St. Louis Public Schools Exemplifies the Need for Educational Transparency

Posted on by Avery Frank

St. Louis Public Schools (SLPS) has been in the news a lot recently, and not for the best reasons. The superintendent is out, the largest school bus vendor cancelled its contract, and chronic absenteeism plagues the district. The most surprising revelation, arguably, is the report that SLPS has moved from a 17-million-dollar surplus to 35-million-dollar deficit all in one year.  The state will conduct an audit of SLPS, and hopefully it will shine a needed light on exactly what happened.

Maybe I should have seen this coming, as SLPS was the second-to-last district to have its Annual Secretary of the Board Report available on the Department of Secondary and Elementary Education (DESE) website—and it was months behind schedule.

Transparency is important in public institutions. Parents deserve to know what their money is being spent on in public education. The Show-Me Institute created MOSchoolRankings for this very purpose, providing needed transparency regarding the performance and spending in our public school system. DESE ought to provide this information, but its spending and performance data website is woefully inadequate.

Missouri’s education system has struggled with transparency. In fact, in 2023, the Heritage Foundation ranked Missouri 46th in educational transparency—a very poor ranking, but a slight improvement on Missouri’s 51st rank in 2022.

Increased transparency can come in many forms, one of which is a Missouri Parents’ Bill of Rights. Additionally, the sunshine law needs to be strengthened, as school districts have demanded hundreds of thousands of dollars from Institute researchers to access curricular documents. The sunshine law needs to have “teeth,” perhaps in the form of significant financial consequences for violations. That way, this law will not just be seen as a mere set of recommendations that can be violated without consequences.

SLPS is facing an uphill battle this year. We will see what we can learn from the state audit. In the future, increased transparency may be able to head off some of these problems before they become a crisis.

The L.A. Olympics Will Likely Be an Economic Failure

Posted on by Patrick Tuohey

The New York Times publishes that as Los Angeles is on the brink of hosting the 2028 Olympic Games, the city’s leaders are bullish on turning a profit, much like the storied 1984 games. But as we’ve seen time and time again, these grandiose promises of economic windfalls often fizzle out, leaving taxpayers picking up the tab.

These big convention hotels, entertainment districts, and sporting events don’t fail to live up to expectations in just Kansas City and St. Louis. They fail expectations all over the world.

L.A. is plowing ahead with infrastructure upgrades—expanding the rail system, modernizing LAX, and revamping the downtown convention center. These projects are fueled by a mix of federal funds, city dollars, and airport fees, with the idea that the influx of tourists will help offset the costs.

Mayor Karen Bass is pitching the Olympics as an opportunity not just to showcase L.A.’s iconic landmarks like Hollywood and Venice Beach, but also as a chance to shine a light on its diverse communities—Little Bangladesh, Little Armenia, and beyond. It’s a noble goal, but L.A. could take a massive financial hit if things go sideways.

And these big events are always going sideways.

The 1984 Olympics held up as their north star were a financial anomaly, largely because the city smartly used existing venues. Fast forward to today and the stakes are higher, with a nearly $7 billion budget hanging in the balance. LA28, the private group organizing the games, insists it will foot the bill through sponsorships, ticket sales, and global TV rights. But if costs spiral out of control, L.A. taxpayers will be left to pick up the tab. The city and state have agreed to cover any budget overruns, which is a colossal gamble.

We’ve seen it before—the pandemic-delayed Tokyo Games ballooned to $14 billion in costs, and Rio’s 2016 Olympics cost a staggering $24 billion, with both events blowing past their budgets. L.A. is trying to avoid that by sticking with existing venues like the Coliseum and Rose Bowl. Even with these cost-saving measures, there’s no guarantee that the numbers will add up.

The reality is the Olympics often leave host cities grappling with long-term debt, gentrification, and displacement. This risk applies to the recently closed Paris Olympics. Groups like NOlympics LA are already sounding the alarm, arguing that the games could exacerbate L.A.’s housing crisis and deepen economic disparities.

The 2028 Olympics could be a golden opportunity for L.A., but recent history tells us it is more likely to be another costly boondoggle. With so much on the line, Angelenos should keep a close eye on how this plays out.

