Students Need Choice, Not-Pie-in-the-Sky Solutions

Posted on by James V. Shuls

When the chairman of the Black Leadership Roundtable announced his plan for ensuring Saint Louis-area students have access to a quality education—a city-county school district—he was presenting an idea that has been recycled for decades. In his 1985 book, A Semblance of Justice, Saint Louis University sociology professor Daniel Monti wrote, “A review of St. Louis County Board of Education’s deliberations between the 1950s and 1970s reveals three overriding concerns among professional educators and the lay leadership: the merger of all county districts with the city district, the equalization of school tax rates in the area, and the consolidation of districts within St. Louis County.” The idea may have some merit. Unfortunately, it is simply too pie in the sky to ever make a difference for students who need better educational options today.

It is highly unlikely that citizens in high-achieving, wealthy school districts such as Clayton would agree to a merger with the low-performing, poor school district of Riverview Gardens. Yet, even if all the area districts merged, it would not dissolve the pockets of concentrated poverty. Though it’s true that school district boundaries would be erased, the boundary lines around individual school buildings simply would become starker; essentially transferring the problem of housing decisions based on district performance to housing decisions based on school performance.

No, simply consolidating school districts will not solve St. Louis’ educational problems. The editorial board of the St. Louis Post-Dispatch realizes as much. When they called for a city-county school district in April 2014, they wrote that their ideal school district would utilize “some form of open enrollment.” The editorial board implicitly recognized that school choice must be a part of any plan to improve educational outcomes for disadvantaged students in the Saint Louis area.

Though the city-county school district will likely never happen, there are ways in which we can expand options for students. For starters, it should be easier for students in low-performing schools to take the dollars allotted for their education to the school of their choice. Missouri has had a successful, voluntary inter-district choice program between the St. Louis Public Schools and county school districts since 1981. With some modifications, the law that allowed Normandy and Riverview Gardens students to transfer to higher-performing schools could be just as sustainable. Moreover, the law could be expanded to allow all students the opportunity to seek the best education possible.

Along those lines, Missouri should allow students to enroll in charter schools across district boundaries. There are many well-regarded charter schools in Saint Louis that would welcome students from Normandy, Riverview Gardens, or other school districts. Moreover, there are many charter schools that would like to open in struggling school districts. They are inhibited from doing so, however, because they can only enroll students from within district boundaries.

Finally, Missouri should create a tax-credit scholarship program to enable students to attend a private school of their choice. Fourteen states now have a tax-credit scholarship program. These programs expand opportunities for students whose needs are not being met, especially students who are disadvantaged or have special needs. What is more, tax-credit scholarships save states money.

We do not need to hold out hope for large-scale changes to area school district boundaries when these solutions are at our fingertips. If Saint Louis truly wants to dissolve the poverty cycle in urban communities, then it should support realistic solutions like charter school expansion, voluntary open enrollment, and a tax-credit scholarship program.

James V. Shuls, Ph.D., is an assistant professor of educational leadership and policy studies at the University of Missouri–St. Louis and a fellow at the Show-Me Institute.

Map Series: II. The Loop Trolley and Existing Transit

Posted on by Joseph Miller

Loop Trolley_Existing_Transit

The map above shows the Loop Trolley in relation to existing demographic characteristics. As the map shows, the Loop Trolley’s path is intersected by seven MetroBus routes and passes within a few meters of two MetroLink stations. The trolley, if it is built, will be redundant for nearly all conceivable transit trips. The map also shows the percentage of renters per census bloc around the proposed route. While multi-unit housing and a high renter population generally means more transit usage, it also means that most of the benefits from any gentrification will accrue to landlords, not residents. Renters as a percentage of total occupants are relatively high around the trolley route. Read more from the Show-Me Institute on the Loop Trolley here.

ESEA: What Should Reauthorization Look Like?

Posted on by Brittany Wagner

Although the Show-Me Institute typically focuses on state-level education policy issues, discussions regarding the controversial Elementary and Secondary Education Act (ESEA) have been popping up lately.

