Virtual Education, Real Opportunity

Recently, the Kansas City Star ran a piece on a little-known and underutilized option for Missouri students, the Missouri Virtual Instruction Program (MOVIP). The article focuses on Kansas City, which — as an unaccredited district — is required to pay for courses when students enroll in the program. The Star reports only eight students in the Kansas City School District are currently enrolled in a MOVIP course. Why? Probably because families do not know about MOVIP.

The kicker here is that this is not an isolated incident — all unaccredited districts and districts with provisional accreditation for two years are required to pay for these courses for their students. Unfortunately, few districts make this readily known. What is more, all school districts have the option to offer MOVIP courses to their students.

As Show-Me policy analysts have noted (here and here), virtual education has tremendous potential to improve and broaden the quality of education for Missouri students. Schools should be lining up to partner with MOVIP.

Imagine a classroom full of students on computers, each taking a different virtual course. One student is making up English I, which he previously failed, while another is taking a course on web design. Other students are taking foreign language courses that the school could not offer, perhaps Chinese, German, Japanese, or Latin.

We are in a tremendous age, where technology is transforming how we operate in our daily lives. Now, technology has the potential to change how we educate our students. By partnering with MOVIP, schools can expand options for students. More students in Kansas City — or even Appleton City — should enjoy greater educational options. It is time we demand more.

The DED Gets Audited . . . Hilarity Does Not Ensue (Part 2)

When the Missouri state auditor’s office released it audit of the Department of Economic Development’s (DED) Division of Business and Community Services (BCS), problems with the Mamtek deal was not the only item of interest it found. The findings also showed that the state could have saved money if it prevented companies from claiming project costs under more than one program.

According to the audit, “the state issued tax credits totaling over $134 million related to project costs included in the basis of more than one tax credit program during the 11 years ended June 30, 2011.”

The Show-Me Institute is no stranger to criticizing the state’s economic development tax credit system. This report reinforces the notion that the state needs to take a new direction to ensure economic growth. Instead of picking winners and losers through the tax code, the state should make the overall economic environment more favorable for all businesses.

If the state eliminated the corporate income tax and made up for the lost income by capping or eliminating economic development tax credit programs, not only would the state benefit economically, but the it would cut down on the type of double-counting mentioned in the audit.

When one discovers government waste, it is natural to immediately call for tighter controls and more oversight. That is why politicians always say they will cut “waste, fraud, and abuse” when talking about cutting spending. It is a position unlikely to cost votes. However, no matter how tight the controls, it is impossible to guarantee that something will not slip through the cracks. That is why, if  non-essential programs are eliminated, such as development tax credits, problems like the one found in the audit are less likely to occur.

Principles Or Politics?

What does your elected official or candidate for public office believe? The Show-Me Institute developed a questionnaire to help you evaluate where politicians stand on key issues in education, the economy, health care, and good government practices.

If you are curious to learn more about free-market solutions to the problems facing our state, click the link for each question to see relevant research and analysis on each topic.

A few questions from the list:

Click here for the full questionnaire.

Lessons For Kansas City From The Chicago Teachers Strike

Who “won” the just-ended Chicago school strike and what are the implications for other large urban districts, including Kansas City Public Schools, where thousands of students are similarly trapped in failing schools?

The Chicago school strike came down to a bruising battle between two flamboyant and abrasive public figures: Mayor Rahm Emanuel and Chicago Teachers Union (CTU) President Karen Lewis.

With Chicago’s 26,000 public school teachers returning to work on Sept. 19, it is clear that there is no real winner in this dispute — not the union, not the mayor, and, most especially, not the students and their parents.

There were concessions on both sides in the battle between the mayor and the Chicago teachers’ union, with a final agreement on watered-down changes in teacher evaluation that may make it somewhat easier to remove low-performing teachers. While winning another round of pay increases (on top of average annual pay per teacher of $71,000 for a nine-month year), the union agreed to a longer school day, and it agreed to limit the number of sick days that teachers can “bank” as a future benefit upon retirement.

All that amounts to tinkering at the edges of a failing system. “Beyond this contract is a larger reality,” the Chicago Tribune noted in an editorial. “This school system faces declining enrollment and rising expenses. CPS needs to find a sustainable financial footing. This contract doesn’t help much.”

Kansas City public schools are facing the same bleak reality, as public school enrollment in the city has declined by roughly 35 percent in the past five years while expenditures per pupil have increased to more than $14,000 — far exceeding per pupil costs in most suburban schools. Further, just as in Chicago, Kansas City schools have an extraordinarily high dropout rate, with only about half of high school students graduating within four years.

