Uncertainty In Airport Funding

Posted on by Joseph Miller

A quick look at the Kansas City Aviation Department’s (KCAD) financial statement shows that without money from the Airport Improvement Program (AIP), which the Federal Aviation Administration (FAA) distributes, the department would be on shaky financial ground. This program provides a large partition of money for projects that maintain or increase aviation capacity at airports. However, just as the Kansas City Aviation Department will require more, there may be less to go around.

KCAD is taking a risk by relying on the AIP to cover additional airport expenses. The Airport and Airway Trust Fund (AATF) funds both the AIP and 75 percent of the FAA’s operating budget. Sequestration has frozen growth in the FAA’s federal funding, requiring it to reach further into the AATF. More for the FAA means less for the AIP, which the FAA proposed to cut by 38 percent in 2013. To make matters worse, the FAA plans to cut grants to most large airports, such as Kansas City International Airport (MCI). The FAA has proposed an increase in the other federal programs to cover the gap, but this requires congressional action.

Should there be a reduction in the AIP without commensurate increases in other funds, it might require the Aviation Department to seek alternative funding sources for its proposed $1.2 billion terminal. This would likely mean greatly increasing landing fees. While the airlines pay these costs, they will respond by either raising ticket prices and/or reducing service. Should this not cover the increased debt, the KCAD will be hard-pressed to maintain the airport without local subsidies.

While federal law disallows the use of airport funds to support a city’s other expenses, there is no barrier to a city funding an airport. With the future of federal funds uncertain, airport planners should fully consider the effects of potential higher landing fees or taxpayer subsidies.

The Price Of Air Travel

Posted on by Patrick Tuohey

Steve Sexton at the Freakanomics blog has an informative post about the cost of air travel. But the costs he discusses are not the kind that affect ticket prices; rather, he analyzes the cost of time for delayed and canceled flights. He writes:

Researchers at MIT and George Mason University estimate that delayed and canceled flights imposed on passengers an aggregate delay of 28,500 years in 2007. The cost of these delays, and of risk-averting behavior like traveling early to destinations, was estimated at $15.3 billion, a startling number that accounts for the opportunity cost of time but doesn’t measure the consequences of missing critical appointments like weddings or job interviews.

While Sexton refers specifically to airline cancellations, his larger point is about the time costs to passengers. This study mirrors recent observations from SaveKCI’s blogger Kevin Koster:

Yesterday, I had to make a day trip to Denver. As I tweeted yesterday morning, it literally took me only 8-minutes from the time I locked my car in the KCI garage until I was through security and standing at the gate ready to board. By comparison that afternoon in Denver, it took me 45 minutes from the time I was dropped at the curb until I was at the gate – and I was told the security lines were unusually short.

More impressive though was our return to KC. It took me less time to get from the gate to my home than it did in Denver to get from the gate to a waiting cab outside. To the business traveler time is money – on average $150/hr. We should be selling KCI’s “private jet speed” convenience to businesses in other markets, rather than considering destroying it.

Airport administrators want to move to airport models used elsewhere in the country to maximize revenue. Kansas Citians like Kansas City International Airport because it allows them to be efficient with their time. For many in the region, this time cost is the most important.

The Blind Men And School Funding

Posted on by James V. Shuls

Many people know the story of the blind men and the elephant. As the story goes, several blind men each look at one part of an elephant and think it is something way off base. The tail is a rope, the tusk is a spear, the trunk is a tree branch, etc. Though many know the fable well, we are often prone to make the same mistake. For a prime example of this mistake in action, you need not look any further than the pages of the St. Louis Post-Dispatch editorial page. The most recent culprit was Brad Desnoyer, a law professor from the University of Missouri-Columbia, in a piece he wrote about school funding.

Like the blind men, Desnoyer looks at one part of school finance and thinks he can explain the whole. This just isn’t so. For instance, he makes the claim that districts with high poverty rates receive less funding than districts with low poverty rates. Sure, if you look at the Clayton School District and the Riverview Gardens School District, this seems correct. However, it is not true when you look at the whole elephant.

Below, I present a table that plots each public school district in the state (charter schools not included). On the Y-axis is 2012 per-pupil expenditure. On the X-axis is percent of students in each district who are eligible for free or reduced price lunches (FRL), a proxy for poverty. As it turns out, school districts with higher poverty rates actually spend more, on average, than those with lower poverty rates. In fact, a 10 percentage point increase in FRL is associated with a $168 increase in per pupil expenditures.

