In this half-hour interview with Lee Presser that first aired on Nov. 12, 2013, Show-Me Institute Policy Analyst David Stokes explains how Tax Increment Financing (TIF) works and the impact on tax policy. Stokes also reviews several notable TIF proposals.
Should School Choice Programs Require State Testing?
Jay Greene has an interesting piece on his blog about school choice and accountability testing. He writes:
There is a legitimate diversity of views on what constitutes a good education. We should be no more willing to impose the “right” kind of education on people than we would impose the “right” religion or the “right” political preference. Reasonable people disagree about what constitutes the good life and the government in a free society should not be in the business of severely restricting that range of disagreement.
Some argue that charter schools or private schools should not receive state funds unless they teach the state’s prescribed curriculum and administer the state-prescribed accountability tests. To this, Greene responds:
So, the state only pays for its own vision of a good education but you have to pay extra if you want to pursue something else. This is roughly comparable to the status of Dhimmis (non-Muslims in an Islamic state) who are allowed to practice a different religion as long as they pay an extra tax. Doesn’t feel compatible with a free society, does it?
In Missouri, opponents of school choice programs often state this very argument. In a recent position paper, the Cooperating School Districts of Greater St. Louis wrote that charter schools should have the “same accreditation process and accountability requirements of all public schools.” The same has been said about private schools in a school choice program.
These opponents of choice must not realize that we can have a “legitimate diversity of views on what constitutes a good education.”
Earlier this week, I had the pleasure of speaking with a group of parents at New City School, a private school in the Central West End neighborhood of Saint Louis. I asked them what they looked for in a school and why they chose New City. Of the seven parents, not one listed performance on standardized exams as their top reason and only one indicated it was in their top three considerations. The most cited reason for picking New City was the school’s commitment to diversity.
In their recent report, “More than Scores: An Analysis of Why and How Parents Choose Private Schools,” the folks at the Friedman Foundation found the same thing that I’m hearing from parents — they are interested in much more than just test scores.
New Terminal Already Costing Kansas City Taxpayers
On March 30, the Kansas City Star reported that according to Aviation Department Administrator Mark VanLoh,
Building a new terminal would not require general taxpayer funds. Instead, bonds would be paid by airport passengers, airlines and other users of the facility.
Now we learn from the Kansas City Business Journal that general taxpayer funds will be used after all. On Nov. 19, Austin Alonzo reported on the latest airport advisory group meeting:
During the meeting, Fowler announced that the board will “engage” New York-based transportation consultancy firm Frasca & Associates LLC as its independent consultant.
After the meeting, Fowler said Kansas City will handle the consultant’s contract, which could be worth as much as $100,000. More information on that choice and what the firm will do for the KCI Advisory Board will be revealed at the group’s next meeting.
Why are general taxpayer funds being used instead of airport funds? Apparently VanLoh cried poverty, saying the Aviation Department does not have the money. Mind you, the airport had the $117,000 to pay public relations firm Global Prairie to tell us how great an idea the new terminal is. The Aviation Department found the money to conduct the multi-year study that is now being considered. They even had the cash to loan Kansas City $10 million (at a modest rate of interest).
Terminal supporters may argue that the Aviation Department should not have to pay for a consultant to review Aviation Department claims. (After all, we at The Show-Me Institute have been investigating the matter for months at no public expense.) But even if you accept that argument, if the new terminal plan goes forward it, will put the airport into even more debt than the new terminal will generate in revenue. And that debt, we argue, could result in Kansas City making up the difference from the general taxpayer funds, as it has with Power & Light, The Citadel and this current airport consultant. Residents will certainly pay the high costs through airline tickets, parking, or reduced options at MCI.
The people of Kansas City do not want a new terminal. MCI’s biggest tenant, Southwest Airlines, says the proposed plan is too expensive and unnecessary. In most places, that would be enough to settle the issue, but in Kansas City, it just increases the cost (see also: streetcar).
Spring Internships With The Show-Me Institute
The Show-Me Institute is now accepting applications for our spring 2014 internship program. All the information you need about the internship is available here. Please submit the required application by Dec. 6. The spring intern positions can be full- or part-time, and the jobs pay $10 per hour. You will note that is above the minimum wage, because we believe in the power of markets, not government mandates. Which basically sums up your entire internship program experience quite nicely.
Kansas City Aviation Department Director Contradicts Own Planning Document
After Southwest Airline Executive Vice President Ron Ricks criticized Kansas City Airport’s new $1.2 billion terminal plan as overly expensive, many media outlets questioned why the Kansas City Aviation Department had not consulted with Southwest (the airport’s No. 1 airline) before the terminal was designed. On Friday, Aviation Department Director Mark VanLoh struck back, claiming that he had spoken to Southwest in May, but that Ricks “may have been out of the loop.” He also stated that the Aviation Department had not discussed financial details because, “the department didn’t, and still doesn’t, know the exact financials because the possible rebuilding is — at the earliest — seven years away.”
