Pay And Park And Pay For The Streetcar

Posted on by Joseph Miller

We have written about the immense cost of the $500 million streetcar expansion plan in Kansas City. Planners have designated a transportation development district (TDD) to pay for the streetcar, which will implement a 1 percent sales tax in most of downtown Kansas City and property assessments for properties situated close to the streetcar line.

Streetcar proponents argue that this is a valid way of funding the streetcar. Businesses will see more customers and property values will increase near the streetcar line, so the TDD simply solves a collective action problem through its taxing district. However, what is less defensible is a special new tax on pay parking spots in the streetcar’s TDD.

Pay,_Park_&_Pay

According to exhibit 14 presented at the recent streetcar TDD hearing, the streetcar TDD will assess $54.75 per surface pay parking space. That new tax would affect up to 4,000 downtown parking spaces. With this tax, those who have chosen not to ride the streetcar get to pay extra precisely because they are not benefiting from it. Far from solving a collective action problem, this tax penalizes the lifestyle of some to pay for the lifestyle of others.

Furthermore, a tax of $54.75 per year on each parking space is likely to drive up the cost of parking and will be a disincentive for businesses to build more paid parking in the city. While that might be part of a long-term strategy for some rail supporters, purposely making it more difficult to park in order to increase public transportation usage might negatively impact residents and businesses.

Kansas City has already decided that those not residing in the TDD will pay for the streetcar through special assessments on city-owned property that the taxpayers must cover. Furthermore, all Kansas City residents will pay for the streetcar through the mass transit sales tax (a portion of which can be diverted to the streetcar) and capital improvement taxes used for streetcar planning. In addition, there still is a $30 million budget gap in the TDD’s funding plan that someone will have to cover.

Now, if residents make the decision to drive — and not ride the streetcar — downtown, they will have to pay for the privilege of not riding the streetcar.

Education Establishment’s ‘All Or Nothing’ Approach May Kill Transfer ‘Fix’

Posted on by James V. Shuls

Friedman - ed bureaucracy against competition

The Kansas City Star recently ran a piece with the headline, “Private school provision could doom Missouri student transfer bill…” It certainly is possible that Missouri Senate Bill 493, which “fixes” the problems with Missouri’s student transfer law and creates a small private school choice program, could fail to be passed and signed into law. If this happens, the blame undoubtedly will be heaped upon the tiny school choice aspect of the bill. In truth, the blame should fall directly on the education establishment, whose all or nothing approach is bent on stopping school choice rather than creating an effective public education system for kids.

Saint Louis area school leaders have boldly claimed that choice and competition work everywhere, except in education.

In the private sector, choice does create competition in the marketplace. It works there. But is [sic] does not work in public schools, at least not in Missouri.

That statement was not made based on careful examination of the evidence or grounded in any factual proof. It was pronounced on the basis of protectionism.

Of course, the establishment’s opposition to school choice is not surprising. In 1975, noted economist Milton Friedman wrote, “There is no doubt what the key obstacle is to the introduction of market competition into schooling: the perceived self-interest of the educational bureaucracy.”

As it currently stands, the proposed private school choice program would allow students to transfer to a handful of small non-religious private schools that are located within the boundaries of an unaccredited school district. When I testified before the Missouri House Education Committee about this matter, I pointed out that state representatives from these districts were debating whether there are one or two private schools that meet the criteria for inclusion in the choice program. If anyone is being intractable or uncompromising on this issue, it is not the school choice supporters. It is the education establishment.

Missouri Needs The Sunrise Act

Posted on by David Stokes

Missouri Rep. Eric Burlison (R-Dist. 133) has proposed legislation tightening the requirements for licensing new occupations in Missouri. It is called the Sunrise Act, and I think it would be an important public policy change for our state. (The legislation has been added to another bill at this point.)

This legislation is not radical. It does not ban new licenses. It does not implement extraordinary new requirements for a new license law, such as a greater than 51 percent vote like some tax increases have. It simply requires that attempts to institute a new statewide occupational license actually provide some evidence for the need and benefit of the license. Right now, there is none. The state legislature could wake up tomorrow, agree that every dog walker in the state needs a license to walk dogs for a fee, and pass that law without any supporting evidence. That is not an exaggeration (leaving aside the fact that the bill introductory period has passed).

