The Ladue Schools Proposed Tax Increase

Posted on by David Stokes

A proposal for a substantial tax increase is on the ballot in the Ladue School District next week. Substantial is not a loaded term – 49 cents added to a current tax of $2.75 is a large percentage and a substantial increase, no matter what this drivel says. This works out to $279 per year for a $300,000 home, and many of the homes in the district are worth much more than that.

The tax increase is needed, according to supporters, in order to (among other things) pay for the operations of a new building the district purchased in 2010. The school district says their projections on revenue were off, but it is not their fault:

“It was so unprecedented. At that point and time, it was hard to imagine that kind of downturn,” said Susan Dielmann, district spokeswoman.

That statement is referring to a choice made in late 2009/early 2010, and it is just crazy. By that time, it was apparent to many people that we were in for a long and difficult economic recovery, and the idea “everybody just assumed the economy would be terrific by 2011” is preposterous. From USA Today in late 2008 (emphasis added):

Others are gloomier. They expect continued job losses and depressed consumer and business spending throughout the year because of tight credit conditions. The resulting damage to the consumer and business psyche will change the very nature of the economy for years to come.

Many families within the Ladue School District send their children to private schools. So, it should hardly surprise people that many taxpayers within the district who do not, will not, or never did use the public schools are opposed to a dramatic tax increase to pay for something the district probably should not have bought in the first place.

On the other hand, someone once did a study demonstrating that high MAP scores have a positive effect on property values within the Ladue School District, so there is no denying that if the tax increase is necessary to maintain the quality of the schools that the taxpayers will recover a portion of those taxes via property values and sale value. However, it is hardly obvious that the new tax dollars are required to maintain the high district rankings and educational quality. Supporters of the proposal obviously think it is, and opponents think it is not. I do not live in the Ladue School District so I cannot say, but the relationship between per-pupil expenditures and school achievement is far from exact. (Clayton and Ladue certainly spend a very high amount per student and are terrific schools, but there are plenty of counter-examples.) 

Even if the tax increase maintains or improves the school quality, some of that property value increase will be offset by lower values due to the higher taxes. That study also demonstrated the positive effects that low taxes can have on property values. I do not pretend to know how the exact relationship (MAP scores vs. tax rates) would work out going forward. The gains from education quality (if the higher taxes lead to that, which is far from certain) may outweigh the loss from higher taxes. But I do predict that, if this passes, more residents in the Ladue School District will appeal their property tax assessments to try to capture some of the real estate decline and offset the higher tax rate. That will limit the effectiveness of the tax increase.

Election day next week is going to be very interesting in the Ladue School District. I fail to see how a tax increase this substantial is going to benefit the people of the district. The 49 cents per $100 of assessed valuation comes out to an average property tax increase of $766 within the city of Ladue itself. (Hat tip to here for that number, though the rest of the piece is awful.) This is a lot of money to correct a mistake.

Double Trouble: Kansas City Considers Extending Trolley Line To Plaza

Posted on by Patrick Ishmael

It seems like only yesterday that I was calling Kansas City’s trolley plans a slow motion train wreck, yet the city appears to have already outdone itself in recent hours; not a foot of track has been laid downtown, and plans are already underway to more than double the size of the project and extend the proposed streetcar line south another 3 miles to the Country Club Plaza.

What could go wrong?

Councilman Russ Johnson has filed a resolution that would direct City Manager Troy Schulte to apply for a Federal Transit Administration grant to study extending the proposed streetcar line to the Country Club Plaza and University of Missouri-Kansas City area.

The current proposal has the line running a 2.2-mile route from River Market to Crown Center. The second leg would add a little more than three miles.

City officials apparently feel they need to go straight to ludicrous speed with this crazy train proposal, but basically all of the same objections apply to the new plan as the old. Kansas City’s streetcar plan attempts to satisfy a market demand for transit that does not exist along the proposed route and will cost at least — and now, potentially far more than — $100 million to get off the ground. In addition, despite city promises, the plan will make the city less competitive, not more competitive, with a spike in local taxes.

Is this really what Kansas City needs to be investing in right now? The Kansas City Star‘s Yael Abouhalkah recently noted that Kansas City has the second-worst debt service burden among the largest cities in the region and one of the highest tax burdens. Why would the city aggravate concerns that are already making it less competitive, and why on Earth would they double down on such a plan?

Donnybrook: Audrey Spalding Reappears on KETC

Posted on by Audrey Spalding

Show-Me Institute Policy Analyst Audrey Spalding was once again a guest on Saint Louis local roundtable discussion show Donnybrook on March 22, 2012. Among the topics covered this time were: The unruly St. Charles County Republican caucus, the NFL "bounty scandal" and Rams' new defensive coordinator Gregg Williams role in it, Occupy St. Louis participants' recent defacing of the Compton Hill Reservoir, comment policy change on the Post-Dispatch website, developments in the Missouri republican party and the tea party's role, and whether employers should be allowed to ask for prospective employees' facebook passwords.

Click here to watch the video of the event.

A President Who Reduced the Budget? Calvin Coolidge

Posted on by Amity Shlaes

The Roaring ’20s didn’t just happen. At the Show-Me Institute’s Speaker Series on Feb. 28, author Amity Shlaes said the President known as “Silent Cal” deserves a lot of the credit for the booming economy. Shlaes, who has written the book Coolidge (due for release June 26), says Calvin Coolidge did what some might consider impossible today. He cut taxes and the federal budget.

