Page 422 – Show-Me Institute

New Friedman Foundation Report Explains Cost Savings from School Vouchers

Posted on September 30, 2014January 13, 2026 by James V. Shuls

In my paper, “Available Seats?: Survey Analysis of Missouri Private School Participation in Potential State Scholarship Programs,” I explained how Missouri could potentially save money from a private school choice program. The Friedman Foundation did me one better. Their new paper, “The School Voucher Audit,” examines how much money private school vouchers have actually saved taxpayers. Based on their estimates, “a cumulative total savings of at least $1.7 billion has been realized since 1990-91, the first year of the historic Milwaukee Parental Choice Program (MPCP), through 2010-11 . . .”

That is some serious savings! I encourage you to check out the slide share above or the full paper here.

The Bankruptcy of Indiana Toll Road Highlights Privatization Advantages

Posted on September 27, 2014January 13, 2026 by Joseph Miller

Recently, the Indiana Toll Road Concession Company (ITRCC), which operates the Indiana Toll Road, declared Chapter 11 bankruptcy. This bankruptcy will mean a new operator for the toll road and significant loses to ITRCC’s investors and creditors. Although this bankruptcy might be viewed as evidence that Missouri should not allow private toll concessions in the state, in reality this situation highlights the advantages of these concessions to taxpayers.

ITRCC is a 50-50 partnership between a Spanish toll road operator and an Australian investment bank. In 2005, those partners paid the state of Indiana $3.8 billion for the right to operate the Indiana toll road for 75 years. As part of the agreement, ITRCC had to make significant capital improvements to the toll road; from 2006 to the present the company invested $458 million.

ITRCC investors expected steadily rising highway traffic to generate returns that would exceed these upfront costs and justify the many stipulations under which the company had to operate the toll road. However, post-recession highway utilization has made the original traffic projections, and hence the debt repayment plan, untenable. This is what forced the company to declare bankruptcy.

While it is unfortunate to see any company fail, Indiana taxpayers have made out like highway robbers on the deal. The state invested its $3.8 billion windfall in a 10-year, statewide transportation improvement plan. The privatized toll road received $458 million in upgrades courtesy of ITRCC, making it a better road now than when Indiana privatized it. And even though ITRCC has declared bankruptcy and must be restructured, the investors, not the taxpayers, will take the hit for overly optimistic traffic projections.

The important lesson of the Indiana Toll Road bankruptcy is not that a private company failed to make a profit, but rather that privatization deals can tap into significant capital for infrastructure improvements and transfer risk to the private sector. In the case of Indiana, we can retrospectively say that the buyer overpaid, but that was (and still is) a risk investors are willing to make when there is a reasonable prospect of profit. Indiana residents did not share the investors’ risk, but they have benefited from more than $4 billion of investments to their transportation infrastructure. With MoDOT slowly running out of the money necessary to maintain its state highway system, the fate of Indiana’s highway privatization deal should not make Missourians wary. It should make them jealous.

Streetcar Costs Balloon in Charlotte

Posted on September 26, 2014January 13, 2026 by Patrick Tuohey

Austin Alonzo at the Kansas City Business Journal reported that Kansas City is tabulating up the cost of the failed streetcar expansion. We’re still waiting on that, but news out of Charlotte, North Carolina, suggests that streetcars are more expensive than proponents argue.

The Charlotte Observer reports,

When Charlotte was planning to build its streetcar line last decade, one touted benefit was cost savings. The idea was that an electric-powered streetcar is cheaper than a diesel-powered bus and that a larger streetcar provides more economies of scale than a smaller bus.

But as the costs of a 4-mile streetcar line are coming into focus, an analysis shows that the streetcar will likely be more expensive to operate than city buses and the Lynx Blue Line.

The specific overruns in Charlotte are detailed in the article.

My colleague Joe Miller points out that some streetcar advocates claim streetcars have lower operating costs than buses because they compare the costs of operating a streetcar at full capacity to a bus at full capacity (120 passengers versus 60). However, in real life the transit systems don’t normally operate at anything close to full capacity, so their numbers are very inaccurate. Even then, this doesn’t include the enormous capital costs of rail.

Regular readers of this blog will not be surprised that streetcars are inefficient. We have been highlighting the poor economics of rail transit for some time. The same Charlotte Observer article also points out that the supposed economic development benefits of the rail line—those so dramatically emphasized in Kansas City—”are difficult to evaluate in a cost-benefit analysis of a transit project.”

The initial streetcar website in Kansas City relied heavily on data prepared by the Charlotte Area Transit System (CATS), so it is no surprise that the claims made were similar. As Charlotte deals with higher-than-expected construction and operational costs, Kansas City voters should be pleased that, at least in this instance, they made a wise choice by not going along with other streetcar cities.

On a Scale of 1-10, It’s 15

Posted on September 24, 2014January 13, 2026 by Michael Rathbone

Dollars an hour, that is. There is a continuing push in Saint Louis and other cities throughout the country to improve the pay of low-wage workers. That is a noble sentiment and I, for one, hope that wages do go up. In fact, I want wages to go up for everybody. However, increasing the minimum wage is the wrong way to go about it.

