On May 8, 2024, Show-Me Institute hosted a virtual event where EdChoice’s Marty Lueken and Reason Foundation’s Christian Barnard discussed and demoed their K-12 School Choice Calculator.
The calculator was built to provide legislators, legislative staff, and stakeholders with an easy way to learn about the potential fiscal effects of funding educational opportunities in their state.
You can access the K-12 School Choice Calculator here: https://www.schoolchoicecalculator.com/
If there is one thing local government in Missouri needs more of, it is audits.
I don’t mean Comprehensive Annual Financial Reports (CAFRs), or the Distinguished Budget Award that seemingly every city under the sun gets.
I mean an audit. The type of audit that gives people nightmares and, presumably, makes them more careful in their accounting and reporting out of fear.
In recent years, we have seen plenty of examples of failed accounting procedures in local government. There have been outright thefts, failures to competitively bid contracts, plenty of conflicts of interest and cronyism, and much more. I don’t think that politicians and bureaucrats in Missouri are less honest than in other states, but I do think that the huge number of small municipalities and other special taxing districts in our state gives them more opportunities for varying degrees of corruption.
We have seen local auditors who totally failed to do their jobs. Seriously, check out these links to the St. Louis County auditor’s page and be amazed at how few audits the office has actually performed over the past decade.
There is a bill in Jefferson City that expands the ability of the state auditor to preemptively begin audits of local governments when there is evidence of problems. Currently, the auditor needs to be invited by local officials or receive a petition from citizens. The former isn’t always done by local officials—for obvious reasons—and the latter can be time consuming and difficult.
This proposal, which is now on the governor’s desk, is an excellent one. It would benefit the taxpayers of our state.
Would it make local officials and bureaucrats nervous? I certainly hope so.
The recent Kansas City Business Journal report about Oracle drastically reducing its Kansas City workforce in the former Cerner offices is troubling but not surprising. It serves as a harsh reminder of commitments unfulfilled and a stern warning regarding future economic development endeavors.
In 2014, Cerner received the largest economic development project subsidy in the state’s history. The company pledged to add 16,000 *new* jobs in Kansas City in exchange for substantial taxpayer subsidies to construct its new headquarters. However, by 2019, Cerner had only managed to expand its workforce to 14,000 total, and not all the jobs were in Kansas City proper. Cerner fell short of its promise. Now, under Oracle’s ownership, the local employee headcount has been nearly halved to a mere 6,400. This is far from the 26,000 jobs—the 16,000 new plus the 10,000 Cerner had at the time—that were supposed to be in place by this year.
The issue runs deeper than just the numbers; it’s more about the impact on the local economy and the trust that was placed in these corporations. The Kansas City region was promised significant economic growth and job creation. Taxpayers delivered, but Cerner, and now Oracle, have failed to keep their promises.
Just like the Power & Light District, and the proposed downtown stadium, the Cerner project reveals the misplaced faith in economic development incentives. Time and again, we see that these incentives often fail to deliver. Instead, they serve as generous gifts to corporations, paid for by taxpayers, with little to no accountability.
The Cerner deal has been an abject failure. All city and state leaders who cheered this project should be held to account.
Current and future Kansas City leaders must learn from these missteps. They must scrutinize these large-scale economic development projects more rigorously and demand transparency and accountability. Tax incentives and subsidies, if issued at all, should include meaningful and measurable outcomes, strict legal standards for what constitutes a new job, and oversight from a clearly defined agency that will monitor the subsidy recipient over time. Holding corporations accountable for their promises will not only protect taxpayers; it may reduce the demand for subsidies in the first place.
The April 2 stadium outcome showed that voters demand more details and accountability from those who seek public funds. Leaders must provide them.
Ignasi Grau Callizo is the General Director of International Organization for the Right to Education and Freedom of Education (OIDEL).
Grau holds a double bachelor in Law and Business Administration and a master’s degree in Political Science.
