A Win for Education in Missouri

Posted on by Susan Pendergrass

Senate Bill (SB) 727, which has been moving through the legislature in fits and starts this year, was finally passed by the House and will be going to the governor’s desk. The bill ended up being quite large. Here is some of what’s in it.

Charter schools could be coming to Boone County. If a group of teachers, parents, or citizens wants to open a charter school and has a solid application, it can now apply to a university or the state charter school board for sponsorship. The group does not need the approval of a local school board.

Eligibility for the MOScholars scholarship program for low-income students and students with disabilities has been greatly expanded. There are no longer geographic restrictions for who is eligible. The income limits for eligibility have been raised. The total amount of tax credits that can be dedicated to the program was increased from $50 million to $75 million. And the dollar amount of the scholarship was raised to bring the number in line with the Foundation Formula amounts for similar types of students.

Districts in the state’s largest communities must now put a potential switch to a four-day school week to a vote. There is also a financial incentive that will be remitted to any district that remains open five days per week.

There is also an important change to the state’s foundation formula. Previously, students were counted purely based on attendance. Now, the formula will be 50 percent based on attendance and 50 percent based on enrollment.

The minimum teacher salary was raised from $25,000 to $40,000 for all teachers and from $33,000 to $46,000 for teachers with master’s degrees.

Districts will be able to attempt to fill teaching positions in “hard-to-staff” schools by placing teachers higher on the salary schedule than they normally would be.

There are many more provisions to SB 727. It represents a defensible trade-off between increasing options for Missouri students who need them and investing in the system. I look forward to the governor signing it.

Documents Give Conflicting Numbers on the Cost of a New Stadium

Posted on by Patrick Tuohey

The other day I asked in a post about the missing Populous report about Kauffman Stadium. I still don’t have the full Populous study, but I do have a slide deck presentation based on the study that Populous was presenting in 2022. I am confident that this is the deck that KCUR references in its November 2023 story.

The Populous slide deck (available here) is dedicated to the problems facing Kauffman Stadium, including the infamous Alkali-Silica Reaction (ASR) or “concrete cancer.” The deck indicates that when this appears, it must be replaced. The report also highlights problems facing several parts of the stadium and concludes “the age of the building systems and outdated technology will force replacement of major mechanical, plumbing and electrical systems as their service life expires.”

The final slide lists the renovation cost estimate as $1.072 billion. That is more than the new ballpark cost estimate of $1.005 billion. These estimates suggest that a financially prudent decision would be to build a new park.

But wait . . .

On page 9 of the term sheet the Royals presented to Clay County on September 28, 2023, the cost of a new ballpark in North Kansas City is listed at $1.277 billion. That’s 27 percent higher than the Populous estimate of $1.005 billion. That increase may be due to inflation, which would also affect the cost of repairing the K. We don’t know the projected costs of the plan to build a stadium in the Crossroads district that voters rejected on April 2 because no one will tell us. We also don’t know the cost estimates of building in the East Village.

Unfortunately, there is so much we don’t know about these proposals. The Star reports that the city manager is now in talks with both the Chiefs and the Royals and that a public vote may not be necessary. It would be a shame if the lesson that new stadium proponents learn from the April 2 vote is that the public should be even less informed and involved in how the city spends tax dollars.

Collecting the Earnings Tax on Remote Work is Illegal. ‘Nuff Said

Posted on by David Stokes

The St. Louis Post-Dispatch has had two recent columns criticizing the Missouri House for passing legislation that would further clarify that the City of St. Louis can’t collect the earnings tax from remote workers. I say “further clarify” because it shouldn’t be necessary at all. What the city did when it started charging the earnings tax for remote work at the start of the pandemic was contrary to the law. Anyone who can read the basic words of the statute can see that. Here is the statute as it is now and has been written for some time (emphasis added):

Salaries, wages, commissions and other compensation earned by nonresidents of the city for  work done or services performed or rendered in the city.

It says, “in the city.” Not “near the city.” Not “connected to the city by a phone line.” Not “in the city unless the city’s budget really needs the money in which case outside the city is fine.” In the city. For the record, a judge also ruled that what the city is doing violates the law.