It is hardly surprising that strong teachers’ unions in large school districts with multiple failing schools will do everything possible to maintain their jobs and to increase their benefits. But that is exactly what makes major reform from within these same school districts a near-impossible task. Reform — if it is to happen — will have to come from the outside, through increased competition and choice.

As things stand today in most large public school districts, including Kansas City and Chicago (both before and after the strike), it remains the case a) that teachers will only be fired for egregious misconduct; b) that when districts reduce staff for budgetary reasons, the most senior teachers stay on the job regardless of their fitness as teachers; and c) principals and others in positions of supposed authority are extremely limited in their ability to reward their best teachers through any kind of pay-for-performance system.

Highly unionized public school districts — where many teachers have understandably grown to feel that they are entitled to hold on to their jobs even though many of their students are failing to learn — need the spur of competition.

Still more, it is a tragedy that so many students and parents in city centers such as Kansas City and Chicago are trapped in schools that are not working. They deserve to be given a choice — and that is something that elected officials at the local and state levels must finally begin to recognize and rally around as a cause for action.

The Show-Me Institute has long called for a major expansion in charter schools to create a real alternative to today’s failing public schools.

Some educators are calling for greater “COOP-ETITION,” meaning a joining together of the traditional public school education with a big increase in the number of charter schools (mostly non-unionized and free from most regulation governing public schools).

We say: Bring it on!

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

‘Saint Louis Has High Taxes!’ Say International Accountants

KPMG, one of the world’s Big Eight, Six, Five, Four accounting firms, released a study last week that ranked Saint Louis as having the second highest tax burden of major American cities. I admit that I was surprised Saint Louis ranked that poorly. (Perhaps our “progressive” citizens are proud of this, and now have a goal to shoot for being No. 1.)

There are two frustrating things about the study. First, as the St. Louis Post-Dispatch’s David Nicklaus noted, it does not make clear whether it is referring to just the city or to the entire region. Obviously, that has repercussions. If they applied the city’s 1.5 percent earnings and payroll tax to the entire region (as I think they did), that would be an error. Second, it is frustrating that Kansas City was not included in the study.

According to Nicklaus’ write-up, the main reason we ranked so poorly was our “relatively high property tax costs.” Some people might question that, as Missouri is not really known for high property taxes, even for businesses. In fact, this study by the Tax Foundation ranked Missouri as seventh best from the business property tax perspective.

How do these discrepancies come about?

First, it appears they are compiling their rankings with different methodologies. The Tax Foundation (which gives a better explanation of its methods) gives a lot of weight to certain property taxes (intangibles, inventory, franchise) that Missouri no longer has. So we rank very highly because we do not have those. KPMG appears to be going simply on total property tax bills and rates.

But I think the main reason Saint Louis ranks poorly while Missouri is ranked highly is that the main corporate property tax is the commercial surcharge, and that tax varies wildly by county within Missouri.

The commercial surcharge is a property tax rate applied on top of general charges for just commercial property, as its name implies. It ranges from 1 cent per $100 of assessed valuation in Reynolds County to $1.70 per $100 in Saint Louis County (followed right behind by $1.64 in Saint Louis City). That is a difference of $5,408 on a $1 million commercial property (not a high valuation for a commercial property). For comparison, 16 of Missouri’s 115 counties have a rate of more than $1, and 68 have a rate below 50 cents per $100 of assessed valuation. That is how Missouri can rank well, but Saint Louis poorly, on business property taxes.

Missouri needs to change our commercial surcharge system to allow the rates to decline as assessments increase, like all other property taxes. For that and other needed changes to the system, please check out this testimony.

The DED Gets Audited . . . Hilarity Does Not Ensue (Part 1)

Last month, the Missouri state auditor’s office released its audit of the Department of Economic Development’s (DED) Division of Business and Community Services (BCS). Among other things, the audit found that in regards to Mamtek, the BCS:

. . . failed to perform adequate due diligence on the startup company, its officials, and information provided by the company.

This is not the first time that the Show-Me Institute has written about Mamtek. Clearly, the BCS did not do a good job managing the entire Mamtek project, but that is not the point. The main point is that the government should not be engaging in economic development projects in the first place.

It would be bad enough for a private entity to fail to perform adequate due diligence on a project; however, at least a private entity would be using its own money when it invests in a project. A government entity, on the other hand, risks the taxpayers’ money in these development projects. People do not have to invest in a private company, they do have to pay taxes.

The government has a few core functions. Picking favorite economic development policies is not one of them. The state should leave economic development to the private sector and let people choose with their own money which project is worthwhile; the decision should not be up to some bureaucrat in Jefferson City.

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