Missouri Taxpayer Bill of Rights, Back to School, and STL County Changes

Posted on by Elias Tsapelas

David Stokes, Elias Tsapelas, and Avery Frank join Zach Lawhorn to discuss: a Missouri Taxpayer Bill of Rights, St. Louis County considering adopting a ‘county manager’ form of government, what the latest test scores tell us about Missouri schools, and more.

Read the Missouri Taxpayer Bill or Rights here

Listen on Apple Podcasts 

Listen on SoundCloud

Produced by Show-Me Opportunity

Slashing the Income Tax to Zero

Posted on by Avery Frank

As a former Tennessee resident, I think I am still mentally recovering from paying a state income tax. It’s not something that I am used to. Having no income tax is a Tennessee staple, and I miss it. But it could become a Missouri staple too, as top state officials have been discussing the need to slash the income tax down to zero. This idea has picked up steam in Missouri over the last couple of years. It is time to turn this talk into a reality.

Think of some of the top GDP growth states in the nation: Florida, Texas, Tennessee. None of these states have a state income tax. Free markets really do matter, and it has been demonstrated time and time again around the world and in the United States.

The Fraser Institute issues a periodic ranking of states according to “economic freedom.” According to its most recent ranking, Tennessee came in third—right ahead of number four Texas, but behind number one New Hampshire and number two Florida. Missouri came in at a respectable, but distant, number 15 ranking. Almost all of the “least economically free” states in Fraser’s report (New York, California, Illinois, West Virginia, and New Mexico), saw population loss.

Not coincidentally, Texas, Florida, and Tennessee have also dominated the U-Haul Growth Index, which measures the ratio of one-way, inbound U-Hauls versus one-way, outbound U-Hauls.

Granted, it is hard for Missouri to be Texas or Florida when we do not have the geographical gifts that those states enjoy.

But Tennessee is right on Missouri’s border and has much in common with the Show-Me State. Tennessee eliminated taxes that hamper growth (such as the Hall Tax, which taxed stocks and bonds), prioritized education reform to increase school choice and accountability, and its leaders are embracing its identity as a pro-growth, freedom-loving state.

Missouri has made recent progress in lowering the income tax burden. Since 2017, the top income tax rate has decreased from 6 percent to 4.7 percent for 2024.

Bringing the number down to zero should not just be a talking point—it ought to be a serious goal. If we want to be a top growth state, a nationwide destination for families, and attract more businesses, lowering the income tax is a great place to start.

I can speak from experience: having no state income tax is a luxury and a draw. Don’t we want that in our state too?

Kansas City Must Weigh Cost of Housing Regulations

Posted on by Patrick Tuohey

The more something costs to produce, the less is produced. This is a basic principle of economics; one doesn’t need to have a Ph.D. to understand it. And yet, the folks running Kansas City seem to be struggling with it.

Since September 29, 2023, Kansas City has required new home builders to adhere to the most recent energy code standards, labeled 2021 IECC. In doing so, Kansas City leaped over a few previous iterations of the code, updated every three years. The result has been a drop in the number of new construction permits sought due to the dramatically higher cost of construction the new standards require.

As a recent article in the Kansas City Business Journal points out, “Through May — the most-recent data available — Kansas City approved 132 single-family permits across the three counties it covers. By that time last year, it had granted 480. The year before that, builders pulled 346 permits through May.”

Even that number is high, because it includes applications submitted before the new energy code standards were put in place. The actual number of single-family permits issued in Kansas City under the new energy code is 32.

Proponents of the new regulations argue they are necessary to increase energy efficiency and lower energy costs. Fair enough. But those savings come with their own costs of construction. It’s a trade-off. Public policy almost always presents us with such trade-offs. If policymakers want to increase energy efficiency without abruptly killing new home construction, they need to work on some sort of compromise. Ordinance 240434 is one such effort, but its consideration is being repeatedly put off. Regardless of the exact solution, Kansas City leaders need to show some urgency to fix this problem.

Kirkwood Rejects Development Proposals

Posted on by Amanda Unverferth

The city of Kirkwood made a smart decision by issuing a request for proposals (RFP) last December to develop two lots on East and West Jefferson Avenue. The lots, both zoned in the Central Business District, offer a great opportunity for developers to add to the community by replacing the city-owned surface-level parking lots that sit there now.

