Missouri Leading On At Least One Health Care Reform

Posted on by Patrick Ishmael

Earlier this month, I had the honor of presenting at this year’s State Health Policy Summit, a meeting that the Cato Institute annually hosts to bring together health policy experts from around the country. The topic of my presentation was last year’s passage of the Volunteer Health Services Act (VHSA), a medical licensing reform which I often pointed out was needed in Missouri. Reforms such as the VHSA have been discussed at free-market events like this for a while, but it was great to be able to speak about something that actually went from just talk to action. One Missouri health care reform down, many more Missouri health care reforms to go.

Many thanks to Cato for the invite and continued support. And if you’re not familiar with Cato, check out the institute here.

Taxicab Reforms In Missouri

Posted on by David Stokes

Kansas City officials are considering changes to the taxicab licensing ordinance that would make it easier for non-profits and churches to offer rides around the city. Tony’s Kansas City has the story here. I support the changes, even though I understand the concerns about treating non-profits differently than regular cab companies. It is a difficult call. If you support treating all companies the same (I do), but the treatment, a.k.a. the local regulations, is awful, do you force everyone to suffer from the same awful rules? In this case, I do not, and I hope loosening up the regulations for some will lead to less restrictive rules for all.

It is the same story of awful taxicab regulations in Saint Louis. Here is Uber, the nationwide, web-based private car service, explaining why they won’t enter the Saint Louis market. The same basic explanation applies to Kansas City, which means they are not giving consumers more choice in Missouri, while they do in many other parts of the nation. Are the safety and regulatory concerns in Missouri substantially greater than all those other cities? Of course not.

I know a little about taxicab licensing. I once opened a bribe for a county councilman from a taxicab operator looking for stricter regulations to protect his company from competition. That councilman and I reported the bribe to police instantly, but another councilman who had been taking bribes went to prison.

Taxicab licensing is there to protect the interests of the cab companies, not the public. Consumers now are more empowered by knowledge when dealing with cabs, like your cell phone and GPS telling you if a cabbie is taking you on a long route. Old rules such as uniforms, regulated fares, limits on cab licenses, and restricted areas (i.e., the airport) are no longer necessary. All that is needed is a basic cab registration with the city or county (for the protection of both the driver and passengers), driving record checks on the drivers, and inspecting meters (but not rates) to make sure they are accurate and properly posted. That’s all.

With these changes, maybe people in Saint Louis would be able to get a cab on New Year’s Eve.

Policy Breakfast: How Expanding School Choice Could Save Millions

Posted on by James V. Shuls

Show-Me Institute Director of Education Policy James V. Shuls, Ph.D., introduces his latest paper, “Available Seats? Survey Analysis of Missouri Private School Participation in Potential State Scholarship Programs.” Shuls surveyed private school leaders in Kansas City and Saint Louis. His findings suggest that a private school scholarship program would expand choice while potentially saving taxpayers millions of dollars.

Read the full essay:

Reforming Missouri’s Tax Structure: New Testimony From The Show-Me Institute

Posted on by Michael Rathbone

Tax reform is a key issue in the current session of the Missouri Legislature. It also is an issue that can have a profound impact on Missouri’s economy. I will submit testimony (Missouri’s Taxing Environment: Some Ideas For Reform) to the Missouri Senate Ways and Means Committee that discusses the necessity of tax reform in our state. The testimony illustrates how the revenue impact of any tax cut can be reduced by eliminating economic development tax credits. Please take a look.

When A Tax Break Isn’t

Posted on by Michael Rathbone

Democrats in the Missouri House of Representatives recently unveiled their tax reform plan. Here are some of the highlights:

  • Starting in 2016, Missouri would have just three tax brackets: A 4 percent tax rate on annual incomes of $30,000 or less; 6 percent on incomes between $30,000 and $300,000; and 8 percent on incomes higher than $300,000.

  • There would be an additional tax deduction for those making less than $15,000.

  • The limit for the total amount of federal taxes a taxpayer can deduct from his/her income would be lowered, from $5,000 to $2,000 for singles and from $10,000 to $4,000 for combined returns.

I am glad there is growing recognition that Missouri is not a low-tax state (at least for most people). I like the fact that this proposed plan shrinks the number of tax brackets from 10 to three. I also like that many Missourians would receive some tax relief. However, raising taxes on those making more than $300,000 a year is not a good idea.

Now, it’s easy for some people who make significantly less than $300,000 to shrug their shoulders about taxes increasing on Missourians with higher incomes. “I’m getting more money, so what if some rich guy has to pay a little more. He can afford it.” The reality is that many of these “rich” people are business owners who report their business income at the individual level. If the state starts taking even more money from these business owners, that’s less money for payroll, which means less money for new workers and less money for raises. Is that going to stimulate economic activity in Missouri? I don’t think so.

If I lived in Kansas, I would love this bill. Unlike Missouri, Kansas business owners face a tax rate of zero. If this bill actually became law, Kansas businesses would have a significant tax advantage over those in Missouri, which would make Kansas an even more alluring destination for Missouri businesses. That isn’t an attractive prospect for Missouri’s economy.

