Five New Year’s Resolutions for Enhancing Liberty – And Pulling Back from the ‘Fiscal Cliff’

Posted on by Andrew B. Wilson

In past years, the Show-Me Institute proposed New Year’s resolutions aimed at Missouri policymakers. This time, our New Year’s resolutions go out to all Missourians worried about the state of the state and the state of the nation. Is there no stopping the drift toward more spending and higher taxes, along with ever-increasing debt, heavier regulation, stunted growth, and greater and greater dependence on government? Are we about to barrel-roll over a Niagara-like “cliff” into a financial panic and a hard recession?

These are our resolutions for 2013:

  1. Ask not what government can do for you; ask what you can do for yourself — without being a burden to others. Recognize, and encourage others to recognize, the grave danger that is posed by a supposedly “caring” government which is in the habit of making promises it cannot keep.
  2. Do not go quietly into the dark night of buying into arguments about “fairness” and “social justice” as an excuse for the limitless expansion of government. You will be accused of being heartless, cruel, just plain stupid, or worse. But do not let others define you, or dismiss you — when they are the ones who press ahead in ignoring the lessons of history, common sense, and genuine humanity.
  3. Always keep in mind that our history and form of government (unlike many other hopeful but fleeting “democracies”) were not built on the proposition of One Man, One Vote, One Time. The great debate in the U.S.A. about the size and scope of government did not end with the 2012 elections. But the proponents of big government are seeking cloture — attempting to discredit and marginalize those who continue to believe in liberty, limited government, and individual responsibility as the essential pillars of democratic self-rule and human progress.
  4. Write out — and be prepared to defend — your own Declaration of Independence against the prevailing orthodoxies of the Hollywood/academic/media elite, who favor every kind of “free lunch” — whether it is universal, “free” health care or universal, “free” college education even if it means severely limiting individual choice, undermining quality, and raising the real costs of health care and higher education.
  5. Do not shy away from the battle of ideas as it continues to evolve inside your own family, your circle of friends and acquaintances, your community, and the state of Missouri. Ideas have consequences, and it is time to consider the catastrophic consequences of thinking it is possible to expand government spending and mandates without destroying jobs and economic growth — and condemning young people to the bleakest of futures. You only have to look at the extraordinarily high rates of unemployment and under-employment among young people in much of Europe (the nations teetering on the brink of bankruptcy) to appreciate the magnitude of the threat.

There is solace in the wisdom of our Founding Fathers, who looked upon anti-federalist sentiment at the state and local levels as an important bulwark in an enduring democracy. They used the words “the states” and “the people” interchangeably. Thus, the 10th Amendment, the final element in the Bill of Rights drafted in 1789 as part of the U.S. Constitution, famously states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

We the people can begin to reassert the principles of liberty and limited government by stopping the growth of crony capitalism (and crony unionism) at the local and state levels which occurs when officials award tax credits, Tax Increment Financing (TIF), and other subsidies to politically favored businesses and constituencies.

Along with other states, we in Missouri can say “no” both to the expansion of Medicaid in our state and to the creation of a state-run health insurance exchange that would implement the hugely expensive, deeply flawed, and greatly unpopular Affordable Care Act (aka Obamacare).
The battle for liberty, freedom, and responsible self-government continues. Indeed, it is never-ending.

Andrew B. Wilson is a resident fellow and senior writer at the Show-Me Institute, which promotes market solutions for Missouri public policy.

One Lucky Duck

Posted on by Kacie Barnes (Galbraith)

Developer Paul McKee is winning, but is Saint Louis? McKee’s NorthSide Regeneration received $10.5 million in state tax credits at the end of December.

The state now has given more than $40 million in credits to the NorthSide project to redevelop a 2-square-mile area in north Saint Louis. And for all this money, there has not been much progress to show for it. So far, the state has not seen any real benefits from awarding several million dollars for this project.

If I was reimbursed for (almost) everything I bought, I would not be in much of a hurry either. McKee says he will make progress after he receives the $390 million Tax Increment Financing (TIF) package he is waiting on. As our regular readers know, we have been covering this issue for a long time. NorthSide applied for the TIF more than three years ago but it has been held up in court.

There is a chance that the Missouri Supreme Court will rule against the TIF in the next few months.

“If that doesn’t go our way,” McKee said about the potential ruling, “we’re dead.”

That would not be such a bad thing. Taxpayers would be off the hook for hundreds of millions of dollars, which are likely to be of more benefit to McKee than to North Saint Louis.

A Little Less Conversation

Posted on by Michael Rathbone

With the new Missouri legislative session about to begin, the time for lawmakers just talking about tax reform is going the way of 8-track tapes and pet rocks. The time for action is at hand.

