Kansas City, Meet the 325 Plan

Posted on by Joseph Miller

The decreasing amount of funding available for state highway improvements has led the Missouri Department of Transportation (MoDOT) to plan for lean times. Their draft proposal is the 325 Plan, which denotes the amount of money ($325 million) MoDOT will have for construction contracts in 2017. The amount MoDOT claims to require to maintain the state highway system in its current state of repair is $485 million in new construction contracts.

As we wrote before, the plan does not simply prioritize the highways that are most used for commercial and personal transportation. Rather, MoDOT will split state highways into a primary and secondary system. The primary system will include the highways necessary to connect all of Missouri’s communities, while the secondary system mostly handles local traffic. For this reason, Missouri highways that carry less than 500 vehicles a day are sometimes in the primary system while heavily trafficked US routes in urban areas are sometimes in the secondary system.

The primary system under the 325 Plan will cover about 8,000 miles of Missouri’s 34,000-mile highway system, and it will receive the funding to maintain its current state of repair. The secondary system will be maintained as much as funds allow, but their state of repair will deteriorate over time. A map of the 325 primary highways in the Kansas City area is shown below.

325KC

All told, only around 900 of Jackson, Clay, and Platte County’s 1,800-plus miles of state highways will be included in the 325 Plan’s primary system. While that includes all of Kansas City’s interstate highways, it excludes most Missouri routes and as much as half of the US routes in those three counties. Among those left out are parts of US 169 and US 71, both of which carry thousands of trucks and tens of thousands of passenger vehicles every day. These well-published omissions have led some to believe MoDOT is attempting to spread the pain wide, instead focusing on maintaining the most efficient highway system, in an effort to convince residents to increase funding.

Whether or not MoDOT’s 325 Plan is politically motivated, there is no doubt that without increased funds parts of the state highway system in the Kansas City area are going to suffer. That is not good for quality of life or the economic competitiveness of the region. If that situation is to be avoided, Missouri will have to modernize the user-funding base that supports the state’s critical roadways.

The Wonderful Evergreen Clause

Posted on by John Wright

Imagine you had a contract with your employer that could never be altered unless both you and your employer agreed to the changes. Imagine this contract was a windfall for you, giving you a four-day weekend, up to three months paid vacation each year, and the ability to retire early with a great pension. That might be great for you, but would it be fair?

If you live in the Saint Louis Metropolitan Area, as a taxpayer you might be the employer bound to such an agreement. The beneficiary of this arrangement? Your local firefighters union.

Nicknamed “evergreen clauses” because they make a contract last forever, these contract provisions are popping up in government collective bargaining agreements across the country. And they create a situation where elected officials cannot alter the pay, benefits, or work rules captured in a union contract unless the union agrees to this change. In practice, this means that pay and benefits can be ratcheted up in years when public finances are good and the union controls public officials, but pay and benefits cannot be brought back down when the union loses its influence or public coffers are tapped.

In West County, the Monarch Fire Protection District has tried to change the terms of its contract with International Association of Fire Fighters (IAFF) Local 2665, but it is limited by an evergreen clause. At issue in the contract are provisions that state:

  • There will be no duties (other than an alarm) assigned to safety staff after noon of each working day. Each working day is a 24-hour shift.

  • A firefighter/paramedic works three days in each nine-day period (two-to-three days each week).

  • A firefighter/paramedic with 15 years of service (most of the shift staff) is entitled to 27 days of paid vacation each year. Working nine days a month, this comes to about three months of vacation a year.

  • In addition to vacation days, a firefighter/paramedic also receives paid days off in the form of sick days and “Kelly” days.

  • Sick leave accrues over time and can be “cashed out” for pay.

Perhaps these provisions made sense when they were adopted several years ago, but now the fire district, and by extension the taxpayers, are powerless to change them.

Contracts like this shift the power of government away from the democratic process to the government union benefiting from the contract. Missouri citizens should consider whether they really want their government to have the power to bind itself to a contract indefinitely.

At the time this story went to print, the firefighters union had not responded to our request for comments.

Saint Louis, Meet the 325 Plan

Posted on by Joseph Miller

As we have written many times before, Missouri is rapidly running out of the necessary funds to maintain, much less improve, the state highway system. In response to the growing problem, the Missouri Department of Transportation (MoDOT) has come out with a draft proposal on how it will operate in lean times. The proposal is dubbed the 325 Plan, to denote the construction budget ($325 million) MoDOT will have to work with by 2017.

