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What Do Bus Rides Tell Us About School Choice?

Posted on October 7, 2013May 5, 2026 by James V. Shuls

Last Tuesday, the Joint Committee on Education hosted a marathon hearing exclusively on the inter-district school transfer law. Over the course of the five hour long hearing, numerous witnesses brought up the fact that some students in the two unaccredited school districts are riding buses for three hours a day in order to attend a school in Mehlville, Kirkwood, or Francis Howell. What conclusion did they draw from this fact? Most decided this was unassailable proof that the school transfer law was failing; that we need to shut it down immediately so these poor children can come back home. This is exactly the wrong conclusion to draw from this.

We must remember that students are riding buses for multiple hours each day by choice. These students want better educational opportunities. They are willing to ride the bus for hours each day to secure those opportunities. Some are even willing to ride their bicycle 30 miles to secure that opportunity.

The fact that students are riding the bus for so long is hardly a criticism of inter-district transfers or school choice. Rather, it is a testimony to the resolve of students and their families. Their sacrifice demonstrates that there is great demand for school choice.

I by no means believe the current transfer law is perfect. Something must be done to make the law more tenable, but fixing the problems should not mean we have to deprive students of the opportunities they so desire and deserve. Long bus rides are not the problem. The problem is a lack of educational options close to home. We can work towards solving that problem by expanding school choice, not by limiting choice.

Brenda Talent at CPAC St. Louis

Posted on October 3, 2013May 5, 2026 by Brenda Talent

Talent advocated a conservative, free-market vision in contrast to the progressive, big-government policies espoused by Washington. Talent also described the mission of the Show-Me Institute, Missouri’s only free-market think-tank.

The Airport’s Self-Dealing

Posted on October 3, 2013May 5, 2026 by Patrick Tuohey

Imagine you have applied to the city for a building permit. The project is complicated and the city wants outside advice before giving you permission. What are the chances that they would ask you to recommend someone to give them that advice? What are the chances they would have applicants apply to you directly? If you’re thinking the chances are zero, then you haven’t worked in Kansas City, Mo. And you haven’t spent much time dealing with the mayor’s so-called advisory group on the proposed new terminal at Kansas City International Airport (MCI).

Members of the advisory group are studying the airport to decide if the Aviation Department should build the new $1.2 billion terminal they want. Those lessons have been presented by, well, the Aviation Department. But the advisory group wants to get an independent point of view, so it is seeking a consultant. Those interested are to apply through, who else, the Aviation Department.

This might be excusable were it not just the latest in a series of events demonstrating that the advisory group is not really expected to tell Mayor Sly James anything he doesn’t want to hear. Consider the following:

The appointed head of the advisory group built airports for a living, including the current MCI.

The mayor has said, while flanked by the group’s leaders, that anyone who opposes a new terminal is uninformed [July 9 Kansas City Star, story taken down].

The City Council told the Aviation Department to go ahead with its plans while the advisory group meets.

Proponents of the new airport spent at least $117,000 on public relations consulting and yet refuse to speak in public about their plans.

One member of the advisory committee works for an economic development council headed by the Aviation Department’s administrator.

The advisory group began its series of meetings by removing opponents at the very moment its leaders were saying the meetings were to be open.

City Councilman Ed Ford said that Kansas City is going to get a new terminal regardless of what voters think.

The advisory group will continue its meetings well into 2014 with no end in sight. No one knows what their decision will be, but it’s clear that any information they receive will either be gathered by the Aviation Department or those it approves, such as the so-called independent consultant.

Lower Costs Or Just Lowball Estimates For A New Terminal?

Posted on October 2, 2013May 5, 2026 by Joseph Miller

Recent public disclosures for Kansas City’s new airline terminal proposal have become more confusing and contradictory. The Kansas City Aviation Department needs to release more thorough information as to why its cost estimates for a new terminal are decreasing.

