Having It Both Ways

In his State of the State address, Missouri Gov. Jay Nixon offered profuse thanks to the General Assembly for passing a massive tax break for one company (Boeing) in their December 2013 special session. This is the same governor who spent much of last year railing against a broad-based income tax cut. The governor continues to argue that Missouri is one of the least-taxed states in the country. “Missouri is a low-tax state — sixth lowest in the nation — and we like it that way,” he said on Tuesday night. So Missouri is a low-tax state, but our taxes are too high for Boeing? Or are taxes too high for Boeing, but just fine for everybody else?

Missouri, in fact, is not a low-tax state, not in the taxes that matter most for a state’s economy.

The governor also laments that our taxpayers are forced to pay for health reform in other states through our federal taxes. He says that by expanding Medicaid, we could get some of that money back. This is a strange argument for a governor of Missouri to make considering that over a 20-year period, Missouri received more in federal spending than it paid in taxes. That means Michiganders and New Yorkers have been paying to improve our schools and our health care. Does the governor think they are entitled to a refund?

The truth is that there isn’t much evidence showing that Medicaid actually improves the health of poor people.

The legislature is in a new session and the state is facing serious challenges. But instead of spending more money (and the governor wants to spend a lot more), the state should focus on significant reform.

One Last State Of The State Post-Mortem

This week, Missouri Gov. Jay Nixon delivered his sixth “State of the State” address to the Missouri Legislature, where he set out his agenda for 2014. We all want to make this state a better place to live, but taxpayers should have serious concerns about the plans the governor detailed. (I commend to you James Shuls’ and Michael Rathbone’s blog posts for more.)

First, the governor is moving in precisely the wrong direction on tax policy. In his speech, the governor congratulated the legislature for creating nearly $2 billion in refundable tax credits for Boeing last year. “We didn’t win the biggest prize,” the governor said of the state’s failed bid, “but we competed at the highest level.”

By and large, tax credits are ineffective and inefficient to promoting substantive growth — risky experiments, if you will — and last year, the governor said about as much. In his 2013 address, the governor railed against the state’s out-of-control, multi-billion dollar tax credit system for six paragraphs. In 2014, he devoted all of 18 words — one sentence — to the issue, and held up what could have been the biggest giveaway of taxpayer money in state history as an example of progress, not regression.

But that’s what it was: regression. Why should the state support corporate handouts like the one for Boeing, but actively deny tax relief to the family businesses in our communities?

Second, substantive Medicaid reform should be the top health care issue in Missouri, not a costly expansion. The governor’s proposal would lock the state into billions of dollars in new Medicaid spending over the next decade without a plan to pay for it, and that’s a bad deal for taxpayers.

Not only is the current Medicaid program wasteful, but the access and quality of care available to Medicaid enrollees is simply deplorable. We should be reforming this multi-billion dollar program, not making it bigger.

Even the education proposal is beset by the same “spend first, ask questions later” mindset. Missouri education funding has marched upward over the last few decades, and yet in terms of student achievement, our children remain stuck in the middle. From 1992 to 2008, Missouri saw an increase in per-pupil spending of 40 percent . . . and yet student achievement has remained basically flat.

That isn’t a spending problem. Our kids deserve to have the best education, and one of the best ways to achieve that is through school choice and competition. The governor’s address made no mention of such reforms — his focus was on simply spending more. That’s wrongheaded.

Wide-ranging reform, not wide-ranging new spending, should lead the state’s agenda in 2014. I hope that is what we will see.

Video: What To Expect During The 2014 Missouri Legislative Session

Last week in Columbia, Columbia Tribune Columnist Bob Roper and I delivered a presentation at the Show-Me Institute’s Show-Me Forum. We talked about what we expect will be the big legislative issues of the new year. We discussed taxes, labor issues, health care, and whole lot more. If you’re interested, you can watch the event in the video below.

Crime And (Doggie) Punishment: A Tale (Or Tail) Of Lost Freedom

First appearing in the January 13, 2014, Weekly Standard:

On a beautiful day in late October, Gus and I were enjoying a rare moment when our only companions in the large and hilly park in front of St. Louis’s Concordia Seminary were nut-gathering squirrels and the birds in the trees.