The legislation further requires that if a license is proposed, the lowest level of licensing necessary to accomplish the public good will be applied. In other words, if you successfully demonstrate that the public will benefit from some level of licensing of dog walkers, you can’t impose heart surgeon-type standards to accomplish that goal. If the necessary public good is served by simply requiring dog walkers to register with the local government and undergo a background check, then you cannot add educational requirements, training hour minimums, continuing education rules, insurance or bond mandates, uniforms, and a host of other rules, all of which are common in licensing laws. For more strict licensing requirements, the Sunrise Act would require some level of additional evidence that those tighter laws are needed.

This issue happens regularly. For example, why are lawyers more stringently regulated than accountants? If you practice law without a license (except representing yourself), that is a crime. But accountants can do many things without a particular license, they just cannot hold themselves out as a CPA (certified public accountant) unless they have met those requirements. People without the CPA license still can be paid to keep company books, prepare tax returns, and much more. They can still do a job they want to do without calling themselves a CPA, and that is what is important.

The point is not to debate lawyers versus accountants. The point is that imposing burdens on people’s jobs and occupations should be more difficult than it is. That is all the Sunrise Act really does. Instead of imposing new burdens on someone’s job, it actually imposes a burden on the person who wants to license that job. That is where the burden should be.

Few Students Transfer From Kansas City Public Schools – Thanks To Charter Schools

Posted on by James V. Shuls

Kansas-City-Missouri-Downtown_at_Twighlight

It is always risky when you make predictions; but aside from the time I bet against the Harlem Globetrotters, I’m doing pretty well. I previously predicted that 2013 would be a banner year for charter schools, and it was. In a December 2013 post titled, “How Choice Changes The Transfer Dynamic in Kansas City,” I predicted that the inter-district transfer law would have less of an effect in Kansas City than it has in the Normandy and Riverview Gardens School Districts in Saint Louis. I wrote:

The existing prevalence of school choice in Kansas City will most likely make the impact of student transfers minimal in comparison to the experiences at Normandy and Riverview Gardens. If school leaders in Kansas City and the surrounding areas handle the situation well, this expansion of school choice could actually benefit the districts and the students.

To date, only 23 children have applied to transfer from the unaccredited Kansas City Public School District to an accredited district. Does this mean that the students don’t want school choice? Not really.

In many ways, charter schools in Kansas City have acted as a release valve. They have provided families with another option and made the prospect of riding a bus or driving to neighboring districts less appealing.

If we think about it another way, the low transfer number demonstrates the positive impact of charter schools. The nearly 10,000 students in Kansas City charter schools would rather stay in those schools than transfer to the Independence, Raytown, Hickman Mills, or other surrounding school districts. It is amazing what can happen when individuals are free to choose, rather than being compelled to send their children to a school that isn’t meeting their needs.

Collective Bargaining In Columbia, Mo.

Posted on by James V. Shuls

Columbia MO salary schedule

In 2007, the Missouri Supreme Court decided that teachers have the right to organize and bargain collectively. Since then, approximately 30 school districts in the state have entered into a formal collective bargaining agreement (we have posted those documents here). Last year, the Columbia School District became the latest to enter into a collective bargaining agreement when the district and the Columbia Missouri National Education Association (CMNEA) bargained a one-year contract. Now, they are back at the negotiating table.

The Columbia Daily Tribune reports that the main bargaining point right now is “making up one year of frozen pay increases.” A few years ago, the district was unable to afford pay raises and instead “froze” teachers’ pay for two years. Thus, any teacher who is currently in the district and was there during the freeze is two steps behind on the salary schedule. Experienced teachers the district hired, however, were able to bring in all of their experience. This has resulted in different levels of pay for two teachers with the same level of experience.

As an illustration, look at the graph above. This chart displays the salary schedule for a teacher with a master’s degree in Columbia and other surrounding school districts for the 2012-13 school year (N. Callaway, S. Boone, Moniteau schedules are from 2013-14). As you can see, after the first couple of years, Columbia teachers should earn significantly more than other area teachers. However, the 67 percent of teachers, according to the CMNEA, who were impacted by the freeze are two steps behind where they should be (dashed line). Even with the “freeze,” the frozen teachers are still earning more than most of their neighboring peers.

According to the Columbia Daily Tribune report, the CMNEA polled its members to determine if they wanted to boost all salaries or make up the frozen steps. The former would give raises to all teachers, while the latter would only impact the 67 percent of teachers who were impacted by the salary freeze. Interestingly, 80 percent of CMNEA members “asked the bargaining team to prioritize restoration of the steps” over adding money to the base.

It may seem strange for teachers who were not impacted by the freeze to vote to restore steps, but if you know your teacher research literature, this doesn’t really come as a shock. Cuky Perez, of Stanford University, conducted a behavioral experiment and found that female teachers were relatively averse to pay inequities. That is, they are not comfortable with co-workers earning different amounts. That may be a contributing reason we have these poorly designed salary schedules.