According to the Kansas City Business Journal, the new terminal plan could cost anywhere between $960 million and $1.35 billion; however, officials with the Aviation Department do not expect costs to go above $1.2 billion and believe they can drive costs down to about $900 million. While these statements make it seem as though $1.2 billion is the cost ceiling for the terminal, the Aviation Department’s Advance Terminal Planning Study puts the expected cost at more than $1.2 billion. That baseline (not ceiling) estimate includes construction, core terminal requirements, necessary new parking structures, repairs to the airfield, and a modest construction overrun cushion.

While construction delays and other unexpected costs could lead to significantly more than $1.2 billion, what are the exigencies through which the Aviation Department could drive down the cost to $960 million, or even $900 million? That would require a savings of $263 million to $323 million, which is more than the costs of all the proposed repairs and improvements to the airport’s runways. Other than cutting a large, integral part of the new terminal project, there does not seem to be anything in the current plan that could reduce costs to $900 million.

To give the benefit of the doubt to the Aviation Department, let us assume that this is one of the first construction projects in the history of the United States with no construction contingencies required, saving the project 15 percent. In this highly improbable scenario, to reach the hoped-for estimates, the project would need an additional $80 million to $140 million in savings, more than any single component in the Aviation Department’s plans.

The new terminal project is being sold to the public on the argument that its design is efficient and the old terminal is inadequate. The Aviation Department should explain which sections of this plan are not necessary or where the initial cost estimates were overzealous. After this approach is taken to other refurbishment approaches as well, the public can make an informed decision about whether Kansas City International (KCI) needs a new terminal.

Levees For Floodways

Posted on October 1, 2013May 5, 2026 by Joseph Miller

The U.S. Army Corps of Engineers (USACE) is looking to move forward with a costly levee system to protect a floodway in southern Missouri. The project is at the expense of much-needed maintenance to existing systems across the state.

In July, the USACE released its latest draft environmental impact statement for the St. Johns Bayou and New Madrid Floodway project. A major component of this $164 million project is to close a 1,500-foot gap at the southern edge of the New Madrid Floodway with a new levee. USACE claims that this project will protect agricultural land in the New Madrid Floodway from yearly back-flooding with a benefit-to-cost ratio of 2:1.

However, experts and other government departments claim that the environmental impact statement, the seventh proposing this levee since Congress approved the project in 1954, underestimates both construction expenses and other externalities. The USACE is well-known for construction cost overruns, exemplified by a lock and dam project on the Ohio River. Although the money already spent on that project is almost five times the original budget, it remains incomplete.

The Corps is also likely underestimating ecological damage to the Mississippi River. As it closes off the last area in Missouri where the Mississippi has access to flooding areas, the proposed levee is likely to damage the Mississippi River’s ecology, including its fish stock and bird species. The U.S. Department of the Interior states that USACE’s plans for mitigation:

…lack scientific validation, are logistically infeasible, and inadequate both in kind…and amount.

A new levee endangers not only fish and fowl, but also Missouri residents. As the U.S. General Accounting Office (GAO) stated in 1995, “That levees increase flood levels is subject to little disagreement.” The back-flooding into the New Madrid Floodway relieves pressure from levees upstream in Missouri. Shutting off this escape route increases the danger of levee failure at other places along the river.

While the Corps plans a new levee system with ominous consequences, Missouri’s existing levees remain in a state of disrepair. Of the 133 rated levees in USACE’s registered system for Missouri, only 5 percent are fully acceptable for a 100-year flood (1 percent chance in any given year). Ninety percent are “minimally acceptable” (have one or more areas that endanger the structure) and an additional 5 percent are “unacceptable” (not rated to perform up to standard in the next flood). That $164 million might be better spent maintaining the system that already exists rather than protecting a floodway.

My Obamacare Story

Posted on October 1, 2013May 5, 2026 by David Stokes

I received a letter the other day cancelling my health care coverage and moving me into a different insurance package that is twice as expensive. Needless to say, I am livid. My family uses a high-deductible insurance plan associated with a health savings account (HSA) to pay for our health care. Because our insurance plan did not meet the insurance requirements of the Patient Protection and Affordable Care Act (PPACA, also known as Obamacare), it was eliminated. At some point in 2014, we will be moved to another plan associated with an HSA that does meet the requirements of PPACA, at more than twice the expense.

