The Good, The Bad, And The Ugly From The State Board Of Education Meeting

Posted on by James V. Shuls

More charter schools, a change in Saint Louis Public Schools’ accreditation status . . . Get the low-down from yesterday’s Missouri State Board of Education meeting with my recap of the good, the bad, and the ugly from the proceedings.

The Good:

The board approved two new charter schools: Eagle College Prep and Lafayette Preparatory Academy. Curt Fuchs, coordinator of educational support services for the Missouri Department of Elementary and Secondary Education (DESE), remarked that the applications were exceptionally strong. After having talked briefly with school leaders from both schools, I am very optimistic that these schools will be highly successful.

The Bad:

The board granted provisional accreditation status to the Saint Louis Public School District. Not that this was a bad decision, in fact, it probably was the right decision. The district met the minimum criteria laid out under DESE’s old accreditation system: the Missouri School Improvement Plan 4 (MSIP). The problem with this is threefold: (1) The bar for provisional accreditation is too low, (2) accreditation status is essentially meaningless, and (3) parents need information at the school level, not the district level.

The state is improving the accreditation system to MSIP 5, but this does not negate the fact that school accountability should come from parents armed with information, not from the state board. An “A” to “F” school grading system would help accomplish this.

The Ugly:

The most disturbing thing from the state board meeting was not anything that was voted upon; rather, it was the overall attitude that the board must micromanage schools, even charter schools. For more than a decade, Missouri has tried accountability systems run at the state level, with little success. It is time to move past the notion that we can prescribe solutions for public education. We need an atmosphere where educational entrepreneurs want to come and innovators can thrive. That can become a reality if we empower schools to make decisions and provide families with options.

Show-Me Institute On Missouri Radio

Posted on by David Stokes

First Thoughts: If I owned a radio station in Mexico, Mo., I would play Wall of Voodoo all day long. Just sayin’.

As long as the Show-Me Institute has been in operation, talk radio has been an important medium for our scholars and policy analysts. It is one of the best ways to bring our message of free markets and personal liberty to the public. Toward that aim, we are excited to announce that I will now be on KRMS radio with Manny Haley at 10:15 a.m. every Thursday to discuss public policy issues in the Lake of the Ozarks area. We are thrilled to be joining Manny each week. Be sure to listen in if you can.

As you may know, I have been appearing at 8:35 a.m. each Monday with McGraw Milhaven on KTRS The Big 550. We are delighted with the feedback we are receiving, and we cannot thank McGraw enough for the opportunity each week. I hope to continue this partnership for a long time, and I hope you all listen in to McGraw’s show whenever you can. Paul Harris has also been great to work with at KTRS.

This Friday morning, I will be a guest at 8:40 a.m. on  KZIM / KSIM  radio in Cape Girardeau. This is our first time on this station, and I cannot wait to join them on the air. If you are in Southeast Missouri, please tune in Friday morning. Or, thanks to “listen live” and the Internet, you can also listen in if you are anywhere in the world. Which is nice.

Give An Inch, Not A Mile

Posted on by Kacie Barnes (Galbraith)

We all know the old saying, “if you give an inch, they’ll take a mile.” Cities seem to skip the “inch” part and give commercial developers a mile right away. What if they thought about ways to only give an inch? Better yet, what if they did not “give” anything, but simply performed the necessary roles of government as quickly and inexpensively as possible?

Many cities conduct economic development with offers of tax incentives to commercial developers in hopes of bringing them to their neighborhoods. Offering these subsidies is often bad practice for many reasons.  Discounted taxes for the select few means marginally higher taxes for everyone else.

Last week, the Kansas City Star reported about property developer Nathaniel Hagedorn’s success in placing a tenant in a 200,000-square-foot building in Riverside, Mo. Riverside did not provide subsidies or incentives to attract this business. The city’s government simply did its job in an efficient and business-friendly manner.

Hagedorn reported that Riverside was the only city in the metro area that took just two weeks to provide all permit approvals for the building project — a valuable feature for businesses. Very few businesses want to sit around and watch the leaves turn while they wait to open a new space. Time is money.

A few months ago, the Society for Industrial Office Realtors (SIOR) and a group of real estate students at the Bloch School of Business at the University of Missouri-Kansas City completed a study of the typical time and cost of having a commercial real estate building project approved. They analyzed 17 municipalities in the Kansas City metro area and found that the average length of time to approve a project is about nine and one-half weeks. This study is very interesting and I hope someone does similar work for Saint Louis.

Shortening the time it takes to approve developments is a simple fix cities can make to improve their business climate. Instead of pulling out the big guns with popular programs like TIF (Tax Increment Financing), TDD (Transportation Development District), and Community Improvement District (CID), municipalities could make small changes that would benefit all new businesses, not just a select few.