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Watch the full video here.

Lower Taxes to Improve the Economy –Calvin Coolidge

Posted on by Amity Shlaes

At the Show-Me Institute’s Speaker Series on Feb. 28, author Amity Shlaes talked about one of America’s least remembered Presidents…Calvin Coolidge. Her book, Coolidge, will hit bookstores June 26, and Shlaes feels today’s leaders could learn something from “Silent Cal.” Shlaes says Coolidge’s tight budgets and tax cuts brought America out of recession and helped trigger the economic boom known as the Roaring ’20s.

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Watch the full video here.

Previewing Day Three Of Health Care Reform Oral Arguments

Posted on by Patrick Ishmael

We have reached the last day of oral arguments for the Patient Protection and Affordable Care Act (PPACA), a.k.a., Obamacare. Two issues remain before the U.S. Supreme Court.

First, is PPACA severable — that is, if one part of the law is unconstitutional, may the rest of the law remain, or must the entire law be thrown out? Readers can find extended coverage on the severability issue here.

Second, is PPACA’s Medicaid expansion constitutionally permissible? Congress’ broadening of Medicaid’s eligibility rules affects not only the federal budget but the budgets of the states, which, along with the federal government, fund state-managed Medicaid programs. By expanding the pool of who can receive Medicaid, Congress is raising the states’ costs; the states’ contributions to the program would have to increase to pay for the greater number of beneficiaries. That is bad news for already tight state budgets. Medicaid is a “voluntary” program technically, but practically, states have come to rely heavily on the federal dollars associated with the program. Foregoing PPACA’s Medicaid expansion provisions also probably means foregoing those federal dollars.

Therein lies the issue: Do PPACA’s revisions to Medicaid, which expand the program’s eligibility requirements, constitute permissible federal pressure on the states stemming from Congress’ spending power, or does it go beyond “pressure,” constituting “compulsion” in violation of the 10th Amendment? For those following the arguments at home, listen for whether and how the justices use the word “compulsion” during the hearing. If the Court believes the changes to the law are “compulsion,” it may be inclined to say the Medicaid expansion goes too far, violating the 10th Amendment.

The Court is expected to rule on this week’s oral arguments in June or July.

The Battle Lines Have Been Drawn

Posted on by Michael Rathbone

In January, Missouri Gov. Jay Nixon (D) launched his opening salvo in what was sure to be a contentious session between the governor and the General Assembly regarding the fiscal year 2013 budget. Last week, the Missouri House passed its version of the fiscal year 2013 budget. Both budgets reflect differing priorities and seemingly difficult choices.

If both the governor’s and legislature’s actions indicate anything, there is seemingly nothing else to cut in the budget and thus the state is faced with the Scylla of higher education cuts and the corresponding tuition increases they entail, or the Charybdis of cutting health programs, specifically a program for the blind who do not qualify for Medicaid. However, despite proposed cuts in these programs, there are still egregious examples of programs that clearly have no business being funded but still receive taxpayer dollars.

I have previously blogged about programs such as the Missouri Wine & Grape Board and Missouri ethanol subsidies. According to the House Budget, the Missouri Wine & Grape board receives an appropriation of $1,826,275 while the state will appropriate $9,850,000 to various ethanol and biodiesel programs. Before fighting about whether to cut higher education or programs for the blind, shouldn’t state officials eliminate funding for programs like the two mentioned above?

Previewing Day Two Of Health Care Reform Oral Arguments

Posted on by Patrick Ishmael

Tomorrow, the United States Supreme Court continues hearing arguments regarding the Patient Protection and Affordable Care Act (PPACA), a.k.a., Obamacare. This time, the Court will consider the arguments related to the “main event” of the hearings: the constitutionality of the law’s individual mandate. The individual mandate requires every American, with a few exceptions, to purchase a government-approved health insurance plan, or be forced to pay a fine.

Modern jurisprudence has increasingly allowed the federal government to regulate commerce that is not of an obviously interstate nature. The issue here is that PPACA goes further and regulates the non-purchase of a good or service. Rather than simply regulating the manner in which the health insurance market will operate, PPACA requires that everyone in the country buy something, or be fined. Under this paradigm, market participation would no longer be required for regulation under the Commerce Clause; instead, and in a very real way, the feds would subject you to a purchase requirement merely for being a living, breathing American.

That is a problem. Having a health insurance plan makes sense, but compelling Americans to buy a health insurance plan through heavy-handed federal coercion is awful policy and arguably unconstitutional. Reading into the U.S. Constitution a federal right to demand purchases from its citizens would eviscerate many of the limits on government power enshrined in that document.

If the federal government can require individuals to purchase health insurance, what can’t the federal government require us to purchase? Ilya Somin, a law professor at George Mason University who has filed a brief with the court, contends that if PPACA passes constitutional muster, then Congress could pass “a broccoli mandate, a car-purchase mandate, really any other mandate that you’d want.” Where is the line against such coercion drawn if not by the plain meaning of the Constitution?

Proponents of PPACA have dismissed the suggestion that the federal government would impose a “broccoli mandate,” arguing that the federal government would never try to expand a mandate to purchase goods and services into such areas. But Americans should not have to entrust their freedoms to the word of politicians and bureaucrats, well-meaning or not.

There is no “just trust us” clause in the Constitution. The Constitution is the check that keeps capricious leaders from doing capricious things, and should remain so.

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