I was sitting on a Coleman camping chair reading a book and Gus, a beautiful black-and-tan Gordon setter, was doing his favorite thing—chasing birds. This is something Gus does at high speed, in narrowly zig-zagging and broadly circling patterns. The chases go on for as long as eight or nine seconds. I have never seen him pluck a bird out of the air, but he is right on their tails the whole time—forcing many a low-flying wren or robin to go into a steep climb.

It is a sight to behold. People stop and stare in disbelief. The birds seem to enjoy the game as much as Gus. Why else would they be so willing to come out of the trees and play catch-me-if-you-can? Sometimes, Gus begs them to do it—in short, staccato steps under a tree. Nose down, he dances to the sight of moving shadows signaling movement above. On a good day, Gus has dozens of bird chases.

On this particular day, my sense of perfect contentment was broken when I looked up and saw Gus at the far end of the park in the company, but not the grasp, of a policeman. It looked as if my grand-dog thought he had found something rather interesting and was happily escorting the policeman into my presence. Gus was off leash, as, too, of course, was the policeman.

As Gus pranced about the policeman, I grew increasingly annoyed thinking about what was about to happen. Wherever you go in today’s America, the nanny state, in its all-encompassing wisdom, has declared there shall be no dogs off leash—anywhere and everywhere, with the possible exception of your own basement.

If people who were alive a hundred years ago were to return today to our parks and open spaces .??.??. and find that no one is allowed to let a dog run free because of a widespread horror of dog poo, and fears that house pets might turn into killers .??.??. they would be appalled at our conformity, timidity, and stupidity. They would feel sorry for the dogs and wonder why we as a people weren’t already extinct.

As my mood turned sour, I also wondered—as a legal point, and I am no lawyer—what gave the policeman the right to come marching up to me on a private college campus.

So I did not politely get out of my chair to greet the officer, or even look up from my book, until he was hovering over me.

“Do you know there’s a leash law?” he asked. I answered his question with one of my own:

“Do you know this is private property?”

“Is it your property?” he countered.

I know my dog and I are welcome here,” I answered. “My wife and I have been here many times. We have come to know several of the faculty members. No one has ever asked us to put this dog on a leash. In fact, our dog has played off leash with their dogs.”

At this point, the policeman claimed the school administration had asked the Clayton police department (Clayton being a close-in St. Louis suburb) to enforce Clayton’s leash law. He pulled out a pad and started to write a ticket—asking for particulars not just about me (my name and address) but also the dog (name, breed, and weight).

The policeman was not unpleasant. An older cop (55 or 60), he was probably assigned to the easiest duty, and what could be easier than sitting in a parking lot on a super-safe college campus and getting out of his car to write a ticket on a dog that befriended everyone, himself included? He sympathized with the fact that my wife and I had been keeping this very sporty dog, now three-and-a-half years old, for our daughter and her family ever since he had been a puppy, and this was a dog, as he could see, that should not be cooped up in an empty house for 10 hours a day while its parents were working. We keep Gus on weekdays and he goes back to Elizabeth’s house on weekends.

So the policeman and I talked a bit about what to do with a dog that really needs at least an hour of hard exercise a day to be fit and happy.

There were several dog parks in the area, he volunteered.

“And they’re all like prison yards,” I told him—places where the more aggressive dogs are forever preying on less aggressive. It’s hump-o-mania all the time in crowded dog parks. Gus could stand up to the aggressive dogs, and would often, good-heartedly, come to the protection of weaker ones, but he didn’t like dog parks. Birds don’t much like dog parks either.

Maybe you could buy a farm, the policeman weakly suggested. He left me with a ticket and summons to appear in court on December 4.

Beth Ann, my wife, wanted to be there—with Gus. She is planning to write a children’s book about our several encounters with the law on this issue—and also our more numerous encounters with other dog-owners who scrupulously obey the leash laws and shout out enviously to outliers like us: Don’t you know there’s a leash law? For the purposes of the book, she wanted Gus to have his day in court.