Plot_2012_PPE_FRL.jpg

The same is true when you plot the percentage of black students and per-pupil expenditures. Here, a-10 point increase in the percent of black students is associated with a $275 increase in per-pupil expenditures.

Plot_2012_Black_PPE

Desnoyer cites statistics that indicate we spend less on our impoverished schools. I’m not sure where he gets his statistics (he doesn’t say), but they don’t hold for Missouri. In 2012, we spent an average of $11,099 in the 17 districts with greater than 80 percent of their students receiving free or reduced price lunches (FRL). We spent just $10,179 on the 15 districts with less than 20 percent FRL.

He goes on to suggest we need a “mechanism that guarantees a minimum amount of funding for each district to stay accredited.” What he is suggesting is simply impossible. We do not know how much money it takes for a district to stay accredited. As we saw in Kansas City throughout the 1980s and 1990s, throwing massive amounts of money at a school system does not guarantee success. We do, however, have a mechanism that helps to level out funding and bring poor districts up to a reasonable level — our funding formula.

Either willfully or unknowingly, Desnoyer looks at a few facts and thinks he knows the whole; he does not. School finance is indeed a complicated endeavor and we can have a legitimate conversation about whether we should spend more money on disadvantaged students, but we should not start that conversation with a misstatement of the facts.

Who Teaches The Teachers?

Posted on by Patrick Tuohey

The Kansas City Public Library recently hosted a presentation by and conversation with National Council on Teacher Quality (NCTQ) President Kate Walsh. The discussion focused on the NCTQ’s new release, “Teacher Prep Review: A Review of the Nation’s Teacher Prep Programs.” The study was supported in part by the Ewing Marion Kauffman Foundation.

According to its release:

The Review looked at 1,130 institutions that prepare 99 percent of the nation’s traditionally trained teachers.

Overwhelmingly, it found that U.S. colleges and universities are turning out first-year teachers with inadequate knowledge and classroom management skills. On a four-star scale, less than 10 percent of rated programs earned three stars or more.

One startling finding that Walsh highlighted: There often are higher academic standards to play football than to get into a school of education. In fact, many of the report’s findings were damning of schools of education, including in Missouri and Kansas.

Walsh saved her most pointed comments for early education approaches to teaching reading. She said many schools do not emphasize the proven methods for teaching reading. Too often education students are told they will figure out their own methods of class management and reading instruction, even when there is research indicating some approaches are better than others.

University of Missouri administrators may have expected they would perform poorly, as they actually denied researchers access to teacher syllabi, claiming they were intellectual property and protected under federal copyright law. A judge has ruled in favor of the school’s refusal. That’s right, the university system did not want to share even an outline of what it teaches its students, the same outlines that are distributed to students at the beginning of the course.

That is too bad, but their resistance won’t last long. NCTQ will be conducting a study of education schools each year and publishing the results in partnership with U.S. News & World Report, which has become the standard-bearer for university ratings. Missouri will eventually have to share with everyone exactly what it teaches its would-be teachers. We can’t move forward without knowing where we are right now; universities should support this. Moreover, students should have access to this information when deciding which college they would like to attend.

Part 2: Highlighting Options Through School Accreditation

Posted on by Allison Davis

While Missouri Senate Bill 125 could lead to better options for students in unaccredited school districts, the bill focuses too much on districts and not enough on the individual school. Dale Singer, of the St. Louis Beacon, raises an important question in this regard, “Should entire school districts or just individual schools be accredited?”

Holding schools individually accountable for performance would change the fundamental structure of Missouri’s public school system. Instead of a special advisory board taking over an entire district, it could target individual schools that are struggling. In this way, state intervention under SB 125 could be more focused and efficient.

However, switching accreditation from districts to schools would benefit families in accredited districts as well, because it would illuminate their options. For example, there is a wide achievement gap between two elementary schools in the Raytown C-2 School District — Eastwood Hills and Blue Ridge Elementary Schools. If they had been evaluated individually and given letter grades under Missouri’s accreditation system, MSIP5, Eastwood would have received an “F” and Blue Ridge would have earned an “A.” Just a 10-minute drive separates these two schools.