LBJ_ESEA-signing

The ESEA was created in 1965 as a part of Lyndon B. Johnson’s “War on Poverty.” The statute funds state primary and secondary education. Currently, Missouri school districts receive about 10 percent of revenue from the federal government.

The ESEA has been reauthorized every five years, and each presidential administration has left its mark on the original act. Most recently, it was reauthorized during the Bush Administration as No Child Left Behind (NCLB). Because Congress has not reauthorized the act during Obama’s presidency, there is concern the administration might be using the act as leverage to incite favored reforms.

The Department of Education has instituted “waivers” from NCLB. The adoption of the Common Core State Standards and tying teacher evaluations to student data are policies states must adopt to receive a waiver. Waivers have faced criticism, as, under similar conditions, some states have received them while others have not. Last month, Oklahoma was given its waiver back.

The question is: Assuming states continue to receive federal monies (and the act will be reauthorized), what should the ESEA’s reauthorization look like?

In an op-ed in the Washington Times, Heritage Foundation Fellow Lindsey Burke made the following recommendations:

  • Eliminate any federal mandates concerning NCLB;

  • Reduce the number of programs associated with NCLB; and

  • Allow states more portability with Title 1, the component of NCLB that allows students in failing schools the option of transferring to a higher-quality public school.

Burke’s recommendations don’t end federal intrusion into state education altogether, but this does seem to be a compromise between keeping the ESEA and giving power back to the states.

Should the federal government stay out of education completely, including federal funding? What do you think of Burke’s recommendations?

Support This Blog and the Show-Me Institute

Posted on by David Stokes

As you consider your charitable contributions for the end of 2014, we truly hope that you will renew your support of the Show-Me Institute by making a tax-deductible donation this year. We could not perform our mission of advancing free-market solutions for Missouri public policy without the support of people like you. Your prior financial support has allowed the Show-Me Institute to become the primary source for free-market research and policy solutions in Missouri.
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With your help, we will continue to fight for limited government, individual liberty, reduced regulations, and entrepreneurial freedom.

If you enjoy reading this blog and agree with the ideas it presents for free-market based policies in Missouri, I hope that you will renew your support of our mission by making your tax-deductible contribution today!

Map Series: I. North Saint Louis Municipalities Fines per Resident

Posted on by Joseph Miller

North_County_Munis

This map shows the amount of revenue from fines and fees the many small municipalities of North Saint Louis County collect per resident. While many collect amounts similar to Saint Louis City and larger municipalities in the county, some collect much more. As the map shows, Edmundson, Calverton Park, Normandy, Pine Lawn, Vinita Terrace, and Beverly Hills collect more than $300 in fines per resident annually. See more of our writings on municipality fines and fees here.

Why Saint Clair Wants Congress to Close Its Airport

Posted on by Joseph Miller

In a previous post we detailed how one Missouri city, Saint Clair (located in Franklin County), has been trying (and failing) to close its small, money-losing local airport since 2006. The city government believes that the resources and land devoted to the airport would be better spent on commercial property development, not keeping a small general aviation airport with a handful of tenants up and running.

While there is some local support for keeping the airport open among politicians and a particularly vocal tenant, the principal protector of St. Clair Regional Airport is the Federal Aviation Administration (FAA). Because the airport has received federal grants to improve the airport in the past, the ability of the local government to operate (or close) its airport is tightly constrained by FAA grant assurances. As we wrote before:

Two of the more cumbersome assurances for a city like Saint Clair are Nos. 5 and 25. Assurance No. 5 obligates Saint Clair to maintain it as a public airport and not dispose or sell any part of the airport without FAA approval. The FAA will only give approval if Saint Clair can show that closing the airport improves aviation in the area. In addition, the dispensation to sell the airport does not free Saint Clair from reimbursing the federal government all recent federal grants. This will cost the city more than $750,000.

The city’s back-and-forth negotiations with the FAA have failed to produce results.

