as representatives. For those government workers who protect us, it’s the least we can do.

Tennessee, Wyoming Reject Obamacare’s Medicaid Expansion (Again)

Posted on by Patrick Ishmael

Medicaid is back in the news as pushes to implement Obamacare’s expansion in Tennessee and Wyoming came to a head last week—with both states rejecting the expansion.

First, Tennessee:

Tennessee was widely seen as the next Republican state that could expand Medicaid under Obamacare, with Haslam negotiating with federal officials for months on an approach that included conservative policy elements. But Insure Tennessee always faced significant obstacles in getting legislative approval, and it was killed even though hospitals had agreed to cover the state’s share of the costs.

The 7-4 vote against the plan by the state Senate Health and Welfare Committee came after impassioned testimony on both sides of the debate. The plan has little chance of being revived during the regular legislative session.

The “hospitals will cover the cost” proposal is becoming a common sleight of hand in the realm of conservative Obamacare apologetics. Those costs would be passed on to customers, either directly through their bills or indirectly through their taxes. It’s not free money.

And then there’s Wyoming:

Several senators said Friday they don’t trust federal promises to keep paying. Some said they don’t want to contribute to the national debt by accepting more federal dollars in any case.

“Make no doubt about it, this saddles more debt upon your children and your grandchildren,” said Sen. Larry Hicks, R-Baggs, who voted against the bill.

[Sen. Michael] Von Flatern said that Friday’s vote could make it harder to get expansion in the future because the bill to the state will be higher.

Mr. Hicks is exactly right that the expansion is being funded out of debt, and Mr. Von Flatern is similarly right that the direct costs of the expansion are on the way and will make later expansion fights tougher for Obamacare proponents. Right now supporters are relying on the “no money down” provisions of Medicaid expansion; once that’s gone, then the question of how a state actually pays for the program comes into sharper focus.

Missouri should continue rejecting bad policy like the expansion. It certainly isn’t alone in doing so.

Kansas City, Millennial Magnet?

Posted on by Patrick Tuohey

In a previous piece, we examined some of the research dealing with millennials, where they choose to live and whether any associated growth will be long lasting. In a New York Times story claiming that millennials are seeking urban areas, a think tank called City Observatory listed the top U.S. cities and their population aged 25 to 34 who had a four-year degree.

If you only look at the close-in downtown neighborhoods, defined by the study as those “within 3 miles of the center of the central business district,” Kansas City saw an increase of 63 percent over the past 12 years. Compared to our peer cities, this is impressive. (See Table 1.) So supporters of using taxpayer dollars to subsidize development might argue their profligate spending is working.

Table 1: Downtown Population; 25-34 with Four-Year Degree
City 2000 2012 Pct.Chg.
St. Louis 3.094 7,371 138%
Indianapolis-Carmel 3,235 5,386 67%
Kansas City 2,640 4,294 63%
Denver-Aurora 20,985 31,678 51%
Oklahoma City 2,173 3,048 40%
Louisville-Jefferson Co. 4,418 5,683 29%

But the data about cities as a whole is not so positive. Of those same cities, Kansas City as a whole ranked last in growth of this sought-after population. (See Table 2.) The average population increase for this demographic in all 51 cities was 25.2 percent. Kansas City came in below that.

Table 2: City-wide Population; 25-34 with Four-Year Degree
City 2000 2012 Pct.Chg.
Oklahoma City 39,114 61,331 56.8%
Denver-Aurora 163,367 239,524 46.6%
Indianapolis-Carmel 74,073 96,633 30.5%
Louisville-Jefferson Co. 41,679 53,489 28.3%
St. Louis 108,723 138,806 25.8%
Kansas City 89,205 107,061 20.0%

City leaders have put their faith in an idea about urban millennials that may or may not be legitimate. In doing so they have diverted funds from projects and services throughout the city to build and maintain things downtown such as the streetcar and Power and Light District. But any subsequent population growth downtown is dwarfed by population stagnation elsewhere.

