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

Apparently, Failing to Meet Promises Is Not a Violation of K.C. Subsidies Regime

Posted on by Patrick Tuohey

In 2019, I wondered where those jobs were that Cerner promised to create in return for the subsidies handed to the firm. It was evident Cerner was nowhere near making good on its commitment to hire 16,000 people. I asked:

If Cerner fails to live up to the promises that made it Missouri’s top recipient of taxpayer subsidies according to Good Jobs First, what are the consequences? Did the issuing agencies insist on clawbacks? Were subsidies issued on a performance basis? Or did taxpayers’ representatives just believe what they were told and not insist that Cerner actually deliver on its promises? If experience is any indication, it’s likely the latter.

Now we have an answer. According to a story in the Kansas City Business Journal, the Kansas City Council requested a report from the Tax Increment Financing Commission on the status of the Cerner development, now owned by Oracle. According to the author:

Cerner pledged 15,000 new jobs ahead of its TIF plan’s 2013 approval, and 16,000 with revisions through 2018. A Bloomberg report in April found Oracle Health had 40% of that count, or 6,400 employees, designated in Missouri, where the Innovations Campus is its lone metro location. However, the commission’s report did not discuss the campus’ job creation or retention, as its redevelopment terms do not have binding job thresholds.

The job creation promises were not binding. Our representatives, including members of the city council and the mayor, just took the company at its word. And what’s more, they didn’t even ask for any guaranty. We apparently just handed Cerner the money. Kansas City leaders should have set up measurable markers and demanded Cerner meet them lest it lose the subsidies and potentially face additional penalties.

As my colleagues here can attest, researching public policy will make you a skeptic. Often, one needs to resist becoming a cynic. But rarely—though maybe not as rare as we’d hope—you find out the truth is as bad or worse than you feared. This is one such occasion.

Tough Choices in Education with Jude Schwalbach

Posted on by Susan Pendergrass

In this episode, Susan Pendergrass speaks with Jude Schwalbach, a Senior Policy Analyst at the Reason Foundation, about his recent article on the urgent need for school districts to either reduce staffing or consolidate to survive. They discuss the financial pressures facing many districts due to declining enrollment, the tough decisions schools must make to remain viable, the potential benefits of consolidation, the resistance from various stakeholders, innovative solutions to navigate these challenging circumstances, and more.

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Produced by Show-Me Opportunity

Transparency Yields Results

Posted on by Elias Tsapelas

It was only a matter of time before the benefits of hospital price transparency became evident. Recently, the St. Louis Area Business Health Coalition released a report showing that some hospitals in the St. Louis region may be overcharging their patients.

According to the report, most hospitals in the St. Louis region are charging above what is considered a “fair price,” with BJC hospitals charging the most. To determine what was “fair,” the report used guidelines established by the National Alliance of Healthcare Purchaser Coalitions. The coalition determined that any rates below 200% of what the federal government reimburses for Medicare to be “fair.” This is a bar that not many hospitals in the area are able to clear (see graphic above).

Of course, not everyone pays the price that hospitals charge, and some hospitals in the region do offer lower or more “fair” prices. But what shouldn’t get lost in this discussion is that assembling a report like this that includes pricing data for every hospital in the St. Louis region would have been nearly impossible if not for the federal price transparency rules that went into effect in 2021.

I’ve written several times over the past year about the benefits of price transparency in the healthcare sector and suggested that Missouri should go further than the feds to maximize transparency. As of early 2023, fewer than half of Missouri’s hospitals were in full compliance with the federal transparency requirements years after the rules went into effect. Unfortunately, even fewer were posting their data in a format that was consumer friendly for patients to access and understand.

Even though the report’s authors were able to navigate their way through the federal data to generate findings for the St. Louis region, the process is still too difficult to expect the average Missouri patient to do the same. That’s why Missouri should, in addition to establishing its own price transparency requirements, follow the leads of many other states in creating its own web-based tool to make it easy for every patient to learn the prices of the care they’d like to receive prior to receiving it.