In an attempt to accelerate the process, Senator Claire McCaskill introduced a bill (S.2759) that would specifically close St. Clair Regional Airport. That bill passed the Senate on December 3, and if it passes the House and receives the president’s signature, the FAA would have to allow the airport’s closure.

You read that last paragraph right. Getting a bill through the U.S. Congress is considered a shortcut to closing a general aviation airport owned by a Missouri city with less than 5,000 residents. That is the kind of intransigence and red trap cities encounter when they, by taking what looks like free money, accept the oversight of federal bureaucracies over local infrastructure. If other local governments want to avoid Saint Clair’s headaches, they should support the development of private airports and local user-funding sources whenever possible.

Highway Funding in Missouri: The Fuel Tax Option

Posted on by Joseph Miller

As first appearing in the Columbia Missourian:

The failure of Amendment 7, the proposed transportation sales tax, in August has left the Missouri Department of Transportation (MoDOT) in a financial bind. In the next few years, the department will no longer have the funds necessary to maintain the quality of the state highway system, much less improve it.

Former proponents of Amendment 7 claim that sales taxes are the best solution for MoDOT’s problems because they are the most politically feasible method of raising large amounts of money. Raising the state gasoline tax (currently 17 cents per gallon)—MoDOT’s principle revenue stream, they say—is not good policy because it is a declining source of funds and it does not poll well. But as we have shown before, fuel consumption has been declining very slowly, and it actually increased in the last year. The erosion in the gas tax’s purchasing power is mostly the result of inflation; Missouri last increased its fuel taxes in 1996, since which time prices have increased an average of 34 percent.

Far from being politically unfeasible, raising the gas tax is actually the simplest method for the state legislature to raise more money for MoDOT. That is because the provision that forces tax increases to go to the voters, the Hancock Amendment, has exceptions for small increases of existing revenue streams. Under the amendment, the legislature can increase revenue in any given year as long as new revenue does not exceed $106 million ($50 million in 1980 indexed to personal income growth) or 1 percent of state revenue looking back two years ($84.2 million for last year), whichever is lower.

Using 1 percent of previous state revenue as a cap, the legislature can collect around an additional $84 million in fuel taxes next year. Missouri currently generates about $29 million per cent from fuel taxes, meaning the state could raise fuel taxes by more than two cents without triggering Hancock requirements. Or, if Missouri followed the example of the federal government and many other states in charging diesel at a higher rate than regular gasoline, the state could raise the diesel fuel tax rate by five cents and the regular fuel tax by one cent and remain under the cap. That would generate an addition $78 million for MoDOT next year.

What’s more, because state revenue has been growing and per-cent fuel receipts have been declining recently, the state legislature could raise the fuel tax in successive years, which could give MoDOT the needed funds to maintain and make necessary improvements to state highways. In fact, this is precisely how Missouri last increased its fuel taxes in the 1990s.

Fuel taxes, as indirect user fees, are a preferable and possible way of funding highways in Missouri. If more money truly is required, the legislature has the option to raise fuel taxes without sending the issue to a ballot and without resorting to new, inappropriate funding mechanisms.

 Joseph Miller is a policy researcher at the Show-Me Institute.

Give Tesla and Missourians a Fair Deal

Posted on by Joseph Miller

First appearing in the Springfield Business Journal:

The last time I bought a MacBook I made the purchase from an electronic goods store, but I could have bought it from one of Apple’s retail locations. In fact, millions of Americans purchase products directly from manufacturers rather than through a local storefront under independent ownership. Should Missouri pass a law barring Apple from directly selling computers? Such a prohibition would strike many people as an abridgement of freedom of choice, but that sort of policy is exactly the approach some lawmakers want when it comes to selling cars.

In Missouri, like other states, it is illegal for any car manufacturer with franchises to sell directly to the public. Dealerships fought for that regulation, implemented in the 1980s, under the argument that they needed to be protected from predator car companies.

Tesla, a new electric car company that has no dealerships, is selling cars directly to Missourians. Instead of welcoming a new business model to the state, car dealers and politicians like Mike Kehoe (himself a former dealership owner) want to ban direct-manufacturer car sales entirely.