The argument over attracting urban dwellers is hotly contested. Regardless of who is right, Kansas City is not seeing much success, and economic development is more cannibalization than growth. Residents in the north, south, and east should be wary of sacrificing their own needs in favor of a downtown strategy that so far isn’t working.

Super Bowls and the Super Rich: A Tale of Two Cities

Posted on by Andrew B. Wilson

As first appearing in The American Spectator:

In ancient Athens, the birthplace of democracy and human freedom, the richest citizens often paid for roads, bridges, theaters, and gymnasiums. They picked up the bill for athletic games and other public amusements. In times of peril, they built war ships and donated them to the city.

This voluntary giving of both time and money maximized freedom, reduced the need for government, and reinforced a powerful sense of Athenian exceptionalism. In his famous funeral oration in 431 BC, Pericles spoke of how the freedom and openness of their city did not weaken but only served to redouble the valor, resourcefulness, and generosity of the citizenry, enabling Athens to exceed all its neighbors in dedication to the common good, both in war and peace.

Charles W. Adams, author of the classic book For Good and Evil: The Impact of Taxes on the Course of Civilization, called this system of giving “the Greeks’ brilliant alternative” to government ownership and control. He described it as “private enterprise for public good.”

In our own time, sports-minded cities across the United States have stood this ancient ideal on its head. In trying to attract or to hold onto sports franchises, most U.S. cities have followed the model of public assistance for private gain, or what is also known as crony capitalism.

Political leaders in our cities and states have been all too willing to grovel at the feet of the wealthy owners of professional sports teams, saying, in effect: If you pick our stadium over competing venues, we will do everything in our power to use the public purse to swell your bottom line and multiply the value of your franchise.

Consider the astounding concessions that the city of Saint Louis made to get the then Los Angeles Rams to move to Saint Louis in 1995—and how the city has now landed in a situation in which it will have to agree to another roughly $400 million in taxpayer assistance to have any hope of holding onto the team.

Neil deMause, co-author of Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit, calls the original deal that the city of Saint Louis struck with the Rams “the worst lease ever”—meaning the most one-sided in enriching the team’s owners at the expense of taxpayers . . . while doing far more to please deep-pocketed corporate clients than to control ticket prices or provide better seating for ordinary fans.

The Rams paid no part of the $480 million in construction costs in building the Edward Jones Dome, and they have paid almost nothing in rent (just $250,000 a year). They received all luxury box and concession revenues, took 75 percent of advertising and name rights, and pocketed a $46 million relocation fee.

Still more, political and civic leaders signed on to a deal that gave the team the right to opt out of a 30-year lease after 20 years—if the stadium no longer ranked in the “top tier” of NFL stadiums. As a result, the Rams may move as soon as 2016, but Saint Louis City and County and the state of Missouri are still on the hook for $120 million in remaining bond payments falling due between 2016 and 2021.

According to Forbes, the St. Louis Rams football team is now worth about $930 million. Experts say that the value of the franchise will jump to between $2.5 billion and $3.5 billion if the team moves to Los Angeles. Any such increase in value would more than offset the cost of building a new stadium in Los Angeles. Rams owner Stan Kroenke—a billionaire developer and the husband of Ann Walton Kroenke, daughter of Wal-Mart co-founder Bud Walton—has acquired a prime site in the city’s Inglewood neighborhood.

The city of Saint Louis and the state of Missouri are considering a brand-new publicly owned riverfront stadium, with still more luxury suites, high-priced club seats, scoreboard, and other amenities, aimed at meeting the most exacting NFL specs. It would cost close to a billion dollars, with local and state taxpayers picking up about 40 percent of the bill through publicly financed debt, state tax credits, and other means that would deplete local and state treasuries and leave less money for police, roads, schools, and other public needs.

However, there seems to be little public or political support for the project. A recent poll commissioned by the Missouri Alliance for Freedom shows that 70 percent of Missouri voters are opposed to public funding for the stadium.

