Passport Scholarship Program Is Good For School Choice

In 2010, the Missouri Supreme Court held in Turner v. School District of Clayton that state law requires unaccredited school districts to pay the tuition of its students who choose to attend an accredited school in an adjoining district. The Turner mandate clarifies the rights of Missouri students stuck in failing schools, but as we reported here and here, implementing Turner has been no easy task. Suburban districts simply do not have the resources to accommodate all of the urban students from Saint Louis and Kansas City who want to transfer.

Herein lies the problem: students want to transfer, and have the right to transfer; but accredited schools cannot accommodate all of them. The “Passport Scholarship Program,” which Missouri Rep. Scott Dieckhaus (R-109) and Missouri Sen. Jane Cunningham (R-7) introduced in their respective houses, addresses at least part of this conflict. The program promotes school choice in the purest form, and could ease the burden that Turner created for suburban schools in the Saint Louis and Kansas City areas.

Under the Scholarship Program, private Missouri taxpayers would receive a tax credit for donating money to any “educational assistance organization,” which must be private, non-profit, charitable organizations. The educational assistance organizations would administer the donations, and distribute money to eligible students in the form of tuition scholarships. Any student residing in an unaccredited district could then apply for a scholarship to attend any qualifying private school in Missouri.

The Passport Scholarship Program has great potential for success in Missouri because it is a market-orientated solution that limits state involvement. Individual taxpayers personally decide whether to donate,  and the educational assistance organizations administer the funds privately. The government has only a minor oversight role in the process. And students could apply the funds to any private school, religious or not, because the Blaine amendment does not affect private scholarships. Any student receiving a scholarship could actually go to the school of his or her choice. So if our goal is school choice — and it should be — the Passport Scholarship Program is a step in the right direction for students stuck in failing schools.

Land Banking Is No Miracle

On Wednesday, Julie Porter wrote in the Kansas City Star that a land bank could help return vacant city property to private, productive use. Porter points to the Genesee County Land Bank, which has existed since 2002, as a shining example of land banking in Michigan.

Unfortunately, Porter fails to consider the 40-year-old land bank in her home state. Saint Louis has had a land bank, also known as the Land Reutilization Authority (LRA), since 1972. The LRA owns about 10,000 parcels, making it the largest land holder in the City of Saint Louis. The Saint Louis land bank’s track record should be considered before creating a similar entity in Kansas City.

Show-Me Institute research has found that for eight years, from 2003 through 2010, the Saint Louis land bank authority rejected almost half of all formal offers to purchase its property. The most frequent reason for rejection was that the property was being “held for future development.” Sadly, the hoped-for future development rarely materializes, and in just eight years, the Saint Louis land bank has turned down offers to purchase more than 2,200 different parcels.

Porter also fails to mention that there already is a government entity that deals with vacant land in Kansas City. The Jackson County Land Trust currently takes ownership of tax-delinquent properties that fail to sell at tax auction, and works to sell them.

There does not appear to be any evidence that the Jackson County Land Trust is doing a poor job of getting vacant property back into private, productive use. In fact, it seems to be doing quite well. During the past decade, in the course of acquiring property by default and trying to sell it, the land trust has added about 140 parcels to its inventory. The Saint Louis land bank has added 800.

However, the land bank bill, Missouri House Bill 1659, would be a land and money grab: All land trust properties in Kansas City would be transferred to the land bank, and it could take on an unlimited amount of debt.

Though Porter warns against private speculators, this bill would allow the Kansas City land bank to act as a speculator. The city would establish priorities for vacant land and use those to determine when to sell property. While this may sound innocuous, that is how Saint Louis was able to turn down so many offers to buy vacant property.

Consider this line from a letter of rejection from the Saint Louis land bank: “…her intended use is as rental property, and the alderman has indicated verbally that he will only support the sale to an owner occupant…” Years later, the property remains vacant, and the LRA still owns the land.

This bill would also let a Kansas City land bank bid directly against people who want to purchase vacant property. That certainly would go against the ostensible goal of alleviating vacancy in the city. The land bank would, when bidding against private buyers, be working directly to keep property vacant, and in government ownership.

HB 1659 creates an unnecessary expansion of government power. No strong evidence has been provided to show that the Jackson County Land Trust has failed, nor that a land bank could do a better job of getting vacant, city-owned property back into private, productive use. In fact, if Saint Louis is any example, the contrary will occur.

Audrey Spalding is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

A Gift? Or A Liability?

Kansas City officials announced today that Bank of America will be giving the city 75 vacant properties. The bank may provide cash as well — up to $20,000 for rehabs of the properties or up to $7,500 for each demolition.