The statement that terminal rebuilding is seven years away, at the earliest, is likely to confuse anyone who has read the Aviation Department’s own plan. Put out in April (one month before the meeting with Southwest), and still on the website as current, the plan states that construction is to begin in June of 2016. That’s less than three years away. In fact, the terminal is supposed to open on Feb. 1, 2019, slightly more than five years from today. Whatever number you view, it appears the Aviation Department was looking to rebuild far sooner than seven years from now. So where is the Aviation Department director’s number of seven years coming from? Is the plan on the website outdated? If so, why have they not issued a new document? And because VanLoh is claiming that he didn’t discuss financial details with Southwest because rebuilding is seven years away, does that mean that the plan written in April was outdated by May?
According to the information that the Aviation Department released earlier this year, they have a new terminal design, cost estimates, and a tentative construction schedule. But it seems like every time the Airport Advisory Group meets or the Aviation Department director talks to a newspaper, we hear entirely new cost estimates and timelines. For the good of Kansas City residents, the city should seek independent analysis of the Kansas City Airport and the new terminal plan.
MSBA Verifies That They Are Fighting To Keep Taxes High
On Nov. 9, the Washington Missourian published a letter to the editor in which I wrote that the Missouri School Boards’ Association (MSBA) uses your tax dollars to fight for keeping your taxes high.
Well, as you might expect, MSBA took issue with my letter. The funny thing is the part of the letter with which they took issue.
Was it my claim that MSBA is gearing up to battle against tax cuts in the next legislative session? No.
Was it my claim that they are hosting a series of anti-tax cut meetings? No.
Was it my claim that they hadn’t invited anyone who is pro-tax cuts to the meetings or that they are not interested in a debate on the issue? No again.
Was it my statement that our tax dollars go to MSBA to fund their efforts to keep our taxes high? Sadly, no.
Carter Ward, executive director of MSBA, took issue with my claim that I would have had to join MSBA if I had been elected to the school board. He wrote, “The decision to join MSBA is made by local boards of education as a whole and is voluntary. No school board in the state is required to belong to MSBA or to spend any money with the association.” Of course, state statute requires every school board member to undergo training that only the MSBA can provide, but never mind that.
He went on to claim that Missouri is a low-tax state and cutting our taxes further would be a “recipe for disaster.”
There you have it, MSBA thinks your taxes are low enough and they will fight to keep it that way.
Robbing Peter To Pay For Paul’s Pension
As first appearing in the Columbia Missourian on November 18, 2013:
Peter and Paul are friends. They went to the same college, majored in education, and graduated the same year. Peter began teaching in the Jefferson City School District and Paul joined the faculty in the Hickman Mills School District. After working for 30 years, both retired. Little did they know that over the course of their careers, the defined benefit pension system had been robbing Peter to pay for Paul’s retirement.
Teachers in Jefferson City (Peter) start at a slightly higher salary than teachers in Hickman Mills (Paul) and they continue to earn a higher salary for 23 years. However, toward the end of their careers, Hickman Mills teachers receive larger pay raises and surpass their Jefferson City counterparts.
Over the course of a 30-year career, a teacher in Jefferson City will earn $29,213 more than a Hickman Mills teacher. Each of these districts is part of the Public School Retirement System of Missouri (PSRS). This system requires 29 percent of a teacher’s salary be contributed to the pension system, 14.5 percent each from the employee and the employer. Assuming a constant 29 percent contribution rate, a Jefferson City teacher will have $8,472 more deposited into the pension system than a Hickman Mills teacher.
Because they deposit more into the retirement system, it would make sense for the Jefferson City teachers to earn more in retirement, but that is not the case. Pensions in the PSRS system are based on a teacher’s three highest consecutive salaries, usually his or her last three years. The spike at the end of their career gives Hickman Mills teachers a higher final average salary, meaning they will earn more in retirement than the Jefferson City teachers.
Despite paying $8,472 more into the pension system, the Jefferson City teacher will receive $55,080 less than the Hickman Mills retiree over the course of a 30-year retirement.
This is a clear problem. Indeed, Missouri’s teacher retirement system is rife with problems. The end result is escalating payments by the state or declining benefits for pensioners. Since 2004, Missouri teachers have seen their contribution rate increase eight times, rising steadily from 21 percent to the current 29 percent. These increases are necessary to combat growing pension liabilities.
The problem with PSRS and many other public employee pension systems in Missouri is that they do not tie an individual’s contributions to his or her pension wealth accrual. That is, what you put into the retirement system is not related to how much you get out of the retirement system. That is why Peter can contribute more, but receive less.
The current pension system is flawed and unfair for teachers in Jefferson City and other districts that are robbed to fund the pensions of teachers in other districts. It is time to stop robbing Peter to pay Paul’s pension. It is time to fix our pension problems.
James V. Shuls, Ph.D., is the education policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.
Sharing Charts On Show-Me Data
Earlier this week, the Show-Me Institute unveiled Show-Me Data. Show-Me Data allows users to compare different states’ economic information.
For those of you who are not yet familiar with the site, this video can help you get up to speed. Those of you who have had a chance to explore the site and how it works might be wondering how to share what you have found on Show-Me Data with others. Show-Me Data has several tools to help you do just that.
Show-Me Data Filters
On Wednesday, the Show-Me Institute introduced Show-Me Data. Hopefully you have started exploring the site.
If you are having difficulty creating charts, please watch this video. If you have been able to create charts, that is fantastic. However, there is more to Show-Me Data than just creating charts from scratch.
Now, take a look at Show-Me Data’s filters and see what they can do to enhance your experience.