Never mind that our prior coverage met the standards for our family just fine. Never mind that we were fully covering our family and other taxpayers were not subsidizing us. Never mind that our insurance now provides us with additional coverage that we neither want nor need. The old plan suited our needs just fine.

Is it possible that we should be blaming our insurer instead of the government? Maybe, but because Obamacare made changes that eliminated the options for our prior plan, I think my anger is appropriately directed at the government and the people who voted PPACA in. We were told that we could keep our health plan if we wanted to under Obamacare. They lied.

Obamacare: Less Choice, Higher Taxes, Slower Economic Growth

Posted on September 30, 2013May 5, 2026 by Rik W. Hafer

As first appearing in the STL Beacon on September 30, 2013:

The time for enrolling in health exchanges is now upon us. Recent polls show that the majority of Americans continue to disapprove of the health care law — the Affordable Care Act, commonly referred to as Obamacare — enacted in 2010. But how many of us really understand what we can expect and what we will pay for this “affordable” health program? The simple fact is that most of us are just plain bewildered, not knowing how the controversial law will affect us.

A September 2013 USA Today/Pew survey provides some evidence on this. Of those surveyed, only one-quarter believed that they had a very good understanding of what the law’s impact would be on them and their family. When asked what the impact of the law would be on them in the future, over 40 percent thought it would have a mostly negative effect. Only one-in four thought it would have a positive effect.

How the law affects us is becoming clearer, sort of. The Kaiser Health News reported that Obamacare affects treatment choice for many patients in eastern Missouri. This is because policies offered by Anthem BlueCross BlueShield, made available through Missouri’s online insurance marketplace, would not include Barnes-Jewish Hospital, or St. Louis Children’s Hospital. As reported in this newspaper, subsequent reporting revealed that BJC Healthcare will be part of another insurer, Conventry. Even with that mystery solved, just which services will or will not be covered under the new plan remains uncertain.

There also are broader negative economic affects that will arise from implementing the new law. What are the tax consequences that the average individual will face? How will these tax changes affect decisions to work?

Answering such questions is the purpose of a recent study by University of Chicago economist Casey Mulligan. (Read Mulligan’s New York Times article, “Health care inflation and the arithmetic of labor taxes“) The basis for his research is the observed fact that policies that raise taxes on your income reduce your incentive to work more. You may need to work to pay the bills, but your incentive to work a second job or someone in your household to take on a part-time work is reduced at a higher tax rate. The after-tax income may simply not be enough to induce you to work.

Mulligan’s study finds that implementing Obamacare will create significant implicit and explicit tax increases that negatively affect the decision to work for many individuals. One avenue for these higher taxes is through employer tax penalties. It also comes through higher taxes on individuals. Mulligan estimates that, on net, “all provisions combined raise marginal tax rates in 2015 by 10 percentage points of total compensation” for about half of the nonelderly adult population.

In other words, under Obamacare a large portion of the working population will experience a significant increase in their effective tax rate. And this increase comes on top of existing tax rates. The disincentive to work is larger under Obamacare than currently exists.

Mulligan’s analysis explores the labor market effects of Obamacare by considering the new, higher implicit tax on full-time work. That is, many individuals currently working full time would find it economically advantageous to shift to part-time, given the provisions of the law. “Some middle-class workers,” Mulligan writes, “will find that they can work substantially less [fewer hours] without losing any disposable income.” That is not a recipe for improving prospects for greater economic growth.

Obamacare will disrupt markets for medical care, forcing individuals to choose hospitals and doctors that they would not have chosen otherwise. Obamacare also will create substantial negative incentives for many individuals to work.

As an increased proportion of the population moves into retirement, this puts increased pressure on government social programs such as Social Security, Medicare, and now health care.

The tax increases under Obamacare will reduce the labor force as people opt out of working by retiring or they chose to work fewer hours. Either way, the growth of output slows and with it income.

