Crowds of parents and students rallied at Union Station in Kansas City to celebrate school choice, as part of the National School Choice Week Whistle Stop Train Tour. Students sang, danced, and cheered as speakers drove home the message that students are all different — but they share one thing in common. They all deserve a quality education.
State Of The State Address: Simply Irresponsible To Propose Medicaid Expansion
It was no surprise that Missouri Gov. Jay Nixon expressed his support for expanding the state’s Medicaid program during his State of the State Address last night. When he introduced the idea in November, he called expanding Medicaid “the smart thing to do” and “the right thing to do.” At the time, I noted a glaring omission from his announcement: how he would pay for the expansion over the long haul.
He did not even bother to pay lip service to the weighty question of how he would fund it in his nearly 6,000-word address. He argued that the federal government — you and me — would pick up the entire tab until 2017, as if splitting the expansion across public credit cards mitigates the cost. That is some creative accounting that conceals an awful reality — that we would be expanding an entitlement today out of debt imposed on our children and grandchildren tomorrow. Simply inexcusable, and not addressed in his speech.
The governor cited the fact that the Missouri Chamber of Commerce supports his Medicaid expansion plans, but just because the Chamber of Commerce supports expanding Medicaid it does not make it the “right thing to do.” The Chamber’s imprimatur does not imply that the conscience of good government has been satisfied; in fact, it sometimes expresses the opposite. Lest we forget, the Chamber also endorsed Aerotropolis and later savaged legislators who have vehemently opposed corporate welfare in the state. The Chamber endorses bad policy all the time, and make no mistake, it has done so yet again with the Medicaid expansion.
Let’s be clear here:
- According to Missouri’s Office of Administration, services for newly eligible Medicaid enrollees would cost the state $54 million in fiscal year 2017, $124 million in fiscal year 2018, $155 million in fiscal year 2019, $212 million in fiscal year 2020, and $258 million in fiscal year 2021.
- In a report released last November, the Kaiser Family Foundation (KFF) found that Missouri could expect to spend more than $1.15 billion between 2013 and 2022 just on these newly eligible enrollees.
- Moreover, those figures do not account for growth in the current Medicaid population and the attendant costs of that growth. As a result of the Patient Protection and Affordable Care Act (PPACA), states can expect to see increased enrollment in their current Medicaid programs as federal promotion of the expansion ratchets up and potential enrollees find out they qualify for state assistance. KFF found that between 2013 and 2022, Missouri could expect to pay an additional $1.6 billion for those enrollees.
If the state expands its Medicaid program, from now through 2022, Missouri would have nearly $3 billion in new Medicaid expenses — the cost of services for newly eligible enrollees plus the cost of services for currently eligible enrollees joining the program. Unfortunately, the governor chose not to address this reality.
You can read the governor’s speech here. Your thoughts are welcome in the comments.
An Impromptu Follow-Up To ‘Responsible Bidder’ Blog Series
I recently wrote a two–part blog series about new Saint Louis County regulations that would prevent most non-union contractors from bidding on county construction projects. The County Council redefined what a “responsible bidder” is for county construction projects, adding provisions (1) that were purpose-built to get union contractors special treatment, and (2), which had nothing to do with the “responsibility” of contractors who would bid on the projects. At the time, I criticized the move as one that subverted the public interest of getting the best deal for construction projects for taxpayers, and instead changed the law to benefit a narrow private interest.
How narrow of a private interest? Last Wednesday, the U.S. Bureau of Labor Statistics released new data showing that of all construction labor, only 13.2 percent is unionized, a drop from 14 percent last year, and a near-record low. Put another way, Saint Louis County rewrote its “responsible bidder” definitions to protect the one-eighth of the national construction industry that is unionized, leaving the vast super-majority of labor —which is non-union — basically in the lurch for county contracts. As the St. Louis Post-Dispatch‘s Dave Nicklaus reported, union rolls in the state dropped by 51,000 members over the last year, putting overall Missouri union enrollment at “8.9 percent [of the workforce], down from 10.9 percent in 2011.” That fits the national trend lines.
Saint Louis County is trying to direct more money to fewer people, and the special interest nature of the change in the law is accentuated by last week’s construction employment data. Saint Louis County officials should reconsider their decision.
McGraw Milhaven – David Stokes on KTRS
David Stokes has a recurring spot on McGraw Milhaven’s KTRS radio program. In this appearance, Stokes and the host discuss topics such as the recent argle-bargle surrounding private water company Veolia being selected to provide consulting services to Saint Louis City’s water service, the outdated system for water billing in the city of Saint Louis, the promise of updated parking meters, and the Show-Me Institute’s study on water privatization in the city of Saint Louis.
