Banning Beer? In Saint Louis?

Posted on by Patrick Ishmael

This weekend, Saint Louis will host its annual Heritage Festival, a giant celebration of all things Saint Louis beer. Craft beer enthusiasts will have the opportunity to sample up-and-coming brews and some old favorites. However, due to intervention from some city officials, it appears some beers will have to be enjoyed another day.

Homebrewers primed themselves Tuesday for a potential legal battle while seeking to ensure that the hundreds of gallons they brewed for this weekend’s St. Louis Brewers Heritage Festival won’t go to waste.

Dozens of amateur brewers were stunned by a decision Monday from the city’s Excise Division that will keep homebrewed beer out of this year’s festival, which runs Friday through Sunday at the Ballpark Village site downtown. Homebrewers do not possess licenses to sell beer, so serving their beers at a festival that people pay to attend would violate a city statute, Excise Commissioner Robert Kraiberg determined.

According to the St. Louis Post-Dispatch’s report, homebrewers had been sharing their brews at the Festival since 2008, and yet this year was the first time public officials ruled against the homebrewers. Homebrews have been served without apparent problems for years, and yet now is the time for the government to step in?

The law should not be prohibiting these sorts of community exhibitions by homebrewers, but if that is how the law is being interpreted and used, it needs to be amended post haste. The timing of the ruling —days before the event and after the beer had long been brewed for it — is no doubt frustrating to the brewers, but the (drinking age) community is hurt because they have fewer choices at an event where choice is paramount.

Baffling, really. Maybe the city ran out of food trucks to regulate?

Meet Me On The Lido Deck After Class

Posted on by Mary Hopkins

There are many concerns about rising costs of higher education in Missouri. These concerns are warranted; a USA Today article that was published earlier this year found that the average cost of attending college in-state has grown 35 percent in the past five years. According to a study by the College Board, the average tuition and fees at public colleges rose 8.3 percent last year alone. Everyone knows that higher education continues getting more expensive, but the question that really needs to be addressed is: What are students these days paying for?

Take, for example, the Tiger Grotto at Mizzou. It was part of a $50 million recreation center that opened in 2005, paid for by an extra $75-per-semester fee for every student taking more than six credit hours, regardless of usage. The Grotto features palm trees, a heated spa, a lazy river, and an oversized big screen TV, all of which caught the attention of Sports Illustrated in 2005 and won Mizzou the title of Best Rec Center in the Country. For additional charges, students can also sip smoothies poolside at the outdoor Truman Pond or, since 2006, enjoy services like facials and manicures (even teeth whitening and tanning). According to the MizzouRec website, “the Grotto will transform your dullest day into a vacation,” and they proudly promote its “resort quality facilities.” It sounds like Missouri students are paying for a nine-month stay at a Sandals Resort instead of for a top-flight education.

Projects like Tiger Grotto show just how extravagant modern colleges and universities have become. Addressing the rising cost of higher education should perhaps begin with a reassessment of what purpose a university should serve, and whether that purpose is best achieved with flat screen TVs and spa days. Perhaps more funding for the classrooms and less funding for facilities that house smoothie-fueled tanning sessions would solve a few problems that face Missouri’s higher education system. Cutting projects like Tiger Grotto, which drive up student fees, would help keep costs manageable for students as state funding decreases. This whole process would help move higher education in Missouri closer to a model where students pay the true cost of attending college.

Nullification Is Unconstitutional

Posted on by Patrick Ishmael

A few weeks ago, we had a lengthy conversation in Show-Me Daily’s comments about whether it would be constitutional for Missouri to nullify the Affordable Care Act (ObamaCare). Then last week, the Heartlander published a story on the “nullification” issue wherein I was quoted reiterating my concerns with such proposals. (For context, my Heartlander remarks were drawn from an interview I gave the publication in early May, before Missouri’s legislative session ended.)

Generally, I would let my prior remarks speak for themselves, but given the continuing interest in the topic, I think it is worthwhile to revisit the issue at least one more time.

