New Tech To Improve Parking In St. Louis City

Posted on by Joseph Miller

Last week, officials with the City of Saint Louis announced their decision to install a new type of parking meter. This is the result of months of a competitive process and trials at specific locations in the city. The winners of the $5 million contract were Xerox and Parkmobile. The city’s plan to update street parking is a win-win situation, with opportunities to implement demand-based pricing as well as maximize the performance of the city’s meter system.

meter11

Above is one of the pilot units of Xerox’s solar-powered IPS single-space meters. The meters accept both coins and credit cards (although the minimum time for a credit card purchase is 1 hour). The Parkmobile app allows people to pay over their phone by space number. The app can warn costumers when only 15 minutes remain, and if the overall time limit is not expiring, users can renew their spot over the phone.

Upgrading the city meters can aid both the city’s bottom line and those people looking for parking. For the city, it reduces the cost of enforcement, as officers can know where expired meters are and focus their ticketing efforts. Moreover, the city can use the data from both the meters and the Parkmobile app to measure the performance of certain parking areas, allowing variable pricing to maximize city revenue.

From the perspective of those looking for parking, the city’s effort to properly price and enforce meter limits can mean more available parking. The new meters and Parkmobile app will make payment convenient and mark the end of having to feed the meter. Additionally, the mobile apps and parking meters may allow people to find available parking by providing information on available spaces, eliminating the hassle of cruising for parking, and decreasing urban congestion. Finally, the city is also conducting a study that might result in the removal of parking meters that do not generate enough revenue for their upkeep. That type of optimization, which saves the city and drivers, is long overdue.

For the City of Saint Louis to realize these benefits, officials must be prepared to coordinate data collection to create a more market-oriented street parking environment. If the city can manage that, and take advantage of rapidly improving software capability, these updates will improve the lives of city residents and the city’s bottom line.

Nix The NIDs

Posted on by David Stokes

A variety of innocuous-sounding names and acronyms are springing up like weeds in communities all over Missouri. They are a threat to the upkeep of sidewalks and streets, and to the well-being of schools and libraries. What is this new but rapidly spreading pestilence?

Neighborhood Improvement Districts (NIDs) are just one of many types of special taxing districts sprouting like weeds in Missouri (and expensive weeds at that). Like Transportation Development Districts (TDDs), Community Improvement Districts (CIDs), and Tax Increment Financing (TIF) districts, NIDs serve as a method for governments to increase taxes without any accountability while getting involved in areas often best left to the private sector or community groups. Greene County officials decided in 2004 that it was the job of county government to play the role of real estate investor via a NID, and taxpayers in the county are now feeling the pain of that decision.

Greene County backed $22 million in bonds for the Jamestown housing and office development in Rogersville, Mo., and another similar development in 2004. Greene County officials believed that the increased taxes from the NIDs created for the developments would cover the cost of the $22 million in bond payments that the county guaranteed. Why did county officials think it was appropriate to use tax dollars to guarantee the private Jamestown real estate development? You will have to ask them that, but what is not in question is the colossal failure of the deal. Unfortunately, the Jamestown development failed, and county taxpayers are on the hook for the remaining $14 million in bond payments without any new tax dollars coming from the development. (The other development also failed, but the foreclosure process worked better in that instance and county taxpayers are not responsible for the bonds. Not yet, at least.) This year, Greene County does not have enough money in its bond reserve fund to cover the current $1.1 million bond payment due. Either general tax dollars will have to make up the shortfall or taxes will have to be increased if Greene County cannot find its way out of the fiscal impasse.

The main criticism is not Monday morning quarterbacking that Greene County made a poor choice of which project to back. Some projects succeed, some fail, and risk is inevitable with development. No, the main criticism is that Greene County thought it was appropriate to get involved at all. More unsettlingly, Greene County is far from alone in its decision to be a real estate speculator. Local governments’ decision to play a role they should not play has sparked controversy around the state.

In Lake Lotawana, outside Kansas City, a CID defaulted on bonds and the CID officials were accused of ethical violations. A TIF in Ellisville, a suburb of Saint Louis, ripped the community apart and led to lawsuits, impeachments, and recall efforts. A TDD in Neosho, near Joplin, has sparked a contentious lawsuit between the TDD board and its former attorney, who is also the Neosho city attorney. These particular controversies may be the extremes, but they are not the exceptions. The fact is that most of these subsidies and special districts fail in the goals of economic development because local governments simply are not equipped to make private sector business decisions. Why they continue to do so is the real question.

Greene County officials’ current plan is to take control of all the parcels in the Jamestown development at an upcoming tax auction, and then to sell the property for enough money to cover the bond payments. I hope they succeed. But what I really hope for is that Greene County officials, as well as officials from cities and counties around the state, will learn from this example and cease getting government involved in business proposals best left to the private sector.