Supporters of direct sales bans claim dealerships just want a level playing field, and that Tesla is getting special treatment. They claim, as all middlemen have, that their position is necessary, that allowing direct competition from manufacturers could allow car companies to destroy the dealership model. That would be bad for Missourians, they assert, because dealerships protect consumers and provide competitive markets. Having many dealers supposedly creates competition, leading to the lowest possible price for consumers.

In reality, vehicle distribution through dealerships can be costly to the consumer. The 2009 Department of Justice paper “Economic Effects of State Bans on Direct Manufacturer Sales to Car Buyers” reported that as much as 30 percent of the cost of a new car is due to auto distribution. Enshrining the car dealership model in law has limited the ability of car manufacturers to both reduce inventory costs and increase customization, practices common in other markets. In Brazil, where GM can engage in direct sales, cost savings from order to delivery averaged 8.6 percent through direct sales.

Car buyers in Missouri, and in America, might prefer directly buying from manufacturers for lower prices, customization, or simply to avoid bargaining at a dealership. A J.D. Power and Associates poll found that half of Americans profess a desire to buy manufacturer-direct, even if the prices are equivalent. If dealerships cannot lure customers the way they operate now, why should Missourians be forced to buy their new cars only from them?

Allowing manufacturer-direct car purchases does not necessarily mean the death of dealerships, as long as they can be of service to both buyers and car companies. From the manufacturer perspective, dealerships allow the company to devolve responsibility for advertising, selling, financing, and maintaining a car, which allows the company to focus on car production.

I bought my MacBook from a store, but I wouldn’t force that choice on others in the market. The next time you purchase a computer, you will have the choice to buy from many types of stores or even directly from a manufacturer—business models that meet the needs of customers in different ways.

That’s a vibrant marketplace, and there is no reason the same type of market cannot exist for cars in Missouri. Indeed, if the playing field between Tesla and other car companies needs to be leveled, we should do so by scrapping the ban on direct car sales. There is no reason manufacturer-direct sales cannot exist side-by-side with competitive dealerships.

Joseph Miller is a policy researcher at the Show-Me Institute.

 

Obamacare’s Medicaid Expansion as “Job Creator”? Not So Fast

Posted on by Patrick Ishmael

One of the Left’s favorite talking points for why states should expand Medicaid is that doing so will mean more jobs at Missouri’s hospitals. That argument is attractive, at least superficially; if the government spends more money on health care, the assumption could be that more people will be hired by hospitals. In other words, it’s “the stimulus” debate all over again: If you spend it, there will be jobs.

But is it true that Medicaid expansion actually leads to hospital job growth? So far, it sure doesn’t look like it (emphasis added).

U.S. healthcare employment began to accelerate after the first three months of the year and the uptick caught the attention of economists with the Altarum Institute, who conducted the analysis to determine whether hiring grew faster in Medicaid expansion states. It did not, they found. In fact, growth was faster in states that did not expand Medicaid, said Ani Turner, deputy director of Altarum’s Center for Sustainable Health Spending.

Proponents of expansion have touted the economic benefits of increased Medicaid enrollment, as they make their case to reluctant state governors and lawmakers. Indeed, hospitals in states that expanded eligibility are seeing less bad debt and fewer uninsured patients. But it might become harder to argue that Medicaid expansion is a jobs engine if the numbers don’t bear it out.

Healthcare averaged 14,271 new jobs a month from April to October in states that did not expand Medicaid, up 117% from the preceding 12 months. The healthcare employment increase in Medicaid expansion states over 2013, meanwhile, was 92%.

You can find one of Altarum’s briefings on the subject here. Missouri is fortunate that by rejecting the expansion it can carefully watch the experiences of other states who did expand their Medicaid programs—decisions oftentimes based on the specious promises of special interests and ambitious politicians. As the numbers come in and oft-cited expansion states like Arkansas consider reversing course, the Show-Me State’s hesitance to jump into the Medicaid expansion pool looks all the more appropriate.

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