The heart of the 325 Plan is separating a primary state highway system that is necessary to connect Missouri’s communities from a secondary system. That primary system, about 8,000 miles of the state’s 34,000 miles of highways, will be kept in the condition they are in today. The remaining miles will receive less-than-adequate maintenance and will deteriorate over time.

Should the 325 Plan be implemented, it would be bad news for Saint Louis City and County. That is because the plan prioritizes the highway connections between, and not among, Missouri’s communities. Very heavily trafficked highways like Lindbergh, Gravois, Route 340, and parts of Manchester Road will not be part of the primary system because they carry mostly local traffic. All told, only around 55 percent of Saint Louis City and County’s state and interstate highways (by route mile) would receive primary system funding. The map below shows the area’s state highways and what portion would be in the primary system under MoDOT’s 325 Plan.

325

The obvious absence of US 67 (Lindbergh), despite the fact that it is both a US route and carries more than 20,000 daily vehicles (along with more the 2,000 trucks) along much of its length, in favor of rural highways that carry only hundreds of vehicles has led some to describe the plan as anti-urban and a political move to spread the pain wide. Whether or not this charge is merited, MoDOT’s declining construction budget was always going to mean tough choices and deteriorating roads in much of the state. That’s a situation to avoid, and one that can be avoided if the state modernizes the user-fee base that has funded the highway system for decades.

Kansas City Embraces Baristanomics

Posted on by Patrick Tuohey

Streetcars, entertainment districts, new airport terminals, Republican confabs, Super Bowls, creative-class millennials, and convention hotels all have grabbed headlines in recent months in Kansas City. Certainly they are evidence that city leaders think they can spend, spend, spend their way into wealth. But they are also evidence that Kansas City has embraced something my colleague at the Show-Me Institute dubbed “Baristanomics.” Baristanomics is the theory that lifestyle spending can revitalize an urban economy.

It doesn’t work.

Richard Florida first proposed the idea that cities need to attract the so-called creative class in order to survive. His prediction was not borne out by time. But like all good economic theories, zealous adherents aren’t swayed by plain evidence. Here in Kansas City, leaders still talk about attracting this creative class with streetcars despite the fact that the evidence tells us that even the millennial-age cohort is no less likely to own cars than their peers in past generations. They act the same way any group does: They move to regions that offer jobs.

A study of successful innovation hubs even demonstrated that among those that have been successful there is no winning government strategy—success does not lend itself to a simple formula.

Boosters of Baristanomics point to the slight growth of downtown residents to show the success of the city’s profligate spending. As another high rise is proposed for downtown—and subsidized with taxpayer dollars—the high availability no doubt will drive prices into the basement. Laying aside the question of whether such modest growth is worth the huge cost to taxpayers, it is clear that Baristanomics has not produced the jobs necessary to keep people downtown. Downtown residents commute out of the core for work—something that writers elsewheredubbed Urban Inversion. Basically, Kansas City is turning itself inside out.

Without jobs—baristas, hotel concierges, and restaurant staff notwithstanding—any measure of success will be short lived if Kansas City isn’t attracting jobs. In fact, the growth of residential development is coming at the cost of commercial and industrial growth potential as one-time office buildings and warehouses are converted into trendy lofts. Furthermore, many of those living spaces were built or renovated with tax abatements or subsidies that will make them much less attractive in 25 years when they end.

Cities do not form around coffeeshops and large entertainment venues. (If they did, where is the development around the Truman Sports Complex? There are barely hotels over there.) People generally live where they work, and if Kansas City continues to be an unattractive place to build a business, all the hip speakeasies and entertainment subsidies will amount to nothing more than curious finds for future archeologists.

Poorly Done EDC Survey Does Not Justify Massive Streetcar Expenditure

Posted on by Joseph Miller

With the 2.2-mile, $100 million-plus Kansas City streetcar line now under construction, city planners and officials are busy attempting to justify this massive expenditure and a future expansion. There is no way to make the case for streetcars in terms of transportation. They are slower than walking in many traffic conditions and an order of magnitude more costly than ordinary buses.

But streetcar proponents rarely make the argument that streetcars improve mobility. Instead, they argue that streetcars, somehow, create “livable communities” and boost economic development. As what constitutes a “livable community” is unclear, streetcar proponents rest their arguments on streetcars enticing developers to Kansas City.