Nevertheless, it will be interesting to see how this shakes out in Columbia.

But Tomorrow Will Rain, So I’ll License The Sun

Posted on by David Stokes

Saint Louis County officials are considering licensing landlords who are within the county’s jurisdiction (Bill No. 73). You read that right. If you want to rent out apartments, duplexes, your own home, whatever, you’ll need a county license to do that within the unincorporated parts, which includes 320,000 residents. This is completely unnecessary. Why someone would try to further restrict the housing market anywhere in Saint Louis in 2014 is beyond me.

This will drive up rental unit costs within the county. Not because of the license fee itself, which is very low ($15), but because anything that limits supply will drive up prices. Now, some prospective landlords will not invest within the county because of this new fee and, more importantly, the accompanying regulations. Is that what the county wants? If landlords are allowing renters to do criminal activity within their homes, the county police simply should use existing law to hold people responsible. A general new license on every landlord in the county will do nothing but increase government interference with property rights and decrease the overall supply of housing.

Landlords are to modern politicians what Christians were to Roman Emperors; a quick and easy group to place blame on and abuse whenever they wanted. A study of a very similar proposal in Milwaukee found no evidence for benefits from these programs. You know why? Because there aren’t any. This is another terrible licensing idea from Saint Louis County.

Here We Go Again . . .

Posted on by Michael Rathbone

One of the biggest fights out of last year’s Missouri legislative session was about Missouri House Bill 253, which cut individual and business income taxes. Missouri Gov. Jay Nixon vetoed the bill and the legislature failed to override his veto. This failure didn’t stop the legislature from passing a new tax cut bill, Senate Bill 509. Below are some highlights of the bill:

  • The top tax rate is cut by .1 percent per year if state revenues increase by $150 million. Once fully phased in, the new top tax rate will be 5.5 percent.

  • Tax brackets are to be adjusted for inflation.

  • Business owners who pay their company’s taxes at the individual level will be able to deduct 5 percent of their business’s income. This deduction will increase by 5 percent every year until it reaches 25 percent.

  • Creates an additional $500 personal exemption for people with incomes less than $20,000.

Nixon already denounced the legislation and will likely veto the bill. He has trotted out the same talking points he used when he vetoed last year’s tax cut. “Once again, members of the legislature have chosen to ignore evidence that Missouri is already a low-tax state — sixth lowest in the nation,” Nixon said. I guess the governor felt that Missouri’s taxes weren’t low enough for Boeing when he signed a $150 million incentive package for the company to move manufacturing jobs here. Also, Missouri is not a low-tax state, particularly when it comes to income taxes.

You probably also will hear progressive groups complain that passing this bill will blow a hole in our budget and seriously harm state revenues. That’s what the Missouri Budget Project is doing. However, the group doesn’t show its arithmetic in its report. This is par for the course for the Missouri Budget Project and the “report” isn’t very useful for actually discussing the bill’s merits.

I’m glad the legislature is trying to cut taxes. I prefer more significant cuts (such as fully eliminating the individual and corporate income taxes). However, I’ll take any forward progress in cutting taxes. Hopefully, this time, the cuts will get enacted.

Saint Louis Taxi Commission Takes Consumers For A Ride

Posted on by David Stokes

The only nice thing I can say about the St. Louis Metropolitan Taxicab Commission (MTC) is that at least there is only one taxi licensing agency doing a terrible job for Saint Louis. We used to have two (city and county), and they did a really terrible job.

Short of that, the MTC has made it plain for all to see that its role is to protect incumbent cab companies from competition. Who cares what changes technology brings? They are going to operate the same way no matter what. Mobile phones, GPS, Internet maps, new phone apps, who cares? They have a job to do, and limiting new entrants into the market is job No. 1.

Why does the new technology matter? It matters because it has dramatically evened out the information advantage that taxi drivers used to have over customers. Now, even a first-time visitor to Saint Louis arriving at Lambert-St. Louis International Airport can check out in just a few minutes on their phone: 1) online reviews of cab companies, 2) the clearest route to the destination, 3) estimated fares for the trip, and more information if needed. Consumers are ready and able to negotiate for themselves, and most cab or mobile app-based drivers know that.

We do not need the MTC protecting us. Just as important, by restricting competition, the MTC is actively hurting taxi consumers in Saint Louis (and Kansas City as well).

Bring back the crooked assessor.

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