Tragedy Of The Cape Commons
The Cape Girardeau County Commission made a smart move last week to maintain the operations of the county park.
The commission voted to establish reservation fees to use park shelters for events. The county was having trouble keeping up with high park clean-up costs, so a nominal $15 daily fee for shelters will go into effect this year. It may seem like a small deed, but the county’s park superintendent estimates fees will cover about 70 percent of annual shelter maintenance costs. Why didn’t they start charging sooner?
Some people may not like the idea of paying to use a public amenity, but everyone can still enter the park free of charge. Imposing a small fee on a special amenity should help remind park users that it does cost a significant amount of money to keep the park beautiful and well-maintained. It also encourages them to book only the shelters that they will use. Groups holding large events often reserve every shelter but use only one or two, preventing others from using the empty ones. (A classic example of the “Tragedy of the Commons.”)
Ultimately, county officials made a smart business decision. Asking shelter users to contribute toward maintenance costs can prevent future needs to increase taxes on county residents, or to cut services.
Callaway County Does Not Need An EEZ
Let the citizens of Callaway County beware: You may think that a nice little sprinkling of government subsidies — done through something called an Enhanced Enterprise Zone (EEZ) — will be a painless and effective way of promoting economic growth and prosperity in your county. However, EEZs and other similar mechanisms have a long and sorry history of producing poor results. This lack of success has not discouraged the Missouri Department of Economic Development (DED) from actively promoting them around the state. The DED’s goal is starting programs; whether it works is not important. Marshall McLuhan famously said that the medium is the message. With the DED, the program is the purpose.
The dirty little secret that the DED and the Callaway County EEZ proponents do not want you to know is that EEZ, Tax Increment Financing (TIF), Community Improvement Districts (CID), and other subsidies do not work. They do not succeed in growing the local economy. All this myriad of subsidies does is shrink the local tax base, encourage more government planning of the economy, and increase the chances of eminent domain abuse. As a famous Swedish economist once said, “It is not by planting trees or subsidizing tree planting in a desert created by politicians that the government can promote . . . industry, but by refraining from measures that create a desert environment.”
If you ask a DED official how effective EEZs are, they will tell you how much investment has occurred within EEZs over the past decade. Their hope is that you will assume all the investment is because of the EEZ. Their lie-by-omission is that they have no idea how much the EEZ aided that investment and how much would have occurred anyway. The consensus among economists is that special tax incentives such as EEZs matter little, and only a very small portion, if any, of investments within a zone can be credited to the subsidies. (This should not be a surprise unless you believe politicians have the ability to see the future and know exactly what business to invest taxpayer dollars in 25 years from now.) Yet the DED will happily let people assume the incentive makes all the difference while hoping nobody asks any follow-up questions.
Most people would claim to oppose corporate welfare, but that is exactly what is being hoisted upon us in Missouri; one special taxing district at a time. This is all being done under the cover of fixing blight, without any real definition of what that means. But the word “blight” is not empty talk. It means many things. One thing it means is that Callaway County is taking a major step toward much heavier use of taxpayer subsidies for all types of commercial activity. Once you have blighted a major portion of the county, it is but a short walk to the point where almost every development in Callaway has some type of subsidy. That is not a “maybe.” That is the current reality in Saint Louis and Kansas City.
The Callaway supporters of the EEZ say that other cities have used these tools with great success (see the KRCG Channel 13 news story on Nov. 29, 2012, for one example). In this, they are completely wrong. The can say it works elsewhere all they want, but they might as well be staring you in the face and telling you the sun rises in the north. The City of Saint Louis has been using urban redevelopment tools such as Enterprise Zones and many others for half a century. How has it worked out? “Mapping Decline,” by Colin Gordon, is a 2008 book that documents the decline of the city of Saint Louis. The book’s research is exhaustive. The dominant theme is the use of urban renewal tools and tax subsidies (including EEZ) — and their absolute, total failure. From the conclusion:
The overarching irony, in Saint Louis and elsewhere, is that efforts to save the city from such practices and patterns almost always made things worse. In setting after setting, both the diagnosis (blight) and its prescription (urban renewal) were shaped by — and compromised by — the same assumptions and expectations and prejudices that had created the condition in the first place.