I previously blogged about my friend Chris Seyer and the new obstacles his business faces to compete with other firms in Kansas. Those other firms now can add a little extra to their margins because they do not have to pay taxes on their pass-through income. His is not an isolated case and that is why there is a growing chorus in Jefferson City to see some sort of tax cut implemented.

There are several tax cuts being discussed. One of them would create a tax deduction for business income and would gradually reduce the corporate income tax rate over a five-year period. Another caps and eliminates certain tax credits and uses the extra revenue to gradually eliminate the corporate income tax.

The idea of cutting the corporate income tax rate is something that appeals to me, so much so that I co-wrote an essay illustrating the benefits to the state of completely eliminating the tax. Whether the tax cuts are phased in or occur immediately, I am glad that the Missouri Legislature is seriously considering tax cuts. Hopefully, the tax cuts would take effect sooner rather than later, but if takes until 2018 to get rid of the corporate income tax, then some things are just worth waiting for.

However, legislatures consider a lot of things; actually enacting them is entirely different. Regarding tax reform, as the King would say, we need a little less conversation and little more action.

A Very Special Update

Posted on by Michael Rathbone

Sometimes I feel like I am Jimmy Stewart in the movie “Rear Window.” I am stuck watching my neighbors do all these things (some good, such as Kansas; some not so good, such as Illinois) while I cannot move or go anywhere. (Unfortunately, I have to sit and watch without Grace Kelly to keep me company.) I mention this not only because I love Alfred Hitchcock movies, but because as a Missourian, that is how I feel regarding tax reform.

I have blogged ad nauseam about the tax cuts in Kansas and how Missouri needs to respond, but just as in “Rear Window,” there is more going on than just in the one apartment building. Nebraska likely will cut taxes and the governor of Oklahoma will pursue some sort of tax cut. Last month, Kentucky’s Blue Ribbon Commission on Tax Reform released its final report on recommendations they believe the state should undertake to reform the state’s tax code. For a good breakdown of the commission’s proposals, see here.

This is not the first time I have blogged about the Kentucky Commission. I know, this is the Show-Me State, and it is understandable to want to see how these reforms impact other states and not react to “maybes.” But Kansas is not a “maybe,” it is very, very real. So I once again stress the point that inaction on the tax front is not an option for Missouri. We need to become more competitive. Now, to be fair, legislators are juggling various proposals in order to reform the state’s tax code, but the gap between what legislators want to do and what actually gets done is about as wide as the Grand Canyon.

It is not too late for Missouri to remain competitive with its neighbors. However, if Missouri continues to twiddle its thumbs while our bordering states make themselves more attractive from an economic standpoint, I will start to feel worse than the killer’s victim and late wife in “Rear Window,” Mrs. Thorwald.

Charter Performance IV: Looking Ahead

Posted on by James V. Shuls

My last three posts noted that charter schools have shown fairly steady improvement over the past three years. Moreover, with the now closed Imagine schools removed from the data, charter schools outperform their neighboring districts. Though the failure of the Imagine schools is a sad story, closing a bad school is a hallmark of a good school choice program. Schools that excel should be rewarded with more students attending them and they should grow. Low-quality schools should close. Those students will then be able to choose a different school that meets their needs better than their former school.

Ironically, though Imagine schools closed, they were not the lowest-performing schools in Saint Louis. In fact, 41 Saint Louis public schools had proficient and advanced percentages that were lower than Imagine College Prep High in communication arts. In math, 22 Saint Louis public schools scored lower than Imagine Academy of Environmental Science and Math. Yet these schools remain open.

The coming year should be a banner year for charter schools throughout the state. With the closure of the Imagine schools and the steady improvement of existing charter schools, I expect to see significant gains in overall charter performance in 2013.

So what is next for Missouri charter schools?

It seems unlikely too much will happen in the Missouri Legislature regarding charter schools because they passed a bill last session allowing universities to sponsor charters in all unaccredited districts and districts that have been provisionally accredited for three years. Additionally, the bill allows school districts to sponsor their own charter school within their district. Hopefully, some districts will take advantage of this and offer more options to their students.

Though it is unlikely lawmakers will extend the right to sponsor charters throughout the state to universities in the next session, there is potential to expand options for some students. The state could begin allowing virtual charter schools to enroll students statewide. This would provide a great service to students in areas that traditionally do not have educational options and would be a real benefit to the state.

Charter Performance III: Without Imagine

Posted on by James V. Shuls

Communication Arts

This past year, the failure of the Imagine Academy network of charter schools was widely publicized. As a result, the charter network’s sponsor dropped Imagine and the schools closed. This is how charter advocates have suggested the market would work; when schools are not performing, they close. Because the Imagine schools are now closed, I have calculated the same comparisons from my previous two posts, removing all Imagine schools from the past five years. Of course, we cannot erase the failing of Imagine schools, but it is interesting nonetheless to see what kind of difference the closing of a poor school might have on the overall performance in the charter market.