Both columns admit to this to various degrees. Tony Messenger describes the city’s legal argument in the court case as “. . . probably a specious argument.” Members of the editorial board admit in their piece that the city’s legal argument “isn’t strong.”

But both pieces conclude that the state legislature should not be doing what it is now doing—further clarifying the law—because the city needs the money. The city’s budget problems, however, do not justify the city breaking the law in its tax collections.

That leads me to another point. The evidence from Kansas City is clear that if you refund earnings taxes for remote work, the sky won’t fall. Kansas City officials have stated this in hearings that I have attended. The amount of money refunded was not as large as they had feared it would be. In 2019 (all of these are fiscal years), Kansas City collected $272 million in earnings taxes. That fell to $245 million during the pandemic. It quickly rose to $289 million in 2021. And this happened while Kansas City was still refunding earnings taxes for remote work when requested.

There is no evidence the legislation passed by the House would “have a devastating effect on the city” as Tony Messenger says in his column. Even if the bill did have that effect, that wouldn’t justify city government ignoring the law.

We can all agree that getting rid of the earnings tax is harder than ever in St. Louis, with skyscrapers that sold for $200 million just over 20 years ago now selling for $3 million. It’s hard to depend on property taxes—like most cities in America do—in this scenario.

Decades and decades of bad policies combined with new, fiscally irresponsible “progressive” changes are making St. Louis look more and more like the new Detroit. It’s probably time to revisit the optimistic work from Institute analysts a decade ago.

Harsh Budgeting Truths

Posted on by Elias Tsapelas

Just how broken is Missouri’s budget? Last week, Missouri’s House of Representatives finished work on its nearly $51 billion version of the state’s budget—and some lawmakers claimed this budget was a sign of fiscal restraint.

To be fair, if the House budget becomes law, it will be Missouri’s first budget in more than a decade that is smaller than the previous year’s budget. Not only is the House budget smaller than last year’s, it’s also approximately $2 billion smaller than what Governor Parson recommended for next year, which represents a small step in the right direction.

It should be noted that the budget process will now move to the Missouri Senate—the chamber more accepting of higher spending in recent years. It’s therefore still too early to tell if the state’s streak of record-breaking budgets is coming to an end.

The recent budget negotiations in Jefferson City also served as a reminder of how much things have changed for Missouri financially over the past several years.

  • Missouri’s total budget has nearly doubled since Fiscal Year (FY) 2019, growing from a little more than $27 billion to $53 billion this year (FY 2024).
  • General Revenues (mostly state income and sales tax collections) have increased by significantly less, going from approximately $10 billion to more than $13 billion over the same period.
  • The biggest driver of budget growth has been the temporary influx of federal funds associated with the federal COVID-19 pandemic relief and infrastructure packages.
  • The federal share of Missouri’s budget has grown from around 30% to closer to 50%.
  • While Missouri (much like the rest of the country) has dealt with record-breaking inflation in recent years, state spending growth has outstripped the increase in prices, and has even grown faster than the state’s population and economy.
  • Going into next year, the state will lose access to the billions of temporary federal dollars, all while state general revenues are expected to remain relatively flat or decline.

Keep in mind that the extraordinary state spending growth in recent years occurred even though Missouri’s constitution includes a balanced budget requirement—the requirement does not apply to federal funds.

There are myriad reasons to think the road ahead will be a tough one, and cutting spending will be a mandatory part of the equation. That’s why I’m happy lawmakers in the House took the measures they did to start turning the tide on state spending, even though I wish they’d gone further. I’m also looking forward to the Senate debating its spending plan in the coming weeks, with the hopes that members of the Senate also share the House’s view that spending should be reined in.

But with so many important spending decisions left to be made, and such dark clouds ahead in Missouri’s financial future, state taxpayers should join me in waiting until the budget makes it across the finish line before considering whether to celebrate any savings.

Watch: The Rise of the Four-day School Week in Missouri

Posted on by Avery Frank

The four-day school week (4DSW) has become increasingly popular in Missouri in recent years. As of fall 2023, 33 percent of all Missouri traditional public school districts have adopted this schedule. But how much do we know about its impact on student achievement, district finances, teacher recruitment and retention, or parental satisfaction? The short answer is: not as much as you might expect.