I can already visualize Callaway residents saying, “But we’re not Saint Louis.” You are correct, you are not; so do not follow a path that will make your city repeat Saint Louis’ mistakes. It is one thing for Saint Louis to try these projects and have them fail. It would be even worse for a place such as Callaway to follow that example already knowing that the entire process has failed. At least the trailblazer who takes the wrong path has an excuse.
Tools such as EEZs fail because politicians cannot see the future better than markets can. Callaway County should focus on low taxes for all businesses, not special incentives for a few. It does not need an EEZ.
David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.
Education News: Why We Need School Choice
In my recent report, “Why We Need School Choice,” I make the case that the traditional system of education is unresponsive to parents, and that school choice is the best way to ensure parents actually have a say in how their child is educated.
. . . opponents of school choice often hail the traditional system where children are zoned for a local public school based on their address. Some view this method of delivering public education as the model because democratically elected officials control the schools on a local level. Though democratically controlled local school districts meet the needs of many students, they simply cannot satisfy the needs of all families. Many families, mine included, have found the traditional system to be frustrating and unresponsive.
My wife and I had a problem with the public school that our children attended. Our problem was not violence or student achievement. By all accounts, this was an average school in an average district in an average state. We simply did not agree with the “discover learning” approach the district was using to teach math.
We met with the teacher, principals, and even the district math specialist, to no avail. We felt our only options were to stick it out or to pull our children mid-year and place them in a private school, which was a financial burden.
There are many reasons one might support school choice. In Missouri, choice has been seen as a way to allow kids to escape failing urban schools, but school choice is more than that. In our case, it meant being able to send our child to a school that was more in line with our desires.
I hope you get a chance to read the full story. If you have stories similar to this, please leave a comment or feel free to share them with me at [email protected] or on Twitter @Shulsie.
Exercising Can Be Taxing
You know all those excuses you give about why you do not get to the gym? Not enough time, you are too tired, you are having too good of a hair day — I have heard them all. But like it or not, this year you could have one less (actually valid) excuse.
Missouri Rep. Eric Burlison (R-Dist. 133) wants to make personal training and fitness classes less expensive for Missourians. Last week, he filed a bill to exempt fitness and yoga from a state entertainment tax.
At first I thought, gee, this is great news for all those gym-goers and yogis out there (myself included). But there is actually a fundamental drawback to this bill.
Let’s start with the good. The positive aspect is that Burlison is trying to un-do the damage caused by too widely interpreting an entertainment tax to include fitness and yoga classes, which if you have ever attended a boot camp class, you know it is far from entertaining.
The negative aspect is that the bill encourages tax exemptions for certain types of businesses. This gives an advantage to some types of businesses over others. Just because the tax is removed, it does not necessarily mean gym memberships will be less expensive. Gyms and yoga studios could very well just keep the extra profits, and patrons will not receive any of the benefit. Missourians would benefit more from tax reform that seeks to lower taxes on all and broaden the base.
So, on the one hand, yes, it would be great for fitness to be a little more affordable for Missourians. But we cannot ignore the fact that this unfairly favors some types of businesses over others, and does not guarantee cheaper fitness for anyone.
Dr. King And School Choice
When I was a teacher, every year around Martin Luther King Jr.’s birthday, I would show a portion of Dr. King’s “I have a dream” speech to my class. Dr. King’s powerful oratory skills are to be admired, but more important than his orations is the idea that “all men are created equal.” An idea we find so eloquently written in our Declaration of Independence.
Dr. King was a tireless advocate of civil rights and I am happy to say that most of my students could not even grasp the concept of discrimination based on race.
In recent years, many have begun to call school choice the civil rights issue of our time. This has led many to ask whether Dr. King would have been a supporter of school choice. In a 1997 article, his niece, Alveda King, remarked, “I can’t presume to know exactly what my uncle would say about the current debate over school vouchers and choice. But I know what principles he taught . . .”
Those principles have led her to become an ardent supporter of school choice, including private school vouchers. She writes, “Is it moral to tax families, compel their children’s attendance at schools, and then give them no choice between teaching methods, religious or secular education, and other matters? Is it consistent to proclaim, meanwhile, that America is a nation that prides itself on competition, consumer choice, freedom of religion, and parental responsibility?”
I agree with Alveda that we cannot presume to know what Dr. King would have thought about school choice. Nor can I say whether school choice is indeed the civil rights issue of our time. I can say that school choice works because it gives options and hope to individuals who otherwise might not have them, and opportunity and hope certainly are worthy of our support.