City leaders are touting the transfer of these vacant properties as a “gift.”  The Kansas City Star‘s headline today reads: “Bank of America gift of vacant houses will aid KC’s urban core.”

But this gift comes with many risks. Kansas City will have to pay to maintain the properties until they are sold. Presumably, Bank of America was paying property taxes on the properties that it owned — taxes that will not be paid if the city takes ownership. The transfer could be a gift, but if Kansas City fails to sell the properties quickly, that gift will soon turn into a liability.

Though I may disagree with their proposed solution, city leaders and area legislators have openly stated that it is difficult to sell vacant property in the city. It is a real possibility that some of the so-called donations will remain vacant, and in city ownership for a very long period of time. That is the risk of owning vacant property, regardless of whether you are a city, or a private investor: There is the chance that no one else will want to buy your property.

For the sake of Kansas City residents and taxpayers, I hope the city finds private buyers who can put the property to productive use as quickly as possible. But I think, given the foreclosure crisis and associated risks, a better headline would have been: “Kansas City’s acceptance of low value properties will aid Bank of America’s bottom line.”

A ‘Historic’ Surge

The tuition hikes that the University of Missouri is instituting are affecting real families all across the state. The Show-Me Institute spoke to one family from Saint Charles County who will be doubly impacted. With an annual increase of $260 per student, the family’s mom, Laura (not her real name), said they will have to pay an additional $520 for their two children to attend Mizzou. Will this extra $520 bankrupt the family? It will not, but it will force them to cut back on some much-needed home and auto repairs.

Due to faulty electrical outlets in the home’s bathrooms, Laura said that they are forced to dry their hair in the kitchen, and with the extra money needed to pay for college, they will be forced to continue this practice. Laura also said that the family may have to forego putting new tires on their son’s car. It is not difficult to imagine the unnecessary worry this young man’s parents will feel when their son drives to and from Columbia on old and worn out tires, especially if it is raining or snowing.

While the University of Missouri raises tuition on families such as the one described above due to state cuts in higher education funding, historic tax credit authorizations in Missouri are on an upswing. In fact, the $91 million in Historic Preservation tax credits authorized in the first six months of fiscal year 2012 have almost surpassed state estimates for Historic Preservation authorizations for the entire year.

The question should be asked whether handing out tax credits of questionable value (like the $1 million tax credit issued to Norwood Hills Country Club)  is worth more to the citizens of the state than preventing a tuition increase that will affect families across the state.

Considering that the state of Missouri faces a large budget shortfall, it would behoove the state to make sure that, at the very least, tax credits go to worthwhile projects. A possible avenue for oversight of the tax credit system would be to subject tax credits to the appropriations process. Missouri Sen. Jason Crowell (R-Dist. 27) has submitted a bill (SB 436) that does just that, and there are items in the bill that deserve commendation. Subjecting tax credits to appropriations would enable the state to keep closer tabs on these programs and help ensure that questionable issuances are examined. Considering the price that all Missourians pay for these tax credits, is subjecting tax credits to some sort of appropriations process too much to ask?

Missouri Should Lower Barriers For Out-of-State Charitable Medical Missions

Licensing laws are typically seen as a way to ensure that members of a profession are well-trained and, thus, their customers well-served and protected. But could overly restrictive licensing rules actually be bad for customers’ health? There is reason to believe so; restrictive and ambiguous Missouri licensing requirements in health care have kept, and are keeping, at least one charitable medical group that provides free medical care to the needy from operating freely in the state. That group: Remote Area Medical (RAM).

The brainchild of British transplant Stan Brock, RAM started as a relief service abroad. But for many years it also has turned its services inward to help America’s neediest, providing medical care to those who otherwise would not have received it. Brock told 60 Minutes in a 2008 report (featured above) that his organization “operate[s] entirely on the generosity of the American people.” Like so many families, stretching those sometimes “little checks” is how RAM makes ends meet. In addition, thousands of highly-trained and medically-licensed volunteers have traveled the country assisting Brock’s work for decades by providing their professional services free of charge.

Yet a recurring stumbling block as RAM visits states is artificial barriers to entry – that is, state laws that prevent out-of-state volunteers from easily donating their medical expertise because of burdensome, and sometimes expensive, licensing requirements. During a phone call last week, Mr. Brock told me that RAM wanted to do more in Missouri, but onerous state requirements — such as requiring licensed in-state medical personnel to participate in a clinic before RAM could provide its services — had stifled his organization on several occasions. Most recently, he said, Missouri regulations prevented RAM from providing free eyeglasses to the southwest corner of the state.

But Missouri could make it easier for groups like RAM to help the state’s neediest if officials relax licensing rules and explicitly allow medical professionals licensed in other states to provide their services for these charitable endeavors. Tennessee has led the way on this policy front.

