So This Is Happening . . .

What is happening, you ask? Work is about to begin on Ballpark Village, the commercial development around Busch Stadium in downtown Saint Louis. According to reports, the Missouri Development Finance Board approved buying its share ($5 million) of Missouri Downtown Economic Stimulus Authority (MoDESA) bonds. Total government aid will amount to $17 million for the first phase of construction. It appears that the government is, once again, in the development business.

Why is Ballpark Village receiving public subsidies? The government, whether local, state, or federal, is the steward of taxpayer money. Yet, the government is spending taxpayer money to help build shops and restaurants. Isn’t there anything else a bit higher up on the public’s list of priorities on which the government can spend money? There are legitimate roles for government, being a developer is not one of them.

It is possible the government sees that helping to finance the construction of Ballpark Village will boost economic growth. However, it should be noted that while these new shops and restaurants may do well and attract customers, other shops and restaurants located in the city may lose business. The disposable income of the average citizen is limited and by spending money in one place, they may be declining to spend money in another. If you are a private investor, this is not something to worry about as long as it is your business attracting the customers. However, what is the net benefit to the economy as a whole and why is the government in the position to favor one business over another?

A lot of people might enjoy Ballpark Village once it is built. However, that does not mean I support Ballpark Village being built with the aid of public money. There are legitimate things on which government should spend money; Ballpark Village is not one of those things.

We ‘Won’t Back Down’ For Educational Options

Last night, I attended a screening of the new movie “Won’t Back Down” at the Hi-Pointe Theatre in Saint Louis. (Which I might add, is not a boring documentary — go see it.) StudentsFirst held the screening to bring awareness to the education reform movement here in Missouri.

“Won’t Back Down” highlights the important message that every child deserves good teachers. Parents do not have to let their children suffer in failing schools.

The movie follows single mother Jamie, who works two jobs and wants desperately for her daughter Malia to have a second-grade teacher who cares about teaching. But Malia’s teacher at the local public school, like many others, is focused on passing the time before she can collect her pension and get the heck out of there.

When we are unhappy with a service in the private market — our dry cleaner, for example — we can easily choose to stop bringing our clothes to that location. We have other choices. I realize that schooling is a bit more complicated than dry cleaning, but the point is this: with schools, parents often do not have the choice to send their kids to a different location that will provide a better education. Sure, your child can go to a private school if you have the money. But many Americans cannot afford it.

Almost all parents pay taxes to support public education. Why should they be forced to pay for and send their children into a system that is not working? Parents need more choices.

In “Won’t Back Down,” Jamie works tirelessly to fight for a better education for her daughter, and she succeeds with the help of caring teachers. Here in Missouri, parents face many of the same obstacles. Jamie shows us that parents do not have to accept a failing school. Change is possible.

To learn more about education issues, watch these videos: Teacher Tenure: Time for a Change, Charter School Benefits and Research, and Can We Improve Urban Schools?

Good News For Hadley Township And Property Rights

Pace Properties has pulled out of the Hadley Township redevelopment plan because it could not reach agreement with all of the homeowners. That is not what I am happy about. I would be very happy to see a redevelopment in the area if it is a result of voluntary property sales and done without tax subsidies.

What I AM happy about, to say the least, is that Pace will not be exercising eminent domain to take the property of people who did not want to sell. They could have done so. They had the legal authority to use eminent domain. They chose not to. Pace Properties officials deserve praise for their restraint.

I am holding off on praising Richmond Heights officials until we see how the Menard’s project next door (also within Hadley Township) goes through.

Private property rights are more important than another commercial development. Forcing people out of their homes would have been immoral. I am very happy for the Bailey, Parker, Tompkins, and Abrams families, who will be able to stay in their homes. Please check out the video of the Show-Me Institute’s interviews with these families here.

However, let’s not deny the great damage done to the neighborhood through the entire process because of previous potential developers and the city. Government involvement caused the recent history of deteriorating property, vacant homes, and more. Residents of Hadley Township are now in a difficult situation that the government caused because it involved itself in real estate development. It was completely avoidable if the city had not become involved.

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 whether the Richmond Heights TIF is gone for good, the economic impact of sports tourism to Columbia, MO, Governor Nixon’s veto of the recent legislation that would have changed the way car sales are taxed, and a rundown of some of the issues on the November ballot.

 

Help Wanted: High-Performing Teachers Need Not Apply

As the Chicago teacher’s strike carries into its second week, many interesting facts are coming to light. We know the average Chicago public school teacher earns more than $71,000. What makes this figure interesting is that on average, Chicago Public School teachers only scored a 19 on the ACT. That is lower than the national average of 21.1 and the Illinois average of 20.9 (see here). The question is not why are teachers earning so much, but why are we attracting so many below average individuals in terms of academic aptitude into the classroom and so few high-performing ones?

Like Chicago, the difficulty of attracting high-quality individuals into the classroom is a problem we face here in Missouri. Teachers score lower than average on a number of standardized tests, includingthe SAT, the GRE, and the Armed Forces Qualification Test (see here). A study using Missouri data found that 20 percent of teachers scored a 19 or lower on the ACT and 69.6 percent scored a 24 or lower.

There are number of issues that perpetuate this problem of below average individuals entering the classroom. For starters, schools seemingly do a poor job of seeking out high-performing individuals.

In a recent study I co-authored for the Office for Education Policy at the University of Arkansas, we examined the application documents of 50 randomly selected Arkansas school districts. What we found was pretty alarming. More schools asked teachers what high school they attended (67 percent) than how they did on the teacher licensure exams (13 percent). Approximately half asked for the applicant’s GPA and none asked for ACT or SAT scores. Certainly scoring higher on a test does not necessarily make you a better teacher, but there is ample evidence to suggest higher-scoring individuals are higher-performing teachers.