None of this is to say that simply requiring hospitals to publish their prices will be enough to immediately drive down costs, or entirely fix our broken healthcare system, but it’s an essential step toward making healthcare more consumer friendly.

Given that a coalition of businesses paid for this report, employers clearly want to be able to compare prices between providers, and that is something patients should be able to do as well. Hopefully, Missouri’s general assembly agrees, and lawmakers decide to make hospital price transparency a priority when they return to Jefferson City in 2025.

Universal Basic Income Programs Are Guaranteed Failures

Posted on by David Stokes

Universal Basic Income (UBI) programs (sometimes called Guaranteed Income programs) are expanding around the United States, unfortunately. In St. Louis, the city passed a new pilot guaranteed income program that has been halted by the courts, at least for now.

In a UBI program, lower-income people are guaranteed an amount of money from the government. (In theory, that “guaranteed income” would apply to everyone, but so far most programs around the country have just been enacted for lower-income people.) UBI programs are different from the myriad other welfare programs in that there are generally no rules on how the money is spent and the requirements for admission into the program are easier. Compare this to food stamps and Section 8 housing vouchers, which obviously can only be spent on food and rent, respectively, and the general complexity of many other welfare programs.

Two studies have been released recently that actually tried to properly account for the success or failure of UBI programs in Denver, Texas, and Illinois. The results aren’t pretty. In Denver, the UBI program was focused on finding housing for the homeless. However, there was almost no difference in results between the groups that received significant sums of money and the control group that only received $50 per month. The control group did just as well at finding housing as the other two groups over the course of a year. While supporters of the program are trying to paint it as a success, the fact is that many homeless people eventually find housing, and the UBI payments made no difference in the results.

In Texas and Illinois, a UBI program gave some people $1,000 a month and a control group $50 per month. After the period of the program, the control group—who received less money—had a higher employment rate and were in better financial position:

The study, which began during the COVID-19 pandemic when unemployment was high, found that employment rates fell in the second and third years among recipients compared with the control group. On average, incomes rose significantly for all groups, though slightly higher for the control group. Incomes for recipients of the $1,000 rose from just under $30,000 to $45,710, while incomes for the control group started at a similar level but grew higher, to $50,970.

People responded to receiving free money by working less, which is exactly what you might expect. It’s also exactly the wrong way to help address poverty. The pilot program in St. Louis should be ended. The Missouri Constitution prohibits gifts to private individuals, and that is exactly what a UBI program is. But this would be a bad idea even aside from the legal issues. UBI programs just don’t work.

Reduce, Reuse, Recycle Spent Nuclear Fuel?

Posted on by Avery Frank

Did you know that the United States could be powered only by nuclear waste for 100 years? After fuel rods are spent in a reaction, only 4 percent of what is left over is genuine, nonreusable waste. These unusable byproducts are called “fission products.” The rest can be recycled to produce energy again.

In Missouri, the Callaway Plant has been operating reliably since 1984. With 40 years of operation, a decent bit of radioactive waste has accumulated. Could Missouri use nuclear recycling in the future to put that waste to use?

Oklo Inc. is a developer attempting to create a commercial-scale nuclear recycling facility. Recently, with Argonne and Idaho National Laboratories, the firm successfully demonstrated its fuel recycling process, capable of capturing 90 percent of remaining potential energy in the spent fuel. This is a huge step for the practice.

The federal government is also backing the development of nuclear waste technology. In the recently signed ADVANCE Act, one of the grant awards is for the first developer to build a reactor that runs off spent fuel or depleted uranium.

This would be a change of pace, as American nuclear facilities have used the “once-through” fuel cycle where waste is not reused. France and Japan use a “closed-fuel cycle,” which recycles nuclear waste and continues to use the recycled fuel until it is not useful anymore.

Reusing nuclear fuel also reduces the required time to securely store radioactive waste, as each subsequent reaction reduces the half-life of the Uranium atoms.

