Show-Me Institute Executive Director Brenda Talent was a
guest
on Saint
Louis local roundtable discussion show Donnybrook on July 26, 2012.
Among the topics covered this time were: The tragic shooting in Aurora, Colorado, and what impact if any the event should have on gun policy, the recent Post-Dispatch coverage of the Clay vs Carnahan congressional race, Governor Nixon’s new television ad’s omission of his party affiliation, U.S. Olympic Team uniforms manufactured in China, and the GSA convention locating (or not) in Saint Louis.
Missouri Stagnation! In Color
This is not the first time that I have lamented about Missouri’s economic performance. However, the U.S. Bureau of Economic Analysis released a map that shows just how well Missouri does when compared to the rest of the country:
As you can see, Missouri is in the bottom 10 in terms of economic growth. From 2010-11, the latest year for which data is available, Missouri also ranked second to last in terms of employment growth.
What are Missouri officials doing to catch up with the rest of the country? They expanded a small business tax deduction, but compared to Kansas cutting its personal income tax rates, Missouri’s actions seem . . . underwhelming.
My colleague Patrick Ishmael and I have called for eliminating the state’s corporate income tax and replacing the lost revenue with the elimination of economic development tax credits. This would serve to both a.) make Missouri more economically competitive with other states, and b.) get Missouri out of the business of picking winners and losers. The state would also benefit from other solutions such as reforming occupational licensing.
Missouri’s economic performance has been abysmal. It needs to change course. Repeating the same things over and over again will not somehow miraculously turn the state around.
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 possibility of tolling I-70 in Missouri, the impact of tolls on communities and prices, congestion pricing on roads, and whether public employee’s salaries should be posted online.
School Choice And Individual Liberty
Nobel Prize-winning economist Milton Friedman once remarked: “The true test of any scholar’s work is not what his contemporaries say, but what happens to his work in the next 25 or 50 years. And the thing that I will really be proud of is if some of the work I have done is still cited in the text books long after I am gone.” Though he has not been gone long, Friedman’s work will undoubtedly be included in the annals of academia for many decades. However, Friedman’s legacy is not just in textbooks. His legacy lives on in the hearts of thousands of students who enjoy educational options they would not have if not for his revolutionary ideas.
In 1955, Friedman introduced the concept that school choice via the use of vouchers could improve the quality of education. Yet, a quality education system was not his ultimate goal. Rather, he believed individual freedom was, or should be, the ultimate goal of a society. And by giving families the freedom to choose for themselves the best educational options for their children, Friedman theorized the market would respond with an improvement in the quality of education delivered.
The current body of research supports this theory. Random assignment experiments, which are the most rigorous type of research study, tend to find positive effects for students using vouchers, and none have found negative effects for voucher students. There is even some evidence that local public schools improve, and no evidence they are worse off, when they face voucher competition. The most promising evidence of voucher success, however, may be in terms of graduation rates. Students attending voucher schools tend to graduate at much higher rates than comparable students in nearby public schools. For example, students participating in the Washington, D.C., Opportunity Scholarship Program were 20 percent more likely to graduate from high school if they attended a voucher school. To rephrase a line Friedman often used, “the society that puts freedom before [educational] equality will end up with a great measure of both.”
Friedman believed the idea of a public education for all children did not necessitate that government be the sole provider of that education. He believed families should be free to choose from a variety of schools operated “by private enterprises operated for profit, nonprofit institutions established by private endowment, religious bodies, and some even by governmental units.” It has taken some time, but Friedman’s ideas of individual freedom through school choice are taking root in the American psyche. Indeed, the Wall Street Journal dubbed 2011 “The Year of School Choice.”
Though we have made progress in increasing school choice, Missouri has a long road to haul before families are able to enjoy the level of freedom that Friedman envisioned. We must continue to work until all families are free to choose the best educational options for their children. As Friedman said, “Freedom is not a natural state of mankind. It is a rare and wonderful achievement.”
James V. Shuls is an education policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.
The Institute is participating in Friedman Legacy for Freedom Day on July 31, an international event celebrating the late Milton Friedman.
Blended Learning: A Solution for Public Schools?
Virtual learning isn’t the future…it’s here right now! Blended with traditional education, it can reform school districts, cut costs and help students. Show-Me intern Mary Kate Hopkins has more…
Rising Taxes And Tax Giveaways In Kansas City
In two weeks, Kansas City voters will consider a proposal which would eliminate the city’s land tax and replace it with a sales tax, an issue which Show-Me’s David Stokes and Joe Haslag wrote about last week. Beyond the policy points that Stokes and Haslag raise, this land tax/sales tax swap, as presented to voters, would result in a net tax increase for Kansas Citians. Unfortunately, some supporters of the change have been less than transparent in explaining that aspect of the measure.
Tax hikes are troubling under most circumstances anyway, but they are particularly troubling in the context of development cultures where tax incentives are running amok. As the Kansas City Star‘s Dave Helling astutely notes today, the proposed tax hike would not only apply to both struggling and prosperous Kansas City neighborhoods, but the tax revenue would not be wholly plowed back into improving public services. Rather, millions would go to supporting city Tax Increment Financing (TIF) projects that, in many instances, probably should not have received TIF anyway.
