A Tale Of Two Airports

Posted on by Patrick Tuohey

The Kansas City Aviation Department has proposed building a new terminal. Boosters for the plan, perhaps in an attempt to appear flexible, note that this is the second proposal — the first was rejected because it sought to move the airport south. But really, the plan is the same: an expensive new terminal.

Columbia Airport Alterantives

Meanwhile, the Columbia, Mo., aviation department also wants to build something new. It is a much smaller market and as a result, the plans are much more modest. But the report that officials provided to the public actually includes several different alternatives and a comparison of each.

Mind you, Columbia Regional Airport’s leadership has some of its own bad ideas, including airline incentives, tax increase proposals, and flawed assumptions about growth. But  officials haven’t hid alternatives from the public.

Imagine how much time and energy would have been saved if Kansas City Aviation Department leadership did the same, allowing officials and the public to consider various alternatives. Instead, they’ve tried selling the public on a huge and unpopular plan that seems to purposefully conflate figures.

The Master’s Degree Bump Boondoggle

Posted on by James V. Shuls

I have heard a lot of bellyaching lately in Missouri about how we need more money for education. However, little has been said about the other side of the coin — spending. As we have seen with recent audits of the Rockwood School District and the Early Childhood Development, Education, and Care Fund, not all of our dollars are being spent wisely. Yet, $22,500 for an in-home child care facility that has no children is just a drop in a bucket compared to another boondoggle that is staring us in the face in the form of automatic pay raises for teachers who receive a master’s degree.

A 2009 study by the Center on Reinventing Public Education estimated that Missouri is spending an extra $146,603,923 to fund the bump received when a teacher earns a master’s degree. The problem is that there is no evidence that earning a master’s degree actually makes a teacher better in the classroom. I can say this as someone who has studied the issue thoroughly and as someone who earned a master’s degree while teaching. Moreover, many teachers are receiving bumps for degrees, like administration, that will simply take them out of the classroom.

The master’s degree bump draws money away from other worthy endeavors that might improve educational outcomes for students. The editorial board of the Des Moines Register gets this. They recently wrote, “If Iowa truly wants to spend education money wisely, such automatic pay increases for teachers should be rethought.”

North Carolina recently moved to eliminate the master’s bump. Maybe Missouri school districts should follow that lead.

Fall Internships At The Show-Me Institute

Posted on by David Stokes

If you are a college  or graduate student, or a recent graduate looking for a fun fall opportunity, consider applying for a Show-Me Institute internship. Interns research, write, blog, and help with videos for all the topics that the Institute covers. Previous interns have had op-eds and letters to the editor published by major Missouri newspapers. We have part-time and full-time openings for the fall.

Check it out — the deadline is this Friday. (If you are just hearing about this and contact us by 5 p.m. Friday to let us know the application will be in by the end of the weekend, that will be acceptable.)

Part-Time Nation: Forever 21 Stores Cap Staff Hours

Posted on by Patrick Ishmael

As I’ve said before, one of the least-covered consequences of the Affordable Care Act (ACA) since its passage was the impact it would have on young people. Along with directly imposing onerous new health insurance mandates on young workers who 1.) generally can’t afford them and 2.) generally don’t use much in the way of health services, the ACA also gave companies the perverse incentive to reduce employees from full-time to part-time status as a way to avoid Obamacare’s employer penalties. In fact, a 2012 Congressional Budget Office described as much, estimating that the equivalent of about 800,000 jobs would be eliminated from the economy because of the law.

So what will the Obamacare part-time “new normal” look like? Like this:

“Forever 21,” reads the memo from human resources associate director Carla Macias, “recently audited its staffing levels, staffing needs and payroll in conjunction with reviewing its overall operating budget. As a result, we are reducing a number of full-time non-management positions.” All employees who received the memo will be reduced to a schedule to not exceed 29.5 hours per week. Why is that the magic number? Because under President Obama’s Affordable Care Act, mid- and large-sized employers are required to pay for health insurance for employees who work 30 hours or more. Forever 21 thinks it can get around this simply by reducing its technically-full time staff to part-time positions.

And they’re right.

