Will Regulations Keep Uber Out of Columbia?

Posted on by Joseph Miller

The St. Louis Post-Dispatch recently reported that Uber is considering expanding its service to Columbia, Missouri. While Uber’s entrance could provide improved for-hire vehicle service, Columbia’s outdated taxi regulations might keep the company out, to the detriment of city residents.

Uber, a transportation network company (TNC), is disrupting over-regulated taxi markets across the country, including Missouri. By using an app to connect passengers with drivers operating personal vehicles, Uber and TNCs like it have the potential to vastly increase the quantity and quality of affordable taxi service. Unfortunately, these business models run afoul of municipal taxicab regulations and entrenched cab industry opposition. Saint Louis and Kansas City have invoked Byzantine, competition-restraining regulations to restrain TNCs like Uber and Lyft.

ubertaxi

Columbia’s for-hire vehicle regulations are not as onerous as those in Saint Louis or Kansas City. However, they might be just burdensome enough to make Uber’s entry difficult, if not impossible (especially if city officials are opposed to Uber). The city’s regulations are written to deal with taxis, limousines, and buses, not TNCs.

Based on the plain language of these ordinances, it is unclear which sections of Columbia’s city code would govern Uber. If Columbia officials classify Uber as a taxi service, the company would be required to have a phone dispatching service, taxi meters, vehicle color schemes, and a taxi light on top of every car. This would make Uber’s business model, which uses dynamic pricing (without meters) and utilizes its drivers’ private vehicles, noncompliant with existing regulations.

Likewise, Uber’s business model also would be impossible under Columbia’s limousine regulations, which require a limousine to charge a fixed fare from the airport or an hourly rate (with a charge of no less than one hour) for intra-city service.

Uber could fall into a nebulous “vehicle for-hire” regulatory category, which might allow the company to avoid the regulations listed above. However, Columbia does not appear to offer any type of business license for general livery service, so that needs clarification.

Columbia officials should consider altering their regulations, as other states have, so TNCs like Uber can provide service to city residents. Better yet, Columbia could reduce regulations so that those (be they Uber, Lyft, or other drivers) who pass background checks, pass vehicle inspections, and purchase proper insurance can offer Columbia residents a ride.

Will California Teacher Tenure Lawsuit Affect Missouri?

Posted on by Brittany Wagner

Earlier this month, The View’s Whoopi Goldberg spoke out against teacher tenure, “Teachers who do not do a good job in teaching have no right to tenure.” The recently released 2014 EdNext poll shows that 50 percent of the public agrees with Goldberg and thinks that teachers should not be granted tenure. This is up 3 percentage points from last year.

Public sentiment against teacher tenure may have risen due to the highly publicized Vergara v. California case, in which Superior Court Judge Rolf Treu ruled California teacher tenure laws violate the state’s constitution in regards to equality of education.

Tenure laws vary across states. A teacher is tenured in Missouri after teaching in the same district for five years. Tenure laws encourage a system in which school districts undergoing layoffs must keep low-quality, tenured teachers and fire high-quality, non-tenured teachers. This is an ineffective system, as research shows teacher performance has a strong correlation with student achievement.

In a 2013 StudentsFirst poll, Missourians overwhelmingly favored tenure reform—74 percent of those surveyed reported that they would favor a system in which teachers had to demonstrate performance in order to earn or keep tenure. Show-Me Institute Distinguished Fellow James Shuls found that even Missouri superintendents are in favor of teacher tenure reform.

If Missouri wants to be among the top 10 performing states by 2020, tenure reform should be a priority. Teacher tenure may protect good teachers, but it also protects bad teachers. To ensure every child receives a quality education, student welfare must take precedent over the interests of low-performing school employees. This is what the Vergara lawsuit taught the nation.

Of Super Bowls and Economics

Posted on by Patrick Tuohey

Following the passage of a resolution in the state legislature, the Missouri Department of Economic Development has convened a Super Bowl Task Force to consider what Kansas City needs to do to attract the annual event. According to The Kansas City Star,

“‘I can think of no better place to host the Super Bowl than Kansas City, the best football town in America,’ [State Senator Paul] LeVota said in a statement. ‘We’ve got incredible fans and a city more than capable of handling such a huge event.’

“Not only would the fans love it, but the economic impact would be enormous, he said.”

Ah, there is that elusive term, “economic impact.” It is thrown about to justify all sorts of government spending, but it is little examined by media and little understood by the taxpayers whose money will be used. We recently reviewed similar claims about Kansas City’s effort to attract the GOP convention. In that piece, we cited a Daily Beast story about the recent Super Bowl in New Jersey:

“So, there’s no economically sound way to predict a Super Bowl’s impact before the event and those that try have been proven wrong again and again. But don’t expect that to stop the cheering from the few with the most to gain. When asked for a more detailed analysis of Super Bowl XLVIII, the host committee demurred, but assured in a statement, ‘Super Bowl XLVIII is expected to be an economic boom [sic] for the region.'”