The change in scores when Imagine schools are removed is most noticeable in Saint Louis, where most Imagine schools were located. In both communication arts and mathematics, Saint Louis charter schools have higher percentages of students scoring proficient or advanced than the traditional public schools of Saint Louis. Without factoring in Imagine, 32.9 percent of students in Saint Louis charter schools scored proficient or advanced in communication arts, 2.9 percentage points higher than the local public schools. Since 2008, the percentage of students scoring proficient and advanced has risen in Saint Louis charter schools by nearly 88 percent.

Charter and Traditional Public School Performance in Communication Arts (Imagine removed)

CommArts_Charters_withoutImagine

Mathematics Comparison

The story in mathematics is much the same. In both cities, charter schools have higher percentages of students scoring proficient or advanced, when Imagine schools are removed. Kansas City charters scored 11.4 percentage points higher than Kansas City traditional public schools; Saint Louis charters scored 6.4 percentage points higher. Both charter sectors have shown steady growth. From 2008 to 2012, the percentage of students scoring proficient and advanced has increased 55 percent in Kansas City and 82 percent in Saint Louis.

Charter and Traditional Public School Performance in Mathematics (Imagine removed)

Math_Charters_withoutImagine

On average, charter schools in Saint Louis and Kansas City have shown fairly consistent growth over the past five years. Kansas City charter schools have higher percentages of students scoring proficient or advanced than the local school district; Saint Louis charter schools are closing the gap between them and the traditional Saint Louis school district. The growth is even more dramatic when the now closed Imagine charter schools are removed from the comparison.

Charter Performance II: Math

Posted on by James V. Shuls

This is the second of four posts on the subject of Missouri charter school performance. In my previous post, I showed that charter schools have displayed increasing performance over the past five years in both Kansas City and Saint Louis. And, in both cities, charter schools are performing at similar levels in communication arts as the traditional school districts. The math results are even more promising for charter schools.

Charter schools in Saint Louis and Kansas City have shown growth every year since 2009. Since 2008, the percent of students proficient or advanced in Saint Louis charters schools has grown 77 percent; in Kansas City charters it has increased 55 percent. Students in Kansas City charter schools now outperform students in Kansas City traditional public schools by 8.9 percentage points. The gains were slightly less pronounced in Saint Louis. Nevertheless, the difference in terms of percent proficient and advanced dropped from 6.1 percentage points in 2011 to 0.5 percentage points in 2012. The closing of the gap came not only from charter school gains, but also from a drop in Saint Louis public school scores.

Charter and Traditional Public School Performance in Math

Math_Charters

There is still much to be desired in terms of overall performance of charter schools. But, unlike traditional public schools, which may be perennially failing yet remain open, charter schools can close if they are low-performing. Indeed, we have seen this in practice in Missouri with the closing of the Imagine charter school network. In my next post, I will examine the student achievement scores without the Imagine schools data.

Charter Performance I: Communication Arts

Posted on by James V. Shuls

The performance of charter schools in Missouri often is the subject of much scrutiny. Ideally, we would evaluate schools not just on attainment, but also on growth. Unfortunately, I do not have access to data that allow me to do the latter (yet). Nevertheless, in this and my subsequent three posts, I will present a snapshot comparison of overall charter performance compared to the performance of the districts from which charter students come.

As you will see, Missouri charter schools have shown steady growth over the past five years. Though there still is much to be desired, there also is room for optimism.

The data I use in this analysis contain the results of the Missouri Assessment Program (MAP) and End-of-Course exams (EOC) for the past five years. In Missouri, students in grades three through eight take the MAP test in communication arts, math, and science. End-of-Course exams are required in four subjects: algebra I, biology, English II, and government. Student scores are reported in one of four categories: below basic, basic, proficient, and advanced.

These data provide for a simple comparison of schools and school districts at one point in time, but should be viewed with some caution because the scores do not capture prior student achievement.

Below, I display the percentage of students in Saint Louis and Kansas City charter and traditional public schools scoring proficient or advanced on all required communication arts exams in each of the past five years. This includes students who took the MAP or required EOC exams in communication arts.

In both cities, the overall performance of students is low, with less than 35 percent of students scoring proficient or advanced in all four groups. Of the four, Kansas City charter schools have slightly higher achievement in most years, including 2012. Noticeably, charter schools in Saint Louis have shown steady increases in the percent of students scoring proficient or advanced since 2008. They have closed the gap with Saint Louis Public Schools in terms of achievement, from 7.6 percentage points in 2011 to 3.3 percentage points in 2012. Over the past five years, the percentage of students scoring proficient or advanced in communication arts has increased 74 percent in Saint Louis and 26 percent in Kansas City, respectively.

Charter and Traditional Public School Performance in Communication Arts

CommArts_Charters

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