Yes they are. Of course, Forever 21 is now denying that the move has anything to do with the health care law, but there’s plenty of reason for skepticism there. Why 29.5 hours? Why not 31 hours? Or 30 hours? Heck, why not a round number? And this is not the first time we’ve seen the ACA’s 30-hour work week limitations come into play. As I’ve written before, Obamacare also incentivizes companies to ship jobs overseas to avoid the 30-hour full-time equivalent work and health care requirements. Maybe legislators should have read the bill to find out what was in it before they passed it, not after.

Young people want gainful full-time employment. For many, the Affordable Care Act is standing foursquare in their way.

Is It Time For Teacher Tenure Reform?

Posted on by James V. Shuls

Debates about teacher tenure often are contentious. Teachers’ unions argue that tenure laws are necessary because they give teachers access to due process. Opponents of tenure often argue that tenure makes it impossible to remove an awful teacher. So, which is it? This is one of the questions addressed in a new essay that I co-authored with Kacie Barnes, “The Power to Lead: Analysis of Superintendent Survey Responses Regarding Teacher Tenure.”

We surveyed 192 Missouri public school superintendents. We thought these individuals would be in the best position to tell the truth about teacher tenure. What did we find?

Seventy-three percent of superintendents in our survey stated that it is somewhat or very difficult to remove a tenured teacher. They note that the process of removing a teacher based on his or her performance in the classroom takes much effort and could cost a significant amount of money. For these reasons, among others, approximately 92 percent of the superintendents stated they would be supportive of some type of tenure reform.

According to the superintendents in our survey, it is time for tenure reform. The question is, what type of reform should it be? Superintendents have thoughts on that as well.

You can read the full paper below.

That Sucking Sound Is Your Money Being Taken From Missouri’s Private Economy

Posted on by Patrick Ishmael

Whose money is it?

Supporters of higher taxes have spilled a lot of ink suggesting that Missouri House Bill 253 will decimate the state’s budget, the bill’s revenue triggers notwithstanding. Taking their figures as gospel only for the sake of argument, I wonder, do tax hike supporters recognize that all that tax money is actually the taxpayers’ money first and foremost? By sustaining the governor’s veto, tax cut opponents are actually taking every dollar it “costs” the state or a political subdivision from the private economy to grow the size of government. Put another way: Does taking more money out of taxpayers’ hands and letting the state spend it — a state that, under the present status quo, ranks 48th in the country in GDP growth since 1997 — sound like a recipe for economic success to you? Sounds like business as usual, and here in Missouri, business has been too bad for too long.

The implication at the core of the veto supporters’ argument is that the state knows how to spend that money better than we do. I disagree. If you support smaller government, you support tax cuts. If you support bigger government, you make excuses.

James Shuls, Ph.D., on Teacher Tenure Reform

Posted on by Kacie Barnes (Galbraith)

Of all the decisions an employer must make, none may be as important as staffing. This does not just include who they hire, but also who they fire. An effective leader should be able to identify those who are not performing at an acceptable level, work with that individual to help them improve, and terminate him or her when necessary. But what if state law does not provide such flexibility? What if the employer is required to give the employee 90 working days to improve before finally being able to dismiss the employee and replace him or her with a higher quality employee? That type of regulation does not seem optimal for a business’ success, but it is exactly the position in which Missouri school leaders find themselves. In many instances, these restrictions limit the power principals and superintendents have to effectively lead their schools.

Read the essay: The Power to Lead.

The Cost Of Teacher Pensions

Posted on by Michael Rathbone

Yesterday, education economist (and Show-Me Institute Board Member) Michael Podgursky had a commentary published in The Washington Times about the costs of teacher pensions on governments and how school administrators gain the most from the status quo. This is due to the way most school pension benefits are calculated.

Currently, Missouri teachers participate in a defined benefit plan. Their pension benefits are calculated by averaging several years of that employee’s highest salary, not by averaging the salary of the employee over his or her entire career. This benefits administrators, who tend to get a big boost in average salary after they move from teacher to administrator. According to Podgursky’s calculations, a school superintendent will end up contributing 53 percent more to his or her pension plan than a senior teacher would over the course of his/her career, but receive 89 percent more in benefits.

