Michael Rathbone on Stadium Sweetheart Deals

Posted on by Michael Rathbone

Michael Rathbone talks about the fairness of public financing for stadiums. Currently, $24 million in taxpayer money is spent annually for the original construction of the Edward Jones Dome. Saint Louis City taxpayers contribute $6 million of that. Saint Louis County taxpayers contribute another $6 million. And the state of Missouri contributes $12 million from the public coffers each year, but it doesn’t make sense that Springfield and Joplin residents are paying for a stadium that they rarely use:

 

Taking The Missouri Budget Project Seriously

Posted on by Michael Rathbone

The St. Louis Post Dispatch recently published an article criticizing a bill that would create a 50 percent tax deduction for businesses whose earnings are taxed on the individual owners’ returns. The article quotes Amy Blouin, of the Missouri Budget Project. Blouin claims that enacting such a measure “would reduce state revenue by more than $500 million when fully implemented.” However, if you actually read the Missouri Budget Project’s (MBP) “analysis,” you won’t find how MBP actually came up with this number. I guess we just have to take their word for it.

This isn’t the only time the Missouri Budget Project has come up with revenue estimates out of whole cloth. In one of its write-ups about a Senate tax cut bill last year, the Missouri Budget Project stated that the bill would “slash Missouri’s general revenue budget by nearly $1 billion when fully implemented.” Page two of the report shows the year-by-year breakdown of estimated revenue losses, but you won’t see anything explaining how MBP came up with these numbers. There isn’t even an endnote.

Compare that to some of the analysis we do at the Show-Me Institute. When my colleague Policy Analyst Patrick Ishmael and I wrote “Passing Through Missouri: Left Behind On Taxes,” we included an entire section of the Appendix detailing our methodology and on what we based our estimates. The Missouri Budget Project’s tax analyses don’t contain anything like that. Yet when MBP officials are quoted in news articles, their numbers are accepted, seemingly without question.

The Missouri Budget Project is free to come up with any numbers it wants, but why aren’t those numbers backed up with explanations? As Wendy’s (and Walter Mondale) used to ask, “Where’s the beef?”

Education’s Magic Wand

Posted on by Patrick Tuohey

Nobody likes to fail, and when it comes to failures in our education system, the education bureaucracy thinks that no one should be held accountable. So in order to deal with failing school districts, the Missouri School Boards Association would like to pretend it isn’t happening. According to the Kansas City Star:

The Missouri School Boards Association on Monday announced that many districts and organizations are pitching an idea that unaccredited districts would be willing to enter into a performance agreement with the state school board. While the districts are under that agreement, the state would classify them as provisionally accredited, freeing the districts and their neighboring districts from the transfer law.

As my colleague James Shuls has noted, this idea is just a shell game. What’s more, it ignores the fact that schools are already in a performance agreement and they have failed to perform. That’s the whole point of accreditation. Missouri Rep. Jay Barnes (R-Dist. 60) equates this proposal to a magic wand and issued a statement reading in part:

This plan doesn’t require any evidence of actual improvement, and it makes a joke of the accreditation process. It changes the school accreditation process from one which requires accountability to one which perpetuates failure without consequence. It’s geared toward protecting existing power structures rather than ensuring substantive changes to improve the lives of Missouri families with students trapped in struggling schools.

Change is difficult, but after decades of failure from the St. Louis and Kansas City school districts, who can seriously argue that they deserve one more chance? It is more likely that school boards are more interested in protecting their own interests than meeting the needs of Missouri families. Barnes ends his piece with this:

In recent years, the State Board has shown it has the political courage to make difficult decisions regarding struggling districts, and it’s my hope that the Board will continue that tradition.

The Show-Me Institute shares that hope.

Privatization: Airport Possibilities

Posted on by Joseph Miller

The Show-Me Institute recently released a case study called “Government Privatization in Missouri: Successes, Risks, and Opportunities,” by David Stokes. The report discusses many aspects of local government that could benefit from partial or full privatization. One such area the case study addresses is the privatization of commercial airports.

In the United States, due to significant financing advantages given to publicly owned airports and onerous federal regulations, all but one of the 502 commercial service airports in the United States are publicly owned, most by local municipalities. That one private airport is Branson Airport in southern Missouri. As the case study points out:

The success of Branson Airport may be uncertain, but one of the features of private enterprise is that individuals and companies risk their own capital, not of that of their fellow citizens, in hopes of a larger return.

The other six commercial service airports in Missouri are all publicly owned, the largest of which are Lambert-St. Louis International Airport (STL) and Kansas City International Airport (MCI). However, they also can benefit from partial or full privatization. The most basic level of privatization, contracting airport services, already is in place at both Lambert and Kansas City. These contracts allow the airports to attain services through competitive bidding from the private sector. MCI is one of the few airports to privatize its security screening through TSA’s Screening Partnership Program (SPP).