“The first TIF proposal that reaches my desk had darn well better be from the east side,” [former Kansas City Mayor Mark Funkhauser] thundered, promising to focus the subsidy on the city’s poorest neighborhoods.
Of course, the first TIF proposal to reach Funkhouser’s desk wasn’t really from the east side. He signed it anyway. […]
Never mind. His idea was sound. [ . . . ]
Boosters of Question 1 promise to eliminate several city levies in exchange for a half-cent sales tax hike. They don’t say it, but passing Question 1 would also unquestionably increase the city’s overall tax burden, by about $24 million a year, money that would come in part from the city’s poorest residents.
That might be a good deal if all that extra $24 million went for better streets or cleaner parks. Alas, about $4 million would go to — you guessed it — reimbursements for TIF projects, possibly including that new hotel near the Plaza.
For those unfamiliar with TIF, it allows incremental increases in taxes from a development to be dedicated to certain costs of that development. Originally intended to help struggling communities attract investment, TIF has grown to be used as a standard tax incentive regardless of the economic status of a development’s surrounding area.
Stokes and other Show-Me scholars have long suggested that TIF is overdue for a reform. This latest tax proposal serves to reaffirm that proposition. Raising taxes is typically a suspect proposition, but raising taxes and transferring some of that money to city projects in tony areas through tax incentives meant to help struggling communities is especially disappointing. Kansas City already has some of the highest tax rates in the Midwest, and along with the ballot proposition that would raise taxes, officials are considering raising taxes further for a vanity trolley car downtown.
Does this sound like a sustainable trajectory? Given the tax hike and transfer, does this even sound like a just trajectory, a trajectory that treats Kansas Citians and their hard-earned money appropriately?
How to Improve Healthcare Without Obamacare
In this video, Dr. Charles Willey, MD, explains some simple steps that could be taken to improve healthcare in America — no government mandate necessary.
Simple Questions: Where Do You Stand On Tax Credits? And What Would You Do About Them?
As the summer has progressed, substantive and thoughtful policy discussions appear to have finally broken back onto the political stage — a stage too often left vacant when “business as usual” returns to the state capitol and elsewhere. On TV and in print, the conversation about the state’s future has reached a fevered pitch, and as such, I think now is a good time to again revisit the question of tax credit reform in Missouri.
As Christine Harbin, Audrey Spalding, Michael Rathbone, myself, and many others have documented over the years, development tax credits have grown into a multi-billion dollar enterprise in the state, and yet Missouri’s economic fortunes have continued to decline despite this flush spending. This culminated with the state losing a U.S. House seat after the 2010 Census. Missouri is not keeping up with the rest of the country. In very real and disturbing ways, Missouri is being left behind.
The examples of policymakers seemingly failing to recognize the problem are wide-ranging, from the half-billion dollar Aerotropolis proposal that collapsed in 2011 to the revelation that even a country club was able to jump into the development tax credit conga line. The country club was able to get a cool million dollars in tax credits from the state for its trouble. And just this month, the Missouri state auditor issued a “blistering” report on the Quality Jobs Tax Credit program, which has promised that more than 45,000 jobs would be brought to the state through the program since 2005. The actual number of jobs the state says were created through the program? A fraction of the promise: 7,176. That first number is great for politicians at press conferences. That second number — the number that actually counts — is bad news for Missouri workers.
With all of that understood, I wonder: Do Missouri’s policymakers believe development tax credits are a real and serious problem in the state? What would they do to reform them? Or would they, to the state’s detriment, be OK with another round of “business as usual” in Jefferson City?
Warrantless Fears Of Tolling In Warrenton
Yesterday, I testified at the Missouri Blue Ribbon Citizens’ Commission on Transportation meeting in Hannibal. It was a good public forum: well-attended, well-run by its co-chairs, former Sen. Bill McKenna and former House Speaker Rod Jetton, and it was interesting. There was less rent-seeking in the public comments than I expected (Thank you for being here. Give us X,Y, and Z!).
The city of Warrenton, in Warren County, was well-represented. Several people in various city capacities spoke. Warrenton is located near where the proposed I-70 toll would begin, according to a Missouri Department of Transportation (MoDOT) plan presented in the last session of the Missouri Legislature. Warrenton officials, to say the least, are opposed to this plan.
One city official said enacting a toll at this location would make Warrenton “a ghost town.” Others said it would devastate city businesses and cause people to move out of the city. Others said it would cause travelers, truckers, etc., to avoid the area entirely and cost Missouri tax revenue. One said a toll would put their businesses at a “competitive disadvantage.” They all have a right to their opinion; but they are all totally, completely, abjectly wrong.
You know what would put Warrenton businesses at a competitive advantage, not disadvantage? Having a new, expanded, six-lane highway serving the city and county. It is not like Missouri is inventing toll roads here. There are thriving cities along toll roads throughout the United States. They are not “ghost towns.” The entire idea of that is preposterous. Did the Lake of the Ozarks Community Bridge harm the community because it has a toll? Did Party Cove disappear when they enacted a small toll that paid for building a brand new bridge and saved drivers a half hour of driving to get across the lake?
Tolling works across the United States to build infrastructure we need while the people who benefit from it pay for it. It is human nature to fear risk more and judge benefits less than deserved. That is what I saw yesterday from civic leaders in Warrenton.
Show-Me Institute research on private financing and tolling, public-private partnerships, highway investment, and I-70 are available here.