If proponents are successful in raising the minimum wage to $15 an hour, there will be a lot of pain. First, such an increase will cause job losses. A Congressional Budget Office (CBO) report estimated that if the minimum wage went up to $9 an hour, 100,000 jobs would be lost. If the wage went up to $10.10 an hour, the number of jobs lost would increase to 500,000. If the CBO is correct about job losses, one shudders to think about how many jobs would be lost if the minimum wage went up to $15.

Is the loss of so many jobs worth the increase in wages for those workers who manage to keep their jobs? That’s a question for proponents to consider. They also should consider the fact that many people who work for minimum wage are not poor. Why mandate raises for them while risking job losses for the same people wage-hike proponents are trying to help?

There is a better way to help poor families. Both the CBO report and Professor David Neumark’s 2012 study on the minimum wage find that the Earned Income Tax Credit (EITC) is a better alternative for helping poor families than increasing the minimum wage.

The EITC is a refundable tax credit that provides direct cash assistance to low-income families. The tax credit is more effective at helping poor families because it is specifically targeted toward them. The minimum wage is not. For example, a teenager working a minimum-wage job whose father is a corporate attorney and whose mother is a surgeon would receive the same monetary benefit as a single mother of two working at McDonalds. That would not be the case with the EITC. If Missouri and other states really wanted to help poor families, expanding the EITC would be a more effective tool than increasing the minimum wage.

Trucks on Missouri’s Highways

Posted on September 23, 2014January 13, 2026 by Joseph Miller

The Show-Me Institute recently hosted a panel discussion on the future of transportation funding in Missouri. An audience member asked what percentage of Missouri interstate traffic consisted of trucks. While that question received no direct answer at the time, an analysis of MoDOT’s average daily traffic maps indicates that trucks make up a significant part of interstate traffic.

MoDOT collects data on how many total vehicles pass over certain sections of the state highway system on an average day, including the interstates. In some areas they also publish the number of trucks that pass over the same section of road. Here is a chart showing truck traffic on I-70:

Total truck traffic on I-70 ranges between 7,600 and 24,000 vehicles per day on the observed segments, which on some parts of I-70 accounts for over 40 percent of total daily traffic, dipping to around 10 percent in the Saint Louis metropolitan area. Combining this data allows us to estimate that truck traffic averages 22 percent of all traffic on I-70.

The story is much the same for the other interstates in Missouri. Truck traffic can range above 40 percent of total traffic in rural areas, usually dipping to between 10-20 percent of total traffic in urban areas. The estimated percentage of total traffic from trucks across major interstates in Missouri is as follows:

For most interstates in Missouri, truck traffic averages more than 20 percent of total traffic along the length of the highway. The exception here is I-64/40, likely because it runs almost entirely through urbanized areas in Saint Louis City, Saint Louis County, and Saint Charles County.

However the numbers are sliced, trucks make up a significant portion of interstate highway traffic in Missouri. And with the average truck doing hundreds, if not thousands, of times the damage the average car does to highways, it may be reasonable to consider funding mechanisms through which shipping companies and residents can jointly invest in highway improvements.

I Am Somebody … Who Has a Choice

Posted on September 22, 2014January 13, 2026 by Brittany Wagner

“In this class, we learn about government; the three branches are legislative, executive, and judicial,” said De La Salle student Trinity with an air of confidence as she gestured to drawings on the classroom’s white board.

Trinity, a school ambassador, led a tour through De La Salle Middle School, a private Catholic school that serves low-income, predominantly African-American students. The school, funded largely through charitable donations, is inspiring—high class participation, positive atmosphere, and flexible grouping by ability. The most impressive quality, however, is that the students forge their own educational paths: “I want to go to Incarnate Ward,” Trinity said.

Trinity, like her peers, is highly tuned in to the various high school options available to her. Her fellow eighth and seventh graders are required to attend high school prep classes once a week, introducing them to both public and private options in the St. Louis area.

Like many other middle schools, De La Salle’s students explore colleges and careers and learn skills that will allow them to be successful in high school. The difference is that students at De La Salle decide which high school fits their own educational agenda, instead of just hoping that the school down the street will fit their personality, goals, and abilities.

“What are you looking for in a high school?” I asked Trinity.

She thought for only a moment. “Diversity,” she said.

Other students expressed different characteristics. “I want to attend a high school with a high average ACT score,” said one student. “I want to attend a school with a good sports program,” said another.

After students graduate from De La Salle, counselors continue to check in once a quarter to ensure students are adapting well to the educational environment they have selected. Individualized goal setting, family involvement, and graduate follow-up have made all the difference.

The high school graduation rate for De La Salle students is 98 percent. This is an impressive statistic considering the graduation rate for the surrounding area is 76.39 percent or less, according to IFF. The typical variables that affect graduation rates are race, income, and family status. One other variable should be considered—educational choice.

De La Salle students are beating odds because they are in the driver’s seat. Being somebody—the school’s mantra—is about choice, and De La Salle students are not just choosing high schools, they’re also choosing success.