However, airports in Missouri can go much further in privatizing operations. This includes privatizing the management of airports or even leasing the airports to private entities through the Airport Privatization Pilot Program (APPP). Kansas City considered this option for MCI once before. This program is actually the only way a municipality can use proceeds from its airports on other public goods. However, the program requires a complex negotiation between the local municipality, the FAA, airport workers, and the airlines. As the case study states:

Should Kansas City pursue the APPP route of privatization, the city could expect significant proceeds from the sale. However, it would require complex and lengthy negotiations with the potential buyers, airlines, and the FAA in order to participate in a program with no record of long-term success.

The full or partial privatization of airports can have many benefits for air service in the state, whether it is simply reduced costs or financial gain from an airport sale. The case study “Government Privatization in Missouri: Successes, Risks, and Opportunities” outlines some of the possibilities that might allow Missouri to create an example of airport privatization for the rest of the nation.

What Does Common Core Mean For Homeschoolers?

Posted on by Emily Watson

The Common Core State Standards have brought a wave of protests from concerned parents throughout the country, including here in Missouri. States readily adopted these standards without properly investigating what the standards, and everything that comes with them, would mean for their students. Now many states are balking at implementation. Amid the growing debate, one group often overlooked in the conversation is homeschoolers. Many in the homeschool community are still trying to figure out what the new standards mean for them.

Having the ability to customize their child’s curriculum is one of the main reasons parents choose to homeschool. Some worry that the new standards may infringe on their ability to do so.

The creators of the SAT and ACT are already working on aligning their tests to Common Core. Public schools are changing their curriculum to align with the new standards and tests. There is concern that homeschoolers will struggle on the redesigned state and national standardized tests unless they also align their curriculum. This defeats the purpose of homeschooling – to have greater flexibility and autonomy.

The more state standardized tests and college entrance exams align to the Common Core, the more textbook companies will align their curriculum to the Common Core. Over time, this could leave homeschooling parents with fewer and fewer alternatives from which to choose. It is difficult to know what the exact impact will be; what is certain is that the issue is not going away anytime soon. Parents, whether homeschooling or not, should continue to question Common Core and to educate themselves about the standards and their potential effects.

Aerotropolis Revisited

Posted on by Joseph Miller

Many Missouri residents remember the ill-fated effort to create a China Hub at Lambert-St. Louis International Airport. The plan, dubbed “Aerotropolis,” envisioned more than $300 million in subsidies for developers and air freight carriers to construct a Midwest hub for exports to China. Analysts at the Show-Me Institute argued that the high subsidies would harm Missouri economically and the supposed benefits to Saint Louis would be illusory. The plan was defeated in 2011, and cargo flights from China to Saint Louis have halted due to a downturn in the international cargo industry. However, like the broom from the Sorcerer’s Apprentice, bits of the chopped-up Aerotropolis legislation are still taking on a life of their own.

The sliver that has come back to life this time is “freight forwarding tax credits.” These tax credits are available to airlines or air freight companies that transport cargo on a direct international flight. Missouri House Bill 1500 (HB 1500) proposes a 40-cent/kg. cargo tax credit for any of those flights leaving a Missouri airport. The proposal calls for eventually allocating $60 million, with a yearly cap of $8 million. The purported purpose of the bill is to encourage foreign trade, presumably by making it cheaper for Missouri products to reach international markets.

However, as of this year, no direct international cargo flights leave Lambert. In addition, the only international passenger flights from Lambert go to resort destinations in Latin America. Whatever demand there is for Missouri exports in Latin America generally, it is unlikely that this demand is in seasonal resort towns such as Cancun and Montego Bay. As HB 1500 only allows tax credits for cargo on direct international flights, there may be few or no companies to take advantage of the proposed tax credit.

So who benefits? One possibility is that this bill is designed to subsidize Brownsville International Air Cargo Inc., which was in negotiations with Lambert for cargo space that could involve freight forwarding to Mexico. Another possibility is that the tax credit will act as another carrot to attract direct international flights to Lambert. Passenger airlines make 5-10 percent of their revenue from “belly cargo” on passenger flights. Making that cargo more profitable could make Lambert more competitive.

While these might seem like enticing goals to some, they are far from promoting Missouri’s foreign trade. The fact is, most cargo hubs in the United States are at either the major air passenger hubs (Los Angeles International Airport, JFK International in New York, etc.) or centers for major shipping companies (Memphis International Airport). Export tax credit or not, Lambert will not become a major air traffic hub when its landing fees are three to four times those of competing airports. Subsidizing a direct flight to Europe or Latin America may bring benefits to a few, but there is little reason the whole state should pay for this.

Like the original Aerotroplis plan, HB 1500 gives tax credits to select industries with only long-shot hopes for significant increases in Missouri exports. Saint Louis could be better off by making the airport, the city, and the state more competitive and economically vibrant, not pinning hopes on tax credit magic.