I didn’t think Beth Ann had a chance of getting through security with a dog—even with such a beautiful and noble-looking dog as Gus. But I am never surprised by my wife’s inventiveness.

I had been sitting in the Clayton municipal courthouse for about an hour—along with about 100 other miscreants waiting their turn before the judge—when she and Gus (on a leash) came sweeping down the aisle. Beth Ann stopped to talk to a lawyer friend who was just leaving the court. Then, just as suddenly, she and Gus were gone.

To skip ahead to what would seem to be the end, when I was called to go before the judge, he told me that I had two options: I could plead not guilty and face a quick trial with the possibility of a fine of $300 or more; or I could talk to the person on the same dais seated to his left, who was the prosecutor and who had the discretion to negotiate a settlement. Naturally, I took the second option.

In a brief conference that took less than a minute, I told the prosecutor that Gus was not my dog, but my grand-dog, and that I had not known that I was violating any leash law at Concordia Seminary. He seemed faintly amused. Here was the deal, which I quickly accepted: If I agreed to pay court costs ($26.50), there would be no fine and, as the prosecutor put it, both Gus and I would be on six-month probation.

I won’t tell you what Gus and I might or might not do between now and next May. But I will tell you how Beth Ann and Gus got into the Clayton municipal courtroom.

As Beth Ann tells the story—

In her first approach to the courtroom door with Gus in tow, she was stopped and told she had to sign in first. Patrolman Karl pointed to an open ledger along the wall on the other side of the anteroom. She signed the ledger. When she returned to the big courtroom door, Patrolman Karl stopped her a second time.

“Dogs aren’t allowed in the courtroom,” he said.

“But he’s the perpetrator. He’s asked to appear in court.”

“I don’t think he has to be present in court.”

“Are you sure?”

“I’ll go ask the judge.”

With that, Patrolman Karl went through the door and Beth Ann and Gus followed a moment or two later. Having determined in private discussion with the judge or prosecutor that Gus’s presence in court was not an absolute requirement, Patrolman Karl duly shushed Beth Ann and Gus out of the courtroom.

So Gus really did have his day in court.

I wish the moral to this story was that you can’t keep a good dog down. But I fear the reality is that the nanny state and its obedient servants will keep any number of good dogs down for a long time to come. We are witnessing the death of common sense as a substitute for rules and regulations.

Life is less fun, with less freedom.

Andrew B. Wilson is a resident fellow and senior writer at the Show-Me Institute, a free-market think tank in St. Louis.

 

In Education, Money Itself Is Not The Answer

Money is not the answer

Missouri Gov. Jay Nixon’s State of the State address correctly identified education as a key policy area this year. This is due to the fact that Missouri’s educational record to date is middling at best. Stanford economist Eric Hanushek and his co-authors in a 2012 study compared gains in National Assessment of Educational Progress (NAEP) test scores for math, reading, and science across states. Out of the 41 states for which assessment results are available, Missouri ranks 27th.

Gov. Nixon called upon the legislature to increase spending on K-12 education in Missouri by $278 million in 2014. Will spending more money on educating Missouri children push us to the head of the class? The chart above, taken from the Hanushek study, does not support the governor’s claim. As shown by the experience of many states over the past 20 years, spending more money on education does not guarantee marked improvements in student achievement.

The chart above indicates no reliable relationship between spending on education and educational success across states. The correlation is 0.12. In other words, the correlation between spending and student outcomes is essentially zero.

Streetcars Will Waste Your Money And Your Time

Paul Jacob writes in his blog This is Common Sense:

Transportation scholar Randal O’Toole regales us with the fix that California’s overlords have put themselves in. Merely assuming that dense city living decreases commuting, California’s legislators cooked up a law requiring local governments to increase population density.

But it turns out “transportation models reveal that increased densities actually increase congestion, as measured by ‘level of service,’ which,” O’Toole informs us, “measures traffic as a percent of a roadway’s capacity and which in turn can be used to estimate the hours of delay people suffer.”

This should be no surprise to Kansas Citians, who are familiar with official calls for increased urban density and the streetcar system that they believe will bring it. An effort to raise private money for the streetcar (so far, $3,775 of their $10 million goal) says that streetcars:

. . . provide high-quality transit service that promotes compact, walkable, higher-density development.