A 2006 study conducted by the College of the Holy Cross, “Mega-Events: The effect of the world’s biggest sporting events on local, regional, and national economies,” analyzes past Super Bowl impacts. The report concludes with a sobering warning to those who would embark on such expenses:

“The most important piece of advice that a local government can take regarding mega-events, however, is simply to view with caution any economic impact estimates provided by entities with an incentive to provide inflated benefit figures. While most sports boosters claim that mega-events provide host cities with large economic returns, these same boosters present these figures as justification for receiving substantial public subsidies for hosting the games. The vast majority of independent academic studies of mega-events show the benefits to be a fraction of those claimed by event organizers.”

Hosting a Super Bowl in Kansas City would be a great opportunity to show off our city to the rest of the world. Afterall, the term “Super Bowl” was coined by Chiefs owner and American Football League founder Lamar Hunt. But regional boosters need not wear blinders. At what cost does such an event cease to be worthwhile, especially when so many basic services in Kansas City already seem to be falling by the wayside? If we’re going to bring people to the City of Fountains, let’s at least make sure we can afford to operate the fountains.

Transferring from Normandy: An interview with lawyer Joshua Schindler

Posted on by Brittany Wagner

Show-Me Institute Education Policy Research Assistant Brittany Wagner interviewed lawyer Joshua Schindler about his work advocating for transfer students. Missouri's transfer law allows students in unaccredited public school districts to transfer to nearby accredited schools; however, a number of districts have refused to accept transfer students, even students that they had accepted last year.

Schindler has represented several of these students in court. Earlier this month, Judge Michael Burton ordered several school districts to accept transfer students from the unaccredited Normandy school district. Because of the number of students involved and the favorable court decision, Schindler is now pursuing a class action suit on behalf of these transfer students.

 

Public Transportation in Columbia, Missouri: The Good, the Bad, and the Ugly

Posted on by Joseph Miller

Officials in Columbia, Missouri, are celebrating the successful launch of “CoMo Connect,” the city’s rebranded bus system. The heightened service is part of Columbia’s recent push to improve its public transportation system through a significant increase in spending. While that investment has yielded positive results for the level of service the bus system provides and the overall ridership, increasing transit costs may become a burden for local taxpayers.

The Good: Setting aside the overall merits of the increased transit spending, Columbia’s bus system has better service and many more riders than it had a decade ago. From 2006 to 2012, Columbia made more than $10 million in capital improvements to its bus system. These improvements have come in funding spurts, one between 2006 and 2007 and another from 2010 until today. Columbia has spent the money on new buses, better facilities, and increased service. As a result, the number of buses plying Columbia’s streets has almost tripled and vehicle revenue hours have more than doubled since 2006. Technology has improved as well. Today, it is easier to track your bus in Columbia than in Saint Louis.

The Bad: While ridership has almost tripled since 2006, most of that increase followed the first $4 million in capital improvements made from 2006 to 2007. Significant spending in 2010, 2011, and 2012 actually has been followed by decreased ridership. Officials have blamed an increase in fares for the drop-off, but at $1.50, Columbia’s fares are cheaper than many cities and still highly subsidized; annual fare revenue only accounts for 10 percent of the system’s operating costs. Furthermore, improved service has steadily pushed up operating costs, from $2.7 million in 2006 to more than $6 million in 2013.

CTC

The Ugly:  More taxes might be on the way for city residents. Although officials claim CoMo Connect is resulting in record ridership, they fail to mention that they temporarily have made the bus free. At the same time, the bus system’s goal of holding down growth in its operating budget is increasingly unlikely, and city officials are looking at ways to increase funding. Columbia currently funds transit with a local sales tax, student housing contracts, bus fares, and downtown parking fees. Columbia might have to further increase these taxes and fees to fund transit, despite the fact that less than 1 percent of Columbians use the bus to get to work.

Columbians would do well to consider what they hope their bus service can achieve and how much those achievements are worth. Otherwise, the decisions will be made by those who have made transit usage an end in and of itself.

How to Attract Jobs, or at Least Not Repel Them

Posted on by Patrick Tuohey

Public officials in Kansas City and elsewhere are eager to be seen as job creators. Almost every taxpayer-subsidized development project, every act of crony capitalism, every public project like a new $1.2 billion airport terminal, $62 million-per-mile streetcar, or convention hotel is discussed in terms of the jobs it will create. Politicians tells us, as they did in the TIF Commission hearing for the Burns & Mac handout, that the city cannot “wait for the free market,” that government must act.

But is government’s use of taxpayer dollars more successful than people making their own decisions?

Economist Enrico Moretti was interviewed on NPR’s Here and Now about his book, The New Geography of Jobs. He was asked about how successfully innovative regions are created and replicated [segment begins at 8:27]:

“[Interviewer] This is the unsettling part of your book: How do cities replicate these innovative job clusters?