Even if schools did request academic information from applicants, they would have little leverage to attract high-performing individuals. The single-salary schedule, which is in place in almost all public schools in Missouri, does not allow administrators to pay individuals more for their aptitude or their potential for being a great teacher. In essence, we get below-average teachers because we treat all the above-average ones like they are . . . average.

The Road to Freedom

In the tenth installment of the Show-Me Speaker Series, American Enterprise Institute President Arthur Brooks spoke to an enthusiastic crowd on the topic of liberty and free markets.

Essential to the message Brooks conveyed is the idea that proponents of free markets should focus less on cold data such as tax rates and more on individual stories of human flourishing brought about by reduced barriers to trade and robust property rights.

This event was held at and co-sponsored by the Saint Louis University John Cook School of Business.

 

Our next SLU Speaker Series event.

Not Nebraska Too . . .

Kansas, it seems, is not the only state intent on taking it to Missouri regarding tax cuts. Now Nebraska is looking to get in on the act. After already cutting taxes this year, Nebraska Gov. Dave Heineman is mulling various options to dramatically overhaul Nebraska’s tax code. One option “on the table” is eliminating the state’s personal income tax, which, if implemented, would make Nebraska and Tennessee our two neighboring states without an income tax.

So this is the situation Missouri faces. Kansas has dramatically cut its income taxes, including completely eliminating taxes on pass-through entities such as LLCs and sole-proprietorships. Tennessee has no income tax except on interest and dividends. The governor of Oklahoma is dead set on cutting income taxes even though she failed to get a tax cut through the legislature last session. Yet while many of our neighbors take steps to make their states more economically competitive, Missouri creates another tax credit review commission. (Do not get me wrong, I hope the commission succeeds in reducing our reliance on tax credits. But after the lack of any progress from the prior commission, I want to see actual action before I heap praise on it.)

If the biggest economic development item to get out of either house of the Missouri General Assembly is the Angel Investment Incentive Tax Credit then we are really in a sad state. We need to go bigger and stop relying on government economic planning. Yes, tax credits are government economic planning no matter what spin you try to put on them. My colleague Patrick Ishmael and I have proposed eliminating the state’s corporate income tax. The Show-Me Institute also has conducted research on phasing out the state’s income tax entirely.

This is a difficult time for Missouri. Our neighbors are racing ahead and putting us at a severe disadvantage. But there is still time to make changes. Missouri can compete with other states economically. It just takes the will to do so.

School Transfer Case Needs Common Sense Solutions

The Jackson County Circuit Court issued a final judgment in the school transfer case that seems to have satisfied no one, not even the judge. In his opinion, Justice Brent Powell wrote, “This Court’s ruling will undoubtedly be appealed” and “… could very likely be reversed and/or significantly altered.” Thus, the case and the problem remain unresolved, and neither taxpayers nor students will benefit from the prolonged legal battle. The courts cannot play Solomon here; we need common sense solutions from legislators that will give students in failing districts more options.

At issue in the case is Missouri statute 167.131, which permits students in unaccredited districts to attend schools in a nearby accredited district. The court ruled the law violated the Hancock Amendment because it created an unfunded mandate for some of the schools that would receive students from the unaccredited Kansas City School District. The problem with the statute is essentially twofold. Receiving schools have no say in how many students they will accept into their district and the amount of money rendered to them is inadequate, or so they say.

The court’s decision was based, in part, on the “per pupil cost” of maintaining grade level groupings, as calculated by the accredited school districts. Justice Powell called the estimates “very credible and reliable,” but as an education policy analyst and former public school teacher, I would dispute that assertion. Because school districts spend whatever money they are given, we know how much schools spend, not how much it actually costs to educate students. Ironically, each school district reported it would cost more than they spent in operating expenses last year.

Nevertheless, the Kansas City School District should have enough money to cover the high cost that the districts report. Last year, Kansas City spent approximately $14,500 per pupil, more than almost all of the costs that the accredited districts reported. Part of the problem is Kansas City does not want to pay other school districts what they spend on their students.

The solution is simple. Allow money, both local and state, to follow the child to his or her school. The tuition paid to receiving districts should equal the lesser of the two districts’ per pupil expenditure for the prior year. These figures can be readily calculated from prior year expense data. Furthermore, this system prevents any receiving district from extracting more money from an unaccredited district than would otherwise be spent on that student.

Money, however, is only part of the problem. Neighboring school districts do not want a mass exodus of Kansas City students into their school districts without any control over the number of students. That would force them to hire more teachers and construct additional buildings. Again, the solution is simple. Allow accredited school districts to determine how many available seats they have at each of their schools. Then, rather than forcing them to accept all students, let them hold lotteries to fill these slots.

Because schools have some fixed costs, including facilities and staff, it benefits them to not have empty seats. If a class has 19 students and could hold one more, the district would benefit from the additional dollars a transfer student brings, and crowding would not be an issue. For smart districts, the school transfer law could be a windfall. State and local elected officials must stop kicking the can down the road and face this problem. The solutions provided here do not completely fix the system, but they move Missouri in the right direction by allowing local schools to have local control and increasing educational opportunities for students who desperately need them.

James V. Shuls is the education policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

Watch Live Tonight: Arthur C. Brooks and The Road to Freedom

Click below for live video of the Show-Me Institute’s Speaker Series on Economic Policy, which will begin at about 6:00 p.m. CDT. Tonight’s speaker is Arthur C. Brooks, president of the American Enterprise Institute. Until January 1, 2009, Mr. Brooks was the Louis A. Bantle Professor of Business and Government Policy at Syracuse University. Mr. Brooks is the author of a new book, The Road to Freedom: How to Win the Fight for Free Enterprise, published on May 8, 2012.

Video streaming by Ustream

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