In waving good-bye to the Rams, many Saint Louisans (this writer included) are therefore inclined to say “thanks for the memories.” We had “the greatest show on turf” for three years—with the 1999 Super Bowl champion, a playoff contender in 2000, and losing only in the final seconds of another thrilling Super Bowl in 2001.

Thirteen out of 32 NFL teams have never won the ultimate prize, and four have never made a Super Bowl appearance.

But as for public funding of a new stadium built mainly for the benefit of a billionaire owner and wealthy patrons, enough is enough.

Andrew B. Wilson is resident fellow and senior writer at the Show-Me Institute.

Two Thumbs Down on Taxpayer Help for New Downtown Stadium

Posted on by Andrew B. Wilson

As first appearing in the Columbia Daily Tribune:

Talk about pouring taxpayer money down a rat hole. How about having to pay out $120 million in retiring the debt on a domed and doomed stadium – whose principal tenant has flown the coup for a new home in a faraway city?

That will happen if the St. Louis Rams decide to move to new digs in Los Angeles in 2016 – taking full advantage of the escape clause open to the team through the original lease agreement.

By the end of this calendar year, Saint Louis City and County and the state of Missouri will have paid off $360 million out of the $480 million in bonds that financed the construction of the Edward Jones Dome, which opened in 1995.

That still leaves another $120 million in bond payments due between 2016 and 2021 ($60 million from the state and $30 million each from the city and county).

Neil deMause, co-author of Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit, has examined dozens of cases in recent decades of cities that have ponied up hundreds of millions of dollars for the construction of new stadiums for professional sports teams. He calls the deal that the city of Saint Louis struck with the Rams “the worst lease ever” – meaning the most one-sided in enriching the team’s owners at the expense of taxpayers . . . and in opting to please deep-pocketed corporate clients (conducting partially tax-deductible “business entertainment” in their luxury suites) more than to control ticket prices or provide better seating for ordinary fans.

The Edward Jones Dome (formerly the TWA Dome) was a 100 percent publicly financed project. The Rams paid no part of the construction costs, and they have paid almost nothing in rent (just $250,000 a year) while receiving all luxury-box and concession revenues, claiming 75 percent of advertising and naming rights, and pocketing a $46 million relocation fee.

Still more, political and civic leaders signed on to a deal that gave the team the right to opt out of the original arrangement 10 years early – in 2015 – if the stadium did not rank in “the top 25 percent of NFL stadiums” – even if that meant having to build a whole new stadium, once again at taxpayer expense.

Jim Nagourney, an ad marketer for Anaheim Stadium who was hired away by the then L.A. Rams as a consultant on their relocation plans, made this comment as quoted in a recent article by San Diego Union-Tribune columnist Tim Sullivan:

I went to a meeting in Los Angeles one morning. We had a whiteboard, and we’re putting stuff down (to demand from cities). I couldn’t believe some of the stuff. I said, “Guys, some of this is crazy.” And John Shaw, who was president of the Rams at the time – brilliant, brilliant guy – said, “They can always say no; let’s ask for it.”

Twenty some years ago, local and state official made a big mistake in not saying no. Are today’s officials about to repeat the same mistake all over again?

Now the call has gone out for building a new open-air stadium in downtown Saint Louis at a cost of almost a billion dollars, with taxpayers bearing about half the cost – through new publicly financed debt, state tax credits, and other means that will deplete local and state treasuries and leave less money for other public needs, such as police, roads, and schools.

Some people say that Saint Louis needs a world-class stadium in order to be a world-class city. But that is an emotional argument, not an economic argument. Despite the rosy claims of local chambers of commerce, there is broad agreement among academic economists that the proliferation of new publicly financed stadiums over the past few decades has done little or nothing to underpin economic growth or employment in their host cities. In some cases, stadium projects may actually undermine growth – by diverting scarce resources to less productive use.