Also, I don’t like this bill limiting the amount of federal taxes someone can deduct from his/her state taxes. The money I pay out in federal taxes isn’t income. I can’t go out and buy a new phone or television with it. I can’t save or invest it, either. So why would the state treat it as if it is income? Limiting this deduction without reductions elsewhere is a form of double taxation.

The sponsors of this bill are to be commended for wanting to bring tax relief to a significant number of Missourians. However, this positive does not outweigh the negatives of increased income taxes on other residents (through higher rates and limited deductions), including many business owners.

Airlines Wary Of New Airport Terminal In Kansas City

Posted on by Joseph Miller

Yesterday, representatives from Southwest Airlines, on behalf of the four major airlines operating out of Kansas City International Airport (MCI), gave testimony to the Kansas City Airport Terminal Advisory Group concerning plans to build a $1.2 billion terminal. Their statements regarding the viability of the current structure, the cost of a new terminal, and the impact of the new terminal’s cost on MCI’s competitiveness should prompt Kansas City officials to go back to the drawing board.

The Show-Me Institute has written about the new terminal plan numerous times. We have questioned the need for a new terminal and the lack of reasonable alternatives to the Aviation Department’s plan. We have expressed concern about the cost of a new terminal and the impact of those costs on the airport’s financial viability and competitiveness. We pointed out that many residents like the current layout, ranking No. 1 in overall airport satisfaction in a J.D. Power & Associates survey. In response, we hear that cost per enplaned passenger does not matter, that the current terminal is falling apart, and we are simply standing in the way of a modern MCI.

But as yesterday’s Terminal Advisory Group meeting confirmed, Southwest and the other airlines that serve MCI agree with our position, and yes, costs matter in the air travel business. Their points were:

  • The current system meets the airlines’ needs now and for the next 10 years. If customers need more, the airlines can pay for that in the future.

  • Airlines have mobile assets and are risk adverse. They will go where they can make the most money.

  • The new terminal plan will increase costs and that “higher cost can lead to less service, not more…”

  • “The terminals do not generate or impact demand” for flights.

  • The example of the billion dollar new terminal at Sacramento International Airport (as the Show-Me Institute publicized), and its subsequent financial and competitiveness issues, are a cautionary tale for MCI.

Essentially, the airline representatives all but said that the $1.2 billion new terminal plan is harmful and unnecessary. Apologists for the new plan are already going for damage control, stating that the airlines are just one voice among many. One Advisory Group member went as far as saying that there is tension between the airlines looking for low costs and the city looking to provide the best experience for is customers.

But the airlines are not just a voice, they are the airport’s tenants and main source of revenue. In addition, as market-driven entities, the airlines’ incentives are more in line with airline customers than city officials. Above all, travelers want cheap, convenient flights, not a shopping mall. If city officials are prudent, they will heed the warnings of the airlines and ground the new terminal plan.

It’s Not The Money

Posted on by Patrick Tuohey

The New York Times published an op-ed titled “What’s the Matter With Kansas’ Schools?” about legislative efforts to cut funding levels and the legal action that followed. According to the article, as a result of one lawsuit, Kansas will have to increase per-pupil expenditures by 17 percent.

In addition to recycling the tired “What’s the matter with Kansas?” cliche, the piece seems to believe that school funding drives education excellence. The piece concludes:

Kansans rightfully take pride in their strong public school system. But as Kansas goes, so may go the nation. The Kansas Constitution, like those in other states, demands that every child be given the educational opportunity to meet his or her promise. This requires, at a minimum, adequate and suitable school funding. Governor Brownback and legislators must meet the constitutional command and, by so doing, advance the core American value of equal opportunity for all.

My colleague James Shuls has addressed the canard that increasing education spending increases results; it doesn’t. The “worst in the country” Kansas City (Mo.) School District spends more than $16,000 per pupil. Imagine how much better educated The New York Times must think those students are than, say, Kansas’ neighboring (and nationally renowned) Blue Valley Unified School District, which spends an offensively low $7,361 per student.

The Times point would be more effective if there was evidence that the additional spending will help Kansas schools meet the goals the state constitution sets for them. There isn’t any such evidence.

No, Kansas City Star, The Legislature Should NOT Expand Medicaid

Posted on by Michael Rathbone

I guess all of the big battles are the ones that are fought over and over again. In “A good year to beat low expectations in the Missouri Legislature,” the Kansas City Star editorial board renewed its call for the legislature to expand Medicaid. I could not possibly disagree with the Star more. There is growing evidence that expanding Medicaid will not improve people’s health and will stick taxpayers with even more bills to pay.

A recent study published in the New England Journal of Medicine found that people on Medicaid fared worse health-wise than people with no insurance. This study joins others from the University of Pennsylvania and University of Virginia that found that health outcomes for Medicaid patients are worse than those without health insurance.

Nor will expanding Medicaid clear up congested emergency rooms. A recent study published in Science found that after Medicaid expanded in Oregon, emergency room visits increased 40 percent. The vast majority of these visits were for procedures that could have been taken care of outside a hospital.

If it expanded Medicaid, the legislature would add billions of dollars in expenditures to a state that cannot afford it while doing little to actually improve people’s lives. It should ignore the Star’s appeals and say “no” to expanding Medicaid.

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