Saint Louis Gets Ballpark Village And You Get The Bill

Posted on by Michael Rathbone

The Missouri Development Finance Board has approved its “share” (according to reports, $5 million) in bond purchases to help fund the first phase of construction of Ballpark Village, the development project located next to Busch Stadium in Saint Louis. That aid might be good news for the Cardinals, but it is bad news for taxpayers. The subsidies to Ballpark Village are just the latest example of the use of public money to help some of our wealthiest citizens — sports team owners — with little or no economic benefit for the city, region, or state.

Since the early 1990s, Saint Louis City, Saint Louis County, and the state of Missouri have joined together in paying a total of $24 million a year ($12 million from the state and $6 million each from the city and county) to retire the debt incurred from building the Edward Jones Dome in downtown Saint Louis. Incredibly, the owners of the Dome obtained private financing for only a tiny portion of the stadium’s cost (less than 10 percent) and even now are getting ready to seek a whole new set of subsidies to finance a major renovation of the Dome that could cost as much as $700 million.

A large body of academic literature supports the conclusion that local and state subsidies to sports stadiums provide no new net economic benefit to the state or region. According to a study by John Siegfried and Andrew Zimbalist, “Few fields of empirical economic research offer virtual unanimity of finding. Yet independent work on the economic impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development.”

One reason such projects deliver little or no economic bang for the buck is the so-called “substitution effect.” New stadiums may attract a lot of customers, but they also take customers from other local businesses: If you spend $150 to attend a football game, that is $150 you likely will not spend going out to dinner and a movie.

Even so, the state has moved beyond financing the construction of stadiums to assisting owners with building projects that are near the stadium. The area surrounding Busch Stadium is now handling more than 3 million visitors every year. This should make that property extremely valuable. If the Cardinals’ plan is a good one, they should be able to obtain private financing for the accoutrements surrounding Busch Stadium just as they did when they privately financed almost all of the construction of the new Busch Stadium.

Having a fancy new development such as Ballpark Village might increase the prestige and glamour of downtown Saint Louis, but having the rest of the state help foot the bill hardly seems fair. Stop to think about it: Why should the people in Hannibal, Springfield, and other places across Missouri be asked to pick up part of the bill for another city’s shops and restaurants? If the people of Saint Louis really want a Ballpark Village, then they should pay for it themselves.

It should not take the entire state to raise this village.

Michael Rathbone is a policy researcher at the Show-Me Institute, which promotes market solutions for Missouri public policy.

Curing Baumol’s Disease In Public Education

Posted on by James V. Shuls

As I diagnosed in my last post, Baumol’s disease is running rampant in Missouri’s public schools. This means Missouri school districts continue to spend more and more on education, with little improvement in the actual quality of education.  How can we combat the growing expenses and near stagnant achievement?

Obviously, there are two ways to control Baumol’s disease. One is to slow the rate at which spending increases and the other is to increase output.

We are in a time of declining state budgets and Missouri already spends approximately 34 percent of general revenue on K-12 education. This may force us to curb or slow education spending, but the public has shown little interest in holding education spending constant or even decreasing spending.

The other option, increasing output, is easier to say than to actually do. And, as we have noted on Show-Me Daily, Missouri has seen very little in terms of gains in academic achievement.

Students and taxpayers cannot support this type of system indefinitely, but fixing Baumol’s disease is not as simple as saying “we will do better.”

If we want to cure this disease, by increasing achievement and putting education on firmer financial footing, we need to rethink schooling.

Harness the power of technology

We at the Show-Me Institute have written at length about the potential benefits of using technology more effectively.

Rethink how we staff and operate schools

The traditional education system is designed to treat teachers like widgets, because teachers are paid in lock-step fashion, they are almost entirely evaluated with high marks, and we retain low-performing teachers just as readily as high-performing ones.

Missouri schools need to do a better job of identifying and rewarding good teachers and removing the worst. Furthermore, educators must figure out how to expand the reach of great teachers so they can have an impact on more students, not just the 25 students in their class.

The Corporate Income Tax . . . Leaving Missouri Behind?

Posted on by Michael Rathbone

The Cato Institute recently released its “Fiscal Policy Report Card on America’s Governors 2012.” Show-Me Institute Policy Analyst Patrick Ishmael wrote a nice post illustrating how Missouri compares to its neighboring states in the eyes of Cato. However, the Cato report also noted the actions of several state governors and their (sometimes successful) attempts to cut their state’s corporate income tax. Gov. Jan Brewer of Arizona signed a 2.1 point rate cut in Arizona. Gov. Jack Dalrymple of North Dakota signed a 1.25 point rate cut. Governors Paul LePage (Maine) , Rick Scott (Fla.), Terry Branstad (Iowa), and Nikki Haley (S.C.) have all called for either lowering or eliminating their states’ corporate income tax.

Why is this important? These states are all making moves to ensure their state’s economic competitiveness. Missouri already lags behind most of the country in economic growth. It will find itself falling further behind other states if it does not match or exceed the reforms being put forward in other states.

That is why it is important for Missouri to act quickly. Patrick and I have both written about the benefits of Missouri eliminating its corporate income tax and how it could be done in a way that would not negatively affect state revenues via the elimination of economic development tax credits. Missouri should eliminate its corporate income tax because it benefits all businesses, not just those who are politically favored. It also lessens government involvement in planning the economy due to the removal of tax credits.