Saint Louis Public Schools Board Member Katherine Wessling endorses a school accreditation system:

Given that most families would prefer to educate their children in the best possible environment that is closest to their home, the switch to accrediting schools rather than districts will give families better information and will also relieve concerns from neighboring districts that they will have to accept influxes of students with little warning or time to prepare.

Individual school evaluations and parent choice are the basis of education reforms in several other states. Ranked No. 1 in the country for school choice, Louisiana’s statewide Recovery School District (RSD) changed the fundamental structure of the New Orleans public school system. Every school in Louisiana is evaluated annually, and the RSD may take over schools with unacceptable performance scores. It can close schools, run them directly, or re-open them as charter schools. Additionally, Louisiana publishes these annual performance scores. This transparency facilitates school choice, particularly in New Orleans, where families can rank all their public and charter school choices in the city on one application. This targeted, market approach has doubled the percent of RSD students who pass the LEAP, Louisiana’s standardized test.

Evaluating public school systems by district obfuscates the reality of a school’s performance. Missouri ought to be asking how each individual school is doing. By holding each school accountable for its own accreditation, Missouri can more effectively meet the needs of every student.

A Real Choice For Students In Unaccredited Districts

Posted on by James V. Shuls

As first appearing in in STL Beacon on August 12, 2013:

Everyone knows the old adage, “You can’t please all of the people all of the time.” However, the Missouri Supreme Court’s recent ruling on the school transfer law has proven that it is quite possible to displease people on all sides of an issue at the same time.

Suburban districts do not want to be overrun with students fleeing the failing school districts. The unaccredited districts are worried that high tuition rates for departing students will bankrupt their districts. Meanwhile, many parents with children trapped in failing schools are dismayed at the prospect of having them bused to new schools more than 20 miles from home.

If nothing else, the almost universal unhappiness about the situation should propel the search for better ways of providing improved educational options for all involved.

There are no cure-all solutions, but one promising idea that has produced excellent results in other states is a scholarship program. Individuals and corporations fund these programs and receive state tax credits for their donations. A common credit amount is 75 percent, which means a donation of $1,000 to a scholarship would earn the donor a credit (not just a tax deduction, but an actual credit) of $750 toward his or her income taxes.

Eleven states have created a program like this. Some are small, such as in Rhode Island, which serves a few hundred students. Some are large, such as Pennsylvania’s Educational Improvement Tax Credit Program, which serves more than 40,000 students. Some states target scholarships to low-income students. Other states, like Indiana, make scholarships available for middle-class families as well. Missouri lawmakers floated an idea like that in the past, and it seems they are looking at this type of program again. In a recent radio appearance, House Majority Floor Leader John Diehl mentioned that private school options should be on the table.

There are several clear advantages to this approach.

First, a scholarship program maximizes individual choice; it allows students and their parents to pick the school they want, whether public or private.

Second, in providing access to a greater number of schools, a scholarship program lessens the outsized impact on a few suburban schools, which attract unusually large numbers of transfer students.

Third, a scholarship program would eliminate the financial trauma that school districts like Normandy and Riverview Gardens now are feeling from having to pay tuition and transportation costs between $10,000 and $20,000 for each transferring student.

Last, a scholarship program would provide greater certainty to all parties – beginning with the students themselves. Each scholarship recipient would have the ease of mind knowing he could continue at his school of choice until graduation – without having to worry that he could be forced to return to his district of residence if it becomes reaccredited.

An abundance of research shows that students benefit from greater school choice. More surprisingly, there is good evidence that students who remain behind in their district-run schools also benefit. In response to the current transfer mess, Normandy Superintendent Tyrone McNichols stated, “I see it as an opportunity. It’s an opportunity to make a difference on a school district that has challenges.” That is the beauty of school choice; it prompts struggling schools to improve with the “fierce urgency of now.”

A tax credit scholarship could potentially be a win-win for everyone. It would expand options for students, ease the burden on accredited districts, and reduce the financial strain on unaccredited districts and taxpayers. No other solution promises as much.