County officials do not have a right to put other people’s tax dollars on the line just because they think a certain proposal will succeed. That is not the role of local government, and it is about time elected officials throughout Missouri acknowledged that.

David Stokes is the director of local government policy at the Show-Me Institute, which promotes market solutions for Missouri public policy.

 

 

Krugman Upended By His Own Logic

Posted on by Andrew B. Wilson

In a recent New York Times column, Paul Krugman made the assertion that “self-proclaimed libertarians deal with the problem of market failure both by pretending that it doesn’t happen and by imagining government as much worse than it really is.”

According to Krugman, the “self-proclaimed libertarians” are either stupidly or maliciously engaged in “projection” – attributing base motives to their political opponents that underlie their own highly prejudicial reasoning.

Kudos to Per Bylund, a research professor at the Hankamer School of Business at Baylor University, for flipping the situation around and pointing out how all you need to do is to replace “libertarian” with any of the words that Krugman might use to describe his own thinking to see a wonderful example of projecting your own intellectual failings onto others of the opposite persuasion.

As Bylund observed in today’s Mises.org: “Keynesiasn/progressives/(whatever) like Krugman deal with the problem of government failure both by pretending that it doesn’t happen and by imagining the market as much worse than it is.”

Kansas City Streetcar District Fails To Win Support

Posted on by Joseph Miller

On Aug. 5, voters in downtown Kansas City rejected a Transportation Development District (TDD) that would have funded a half billion dollar streetcar expansion plan (60 percent to 40 percent). The city’s streetcar plan was expensive and had little transportation merit, making this result welcome news for those who support sound transportation policy in the Kansas City area.
Light Rail Icon

The Kansas City streetcar plan required the approval of a TDD to provide local funding. Because voters rejected the formation of the TDD, the project lacks local funds and, thus, cannot proceed. But this is unlikely to be the last we hear of plans to expand the streetcar. Some Kansas City officials have made it clear that they view this election as just a setback for their vision of an extended streetcar system. The mayor stated:

“It’s very possible either way, but we’re not going to just roll over and let it go…We’ve got to continue to look for options to get the job done.”

That might mean a newly drawn TDD or some other tax increase that will provide enough local funding to apply for federal grants.

However, for the time being, the election has halted any streetcar expansion plans. Let’s hope the ultimate result of the election is a renewed focus on efficient transportation policy for all of Kansas City.

Gas Taxes And Funding MoDOT

Posted on by Joseph Miller

In the aftermath of the transportation sales tax (Amendment 7) defeat, former supporters are still on a misinformation campaign. They claim that Missouri’s roads are in dire straits (they aren’t), and of course, that a sales tax was the only good option. They claim increasing a user fee such as Missouri’s gas tax, which is the sixth-lowest in the nation, is not possible. Bill McKenna, one of the principle supporters of Amendment 7, stated:

“You’ve got to realize how much money [the Missouri Department of Transportation] MoDOT needs,” he said. “You’re not talking 2 cents. You’re talking 16 to 20 cents.”

That’s a significant tax increase, but former Amendment 7 supporters seem to have different estimates. Missouri Sen. Mike Kehoe (R-Dist. 6), who introduced the Senate version of Amendment 7, said the gas tax would have to increase by 20 to 25 cents a gallon. Luckily for Missourians, these numbers appear to be disconnected from any real assessment of MoDOT’s needs.

Auto Icon

According to MoDOT Director Dave Nichols, MoDOT needs a $485 million construction budget to maintain Missouri’s highways. This year, MoDOT’s construction awards are greater than $720 million. MoDOT assumes that the federal government will scale back its support in the future, leaving MoDOT with less than $485 million by 2017. That scenario may not come to pass, but if it does, MoDOT’s construction budget would fall to $325 million, about $400 million less than today and $160 million less than the ability to maintain the roads. If the federal government continues to maintain current support, Missouri officials only need to ensure that the state has matching funds, necessitating less than $130 million in extra revenue.

The amount the Missouri fuel taxes would have to increase is nowhere near sales tax supporters’ claims. Last year, Missouri sold more than 3.9 billion gallons of fuel. Therefore, to raise $400 million, the state would have to raise the fuel taxes 11 cents. That maintains current spending ($300 million more than maintenance only) under dire circumstances. If the federal government does not reduce funding, a 5-cent increase likely would be sufficient to maintain matching funds. Missouri officials also could increase the diesel rate more than the regular gasoline rate, a practice in place nationally and in many states to account for the disproportionate damage trucks do to highways. McKenna’s 20-cent increase would raise $705 million for MoDOT and Kehoe’s 25-cent increase would raise $882 million (remember, Amendment 7 would have raised $397 million for the state highway system).