Is there a constitutional right for states to nullify federal laws? The answer is “No.” As the Heritage Foundation notes, the nullification question was decided far more conclusively than some have suggested, and was decided in substance by the founding generation and its immediate successors. The right did not exist then, and it does not exist now.

Although James Madison’s work is frequently cited to support nullification arguments, the fact is he did not advocate for nullification in 1798. To the contrary, Madison — often recognized as the “father of the Constitution” — vehemently asserted that no nullification right existed for the states, “with a surprise hereafter, that any other [interpretation] should ever have been contended for.” Even President Andrew Jackson, a staunch and boisterous defender of states’ rights, rejected nullification as a right reserved for the states.

There is no “secret” or “forgotten” history here. Whether things “should have” turned out this way and whether they did are very different questions, and they should not be confused as being the same. While I love a good philosophical discussion about how the best or ideal government would be structured, I would be in error if I expressed my philosophy as a history in spite of the history. There is no provision in the Constitution for states to “nullify” a federal law, and I hope the liberty-minded will decline to try and breathe life into such an interpretation.

Kansas City Citizens’ Commission: One Step Forward, Two Steps Back?

Posted on by David Stokes

If you were trying to break a gambling problem, would you want your intervention team
to consist of a bunch of guys you know from the blackjack tables? Probably not. In some
situations, taking advice from people outside of your circle is a good idea. You should not count
on the people who helped put you into a problem situation to help get you out of it.

A Kansas City citizens’ commission that the mayor appointed recently released a draft
report on changes to the city’s municipal revenue structure. Not surprisingly, this commission
that is stacked with former city and county employees avoids anything substantive or radical in
its report. When you load up a finance commission with lawyers — and do not put one
economist on it — this is what you are going to get. However, not all of the Citizens’
Commission on Municipal Revenue’s (CCMR) recommendations are bad. Indeed, there are
several good ones in the report.

Kansas City’s business and occupational license system is very complicated. The system
is unfair to businesses and city government alike. Collection costs are higher for this tax than
others because it is so complicated. The CCMR has decided to continue its work with a singular
focus on simplifying and improving the license system. It has identified the problem, and seems
serious about a solution. Kansas City would greatly benefit from these changes that would treat
businesses equally and require less work to administer.

Dedicated taxes with sunset provisions are good things. They let taxpayers know exactly
what they are voting on, and give taxpayers a chance to judge results. However, it is possible to
go too far with dedicated taxes, as Kansas City has done. For example, Kansas City previously,
and unnecessarily, chose to dedicate its entire 1 percent baseline sales tax to capital
improvements. The committee is right to suggest that Kansas City loosen the requirements for
that tax so that it can be used for more general purposes.

One of the major disappointments in the report is the refusal to take on Tax Increment
Financing (TIF). It is difficult to see how a commission tasked with reviewing municipal
revenues could overlook TIF beyond a meekly-worded warning that Kansas City carefully
evaluate future TIF projects. TIF has been abused in Kansas City and throughout Missouri. A
true analysis of municipal revenues would encourage its elimination, not gloss over it.

One of the most audacious suggestions was to tax income from non-residents earned
outside the city. Essentially, the city wants to tax the income of people who do not live in Kansas
City for work they did not do in Kansas City. To be fair, this was not included among the final
recommendations. The fact that the commission even considered ways to keep tax money it does
not have a moral or legal right to is disturbing.

One tax idea that has widespread agreement among economists is the benefit of land
taxation to fund local governments. Land taxation is fair, consistent, has very limited economic
distortion, encourages investment, and is easy to collect. Kansas City is the only local
government authorized to collect a land tax in Missouri. So, what does the CCMR want to do
with the single-best tax Kansas City enacts? Get rid of it, of course, and replace it with higher
sales taxes.

Kansas City has a tax that other cities in Missouri should envy, and economists would
almost universally encourage. And this is what the CCMR wants to eliminate. When you load up
a commission on taxation with lawyers and bureaucrats, this is what you are going to get.