James V. Shuls, Ph.D., is the education policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

 

Part 1: Expanding School Choice Is A Choice

Posted on by Allison Davis

Missouri Senate Bill 125, which goes into effect on Aug. 28, will change Missouri’s state education policy. The law will allow the State Board of Education (SBOE) to intervene in unaccredited school districts more quickly and with greater authority. The SBOE can now take over an unaccredited district immediately instead of waiting two years. The SBOE can choose to leave the existing district board in control or appoint a temporary special administrative board (SAB). SB 125 could be good or bad news for school choice, depending on how SBOE leaders decide to use it.

Simply putting a SAB in charge is not a long-term solution. Failing schools are a result of systemic problems in the public school system. If new management does not change the fundamental structure, then districts are likely to lapse into their old ways once local boards regain control. In that case, SB 125 effectively shifts unnecessary power to the state, which could be bad news.

However, when a SAB takes over a district, it has the opportunity to make systemic changes. For example, the SAB in Saint Louis recently chose to diversify its portfolio of schools by forming a partnership with KIPP. Decisions like these that promote school choice are forward-thinking, lasting solutions. If the state uses its new authority to expand school choice, then SB 125 is good news.

Though there is hope that SB 125 could lead to better options for students, it overlooks an important issue. Too much time is spent focusing on district accreditation, when the spotlight ought to be on the individual school. More on this in my next post.

Opposing Tax Cuts, Supporting Bigger Government, And The Wisdom Of Milton Friedman

Posted on by Patrick Ishmael

Few economists of the 20th Century had as wide and substantive an impact on the political discourse as Milton Friedman. The 1976 recipient of the Nobel Prize, Friedman not only was a student of free-market economics but one of its great communicators, evangelizing the values of the free market in books, on television, and even on blogs. Friedman was a quintessential happy warrior for the cause of economic freedom, remaining active in the movement late into his life and providing clear, principled advice on tax policy to young politicos throughout his later years.

Although I could cite a host of Friedman literature on the subject of taxes, I’d like to just highlight one interview he did in 2003, at the age of 90, with John Hawkins. Asked whether “the Bush tax cuts” were the “right thing” to do, Friedman replied that he was “in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.“

The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, “How do you hold down government spending?” Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes. [Emphasis mine.]

Creep, indeed. Ten years later in Missouri, supporters of Gov. Jay Nixon’s tax cut veto have delivered a parade of horribles about what will happen if the legislature overrides the governor’s veto and Missourians get tax relief. They claim (among other things) that the state will have to leave bills unpaid and cut education, its bond rating will decline, dogs and cats will live together… in short, mass hysteria. No, public education funding won’t be eviscerated by giving the People back their money, and as to the bonds, of course it wasn’t a tax cut that imperiled Missouri’s rating earlier this year. It was … the prospect of new government spending, specifically in the Medicaid program. That’s an inconvenient fact which, in all the bluster about credit ratings, veto/Obamacare supporters hope you forget.

That’s because it’s all interconnected. Missouri’s tax cut opponents don’t want taxes cut because less tax revenue would prevent them from maintaining and growing the size of state government — whether they say it explicitly or not. It was spending, not tax cutting, that imperiled our bond rating this winter. And if I might repeat Friedman’s words here, “The only effective way I think to hold [the government’s size] down, is to hold down the amount of income the government has. The way to do that is to cut taxes.”

Friedman was right. If you support smaller government, you support tax cuts. And in my view, if you support bigger government but don’t want to say so, you make excuses instead. I think Missourians are tired of excuses.

Shining A Light On A School Transfer Solution

Posted on by James V. Shuls

The school transfer case has placed education at the center of attention in Saint Louis. Many are eagerly watching the events unfold as students begin school. As far as I know, there haven’t been many problems. Nevertheless, this issue has created numerous frustrations in the community. This has led many to start looking for solutions to the school transfer problem.

Today, the St. Louis Beacon published my op-ed that provides a potential fix — private school scholarships. There are some clear advantages to giving students access to private schools:

First, a scholarship program maximizes individual choice; it allows students and their parents to pick the school they want, whether public or private.

Second, in providing access to a greater number of schools, a scholarship program lessens the outsized impact on a few suburban schools, which attract unusually large numbers of transfer students.

Third, a scholarship program would eliminate the financial trauma that school districts like Normandy and Riverview Gardens now are feeling from having to pay tuition and transportation costs between $10,000 and $20,000 for each transferring student.

Creating a private school scholarship program certainly wouldn’t solve the problems overnight, but it would begin putting the system in place for improvement to occur.

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