Produced by Show-Me Opportunity
A few weeks ago, the Missouri House passed House Bill (HB) 1753. The bill provides guidelines on shutting down electric power plants. Given that Ameren plans to shut down all coal plants in Missouri by 2045, this bill could ensure Missourians’ future energy needs are met.
HB 1753 mandates that prior to the closure of an existing power plant, there must be:
What does “reliable electric generation mean?” This is calculated by taking the average of the summer and winter accredited capacity (the most a plant could produce in each peak season) of the plant being shut down and comparing it to the plant(s) replacing it. For example, let’s say a Solar Plant Alpha could produce a maximum of 600 MW in the summer, but only 200 megawatts (MW) in the winter. The amount of “reliable electric generation” would then be 400 MW. This is an improvement from using nameplate capacity, which is how much a plant could produce if it produced at full power 100% of the time.
HB 1753 also mandates that the new plants replacing a closing power plant must be also comprised of at least 80% dispatchable energy (dispatchable energy is from a source that is available for use on demand and can have its power output adjusted to market needs). The bill defines dispatchable as: natural gas, nuclear, hydroelectric, biomass, petroleum, geothermal, and coal.
While the 80% rule may sound like a strong protection ensuring that most of our energy is dispatchable, I am concerned that the provision isn’t strong enough.
Let’s say Missouri has coal plants that produce 800 MW of dispatchable energy and solar farms that produce 200 MW of intermittent, non-dispatchable energy, for a total capacity of 1,000 MW. In this scenario, dispatchable energy comprises 80% of total energy capacity.
If you shut down a 100 MW coal plant (which is dispatchable) and replace it with 80 MW of new natural gas (dispatchable) and 20 MW of new solar (non-dispatchable), the total capacity now would be 780 MW of dispatchable energy (800 – 100 + 80) and 220 MW of intermittent, non-dispatchable energy (200 + 20).
Then let’s say you shut down seven more 100 MW coal plants and replace them with seven new 80 MW natural gas plants and seven new 20 MW solar farms. Now after these closures, you would have 640 MW of dispatchable natural gas plants (780 – 700 + 560) and 360 MW of non-dispatchable solar farms (220 + 140). Now, in this new scenario, dispatchable energy comprises 64% of total energy capacity—a gradual erosion.
California, in which non-dispatchable energy makes up around 40% of its portfolio, has had significant issues with energy reliability. During particularly hot summers in recent years, Californians have been urged to ration energy usage:
Officials are urging Californians to run their air conditioning earlier in the day, when more power is available, and to turn up the thermostat starting at 4 p.m. They’re also asking people not to use large appliances, like washing machines, dishwashers and dryers, between 4 p.m. and 9 p.m., which are peak hours for electricity use.
HB 1753 is a step in the right direction and would help provide energy stability for Missourians, but it could be strengthened by changing the 80% dispatchable rule to a 100% rule. There are other concerns that are outside the scope of this bill—in particular, how to account for the growing energy demand in Missouri—but I will address that in a later post. For now, policymakers should consider tweaking HB 1753 to ensure energy reliability in Missouri.
On April 23, 2024, at the Kansas City Public Library Central Branch, Jim Geraghty, Fellow at National Review Institute and National Review’s senior political correspondent, discussed his two reporting trips to Ukraine. Geraghty delved into the broader implications of the conflict and its significance for the United States.
Geraghty writes the National Review’s widely read daily “Morning Jolt” newsletter and appears on the magazine’s weekly “The Editors” podcast. He also co-hosts two podcasts and has authored eight books, including “Heavy Lifting” with Cam Edwards and “Voting to Kill.”
Listen to the event as a podcast here.
This event was co-sponsored by Show-Me Institute, National Review Institute, the Kansas City Public Library, and Show-Me Opportunity.
On April 23, 2024, at the Kansas City Public Library Central Branch, Jim Geraghty, Fellow at National Review Institute and National Review’s senior political correspondent, discussed his two reporting trips to Ukraine. Geraghty delved into the broader implications of the conflict and its significance for the United States.