Name One Branch of the U.S. Government

Posted on September 20, 2014January 13, 2026 by Brittany Wagner

For an immigrant seeking U.S. citizenship, this might be just one of the 100 questions he or she would be required to answer correctly. Shockingly, one-third of Americans can’t pass the citizenship exam, and a majority of high school students would not be able to pass the test. In response, a group has launched an effort to make passing the citizenship test mandatory for Missouri students.

The effort is expected to receive bipartisan support, as research shows there is an increasing lack of civic responsibility in American citizens. Mandatory testing may sound like the answer to instilling values in Missouri students, but it’s not, and here’s why:

Storing information in long-term memory does not happen overnight. It’s not uncommon for students to engage in “binge studying,” as opposed to studying for shorter amounts of time over a longer period, which is more likely to lead to long-term memory storage. Thus, a 10-question multiple choice test in which students study for one hour prior to the test will not necessarily produce value-driven Americans.

This is not to say that civics education is not important, but there are other outlets to reform that may have more of an effect. In fact, research indicates that schools of choice increase civic values and responsibility. Students who attend private schools tend to be more politically tolerant and have increased political participation, knowledge, and voluntarism.

The United States implemented No Child Left Behind mandatory testing more than a dozen years ago. It is clear that simply testing students does not magically improve student learning. Why would we expect it to work for civics? Let’s consider alternatives like school choice programs before we implement more mandated tests.

If we want students to value liberty, why not start with liberty in education?

Light Rail Never Sleeps: The Saint Louis Edition

Posted on September 19, 2014January 13, 2026 by Joseph Miller

Recently, the U.S. Department of Transportation announced that St. Louis Metro would receive a TIGER (Transportation Investment Generating Economic Recovery) grant to build a new MetroLink Station between Boyle Avenue and Sarah Street. The $10.3 million grant covers most of the total cost ($12.9 million) of the project, which includes ancillary items like bike paths along with the station.

The St. Louis Streetcar project, which did not receive a TIGER grant, has garnered less attention. The plan would have built a 6.9-mile streetcar system from downtown Saint Louis to the Central West End, at a cost of $270 million (likely a low estimate).

You may not have heard much about this project, because Metro never mentions adding streetcars in its Long-Range Transit Plan. Their long-term improvements are focused on expanding MetroLink or adding bus rapid transit, but not adding a streetcar network. Nor was the project part of East-West Gateway’s (the Saint Louis metropolitan planning agency) Regional Transportation Plan when it was released in 2011 (it was added in 2013). City leadership did not discuss the plan until it was suddenly to receive tens of millions of dollars from the ill-fated Amendment 7.

The downtown streetcar is primarily the creation of Partnership for Downtown St. Louis, an organization whose membership is mostly made up of corporate representatives and whose budget comes from property taxes collected from a Community Improvement District (CID) located downtown. They created the plan and lobbied the city to submit the TIGER grant application. Although the process used to create the streetcar plan did not come from city residents, the methods of payment would have. The proposed methods of payment included a Transportation Development District (with accompanying sales and property taxes), Tax Increment Financing, tax credits, and parking fees.

Those new taxes and fees would have been a hard sell for a transportation mode that shadows the MetroLink and does not provide rapid transit. However, Saint Louis residents should be upset that non-elected corporate representatives were promising residents’ local tax dollars in order to get a piece of residents’ federal tax dollars. This episode also should be a warning that local non-governmental organizations have the ability to push forward wasteful civic projects with taxpayer money.

The Faux Moral High Ground

Posted on September 19, 2014January 13, 2026 by James V. Shuls

Bre Payton of Watchdog.org has a great piece today about the Normandy/Francis Howell transfer situation. She tells the story of Paul Davis, a Normandy parent whose autistic 16-year-old son benefited from transferring to the Francis Howell School District last year. Davis says, “The transfer program shouldn’t have ever been taken away. We were thinking our lives were going to get better, and then all of the sudden they pulled the rug out.”

Despite having the rug pulled out, Davis and other parents are pushing to make sure their kids receive a quality education. They are being fought at every step. The Francis Howell School District has told parents that they are only allowed to return if they get a court order that states the district must accept the student.

The Francis Howell School District justifies their actions by taking what I have called the “faux moral high ground.” The Watchdog elaborates:

Francis Howell officials have said they don’t want to drain Normandy’s coffers, since Normandy was required to cover tuition costs for students to attend schools in other districts.

“Sending some students to outside school districts depletes the resources for the larger student population who remain in the unaccredited school districts,” Jennifer Henry, communications manager for Francis Howell, said in an email to Watchdog.org.

As I explain in the article, “Because districts are allowed to set their own tuition rates, they could easily charge Normandy less if they were truly concerned about depleting Normandy’s funds.”

This situation reminds me a lot of what Howard Fuller, civil rights activist turned school choice supporter, said about Harriet Tubman. He asked, “Did Harriet Tubman want to end the system of slavery? Of course she did. But until that happened, she woke up every day to try to save every single slave that she could.”

Wanting to fix the schools in Normandy is a worthy goal. For now, we should provide students a quality education elsewhere.

I encourage you to check out the entire Watchdog piece here.

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