The defeated transportation sales tax proponents’ fuel tax estimates are exaggerated, much like their claims about the imminent collapse of the Missouri highway system.

Amendment 7 Defeated

Posted on by Joseph Miller

Yesterday, Missouri voters rejected Amendment 7, the proposed statewide transportation sales tax (59 percent to 41 percent). Using a sales tax to pay for highways and bridges is bad policy, and the state of Missouri is better off having rejected this unfair, economically unsound proposal.

Winners And Losers At A Glance The Votes County By County St. Louis Public Radio
From St. Louis Public Radio

However, this defeat of Amendment 7 is just the start of creating a sustainable funding source for the Missouri Department of Transportation (MoDOT). In the very near future, the department may not have enough funds to maintain the existing state highway system. A deteriorating highway system would be damaging for both residents and the state economy. It is time for policymakers and opinion leaders in the state to convince Missourians not just about the amount of money MoDOT needs, but also about the proper and most efficient way of raising revenue for those needs: user fees. Whether that means raising the gas tax or implementing tolling, the basis of good policy is an informed, not a frightened, electorate.

While these future challenges remain, yesterday was a defeat for poll-driven policy and a victory for Missouri.

Teacher Retirement System Demands Reform

Posted on by James V. Shuls

As first appearing in the Columbia Tribune:

If the lovable bear Winnie the Pooh has a downside, it is his insatiable desire for the sweet taste of honey. Time and again, his uncontrollable urge has ended with him getting his head stuck in the honey pot and needing to be bailed out by his friends. In many ways, Missouri lawmakers have encouraged the same kind of foolishness, continually sweetening the pension pot for public school teachers. If they do not change course — and soon — they will put future lawmakers into an impossible situation where they are forced to call on their friends — the taxpayers — for a major bailout.

Sweetening the pension honey pot for public employees is a very tempting proposition. Indeed, for lawmakers, there is almost no down side because pension promises often are not realized for many years. By improving pension benefits, politicians can please many voters with promises that they do not have to keep. These pension enhancements, however, are not free.

In a new Show-Me Institute case study, Robert Costrell, professor of education reform and economics at the University of Arkansas, detailed the impact of pension enhancements to Missouri’s largest pension system, the Public School Retirement System (PSRS). “Missouri repeatedly and considerably enhanced its pension benefit formula from 1975 to 2001, resulting in large increases in pension wealth, particularly for those retiring in their 50s with 25-30 years of service,” Costrell wrote.

Three essential numbers are used to calculate a teacher’s pension payment from PSRS: years of service, final average salary and a multiplier that allows PSRS to calculate reduced early retirement benefits. Lawmakers can sweeten the pension pot by inflating final average salary calculations, increasing the multiplier or allowing individuals to retire earlier without penalty. Over the past few decades, Missouri lawmakers have employed each of these tactics.

Costrell noted that in 1977, a teacher could retire with his or her full benefits at 55 with 30 years of service. In 1986, the benefit multiplier was increased from 2 percent to 2.1 percent; in 1991, full benefits were granted with 25 years of service; in 1994, the multiplier increased to 2.3 percent; in 1996, lawmakers added insurance benefits into the final average salary calculations; in 1998, they increased the multiplier to the current 2.5 percent; in 1999, they instituted a “Rule of 80,” which allows a teacher to retire with full benefits when his or her age plus experience equals 80. That same year, lawmakers reduced the years used for the final average salary calculation from five to three, a move that increased the final average salary of all retirees.

With all of these enhancements, a teacher in Jefferson City can now retire in his or her early 50s after 30 years in the classroom with a pension that is approximately the equivalent of a lump sum payment of $950,000. That is, the “cash value” of the pension at the time of retirement is close to $1 million.

To keep pace with the pension enhancements, the contribution rate for teachers and their public school employers has increased dramatically from a combined 16 percent in 1975 to 29 percent today. Even with these increases, PSRS has not been able to keep pace with the promised benefits. If we assume a 4 percent return on investment, PSRS has more than $31 billion in unfunded liabilities.

If they are as simple-minded as ol’ Pooh, policymakers might think they are helping create a secure retirement system for teachers when they enact these pension enhancements. But they are really making promises that they (or future lawmakers) cannot keep. If they want to create a secure retirement system for current and future public school teachers, they do not need further enhancements; rather, they should enact fundamental pension reform.

James V. Shuls, Ph.D., is the director of education policy at the Show-Me Institute, which promotes market solutions for Missouri public policy.

Support Us

The work of the Show-Me Institute would not be possible without the generous support of people who are inspired by the vision of liberty and free enterprise. We hope you will join our efforts and become a Show-Me Institute sponsor.

Donate
Man on Horse Charging