Didn’t We Do This Already?

Posted on by Kacie Barnes (Galbraith)

Despite my young age, I will admit that I have a pretty bad memory. That is why I am meticulous about organizing everything and recording notes so I do not lose track of what I have done. When I do forget, I simply search back through my notes and files — problem solved. Call me crazy, but I did not think I was unique in doing this.

Well, Jefferson City City Council members just decided to hire an outside party to complete an in-depth study of transportation system needs and resources. But a couple of years ago, the city hired a $150,000 consultant to do just that. The mayor aimed to justify a new study, suggesting that things have changed enough to warrant a new study. Yet, when asked whether he had reviewed the last study’s recommendations, he said, “It’s been a long time … I don’t want to go there today … I plan on it.” How does he know a new study is needed, if he does not even know what the last one said?

Apparently, many city council members were not even aware of the previous study. I would think a review of that one is necessary before they, or the mayor, can decide what action needs to be taken next. As Bill McClellan has pointed out in some old St. Louis Post-Dispatch columns, we are not doing anyone any favors (besides consultants) when governments pay for expensive studies that sit on the shelf, only to be duplicated again after they are lost under a layer of dust.

The cost of a new consultant was not mentioned in the article, but the city should evaluate the previous study and other options before throwing money into something that may simply reproduce previous work. I have to wonder, is there no one who works for the city (perhaps the Transit Division director) who is capable of making transit recommendations?

The Emperor’s New Airport

Posted on by Patrick Tuohey

At a recent Kansas City Transportation and Infrastructure Committee hearing, Aviation Department Director Mark VanLoh walked the committee through a slide show featuring lots of exciting computer graphics of an airport that does not exist and likely never will. VanLoh said the images were merely “conceptual;” no architect is bound by them. Yet several news outlets have picked them up to illustrate what the proposed terminal could look like. This future airport is as real as the fabled emperor’s new clothes.

Why is fanciful airport art an issue? Kansas City officials argue that we need a shiny new terminal because we are losing market share to other airports in the region, such as Branson, Mo., and Wichita, Kan.

On KCPT’s Week in Review program (comments begin at 5:07), Scott Parks of KMBZ 98.1, in a courageous act of honesty, questions the whole concept of a city “losing flights” to another city. He says:

Maybe I struggle against this panel mentally. I don’t understand how Kansas City is losing flights. Airlines are a business. If people want to fly to Kansas City for business, for pleasure, to visit family, whatever, they’re going to fly to Kansas City. I heard the argument this week that we’re losing flights to Columbia, we’re losing flights to Branson, we’re losing flights to Wichita. Well if I live in Seattle and I have family that lives in Kansas City, I’m not flying to Wichita and then driving three hours to Kansas City. I don’t understand how flights that were supposed to be coming to Kansas City are now going to Wichita or Branson.

The conversation immediately moved to the cost of security and Kansas City International Airport (MCI); no one addressed Parks’ concern.

Just like the old ministers in Hans Christian Anderson’s “The Emperor’s New Clothes,” Parks states the obvious — doing so almost apologetically. But he is exactly right. If proponents want to argue that the airport is unattractive as a hub — a place where people make connections to other flights but not itself a destination — a shiny new terminal will not address that problem. It will only exacerbate the problem if it results in higher costs to airlines who are already being lured elsewhere with cash.

Week in Review was rife with those same slick computer-generated images that were shown at the transportation committee meeting. Those images are meant to appeal to emotions. The Kansas City Star reported that the aviation department has contracted with an outside public relations firm for $117,000. Are presentations to the Kansas City Council and the public already focused on selling slick and colorful images rather than answering substantive questions? The city council’s committee hearing suggests the answer is “yes.”

Kansas City Mayor Sly James has called for an “adult discussion about the facts,” and that is good. But he and others on the City Council have yet to make their case that the Emperor is not naked.

It Is Called ‘Fact-Checking,’ Rolling Stone, And You Should Try It

Posted on by Patrick Ishmael

Let’s cut to the chase. Matt Taibbi of Rolling Stone magazine has jumped on the American Federation of Teachers “blacklist bandwagon.” As it turns out, the Show-Me Institute’s work on public union pensions and public union policy generally has made us a national bête noire of the Left.

Of course, Taibbi knows his role in that game and plays it as best he can. But I would like to know his source on this nifty factoid (emphasis mine):

Dan Loeb isn’t the only hedge fund manager aligned with groups like Students First, the Manhattan Institute, or local anti-benefit lobbies like the Show-Me Institute (created by billionaire Rex Sinquefield to campaign against defined benefit plans in Missouri) . . .

Oh? And what actual evidence, Matt, do you have for the assertion that the Show-Me Institute — now close to a decade old — was founded for the purpose of “campaign[ing] against defined benefit plans”?

We’re waiting.

But while we wait, Matt, I did want to tell you that I found your investment advice remarkable, compelling, and ironic (emphasis mine):

A lot of teachers and public sector workers would do just as well to just dump their money on some plain-vanilla S&P index and not pay obscene tax-sheltered fees[…]. Not only would the returns probably be a wash or close to it, but retirees at least wouldn’t be stripping themselves of their biggest asset – the political power their money represents.

That is excellent advice. And you know who helped invent the first S&P index fund? Rex Sinquefield, of course. But you knew that, right?

Right?

Stokes on KWMU – Veolia Contract Would Benefit City

Posted on by David Stokes

Innovation comes from the private sector. You don’t have to be a radical capitalist to agree with that simple truth. For example, a private inventor, not a government water company, devised the water meter. St. Louis residents will benefit from the proposed consulting deal with a private company to improve the city’s water division.