So the residents of Kansas City are subjected to report after report of just how much money the unfinished streetcar line is bringing the city. The only problem: Even the most rudimentary investigation of the “evidence” for streetcar development reveals serious flaws. In their zeal to prove the impact of the streetcar renaissance, city planners have included plans that predated the streetcar, businesses that are just relocating within the Transportation Development District (TDD), and even an unfunded Broadway Bridge rebuild. They’ve even dropped the ball on the basic arithmetic.

But for all the flaws in these reports, none has been as methodologically flawed as the most recent effort put forth by the Economic Development Corporation of Kansas City (EDC), the lobbying arm of six statutory KCMO redevelopment agencies. Its report claims that the streetcar has generated more than $600 million in economic development and created more than 1,000 jobs.

The EDC came to this conclusion based on the results of a voluntary survey (with less-than-objective response recovery tactics, as KCBJ reports) sent to downtown developers. While that survey had six questions, only one actually asked about the streetcar’s impact on development. It is as follows:

2. To what degree was your location decision influenced by the planned streetcar line?

5 – Major positive influence – The planned streetcar line was a primary factor.

4 – Positive influence – The planned streetcar line was one of the major factors.

3 – Somewhat positive – The streetcar was thought of as a positive amenity but not a major influence on your decision.

2 – Neutral – The streetcar was taken into consideration, but played no major role.

1 – Negative – The planned streetcar was seen as a negative factor.

Notice that the language of “Major positive influence” allows for the streetcar to be just one of multiple primary factors, so that we do not know if the streetcar was actually the deciding factor. What is really relevant, but left unasked, is whether these developments would have located downtown, or better yet, anywhere in the Kansas City metropolitan area without the streetcar. If the answer to that question is “yes,” the streetcar has not created anything but higher taxes and a traffic impediment.

Thoughts on Gov. Nixon’s State of the State Address

Posted on by Michael Rathbone

The president’s State of the Union address is always filled with lots of pomp and formality. It’s the closest thing we have to a monarch addressing Parliament. On Wednesday evening, we had the mini version of that same spectacle when Gov. Nixon gave his State of the State address at the Missouri Capitol. In it, he outlined his priorities for the upcoming year. You can watch the speech here or read a transcript here.

There were some appealing aspects to his speech, like his thoughts on how to address our transportation infrastructure. Gov. Nixon stated:

One option is a toll road on Interstate 70. The Highway Commission’s recent report showed that this approach could make I-70 better and safer … and free up tens of millions of dollars for other roads around the state. Trucks and out-of-state vehicles that do the most damage to I-70 would have to pay their fair share. That deserves serious consideration. Here’s another option: the gas tax. Missouri’s gas tax hasn’t gone up a penny in nearly 20 years. It’s the fifth-lowest in the nation.  With gas prices as low as they are now, this is worth a very close look.

Kudos to Gov. Nixon for at least considering user fees as a way to finance transportation in the state. My colleague Joe Miller has written extensively about the benefits of tolling and how gas taxes are a better way to fund roads than the sales tax. Tolling is a fair way of financing improvements to Interstate 70 because it can be done in such a way as to get much, or even most, of its revenues from commercial vehicles, which cause the most damage to our roads and highways.

However, not everything in Gov. Nixon’s address was good policy. The governor still insists on expanding Medicaid.

Now I’d like to talk about another challenge … but an even greater opportunity: Strengthening and reforming Medicaid. Let me remind you, a lot has changed since last year. Since I stood here last year, Missouri taxpayers have sent $2 billion to Washington. Those dollars are being used right now, in other states, to reform and improve their Medicaid systems. That’s 2 billion Missouri taxpayer dollars.  And this year, there’s another $2 billion at stake. If we keep standing still, that’s $4 billion Missourians will have lost to other states by the end of this year. Across the country, people are moving past the politics.

To help you decipher politico speak, when the governor talks about reforming Medicaid, he really means expanding Medicaid. Show-Me Institute Senior Analyst Patrick Ishmael has done a tremendous job explaining why expanding Medicaid is a bad idea. Not only would it strain future Missouri budgets by adding billions in new spending (Medicaid already takes up 22 percent of Missouri General Revenue expenditures, up from 17.5 percent just 10 years ago), but the program doesn’t work. The poor should get decent health care; Medicaid fails on that front.