Since income funds Social Security and Medicare and now Obamacare, to fund these programs at existing levels — and with even more individuals enrolled in retirement programs — it puts strains on those still working, which is a shrinking proportion of the population.

Unless you cut back on existing programs (coverage, services, etc.) and/or raise taxes on those employed, there simply is not enough inflow of funds in out years to pay for all of these programs at current levels of coverage.

The disincentives created by the Affordable Care Act decrease the likelihood that the economic growth will rebound any time soon.

Rik Hafer is a distinguished research professor in the Department of Economics and Finance at Southern Illinois University Edwardsville and a scholar at the Show-Me Institute.

Pattonville’s Poorly Designed Pay Scale

Posted on September 27, 2013May 5, 2026 by James V. Shuls

In education, retention of teachers is a persistent problem. Richard Ingersoll, of the University of Pennsylvania, estimates that 46 percent of teachers leave the profession within the first five years. Those exiting the field cite inadequate salaries among the chief concerns. This has led many to conclude that teachers are underpaid. Indeed, the fact that teachers are underpaid is so often stated that it has become almost a mainstay in the American psyche. I don’t know if teachers are poorly paid, but they are certainly paid poorly. That is, they are paid by a poorly designed compensation system.

Take, for example, the salary schedule for the Pattonville School District in Saint Louis County. A teacher with a master’s degree starts at $42,070. Over the next 10 years, the teacher’s salary will increase by slightly more than 25 percent. This is a modest gain of nearly 2.5 percent a year. From the 11th to the 20th year, however, the teacher will see a dramatic pay increase of 48 percent — from $53,610 to $79,360. This tremendous jump occurs primarily over a two-year period between the teacher’s 16th and 18th years. I doubt a teacher improves so much between his 17th and 18th year to deserve a $10,000, or 14 percent, pay raise.

What explains the tremendous spike in teachers’ salaries toward the end of their careers? One simply does not arrive at a salary schedule of this sort through logic or sound accounting principles. More likely, unions negotiated this schedule in an attempt to get the best retirement benefits for their members. Pattonville is part of the Public School Retirement System of Missouri, which bases teachers’ retirements on their last three years of service, not on their contributions over the life of their career.

Pattonville’s pay schedule is poorly designed if the district wants to recruit and retain young teachers. However, it is expertly designed for those wishing to game the retirement system.

HHS Report Confirms: Insurance Rates In Missouri Exchange To Rocket Upward

Posted on September 26, 2013May 5, 2026 by Patrick Ishmael

At 12:01 a.m. yesterday, the U.S. Department of Health and Human Services (HHS) released a report on what some of the average insurance prices for 2014 will be for plans purchased in the new federally run insurance exchanges. That list includes Missouri. You can read the report here.

The takeaway: Rates will rise in 2014, and by a heck of a lot for some people in the state. A quick analysis of the data by Avik Roy, of the Manhattan Institute, finds that for a 27-year-old man in Missouri, rates for the least expensive “Bronze” plan will be 104 percent more expensive — more than twice the price of the cheapest plan available today. For a 27-year-old woman, that same plan will be 29 percent more expensive than what they’re paying today. For a 40-year-old man, the cheapest plan will spike 109 percent; for a 40-year-old woman, that plan will spike 35 percent.

About the “lower than projected” talking point: The report couches its findings as a positive — that insurance rates in the “Affordable Care Act” (ACA) exchanges will come in “lower than projected.” Both the methodology and claim are dubious, reeking more of desperation politics than academic research. The HHS compared 2014 rates to an HHS-readjusted prediction from the Congressional Budget Office about insurance rates . . . for 2016. Ignored is the sticker shock of going from today’s on-average lower rates to the dramatically higher rates of the exchange. Take all that together, and voila! The new ACA insurance plans kinda sorta sound cheaper. Also, pay close attention to the news outlets that say insurance rates will be “lower” based on this report; either they didn’t read the report, or they’re willfully misrepresenting the facts to their audiences.

The HHS report is really, really bad news for consumers, despite how you may have seen this news portrayed so far. More to come.

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