You might be asking yourself why we don’t do this already. The answer: history and cost. In the 1970s, this practice was emerging in the United States. The Cold War still loomed over the world, and during this time, there was a fear of nuclear proliferation. In 1977, President Carter halted the use of recycling nuclear fuel, as the process had the potential to be diverted to extract weapons-grade plutonium—a material used in making atomic bombs. By the time President Reagan lifted the ban in 1981, new nuclear projects had fallen out of favor since the Three Mile Island Incident occurred in 1979.

Not all nuclear reactors can use spent fuel at the same level of efficiency—light-water reactors—cannot use it as many times as other reactors—and those reactors make up the lion’s share of our fleet. To recycle nuclear fuel, the United States would need to construct more “fast” reactors, which use liquid sodium, lead, or other coolants as opposed to water.

There is momentum in the private sector and federal government to create these fast reactors. Will Missouri take advantage of this opportunity?

Why Markets Matter in Education with Mike McShane

Posted on by James V. Shuls

In this episode, James V. Shuls speaks with Michael Q. McShane, Director of National Research at EdChoice and Senior Fellow of Education Policy at the Show-Me Institute, about his latest paper, ‘Why Markets Matter in Education.’ They explore the growing role of market forces in education, the benefits of choice and competition for schools and students, the impact of educational marketplaces on innovation and quality, the challenges of government intervention in schooling, and the long-term advantages of allowing parents to shape their children’s educational journeys.

Read the essay here.

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Produced by Show-Me Opportunity

CON-sanity

Posted on by Elias Tsapelas

Much of Missouri is suffering from a healthcare shortage, and unfortunately, the state’s hospitals are helping keep it that way. In recent years, two hospitals in northern Missouri have proposed plans to expand the services they provide in the region. Both expansions would represent meaningful improvements in healthcare access for their patients, yet neither expansion is likely to happen. But why not?

In short, the answer is Missouri’s Certificate of Need (CON) laws. These laws give the government power to manage competition in the healthcare industry by requiring permission before providers can open certain facilities, expand certain services they offer, or even install certain medical devices.

While being required to ask for governmental permission may sound bad enough, what makes CON laws even worse is that the healthcare facilities that are covered by the state’s CON laws help decide whether new competitors are allowed to enter their healthcare markets. It shouldn’t be surprising that when given the choice, incumbent businesses prefer less competition nearly every time. Competition means more choices—which in turn lead to lower prices. Artificially limiting supply, which CON laws do, has often been shown to result in higher prices.

So how does this apply to what’s happening in northern Missouri? According to a recent article in the Missouri Times, the Hannibal Regional Medical Center asked the state legislature this year for money to build a new radiation oncology unit in Kirksville, which is approximately 100 miles away from its Hannibal location. The Northeast Regional Medical Center (a hospital located in Kirksville) opposed the funding on the basis that the creation of a new medical campus would “cause a duplication in services that could produce a financial hardship for both hospitals.”

Apparently, this story goes even further back than this past legislative session. Two years ago, the Northeast Regional Medical Center submitted a CON application for permission to replace a linear accelerator (a machine used for radiology treatments) for its Kirksville hospital. In response, the Hannibal hospital filed an opposition under Missouri’s CON laws, effectively barring the hospital from purchasing the device that would allow it to offer better cancer treatments for its patients.

While it’s still too early to know what the result of the fight in northeast Missouri will be, it’s important to recognize what’s happening. As a result of the veto power afforded by Missouri’s CON laws, instead of Missourians having greater access to valuable cancer treatments in northeast Missouri, neither the hospital in Kirksville nor the one in Hannibal will be allowed to offer expanded services. In other words, Missouri patients lose.

Unfortunately, sometimes it takes a real-world example to illuminate the costs that Missouri’s CON laws impose on the state’s patients. It’s long past time for Missouri to repeal its CON. As long as the state’s incumbent healthcare providers are allowed to pick who their competitors are, Missouri patients will continue to suffer.

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