In 1995, Tennessee enacted the “Volunteer Health Care Services Act,” a reform of its medical licensing law which allowed relief organizations like RAM to bring out-of-state medical professionals to help Tennessee’s poor without putting professionals licensed in their home states through an arduous and unnecessary process of re-licensing. If a doctor is licensed to practice in her home state, RAM can bring that doctor to provide her services free of charge to Tennessee’s medically-underserved. It is, in short, a clear and unambiguous law that ensures the state’s neediest are served ably and safely.

The good news? The reform movement appears to be spreading, with a handful of states following Tennessee’s lead in whole or in part. Oklahoma has reformed its laws to accommodate organizations like RAM, and more recently, Connecticut and Illinois passed legislation that allows organizations like RAM greater access to its neediest citizens. Arizona currently is taking up a reform of its own laws.

Tennessee’s law is a model for the country – and a model that Missouri, one of Tennessee’s neighbors, would do well to emulate. Allowing organizations like RAM to freely enter Missouri would go a long way towards improving care to Missouri’s underserved. When burdensome licensing laws and medical regulation interfere with the delivery of skilled, safe, and desperately needed services to America’s poor, the system is in need of reform. For Missouri, relaxing licensing laws for charitable groups like RAM would be a step in the right direction.

Is This The Sort Of Development Missourians Expected?

Meet Norwood Hills Country Club. In 2006, the state issued more than $1.1 million in state Historic Preservation tax credits (HPTC) to the facility.

Norwood Overview from Norwood Hills CC on Vimeo.

Norwood Hills Country Club first opened in 1922. A successful private club in north Saint Louis, it hosted the PGA Championship in 1948. In 2005, the club sought and received designation as an historic landmark in the federal government’s National Register of Historic Places. As a designated historic landmark, it was eligible for Historic Preservation tax credits from Missouri, and the state issued credits to Norwood the next year, in 2006.

norwood

Whether credits for a country club are an appropriate use of taxpayer money is a question worth considering. The Missouri Department of Economic Development administers the Historic Preservation tax credit program, so tax credits in that program are imbued with a presumption that a fundamental objective of the credit is economic growth. Indeed, entire studies have been devoted to trying to measure the HPTC’s impact in terms of jobs and growth. But does granting historic preservation credits to a private country club that markets a $1,000 entry-level membership package really promote economic growth? Is that what Missourians thought they were paying for by offering these credits?

The HPTC is often defended as a way of correcting market failures and increasing positive externalities — that is, giving an intangible boost to the standard of living of those who can see and enjoy the property. Is it likely that there was a market failure at Norwood Hills that the state had to step in and correct? And is it reasonable to believe that Missourians will really be able to enjoy the externalities promoted as a result of sending their tax dollars to a private club?

To be clear, determining whether a building is “historic” is oftentimes in the eye of the beholder. But taxpayers have ample reason to question whether the state should be granting tax credits to country clubs, not only on grounds of whether an economic development objective is really being advanced, but also whether society is really getting a “positive externality” when it subsidizes an operational private club and golf course. And certainly, sometimes buildings are properly considered “historic” by virtue of their age alone, but if the “age” of a building is enough to get an HPTC, what should be the cut-off year? 1800? 1900? 1950? 1980? The later that date gets, the more important it is that the reverse of the question is asked: how many buildings would not be considered historic under the tax credit system?

Moreover, the proximity in time between historic designation and tax credit issuance is troubling. Did Missouri issue a tax credit to preserve an historic landmark, or was an historic landmark created to access Missouri tax credits?

Lastly and more generally, what has the state foregone – what “unseen” projects and tax cuts have gone by the wayside – because the state has been putting money into projects like Norwood Hills?

policy bfast clips

 

 

At the Show-Me Institute’s policy breakfast on Feb. 8 titled “Rich State, Poor States”, Jonathan Williams of ALEC said people are voting with their feet in this country, and moving to states that have the lowest tax burdens. . . .

“Rich States, Poor States” was the theme of the Show-Me Institute policy breakfast on Feb. 8. Show-Me Institute chief economist Joe Haslag said the data is clear. Missouri is falling behind the country.

Missouri’s Budget Shortfall: Two Legislators’ Views

At the Show-Me Forum in Columbia on Monday, February 6, State Senator Kurt Schaefer and State Representative Chris Kelly discussed the state of the state. Both agreed Missouri doesn’t have enough revenues. Sen. Schaefer said one area to look to make up the shortfall is state tax credits.


State Representative Chris Kelly and State Senator Kurt Schaefer discussed the state of the state at the Show-Me Forum in Columbia on Monday, February 6. Both agree Missouri doesn’t have enough revenues, but Rep. Kelly insists the shortfall shouldn’t come from education.

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