Geraghty writes the National Review’s widely read daily “Morning Jolt” newsletter and appears on the magazine’s weekly “The Editors” podcast. He also co-hosts two podcasts and has authored eight books, including “Heavy Lifting” with Cam Edwards and “Voting to Kill.”
This event was co-sponsored by Show-Me Institute, National Review Institute, the Kansas City Public Library, and Show-Me Opportunity.
Watch a video recording of the event here.
Produced by Show-Me Opportunity
Recently, the Missouri House passed a bill—House Bill (HB) 2274—that would gradually repeal the corporate income tax. HB 2274 would cut the current corporate income tax rate from 4% to 3% on January 1 and would continue to make cuts by a percentage point every year until abolishing the tax entirely in 2028.
Getting rid of the corporate income tax has many benefits, chief among them is raising Missouri’s GDP growth rate. Countless studies have found that corporate income taxes are economically harmful. Missouri ranks 26th in the United States for GDP growth, and eliminating this tax would make Missouri a more competitive, pro-growth state. While eliminating the corporate income tax would mean giving up the $900 million in revenues that the tax raised in 2023, some of the lost revenue would be offset by higher sales and personal income tax revenues owing to stronger economic growth. Moreover, the gradual nature of the phase-out would ease the transition.
Cutting the corporate income tax rate will also lead to business growth. A 2016 peer-reviewed article in the American Economic Review found that a 1% cut in a state’s corporate income tax rate leads to a 3–4% growth in the number of establishments over a 10-year period. The study found that a lower corporate tax is also good for increasing entrepreneurship. Missouri will become more attractive to both new and existing businesses with the elimination of the corporate income tax.
Another study found that a little more than half of the total incidence of corporate taxation falls on consumers through higher product prices, with capital owners bearing only 20% and workers bearing the remaining 28%. The Tax Foundation reports that, because corporate income taxes make it more expensive for businesses to invest in technology and equipment, eliminating the tax can increase efficiency which would generate higher revenue for companies. A tax cut will enable companies to not only increase wages but also create new jobs. If Missouri’s policymakers want to increase overall economic growth, HB 2274 is a step in the right direction.
Several years ago, I was invited to give a guest lecture to a group of STEM educators seeking a doctoral degree. My task was to share with them ways in which my work in education policy overlapped with their world. My key point that night was that we need to change how we pay teachers. It was a point I have been making since the release of my 2012 report, “The Salary Straitjacket: The Pitfalls of Paying All Teachers the Same.” Now, if Senate Bill (SB) 727 is signed by the governor, one of those recommendations from that paper may finally come to pass.
Teachers in nearly every school district are paid by what is called a “single salary schedule.” This is a system that pays all teachers, regardless of subject matter expertise or teacher demand in that district, the same amount. These schedules generally provide raises based on years of experience and graduate degrees.
When I spoke with that group of doctoral students, I presented a hypothetical situation of a local business. When the business attempted to hire, they received numerous applications for one type of position and very few for another. I asked them what they might do to attract and retain people in that harder-to-staff position. The answer was clear—pay them more.
This is the very situation we have in public schools. Some positions may get few, if any, applications. These include subjects such as physics or, in some instances, special education. Nevertheless, school districts fail to use one of the key levers they have to attract and retain these teachers—pay. Instead, everyone is on the same salary schedule.
In that 2012 report, I argued that school districts could place teachers in hard-to-staff subjects at a higher level on the salary schedule. SB 727 followed that recommendation completely. The bill states: “The board of education of a school district may include differentiated placement of teachers on the salary schedule to increase compensation in order to recruit and retain teachers in hard-to-staff subject areas or hard-to-staff schools.”
When I joined the Show-Me Institute’s Director of Education Policy Susan Pendergrass on a recent podcast to discuss SB 727, I said there were things in the bill that people would like and other things they would not like. Allowing districts to differentiate pay for hard-to-staff subjects is a sensible policy that everyone should like. Of course, it would be even better if we could pay teachers based on everything they bring to the table, including their performance, but this is a step in the right direction.