Gov. Nixon raises the point about Missouri taxpayers sending money to Washington, and by failing to expand Medicaid, other states get to spend our money. This is also false. Patrick lays out why this claim is wrong in his most recent Forbes piece. First, Missouri is a net recipient of federal tax dollars. This means that Missouri gets more in federal aid than it sends out in tax dollars. Also, the money for Medicaid expansion is not like some large pie that gets distributed to the states that participate in the expansion. Each state has its own allotment of money to help pay for expansion. If the state doesn’t expand Medicaid, the money isn’t reallocated. That’s why you are seeing the overall cost of Medicaid dropping. Fewer states are signing up for expansion, and thus the actual cost growth of Medicaid is falling below what was projected. If the money was being redistributed, actual cost growth would be closer to projections.

Gov. Nixon’s speech was a mixed bag. The legislature should feel free to ignore the bad ideas. I hope, though, that the good parts mentioned above do more than just receive serious attention. There are serious issues in this state that need addressing, and we need pro-market solutions.

Show-Me Now! Bring The Great Depression To Your Classroom

Posted on by Michael Rathbone

Are you a high school history teacher? If so you may want to invite us to your school for a presentation on the Great Depression. The presentation is about 25 minutes long followed by a question and answer session with the students. Please call the Show-Me Institute at (314)454-0647 or email [email protected] with any inquiries.

 

 

For Education, It’s More of the Same

Posted on by James V. Shuls

In Wednesday night’s State of the State address, Gov. Jay Nixon doubled down on the same education initiatives that have gotten us nowhere—increased funding, mandated standards, accountability tests, strong tenure laws, smaller class sizes, increased teacher salaries. This has been the strategy for the past 20 years, and it hasn’t worked.

Since 1992, per-pupil spending in Missouri has increased nearly 40 percent in inflation-adjusted dollars. Missouri has had state-imposed learning standards since 1993. We’ve participated in No Child Left Behind mandated testing for more than a decade. Teachers are given an indefinite contract after five years, making it difficult to remove even an ineffective teacher. In 2014, there were approximately 13 students to every one teacher. The average teacher’s salary is nearing $50,000, with a 14.5 percent match on retirement contributions and benefits that far surpass private-sector counterparts.

More of the same is not going to propel Missouri forward.

Allowing charter schools to enroll students across district boundaries, creating opportunity scholarships, reducing mandates—these are the types of policies that will create an ever-improving educational market. These are the types of changes we need.

If we truly believe that “education is the key to the economic future of our state,” as the governor suggested, then we need to re-think our policies and re-imagine what it means to have a quality public education system. Mandating, taxing, and spending will not get us to the schools that we need. We need policies that enable school leaders to be change agents who empower parents with educational options.

Saint Louis Ridesharing Update: MTC Still Dragging Its Feet

Posted on by Joseph Miller

Ridesharing has had a bumpy ride in the Saint Louis area. The Metropolitan Taxicab Commission (MTC) strictly regulates the number of cabs, the prices they can charge, and even minutiae like the color scheme of taxis. It is a regulatory system marked by parochial, top-down control. So when Lyft began operating in the metropolitan area without the permission of the MTC last year, the official response was hostile. Police ticketed Lyft drivers, and the company was forced to cease its Saint Louis operations.

The bright spot for residents hoping to use ridesharing was Uber’s entry into the Saint Louis market. By negotiating with regional power brokers, such as Mayor Slay and the MTC, Uber was able to secure regulatory changes that would allow it to operate its expensive black car service, which launched last October.

Unfortunately, the relaxation in regulation was only very slight, and the MTC still firmly regulates taxi operations in the Saint Louis area. For example, the MTC only allows Uber to act as a dispatch service for MTC-licensed premium sedans, the number of which the commission has limited (initially the MTC added only 26 new vehicles to accommodate Uber). The MTC also passed restrictions to ensure that Uber Black uses only premium sedans and charges premium prices, lest they compete with normal cabs.

Notwithstanding the subsequent undersupply of Uber vehicles, Uber claims significant demand and wishes to expand its black car service and begin operating UberX, the company’s true low-price ridesharing service. But unlike cities across the country (including Kansas City and Chicago) the MTC has not shown the inclination to make the large-scale regulatory changes that would open the way for innovative ridesharing companies or create a more robust taxi market.

In a city where officials ceaselessly talk about attracting businesses and innovators downtown, it is shocking that they are unwilling to reduce regulations in order to make the city an easier place to work and play. If Saint Louis is going to experience sustained revitalization, it is going to come from being a leader in fostering new businesses, like ridesharing companies, that residents choose to patronize. It will not come from splashy, taxpayer-funded development schemes that regional leaders repeatedly propose.

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