In the Coliseum in ancient Rome, the crowds signaled with a thumbs up for sparing the life of a game’s losing contestant or a thumbs down for showing no mercy.

We have seen that publicly financed stadiums are a misuse of public funds. It is time to turn two thumbs down on a bad idea of no redeeming merit.

Andrew B. Wilson is resident fellow and senior writer at the Show-Me Institute.

Transit of the Future; You Read It Here First

Posted on by Patrick Tuohey

“Futurist” Zack Kanter wrote for Business Insider that the coming autonomous, or self-driving, cars will reshape the U.S. economy. While the whole column is compelling, the main point is here:

A Columbia University study suggested that with a fleet of just 9,000 autonomous cars, Uber could replace every taxi cab in New York City—passengers would wait an average of 36 seconds for a ride that costs about $0.50 per mile. Such convenience and low cost will make car ownership inconceivable, and autonomous, on-demand taxis—the “transportation cloud”—will quickly become dominant form of transportation—displacing far more than just car ownership, it will take the majority of users away from public transportation as well. With their $41 billion valuation, replacing all 171,000 taxis in the United States is well within the realm of feasibility—at a cost of $25,000 per car, the rollout would cost a mere $4.3 billion.

Back in November 2013, we observed largely the same thing without the benefit of the Columbia study:

In contrast to light rail, the rapidly progressing leaps in driverless car and cycling technology are allowing people more freedom and choices in how they get from point A to B. Indeed, the future of transportation is in flexibility, not inflexibility. Google driverless cars allow for cheap and easy transit while respecting individual freedom. In several places, state legislatures have altered their traffic laws to allow for such cars.

Sadly, Kansas City is still bent on building what the people do not want, 19th-century fixed rail. Meanwhile, it fights innovation from Uber and Lyft. Our conclusion then remains true today:

The fixed rail they will be installing downtown offers none of that flexibility or popular appeal. Rails do not take passengers where they want to go; rail takes people where city planners want or need them to go (not to mention a car ride to the stations in most cases).

To add insult to injury, the rail system that is being built likely will be abandoned by the hip urbanite core that it is meant to attract as soon as something sexier comes along … like a Google car.

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The Myth of the Urban Millennial

Posted on by Patrick Tuohey

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The debate over what millennials want continues to rage in Kansas City and elsewhere. City leaders are spending gobs of taxpayer money on entertainment districts, streetcars, and subsidized housing in hopes that the so-called creative class will flock there. But the evidence to support such efforts is weak and growing weaker with time.

The New York Times published a column recently about where young college-educated people are choosing to live. The author wrote:

[A]s young people continue to spurn the suburbs for urban living, more of them are moving to the very heart of cities — even in economically troubled places like Buffalo and Cleveland. The number of college-educated people age 25 to 34 living within three miles of city centers has surged, up 37 percent since 2000, even as the total population of these neighborhoods has slightly shrunk.

Yet a Wall Street Journal piece, published just last week, reports:

A survey released Wednesday by the National Association of Home Builders, a trade group, suggested otherwise. The survey, based on responses from 1,506 people born since 1977, found that most want to live in single-family homes outside of the urban center, even if they now reside in the city.

A recent article in Business Insider suggests that the era of young professionals living in urban areas has peaked:

But a decade from now, the landscape will look very different. Millennials will pair up and have kids and want space. Cities, particularly the megacities like New York and Chicago, aren’t likely to become more affordable.

Demographics are destiny. That big bulge of younger millennials visible in the population pyramid is going to be hitting the prime age range for marriage and having kids in the next few years, and it’s likely that many of those new families will move out to the ‘burbs (or further!).

The true cost of revitalizing downtown may be more than the city can bear. Kansas City cannot afford to operate its own fountains and is cutting funds to public safety services. It cannot cover bad investments without taking money from the airport, it neglects the real urban core, and it relies on charity to meet basic city services. Kansas City needs to have a debate on these economic development assumptions, especially because there is so little money left to give away.

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