In putting together a team of officials working to improve water services, Saint Louis Mayor Francis Slay deserves credit, not criticism. When an agency such as the water division, which has been doing something for a long time, seeks ways to improve, they need to look outside the organization for new ideas. Anything else is an exercise in futility.

The team the mayor established collected many water consulting bids and chose the French company, Veolia, to advise the city. The contract calls for a $250,000 consulting fee. Depending on which suggestions the city chooses, Veolia would then be paid more to help enact the improvements.

This is not privatization. Trust me, I wrote the study on privatizing the city water division and I wish this was privatization. It is not. This is a simple consulting deal. The city would still own, operate, and maintain every part of the water division. All this proposal calls for is tapping into the private sector expertise to improve water service. That will benefit everyone, and should be embraced, not attacked.

Opponents of this proposal are applying the shotgun approach in their fight: objecting to everything possible. This includes irrelevant issues like Veolia’s work in the West Bank and Israel and cherry-picking a few Veolia city contracts that failed and ignoring the many that have succeeded. Veolia has been effectively providing comprehensive water services in Oklahoma City and Edwardsville, Ill. — to give just two Midwest examples — for many years. Those cities have routinely renewed their Veolia contracts.

This contract has nothing to do with privatization, but the absolute objection to private water from some is still strange. Private water companies have been serving the one million people in Saint Louis County for a century. Do you recall all the scandals and controversies about private water in the county? Neither do I.

But it is scandalous that the city water division has never put in water meters. I am not blaming current leadership — this should have been mandated 50 years ago. The lack of water meters encourages waste, inefficiency, and is unfair to consumers. When the city raises water rates, residents have no effective way to react. Businesses, which have water meters in the city, can respond to price hikes by reducing usage to save money. as AB InBev recently did. City residents deserve the same ability to benefit from conservation.

City residents who use less water have long subsidized heavy water consumers. If you choose to sprinkle your lawn like you’re a zealot at Masada, wallowing in abundant water to purposely taunt the suffering Romans legions in the scorched desert below, that’s fine. But you should pay for it, not your neighbors.

The consulting deal with Veolia will result in many different ideas for better water delivery. People, businesses, and governments all benefit when they seek advice from knowledgeable parties outside their normal circles. The objections to the contract are an example of scattered ideology trying to stop practical steps for general improvement. The Veolia contract will improve water service in the city, and that will benefit us all.

Part II: Squaring The Circle Of Tenure Reform And Local Control

Posted on by James V. Shuls

In my last post, I noted that I would like teachers to be evaluated based on their ability to improve student achievement and removed if they are ineffective. I also noted, however, that it is difficult to support legislation that mandates these things at the expense of local control. The question then is, how do we square this? How do we ensure that school districts have the ability to evaluate teachers rigorously and remove those who are not performing up to snuff, while at the same time adhering to local control?

In my opinion, there are three things that must happen for our district schools to be able to effectively manage their teacher workforce and for them to have the incentive to do so.

First, we must remove state restrictions that make it incredibly difficult to remove a teacher after their fifth year in the classroom.

Second, the state must make it possible for school districts to develop value-added measurements of teacher effectiveness. After all, these are sophisticated analyses that must be conducted and not all districts have the resources necessary to compute these measures. While the state should provide guidelines and assistance, local districts must have the flexibility to make these teacher evaluation systems their own.

The first two points will be moot if school leaders lack the appropriate incentive to actually evaluate and remove ineffective teachers. This, however, does not mean that accountability should come from on high. The best way to ensure school leaders will put in place effective evaluation practices is through market pressure. Providing families the ability to choose where their child goes to school encourages school leaders to constantly look for ways to improve. If they do not, they risk losing students.

A good example of a bill that attempts to balance these issues is Senate Bill 408. In my estimation, it is much more in line with local control than the current state provisions regarding teacher tenure.

Brief Comments About Long Bill

Posted on by David Stokes

Senate Bill 207 is a major topic of conversation in Jefferson City this year. Simply put, it allows AmerenUE to add a surcharge to bills to collect funds now to pay for upcoming infrastructure investment. Under current law, AmerenUE has to wait until a project is complete before it can charge for it.

I support the changes in SB 207. I support it because I support infrastructure investment in our state and if the current customers of AmerenUE (which is all of us) do not pay for it then who will? I guess Ameren could make greater use of bonds and debt instead of price increases, but that comes with increased costs of its own (e.g., interest). Who will pay for those bonding costs? Us, of course.

I think electrical companies should operate under the same terms as water and gas companies, which this bill would allow them to do.

In case you think I am shilling for the electric companies, please note that I completely support deregulating Missouri’s electrical system and giving Missouri consumers more choice in their electrical providers. They have done this in Illinois, among other states. I think we should do it here as well.

But for now, we have our regulated monopoly system in place, and I support most ideas designed to encourage real infrastructure investment in that system. (“Real” = actually produces power without ridiculous government subsidies, i.e., not wind energy or ethanol mandates.) That infrastructure investment costs money, and I think charging current customers for the expansion of a system we (or at least most of us) will use is fair.

Myths About Inequality

Posted on by Lee Ohanian

Recently, and especially leading up to the 2012 Pesidential Election, there has been much talk about inequality of both wealth and tax burden among the American people. In a talk at Saint Louis University, UCLA Economics Professor Lee Ohanian dispelled some of the popular but mistaken ideas about the relative income growth of rich and poor, the tax burdens each group bears, and how best to restore prosperity for every American.

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