Be Skeptical of Claims St. Louis is Running A Surplus

KMOV ran a piece the other day reporting that the St. Louis comptroller claims the city has a $42.2 million surplus.

I’m skeptical, and you should be too.

This is a claim that cities and states like because it makes their leaders look financially responsible. But it’s often just a result of bookkeeping sleight of hand. Governor Mike Parson made the same claim in January, and it wasn’t true then, either.

The accounting trick consists of merely looking at the cash you have on hand and not considering your long term-debts. Truth in Accounting (TIA), the indefatigable men and women who pore through annual reports, issued its State of the Cities report in February 2024. St. Louis ranked 64th in financial health out of the top 75 cities examined. The authors wrote:

St. Louis’ financial condition appeared to improve due in part to increased tax collections and federal COVID relief funds. Despite the good news, it still had a Taxpayer Burden™ of $11,100, earning it a “D” grade from Truth in Accounting. But the improvement is deceiving, because the city used outdated pension data.

On pages 150 and 151 of the report, available online here, TIA lists St. Louis’s assets and liabilities. The report must use 2022 data because St. Louis is not a stickler about releasing its financial data in a timely manner. Despite being in the red, St. Louis’s cash-basis accounting allows it to consider the money it has on hand without considering its long-term debts. It’s akin to getting a cash advance on your credit card and pretending you’re richer as a result.

If the comptroller wants to make such claims, she should release a complete and to-date copy of the city’s books. Until then, I am going to assume that if it sounds too good to be true, it probably is.

The good news is that we here at the Show-Me Institute, and the fine folks at Truth In Accounting, are dedicated to making sure people understand the truth about city and state finances.

Court Fee Increase Would Negatively Impact St. Louis County

A version of the following commentary appeared in the St. Louis Post-Dispatch.

Among the many things that Missourians will vote on in November is Amendment 6, which if passed would reinstitute a fee on court filings in Missouri to fund a larger pension for sheriffs and prosecutors in Missouri. (The fee was previously $3 before it was overturned by Missouri courts.) There are many troubling aspects of Amendment 6 that I hope Missourians consider before they vote, because the proposed amendment would have effects that go beyond the understandable desire to support law enforcement.

Locally, this amendment is especially bad public policy for St. Louis County residents. St. Louis County has by far the largest number of court filings due to its status as the largest county by population in Missouri and the presence of CT Corporation Systems in Clayton, which is the largest registered agent company in Missouri. What’s more, the St. Louis County sheriff is not a law enforcement agent and is therefore the only sheriff in Missouri who does not participate in the Missouri Sheriff’s Retirement System in the first place. So, to be clear, St. Louis County residents would pay the largest amount of fees into the fund—probably several hundred thousand dollars a year—while at the same time receiving the least benefit of any county. Coincidence? Perhaps. Fair? Definitely not.

Every person in St. Louis County who seeks redress in court, who files for a domestic order of protection, who has to pay a traffic fine, or is in court for any other reason, would have to pay this reinstituted fee to increase the pensions of primarily rural sheriffs and prosecutors. (The St. Louis County prosecutor might be included in this plan, so that’s one person in a million, for a position that is already well-compensated with a generous pension.)

The ballot language for Amendment 6, as is so often the case, is highly misleading. A typical voter will read the language proposing to “levy costs and fees to support salaries and benefits for current and former sheriffs, prosecuting attorneys . . .” and understand that to include the many dedicated deputy sheriffs and assistant prosecutors around the state. It doesn’t. This new fee will only benefit the elected sheriff and prosecutor in each county (and not even the sheriff in St. Louis County). That’s two people per county. Deputy sheriffs and assistant prosecutors have their pensions funded separately and are not affected by this proposal.

As if the misleading language and targeting of one county wasn’t enough to object to, the fact is that funding pensions by court fees is a bad policy. That is why previous attempts to fund a sheriff’s pension in this manner were thrown out as unconstitutional by the Missouri Supreme Court. Imposing court fees that make it harder to seek justice in court, or harder to pay fines ordered by court—especially when those fees financially benefit the law enforcement officials who impose some of them—creates a perverse incentive. Funding for the salaries and benefits of sheriffs and prosecutors should come from general local taxation, and there should be no financial incentive for increased fines, arrests, and so on. But instead of trying change their proposals to address these constitutional objections by judges and others, supporters of Amendment 6 are attempting to do an end-run around the law by changing the constitution. Supporting law enforcement by going around the law is an ironic way to accomplish their goals.