“[Moretti] It’s very tough, because if you look historically where the innovation clusters are located, almost none of them [were] created by some deliberate, explicit policy. It’s really hard to engineer an innovation cluster. We talk about Seattle, but if you look at a lot of the clusters, they were all born in very random, often serendipitous, ways. So it’s really hard for policy makers to engineer from scratch.”

There is no magic formula known to bureaucrats or politicians about which companies and industries will be successful in the future. But they use public resources time and again chasing that white rabbit of jobs and growth. And unfortunately, the impact of taxing many businesses to subsidize a few is more often than not a recipe for destroying jobs, or at least keeping them away.

A better investment, as Show-Me has argued for years, is for government’s action to be broad and neutral: keep taxes low for everyone, maintain infrastructure, deliver necessary city services, and ensure quality education. Maybe those aren’t as appealing as large edifices named after politicians, but they are more successful.

Missouri Should Stop Funding Ghost Students

Posted on by James V. Shuls
Photo Credit - The Goldwater Institute
(Photo Credit – The Goldwater Institute)

Like most states, Arizona felt a financial crunch in the wake of the economic downturn of 2008. As a result, funding for education could not keep pace with the expected increases. An Arizona judge recently ruled that state lawmakers did not fund schools properly during this time and must appropriate an additional $317 million to Arizona public schools, immediately.

However, as Jonathan Butcher of the Goldwater Institute points out, much less money would be needed if “ghost students” were removed from the funding formula. A ghost student is essentially when the state pays for the same student twice.

In The Arizona Republic he writes:

“Arizona schools can apply for additional funding for current-year enrollment growth, but they do not have to adjust for enrollment decreases in the same year. Traditional school payments are generally not updated until the following year, which means schools get funding for students who aren’t in their classrooms anymore.

“As Goldwater Institute research has reported, the state pays about $125 million for empty seats every year.

“Traditional school payments should be based on the number of students in the classroom, with payments updated accordingly throughout the year.”

In Missouri, we often hear that the state’s foundation formula for education is not fully funded. That is true, but Missouri’s formula is riddled with the same features that create ghost students in Arizona. Schools are funded based on the number of students from the current or two previous years. Thus, a district with declining enrollment could get funded based on their enrollment from two years ago, while a district with increasing enrollment gets funded based on the current year’s student count.

In addition, there are several other features that do not allow a district’s funding to decrease when it should. For instance, the amount counted as “local dollars” is pegged to 2004 assessment levels. If local property taxes increase, the state should pay less to the school district, but they don’t. On top of all of this, Missouri has a “hold-harmless” provision that prevents state funding from decreasing below a set level, even if the district should receive less based on the formula. As of 2013, there were 174 hold-harmless districts.

If Missouri were to remove these provisions it would allow the formula to adjust to the changing demographics of our schools. Then the formula would not be as dramatically underfunded as is claimed. This would be a wise step, because we simply cannot afford to continue to fund ghost students.

For more on the funding formula, check out our handy primer.

Local Road Funding in Missouri

Posted on by Joseph Miller

The Missouri Department of Transportation’s (MoDOT) growing funding problem has put the issue of state highway funding on the center stage. This focus on the state road system obscures the fact that most of Missouri’s streets are the responsibility, in terms of funding and maintenance, of local governments.

Missouri has more than 90,000 lane miles of local roads that are the responsibility of cities and counties, as compared to 33,000 lane miles of highways under MoDOT’s purview. While MoDOT receives most of its funding from fees placed on drivers, local roads do not. Counties and municipalities partially fund their streets with the 25 percent of state fuel taxes remitted to localities, but in most areas that is inadequate. Local governments, therefore, rely on local sales taxes, property taxes, and specially formed taxing districts known as transportation development districts (TDD) to pay for road improvements.

One source of funding localities technically could use—but do not—are local fuel taxes, even though they might be a fair and economically sound way to fund roads. Paying for streets with fuel taxes, as opposed to other forms of local taxation, also might have the benefit of limiting wasteful spending, because the Missouri Constitution stipulates that all local fuel tax proceeds must be spent on roads.

The likely reason no Missouri localities collect fuel taxes (although attempts have been made) is that the state constitution stipulates that voters approve any such measure by a 2/3rd majority. Other forms of local taxation, such as transportation sales taxes or property taxes, require only simple majorities. TDDs, semi-democratically created ad hoc taxing districts, also are much easier to implement than fuel taxes. It is, perhaps, unsurprising that while no city has a fuel tax, there are more than 170 TDDs in Missouri, collecting revenue with little accountability or oversight.

Moving forward, many of the funding problems that MoDOT faces for highways is mirrored on the local level. Counties and cities face street maintenance backlogs, and residents have noticed. Recent surveys in Springfield and Kansas City showed residents were highly unsatisfied with the state of local streets.

It is hard to tell what portion of the need arises from a genuine lack of funding and what portion is the result of misplaced priorities. However, as Missourians consider if more must be spent, they also should question how more would be raised, and whether the current methods are transparent and economically sound.

 

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