On the other hand, new teachers do not benefit as much because their starting annual salaries are lower than a “senior” teacher. Again, according to Podgursky’s calculations, these novice teachers will contribute 30 percent of what a senior teacher does, but only expect 18 percent of the benefits. Novice teachers will eventually become senior teachers and these differences will all even out … if they remain teachers. However, as Podgursky notes, those who leave early rarely collect their benefits.

Because school administrators benefit the most from these types of plans, they have little incentive to insist on changes, even though they can be burdensome on the district and taxpayers.

The fundamental problem with Missouri’s defined benefit plans is that they do not directly tie an employee’s contributions to his or her benefits. Podgursky notes that “cash balance” plans address some of these problems. Personally, I prefer defined contribution plans. They’re personal, portable, and for the employer, there is no ongoing liability once the employee leaves. Whether it is a cash balance plan, or a defined contribution plan, some type of reform is needed.

Will School Transfers Lead To Disaster Of Biblical Proportions?

Posted on by James V. Shuls

Is it just me, or does a lot of the conversation lately about school transfers sound a lot like a conversation from the movie “Ghostbusters”?

Peter Venkman: You can accept the fact that [the Normandy and Riverview Gardens School Districts are] headed for a disaster of biblical proportions.

Mayor: What do you mean, “biblical”?

Ray Stantz: What he means is Old Testament, Mr. Mayor, real wrath-of-God type stuff!

[Brad Desnoyer: We have done more than give up on the unaccredited districts; we have ensured that they will not regain accreditation absent state intervention.]

Venkman: Exactly.

Stanz: Fire and brimstone coming down from the sky! Rivers and seas boiling!

Egon Spengler: Forty years of darkness! Earthquakes, volcanoes!

Winston Zeddmore: The dead rising from the grave!

[Karl Frank Jr.: Further economic devastation!]

Venkman: Human sacrifice! Dogs and cats living together! Mass hysteria!

Citizens in the area are rightly concerned about the impact thousands of transferring students will have on the unaccredited school districts. However, it is important to keep things in perspective. Normandy and Riverview Gardens receive money to educate students. When those students leave, the money follows those students. When those students go to a district with high tuition rates, Normandy and Riverview Gardens will indeed lose money. However, when students transfer to less expensive districts, they will save money.

As of Aug. 1, there are 2,641 students who have transferred from the two unaccredited districts. They enrolled in 26 area school districts. Using these enrollment figures, I calculated an estimated cost for tuition. These figures were based on each district’s 2012 per-pupil operating expenditures. It is true that Normandy and Riverview Gardens will be out a substantial sum of money, but we must not forget that they also will receive money to educate these students. By my estimates, Riverview Gardens looks to be upside down by approximately $2 million and Normandy might actually come out ahead. Of course, these numbers will be even lower when factoring in the cost of transportation.

Operating funds the district receives to educate transferring students Cost of Tuition Difference
Riverview Gardens $13,751,892 $15,659,798 ($1,907,906)
Normandy $14,596,164 $13,758,937 $837,227

While the school transfers most likely won’t result in “mass hysteria,” the two unaccredited districts undoubtedly will be placed in a tough position. There is, however, a solution — tax credit scholarships. If those same students were allowed to attend private schools with scholarships funded by tax credits, the unaccredited districts would actually come out ahead because they would only lose the portion of their funds that they receive from the state or federal government for those students.

In 2012, approximately 31 percent of Riverview Gardens’ and 36 percent of Normandy’s operating expenses came from local property taxes. This is money that would stay in the district. Moreover, the districts would not be liable for tuition because private donations would cover the costs of a tax credit scholarship program. As a result, the districts would actually have more money to spend per pupil. Here is a simple illustration of the savings.

Operating funds the district receives to educate transferring students Cost of Tuition Difference
Riverview Gardens $5,218,129 $0 $5,218,129
Normandy $4,228,707 $0 $4,228,707

There are few options that expand choice for students and lessen the financial burden on the unaccredited school districts, but tax credit scholarships are one good option.

For more about tax credit scholarships and other private school choice programs, see the links below:

Public Dollars, Private Schools: Examining the Options in Missouri

The Fiscal Effects of a Tuition Tax Credit Program In Missouri

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