Furthermore, any increase in the retirement benefits of elected sheriffs and prosecutors should be accomplished by an expansion of defined-contribution plans available to them rather than an increase in their defined-benefit pensions. Expanding the opportunities for these well-compensated elected officials to participate in 457 retirement plans [which are like 401(k) accounts but for public employees] or similar alternatives is a better way to allow them to save for retirement without further burdening taxpayers.

Missouri sheriffs and prosecutors deserve our support, but Amendment 6 is not the way to show it. There are several good reasons for all Missourians to reconsider their typical support for law enforcement in this case, and for the people of St. Louis County, this choice should be easier than rooting against Stan Kroenke’s Rams in the Super Bowl.

High Hopes for a New Committee at the St. Louis Board of Aldermen

On Wednesday, October 9, a new committee of the St. Louis Board of Aldermen is holding its first hearing. The Special Committee on Special Taxing Districts was formed to look into how the city can provide better oversight of the many community improvement districts (CIDs), transportation development districts (TDDs), and other such entities in the city.

CIDs, TDDs, and other districts undoubtedly need better public oversight. There also needs to simply be fewer of them, oversight or not. Hopefully the second part will be as important as the first part for the committee. An audit of CIDs by the Kansas City auditor in 2021 detailed the many issues with them in Kansas City, and a similar report from this committee would be beneficial.

I will be at this first committee meeting to enter into the record the  2019 report on special taxing districts published by the Show-Me Institute. It is great that the city has formed this committee, and hopefully both better oversight and reduced usage of special taxing districts will be the result.

(As a child of the 80’s, the hardest part of writing this blog post about a special committee studying special taxing districts was avoiding making a bunch of church lady references.)

POSTPONED: Charles C. W. Cooke on October 9

The event featuring Charles C. W. Cooke, scheduled for Wednesday, October 9, has been postponed. Due to travel complications related to Hurricane Milton, we are unable to proceed with the event as planned.

We apologize for any inconvenience this may cause. We are working on scheduling a new date for the event and updates will be posted here. Thank you for your understanding.

Missouri Shows that More Government Doesn’t Equal More Housing

Housing is an important issue. Many people, myself included, believe it is a cornerstone issue for so much of what ails America. If we can solve housing, many other solutions would be within our grasp. Yet so many policy proposals seek only to address the secondary effects of housing rather than the core problem itself.

The fundamental issue here is supply and demand. There is a tight housing market in many places in the country where supply is already constrained—though that is generally not the case in Kansas City or St. Louis. Housing policies that focus on boosting demand rather than increasing supply tend to backfire. The Housing and Urban Development Act of 1968 and the Clinton administration’s National Homeownership Strategy both drove temporary housing booms followed by market crashes. These policies didn’t solve affordability; they exacerbated it.

The same flawed logic has shaped housing markets in Kansas City and St. Louis, where misguided interventions have made housing less affordable. Kansas City’s adoption of the 2021 International Energy Conservation Code (IECC) stifled new home construction by inflating costs. Builders, facing steep regulatory burdens, simply stopped building. In St. Louis, a reliance on tax credits and incentives for flashy developments has left vast swaths of the city with vacant lots and dilapidated buildings. In both cities, the results are clear: policies that ignore basic market principles fail to deliver desired results.

Kansas City and St. Louis offer cautionary tales. We don’t need more interventions that drive prices higher. We need policies that foster more housing construction, deregulate land use, and let the market work. Housing affordability won’t improve with more government spending—it will improve when we stop putting obstacles in the way.

Missouri Ballot Issues and the Return of Three Mile Island

David Stokes, Elias Tsapelas, and Avery Frank join Zach Lawhorn to discuss: Missouri’s Amendment 6, the Kirkwood sales tax vote, the state’s minimum wage proposition, the return of the Three Mile Island nuclear plant, and more.

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Produced by Show-Me Opportunity

Federalism and The Founders’ Vision with Charles C. W. Cooke

See Charles C.W. Cooke live on October 9 in St. Charles, MO
Tickets and Details Here

Susan Pendergrass speaks with Charles C. W. Cooke, senior editor at National Review, about the growing trend of federal centralization and its threat to the U.S. federalist system.

They discuss how the founders intended for states and local communities to have control over their governance, and why the push to consolidate power in Washington undermines American principles of liberty and self-governance. Charles explains why this centralization is antithetical to the country’s founding ideals, the consequences of this shift, and why it’s essential to reverse course.

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Produced by Show-Me Opportunity

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