Missouri does not have the least attractive environment for business . . . yet. However, its current inaction in the face of other states’ increasingly aggressive moves to make their states more competitive, especially Kansas, put Missouri at risk of being a permanent economic wasteland.

Public Education Going The Way Of The Post Office

Posted on by Kacie Barnes (Galbraith)

Recent news of the United States Postal Service’s debt problems has brought the agency’s mounting business troubles back into the spotlight. Many post offices were shut down last year (20 in Missouri), as the USPS used one if its few tools to respond to changing business conditions.

This is an example of an industry where there are strong private alternatives to a government-provided service. USPS has a monopoly on first class mail, but UPS and FedEx provide consumers with many other options to meet shipping needs.

As I read James Shuls’ blog post “What is Public Education?” it occurred to me that traditional public schools and the postal service have more in common than one might expect.

Public schools and post offices obviously provide different services, but they are both trailing behind their private counterparts. These government services are highly regulated, in what I assume is an attempt to make them well-run. But the opposite is true. Under these conditions, the postal service cannot adapt to the changing marketplace as easily as UPS and FedEx. Similarly, public schools cannot respond to changing school and student needs as swiftly as private and charter schools.

The success of UPS, FedEx, charter schools, and private schools shows us that people often prefer non-government services and (gasp) receive a better product.

Traditional public schools are not always able to attract and retain the best teachers, nor can they remediate or remove the worst. Bad schools stay open when they should close. And regulations prevent students from using technology to learn at their own pace.

I am certainly no anarchist, but I am rational enough to see when markets are better than government. Businesses thrive when they are able to adapt and compete. Just as restrictive burdens on the USPS have hindered the organization’s performance, government regulations are stifling education. In Saint Louis, for example, it often takes more than 100 days to remove a low-performing teacher.

We need to take a clue from the postal service: freedom, not regulation, produces better results.

No, It Is Not OK To Vote In Two States In One Presidential Election

Posted on by Patrick Ishmael

Project Veritas is a 501(c)(3) whose mission is “. . . to investigate and expose corruption, dishonesty, self-dealing, waste, fraud, and other misconduct in both public and private institutions in order to achieve a more ethical and transparent society.” One of the issues the organization covers is voter fraud, and this week the group released a troubling hidden camera video that appears to show a campaign worker helping a “voter” — in reality, a Project Veritas representative —vote twice: in person in one state, and by absentee in another state. It is illegal to vote in two (or more) states in a single presidential election, but as the video shows, the barriers to this kind of fraud are extraordinarily low.

Voter fraud is real. Yes, sometimes campaign workers are truly mistaken about what the law is when it comes to voting in this country. But whether the staffer in Texas was unaware that what the camerawoman was “attempting” is illegal, or the staffer was in fact willing to turn a blind eye to the fraud she knew she might be assisting, the takeaway from the situation is the same — that not only is voter fraud a genuine problem, but that it is far too easy to perpetrate. This is unacceptable.

RELATED: The Show-Me Institute and the Federalist Society have partnered to put on a debate about voter ID and voter fraud later this month. It is scheduled for 6 p.m. on Thurs., Oct. 25 at the Crowne Plaza Hotel in Clayton and features John Fund of The Weekly Standard and Denise Lieberman of Advancement Project. The event is open to the public.

Disease* Runs Rampant In Missouri Public Schools

Posted on by James V. Shuls

Baumol’s disease is running rampant in Missouri public schools. Before you jump in the mini-van and rush to school to pick up your children, let me clarify. Baumol’s disease is an economic term, which describes the tendency of labor-intensive industries to continually have rising costs without achieving similar gains in production, i.e., they spend more, but do not produce more.

Recently, Matt Ladner wrote a series of blog posts about Baumol’s disease in public education. Ladner is certainly not the first to point out this problem. Jay Greene even touched on the topic this week in The Wall Street Journal.

I have seen the numbers nationally, but I wanted to bring it home for Missourians. So I constructed my own graph that demonstrates the Baumol phenomenon in Missouri’s public schools.

The graph was constructed using the Digest of Education Statistics Table 194 and results from the National Assessment of Educational Progress (NAEP). NAEP data are only available after 1992 and the tests are typically taken every other year.  The Digest of Education Statistics data stop in 2008-09. Thus, the graph presents the results from 1992 to 2008. When there were gaps between years, I linearly imported the figures.

Since 1992, Missouri has seen nearly a 40 percent increase in per-pupil spending. Yet we have seen little in terms of increases in academic achievement. This is the very picture of Baumol’s disease: increasing cost with very little improvement in output.

Is there a cure for Baumol’s disease? I think so and I will highlight a few in my next blog post. For now, I will leave you with a thought. If a real disease was running rampant in our schools, there would be immediate action. Yet we have a real economic disease that is plaguing our schools and little is being done. We cannot continue operating an educational system that is plagued with Baumol’s disease.

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