The mayor wishes to enact the recommended changes by putting them on the ballot later
this year. He wants voters to approve higher sales and property taxes while removing certain
taxes. I hope the city council thinks twice before replacing effective taxes like the land tax with
higher and more harmful substitutes.

David Stokes is a policy analyst for the Show-Me Institute, which promotes market solutions for
Missouri public policy.

The Media’s Take on the Missouri Legislature 2012

Posted on by Mike Ferguson

Mike Ferguson — formerly of the Eagle in Columbia, currently director of
Missouri News Horizon — spoke on the topic of the 2012 Missouri
Legislative Session at the most recent Show-Me Forum in Columbia, MO.
The speaker gave a media perspective on what did and did not happen, and
why. One focus of the talk was the republicans, who control the
legislature, not wishing to rock the boat during an election year, and
thus being unwilling to discuss or move forward on important issues to
the state, such as roads, education, and tax credits.

Ameren: A Boost For Nuclear Energy?

Posted on by Daniel Ritter

For years, Ameren Missouri officials have worked to reform Missouri’s construction-work-in-progress (CWIP) law that prohibits utilities from billing customers for expenses during a construction phase.  There is room for debate on whether this anti-CWIP legislation has been good for consumers or harmful to economic growth, but there is no denying it has impeded the expansion of energy resources in Missouri. As the U.S. Environmental Protection Agency (EPA) imposes more greenhouse emission regulations on coal-fired power plants, Missouri officials must seek alternative sources of energy. Unfortunately, Missouri’s CWIP law prevents nuclear power expansion in the state; such an expansion would provide the state with more power, cleaner energy, and potentially lower rates over the long run.

However, Ameren Missouri officials may have found a solution to the dilemma: the U.S. Department of Energy’s competitive federal cost-share investment funds. Ameren Missouri and Westinghouse Electric Company recently announced that they are seeking competitive federal cost-share investment funds from the Department of Energy, which would be used to manufacture Small Modular Nuclear Reactors. If Ameren receives the funds, Ameren would then expand the nuclear power plant in Callaway County without the need for reforms to Missouri’s CWIP law. This would help Missouri generate more alternative energy without unnecessary mandates. Making this deal even sweeter is the potential for the partnership between Ameren Missouri and Westinghouse Electric Company to create thousands of jobs for the engineering, manufacturing, and operation of the Small Modular Nuclear Reactors. Finally, because portions of the electricity produced in Missouri will be shared around the nation via the electric grid, some level of federal investment is legitimate here. It makes sense that Missouri customers will not pay every penny for something that benefits more than just Missouri.

This is an exciting project that has potentially great benefits for Missourians.

A Smaller And Smaller Piece Of The (Tax) Pie

Posted on by Michael Rathbone

The state coffers are filling up faster than anticipated. At an education forum on June 7, Linda Luebbering, the state budget director, said that state officials expect revenue growth to continue, but revenue will not reach the point where it was before the recession. At that time, net general revenues topped $8 billion.

“We really need above-typical growth to get where we used to be,” Luebbering said.

Unfortunately, Missouri’s growth is far below what is typical. Last week, my colleague, Show-Me Institute Policy Analyst Patrick Ishmael, blogged about how Missouri is lagging behind other states in terms of economic growth. According to the U.S. Commerce Department, Missouri ranked 43rd in economic growth last year. In fact, Missouri grew by just .04 percent. Forget about getting above-typical growth; that is barely any growth.

Missouri can do better. For instance, Missouri can eliminate its corporate income tax to make the state more attractive for business. As taxes go, taxes on corporate income are among the most economically harmful. The corporate income tax only makes up 4 percent of general revenues, yet its removal would have a positive impact on the economy. Eliminating economic development tax credits, which should be done anyway, can offset all of that lost tax money for the state. This change would, in the short term,  be revenue-neutral at worst, but its long-term benefits for our state would be tremendous.

If Missouri wants to get going again, it cannot keep doing what it has been doing. Eliminating the corporate income tax would be a positive step toward increased economic growth and as a side effect, revenues will grow as well.