Audio Recording Of Legislative Hearings Should Be Standard Operating Procedure At Missouri Capitol

Posted on by Patrick Ishmael

This weekend, longtime statehouse reporter Phill Brooks penned a commentary for the Columbia Tribune examining the history of broadcasting the proceedings of the Missouri Legislature. I commend to you the whole piece, but I think Brooks intends to leave us with a warning that we should not take the unintended consequences of recording legislative proceedings for granted — not only the potential of legislators hamming it up for the camera, but also the concerns about the potential for lobbyist pressure if every official move of our representatives is documented. I appreciate those concerns; after all, we want our legislators focused on their job of legislating well, not putting on a performance.

However, I think one section of Brooks’ piece deserves to be highlighted for why erring on the side of recording should be preferred to erring on the side of what are really the political concerns of our legislators.

It is difficult to realize how different the Senate was some four decades ago.

The chamber even banned taking notes in the visitors’ gallery overlooking the chamber. A couple of senators said they didn’t want lobbyists using their quotes against them. The note-taking ban was dropped when it was exposed by a newspaper story that made the chamber look silly.

The “note-taking ban” was news to me, and it’s appalling that the Senate chamber at some point in its history felt that such a rule was appropriate. Thankfully, both the House and the Senate now livecast their floor debates online. As someone who is rarely in Jefferson City, that service is invaluable not only to my work but also to all Missourians. If legislators are concerned that constituents might hear what they said at a public hearing . . . well, they better get used to that idea, because that’s the whole point of a public hearing.

Likewise, requiring that House and Senate committee hearings to be broadcast in the same way as when the full House and Senate are in session — or, alternatively, recorded and made available online afterward — should be a no-brainer when it comes to promoting transparency in government. It’s why I think the audio recording of the legislature’s public hearings should be on this year’s reform agenda. Missourians with full-time jobs across the state deserve to be able to hear the committee debates that, these days, are only accessible to “note-taking” Jefferson City lobbyists.

Let the sunshine in.

Ferguson Mayor James Knowles On Privatization

Posted on by Darin Morley

There are numerous ways that Missouri communities can benefit from privatization. David Stokes documented examples from across the state to help inform both decision makers and the public about the options available (read the case study). He also interviewed Ferguson Mayor James Knowles about that city’s use of privatization:

 If you enjoy these highlights from his interview, please watch the full interview.

Missouri Privatization Documents

Posted on by David Stokes

The Show-Me Institute has released a comprehensive project about privatization efforts in Missouri. This project documents the wide variety of ways in which counties, cities, and towns can engage the private sector to provide many public services. We also discuss the many public service areas where privatization is appropriate and potentially beneficial, along with the areas it is not. The study provides city officials, administrators, and interested citizens with examples of where, how, and why privatization can be expanded in their communities. The documents made available here are part of that effort.

Government privatization refers to the practice of providing what are commonly considered public services via the private sector. In these cases, the public service is provided either directly by a private firm (or multiple private firms), or indirectly through private firm management of government-owned operations (i.e., outsourcing). There are numerous ways private management of government operations can be arranged. Privatization, when done properly, can increase efficiency and expertise, provide additional services to the public, and decrease costs for taxpayers.

In 2003, the Missouri Legislature created a subcommittee on Competition and Privatization that issued a final report in December 2004. The subcommittee’s work was promising, and its goals were inspiring. Unfortunately, the final results of the project were ultimately disappointing and few of its recommendations were implemented. However, there are valuable parts to the report that document how Missouri has used private entities for many information technology (IT), data entry, and other service-related state government needs. For the first time, that report is available online at Showmesunshine.org.

We also have included several examples of contracts and proposal requests between local governments and private sector partners. If there are local officials in Missouri who wish to look further into privatization but do not know the legal requirements, we hope that these examples of existing contracts and proposals can be of assistance. These contracts include examples from the City of Saint Louis, Kansas City, Cameron, Jackson County, Chillicothe, and Wentzville.

Other documents we have made available online here include:

  • A 2007 memorandum from the City of Florissant documenting how it used the funds from the 2002 sale of its municipal water utility.
  • A 2004 memorandum from Milwaukee County, Wis., detailing that county’s privatization efforts from 1995 to 2004.
  • A 2004 report from Stephen Witte with the Missouri Legislative Academy on the issues regarding toll roads in Missouri.
  • A 1996 report from the Missouri Council on Efficient Operations discussing various ways to make state government more effective.

The Show-Me Institute’s privatization project is dedicated to expanding the use of privatization in Missouri state and local governments. That effort is ongoing. Missourians can use this information to monitor state government and their local governments as a way to encourage privatization efforts when possible. We also hope the documents listed here will assist local government officials who may be considering privatization efforts. Being active in government and monitoring its services can be difficult. This tool makes it a little easier.

 


Contracts and proposal requests between local governments and private sector partners:

 


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