Unfortunately, the city announced in June that it would not be moving forward with any of the six proposals that were submitted. These proposals would have offered downtown Kirkwood new retail storefronts, additional parking, and residential spaces.

So why would the city of Kirkwood reject all six proposals? Frustratingly, the city council hardly offered any reasoning other than general opposition to large developments in the downtown area. Parker Pence, a Kirkwood native who has written about the rejected proposals in his blog, the Kirkwood Gadfly, quotes a newly elected council member in a comment to one of his pieces:

One of the main promises of my campaign was a promise to stop large developments in our downtown and I am delighted to inform everyone that the current council voted unanimously against any new large developments and advised the city staff to tell all developers that we are not moving forward with any proposals for those parking lots.

These lots are zoned in the Central Business District, which, according to the Kirkwood Municipal Code “seeks to encourage mixed-use development with commercial services, retail facilities, and residential uses that complement each other and attract customers from outside the district.” This type of blanket opposition to “any new large developments,” is the opposite of productive for this area.

Pence investigates how much money Kirkwood stands to lose by rejecting these proposals. He notes that Clay|Adams estimates that the city forfeits nearly $90,000 in additional sales tax revenue and $145,000 in property tax revenue by turning down its proposal. Developer assessments should be taken with a grain of salt, but this still provides a ballpark idea.

Furthermore, proposals that include apartments, such as the Clay|Adams proposal, could even boost housing affordability by providing higher-density housing. For many, apartments are likely to be more affordable than the median half million-dollar single-family home found in Kirkwood.

It is disappointing to see Kirkwood pass on such an opportunity with its vague opposition to large developments. I hope that in the future, Kirkwood and other cities will objectively and transparently evaluate the economic growth and community benefits these types of developments could bring.

Jackson County COMBAT Is Still a Failure

Posted on by Patrick Tuohey

It’s been a few years since we’ve checked in with COMBAT, Jackson County, Missouri’s Community Backed Anti-Crime Tax.

Back in 2016, I noted that Jackson County Executive Frank White said of the tax at its renewal: “Anything that we can do to help our citizens in terms of prevention, and being proactive in what we do, is really what this (tax) is about.”

I pointed out at the time that the DARE program, funded by the COMBAT tax, has failed to show positive results in the research studies that have examined its effectiveness.

Four years later, in 2020, I mentioned an audit of the tax by then-Auditor Nicole Galloway. She wrote: “The county has not developed a plan for ensuring that performance evaluations of the programs funded by COMBAT are performed annually as required by county code.”

Now, in 2024, precious little seems to have changed. In a column for The Kansas City Star, I noted:

COMBAT doesn’t appear to measure outcomes. The closest it comes is a Community Impact Report, which relies chiefly on anecdotes and testimonials — many from people with financial interests in supporting COMBAT. A clue COMBAT doesn’t monitor program effectiveness is a note in the report indicating the number of those served by various programs are based on “grant application projections.” Not only is this relying on self-reporting by those receiving funds, but doing so at the moment they apply, when their plans are the most optimistic and least tested.

Kansas City’s homicide rate reached a record high in 2023. It has been a little lower so far this year, which is good. Unfortunately, it’s not clear that anyone knows why. Maybe it’s just a matter of chance.

While the lower homicide rate is great news, if we don’t measure the effect of the money we are spending, we risk not doing enough of what is working. That assumes any of it is working. We just don’t know, and that isn’t good enough for policymakers or the families of those lost.

If Kansas City leaders want COMBAT to be taken seriously, we must measure the effectiveness of the program and focus funding on what works.

Watch: The Case for a Missouri Taxpayer Bill of Rights Virtual Event

Posted on by Elias Tsapelas

On August 12, the Show-Me Institute and Show-Me Opportunity hosted a virtual event where Elias Tsapelas, director of state budget and fiscal policy at the Show-Me Institute, and Aaron Hedlund, chief economist at the Show-Me Institute, made the case for a Missouri Taxpayer Bill of Rights. The event explored the limitations of the current Hancock Amendment, proposed reforms to better protect taxpayers in the state, and more.

Download the full Missouri Taxpayer Bill of Rights Policy Brief Here

Produced by Show-Me Opportunity

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