We Will Take It!

Posted on by James V. Shuls

Over the years, I have competed in a number of team sports, particularly soccer. There were times when my team barely squeaked out a win; though it may not have been pretty, the response often was “We’ll take it!” For school choice supporters, Missouri Senate Bill 576 may be one of those moments. If the governor signs the bill into law, charter schools could open in more areas of the state; in turn, charter schools and their authorizers would face increased accountability. Though the bill falls short of ensuring high-quality educational options for all Missouri students, it is a small victory for school choice.

Currently, charter schools operate in Saint Louis and Kansas City. SB 576 would allow charters to open in unaccredited districts and districts that have been provisionally accredited for three years. School districts would also have the power to authorize charter schools, however, in this case, the charter school would still be under the jurisdiction of the local school district. Currently, Riverview Gardens is the only unaccredited school district in which charter schools do not exist. There are nine provisionally accredited districts. Combined, these 10 districts have fewer than 17,000 students. This means less than 2 percent of Missouri school children currently attending a traditional public school might benefit in the coming year from expanded school choice that is outside of district control. Of course, this number could grow if more districts fall into the provisionally accredited category in coming years.

Assuming charter schools open in each of these districts, charter schools would be available for less than 7 percent of students in traditional public schools statewide.

This expansion comes at a cost to charter autonomy. For the bill to pass, a compromise was worked out: Expansion of charter schools for increased accountability of charters and their authorizers. For example, charter authorizers must develop policies for review of charter schools, including a method of rigorous evaluation. Additionally, they must lay out how they will intervene if a charter school fails to meet the standards the authorizer has set. While it is important for failing schools to close, and these regulations seem reasonable, they will lead to increased paperwork. Indeed, some authorizers may need to add to their management staff in order to comply. The increased regulatory burden on authorizers may limit the expansion of new charter schools and may inhibit other colleges and universities from joining the ranks of authorizers.

Though we applaud this expansion of charter schools, we believe students throughout Missouri would benefit from a greater proliferation of school choice. According to data from the Missouri Department of Elementary and Secondary Education, 195 of the 530-plus districts had fewer than 50 percent of their students score proficient or advanced on the state’s mathematics exam for grades three through eight in 2011. In communication arts, the number was 246. In these districts, as well as higher-performing districts, there are many parents who are unsatisfied.

SB 576 expands school choice to a limited number of students, while possibly decreasing the likelihood of additional charters being approved. Though this is a narrow win, it is a win and many students will benefit from this piece of legislation. We will take it.

James V. Shuls is an education policy consultant for the Show-Me Institute, which promotes market solutions for Missouri public policy, and a Doctoral Academy Fellow at the University of Arkansas.

Missouri Employees To Receive Same Raise, Regardless Of Performance

Posted on by Audrey Spalding

The St. Louis Post-Dispatch reports that state employees earning less than $70,000 per year will receive a 2 percent raise, starting in July. About 54,500 state employees will get the increase, and the total impact on the state budget is estimated at $45.5 million.

The narrative being used to sell this raise is that most Missouri employees have not received a raise for years. After reviewing state employee data posted on the Missouri Accountability Portal, I agree. It is true that some employees really have had exactly the same salary for years.

But awarding tens of thousands of employees the same pay increase, without considering performance or whether those employees have been some of the lucky few to receive raises, is irresponsible. Though some have not had a raise, many employees have received raises in recent years. Many of these wage increases (some associated with promotions) are larger than the touted 2 percent raise.

A better move would have been for Missouri legislators to award each state department a lump sum to use on employee pay as needed. If the department is having trouble motivating or retaining its employees, outstanding employees could be given more substantial raises. If the department desperately needs another employee, the money could be used to hire someone.

Furthermore, it can be quite difficult to fire public employees. It is likely that some of the employees among the 54,500 should not be awarded a raise, even a small one of 2 percent.

Employees should be rewarded for performance, instead of being awarded a small pay boost because legislators feel sympathetic.

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