A firm hired to help build the streetcar system offers as a potential benefit, “Increase[d] population and economic density to the urban core.” Streetcar booster and former Kansas City Mayor Mark Funkhouser claimed that a rail system “produces density, which is key to efficient land and resource use.”

We know from previous studies that rail transit does not remove cars from the road. And we know that it is not the rail lines themselves that drive economic development but rather the additional tax incentives that governments hand out along rail lines. We know that the people of Kansas City have voted down streetcars every time a legitimate election has been held. And judging by the effort to raise private funds yielding only three-ten-thousandths of 1 percent of their goal, Kansas Citians still don’t support it.

But just as in Kansas City, California politicians continue undaunted. O’Toole writes:

The gist of the new standards of “regulation”? “[T]hey ignore the impact on people’s time and lives: if densification reduces per capita vehicle miles traveled by 1 percent, planners will regard it as a victory even if the other 99 percent of travel is slowed by millions of hours per year.”

If you doubt that city leaders care more about spending taxpayer money than respecting taxpayer time and convenience, consider the plans to build a $1.2 billion airport terminal.

Spending Money Kansas City Doesn’t Have On Streetcars It Doesn’t Need

Optimistically anticipating that their initial 2.2-mile downtown streetcar line will be a resounding success, Kansas City planners are proposing a Transportation Development District (TDD) to fund a $500 million streetcar system. This move is a blatant bid to get federal dollars to pay for an expensive and outmoded transportation device.

The Show-Me Institute policy staff has argued numerous times that streetcars do not improve mobility or connectivity. Development along streetcar lines is likely due more to tax incentives and other government investment that diverts development to the favored corridor. Even researchers who do not oppose streetcars point out that there is a lack of proper research on a streetcar line’s effect on regional development.

However, backers of the streetcar in Kansas City are not content to wait for real, rigorous studies on the success or failure of the streetcar fad before charging ahead. That is because streetcars are too expensive to build without matching federal dollars, at more than $50 million per mile, and federal policy can change quickly.

For instance, during the Bush administration, streetcars received little federal dollars. The department at the time focused on transit projects that were cost-effective and promoted congestion relief. But those guidelines changed under the Obama administration to favor “livability.” This change in policy, coupled with the stimulus, made billions of dollars available for streetcars in Kansas City and across the country, mostly in the form of TIGER and MAP-21 grants. However, the federal favor shown streetcars may not outlive the Obama administration, which would effectively kill any attempt to expand the streetcar in Kansas City. There is little wonder that there seems to be a race to lock up federal dollars.

Funding expensive and inefficient transportation options with money that falls from the sky is a short-cited policy for Kansas City. Federal grants may fund new transit infrastructure or increased capacity, but grants for repair and maintenance are rare. This means that the costs of the proposed $500 million streetcar system will continuously rise for Kansas City, likely beyond what the initial TDD will support.

And as the experience of Portland has shown, streetcar users will not be willing to pay anything like the full cost of their ride. After years of “free zones” (free streetcar rides in many areas of the city), tax breaks, corridor improvements, and high-density zoning, passengers using the existing streetcar lines declined following the imposition of a $1 fare. That fare, enough to deter ridership, only generates an insignificant percentage of the Portland streetcar’s $251 million capital or $8.2 operating budget, all for 7.3 miles of track.

If Kansas City cannot afford to build the streetcar without federal aid, it cannot afford a streetcar with federal aid either. If Kansas City residents approve the TDD and the proposed system is built, it virtually guarantees that, like Portland, everyone in the city, region, state, and country will pay for a mode of transportation whose sole purpose is to divert development to favored sections of downtown Kansas City.

Three Recommended Reforms For Tax Increment Financing (TIF)

As Missouri’s General Assembly gets underway in 2014, they should move to reform Tax Increment Financing (TIF). David Stokes suggests three reforms that the legislature should enact this session:

  1. Prohibit elected city officials from overriding county TIF commissions
  2. Focus TIF subsidies on returning property to greenfield status
  3. Prohibit TIFs from being awarded in floodplains statewide

 

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