Learn more about what the available literature says about the impact of the switch to the 4DSW and what Missouri parents think about the four-day schedule.

Where Is That Populous Report on Kauffman Stadium?

Posted on by Patrick Tuohey

On November 9, 2023, Kansas City public radio (KCUR) reported:

According to a report released by Populous in 2022, a stadium design firm that’s done work for nearly all MLB teams, The K suffers from severe structural issues that would cost more to fix than a new stadium would be to build.

The link included in that text, however, is no longer available. It now defaults to a splashy artists’ rendering of a downtown ballpark.

That report became an issue again when the Royals announced they wanted to leave Kauffman Stadium. The findings from the Populous report run counter to another publicly available engineering report that found Kauffman to be in satisfactory condition, with no mention of any significant concrete issues.  According to a January 31 story in The Kansas City Star:

When The Star asked a team spokesman about the discrepancy, the Royals issued a statement that said those annual assessment reports and the one Populous produced for the team are not comparable.

“The shortest and simplest answer is that these are two very different reports aimed at very different objectives. One is an annual repair plan and the other is about long-term viability,” the Royals said. “The study referenced in the public meeting came from a leading structural engineer of sports facilities. This firm knows our building well after working on the 2008 renovation. We asked them to evaluate long-term structural issues and the feasibility of extending the existing structure for 40 more years.”

Jackson County Executive Frank White asked the Jackson County Sports Complex Authority, which oversees the Chiefs and Royals stadia, to conduct an investigation. It declined.

At the March 19 library event, Mayor James held up a stack of paper when referring to a study of Kauffman Stadium. I asked for and received what he held up. Ms. Tourville, a spokeswoman for the Royals, previously referred to a report from 2007 “that has shown significant deterioration and concrete cancer.” Indeed, what Mayor James handed me are two reports dated 2007. (The scanned document is available here.)

But what about that Populous report mentioned in the media?

When Mayor James handed me the report, there were two brightly colored sticky notes on the report. On each was written “Populous studies.” (Photographs available here and here.) But the documents themselves were not the Populous study.

The Royals seemed to drop the claims of faulty concrete pretty quickly. On a March 27 discussion on Sports Radio 810, Royals President Brooks Sherman said, “We need a new stadium to be competitive with our peers” (found at 38:26 in the audio here). Later on that same program, Executive Director of the Jackson County Sports Complex Authority Jim Rowland said, of the teams, “They’ve kept the buildings in first class condition” (found at 1:13:35).

Hopefully the Royals will release whatever study Populous conducted on Kauffman in the name of transparency. If it found “severe structural issues” with Kauffman Stadium as claimed, it would be a significant development. Otherwise, this episode seems to be one of many examples of a poorly conceived and poorly run effort to get Jackson County voters to part with their money.

April 30: Insider’s Hour with Show-Me Institute in Columbia, MO

Posted on by Show-Me Institute Staff

What’s happening as the session wraps up in Jefferson City? Missouri’s $50 billion budget, healthcare price transparency, and a proposed Taxpayer Bill of Rights. Get the latest information at the Insider’s Hour with Show-Me Institute and 93.9 The Eagle!

Join us for an open discussion with Chief Economist Aaron Hedlund and Director of State Budget and Fiscal Policy Elias Tsapelas from the Show-Me Institute.

Register Here

Where:

Country Club of Missouri

1300 Woodrail Avenue

Columbia, MO 65203

When:

Tuesday, April 30

11:30 a.m. doors open

12-1:00 Panel Discussion and Q&A

Cost: $20.00 (includes lunch and beverages)

Details of the Negotiations Between the Royals and Clay County

Posted on by Patrick Tuohey

Given that Jackson County voters rejected the proposed 40-year 3/8 cent sales tax that would have funded a downtown baseball stadium, the team may decide to re-enter negotiations with Clay County. According to  documents I’ve highlighted below, those negotiations were put “on hold” by the Royals on January 16, 2024.

Linked here are documents regarding those negotiations received through an open records request:

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