KTRS talk show host McGraw Milhaven recently called Show-Me Policy Analyst Audrey Spalding “the single most powerful woman in the state of Missouri.”
Hear why in this audio clip from the interview on October 27.
Residents of St. George Slay the Municipal Dragon
I can say with some certainty that this is our last post about the small Saint Louis County municipality of St. George, because in a few days it will no longer exist. Last night, voters in the city of St. George voted to disincorporate. I think they made the right decision.
The city long survived on speeding ticket revenues. After a few scandals resulted in the disbanding of the St. George Police Department, the Saint Louis County Police Department took over. That was perfectly fine for the residents’ safety, but the County has no interest in writing speeding tickets solely for the purpose of city revenues. So the city lost its major source of revenue, the streets started to crumble, and there was no money for repairs. Thankfully, smart thinking prevailed and the city will no longer be with us once the votes are certified.
I am not a knee-jerk supporter of fewer municipalities in Saint Louis County. There are benefits (as well as costs) to having a number of small cities. The lack of centralized urban planning is the main benefit. However, in some instances, the tiny municipalities in the county border on the ludicrous, and St. George was Exhibit A.
I think some of the other 91 90 cities in the County should consider doing the same. Some should disincorporate, some should merge, and some others should follow Jennings’ lead and remain as they are while making key changes. I have no idea what would be the “best” number of cities in the County. Nobody else does either. For the sake of this post, I would say that about 70 cities would allow for the benefits of many cities while getting rid of the most obvious cost inefficiencies and poor policies (like cities that have a primary funding source of speeding tickets).
Whatever the choice, it should be up to local citizens. I think the local citizens of the newly-unincorporated community formerly known as St. George made the right decision and have shown us the way.
The Road To Prosperity Is Paved With . . . State Tax Incentives?
Missouri Gov. Jay Nixon loves awarding tax incentives. So much so that in April, a road was named after him, which was pavedpaid with tax incentives. Although roads named in the governor’s honor may be rare, state tax incentives are not. Last month, the governor announced a Ford investment that will benefit from state tax credits, and a few days ago, he announced the expansion of a General Motors plant that also may benefit from tax credits.
There’s no doubt the governor grasps the notion that tax incentives can promote investment — but when will he realize that cutting taxes may have the same beneficial effects? Tax cuts may attract more investment to Missouri, promote job growth, and incentivize business expansions — three things for which Nixon already credits tax incentives. Tax cuts may even make business expansions easier; there won’t be all the red tape that goes along with obtaining government tax incentives.
It’s not as if tax incentives always work. Remember Mamtek? Hundreds of jobs were promised, but now all the state has to show for it are an SEC investigation and an unhappy legislature. Show-Me Institute Policy Analyst Audrey Spalding has already written on this and other tax incentive blunders. Because tax cuts won’t be tied to firm-specific investment and job creation, such government failures could become a thing of the past.
The governor needs to stop favoring focused tax incentives and start favoring broad tax cuts.
We Need to Shut Down Failing Schools
On Monday, Missouri Commissioner of Education Chris Nicastro said in an exceptionally strongly-worded letter that the Imagine charter schools in Saint Louis City should close. Nicastro’s letter came after the St. Louis Post-Dispatch published a series of articles showing the derelict state of education at Imagine schools, and after Saint Louis Mayor Francis Slay publicly called for the schools to close.
According to the Post-Dispatch, not only does the charter school company appear to have rushed to open a school without providing textbooks and other school supplies, and with some classes held in hallways, but the school hired a developer who pled guilty to fraud earlier this year (in an unrelated matter). That developer also received historic tax credits for redeveloping an Imagine Schools property, and charged the charter school company $150,000 for the service of acquiring nearly $480,000 in tax credit money from the state.
In her letter to the sponsor of the Imagine charter schools, Nicastro minced no words:
We do not view it as the intent of the Missouri General Assembly that the department engage in intrusive regulatory oversight of charter schools, or to perform the administrative responsibilities of the sponsor. However, it appears from your public statement that [you desire] our recommendations in this matter. Let me be specific:
1) Announce immediately that the Imagine charter schools will close at the end of the current school year.
Some may rush to use Imagine schools’ negligence as evidence that many, if not all, charter schools are inferior, and that the expansion of charter schools in Missouri is bad public policy. On the contrary, it is necessary that bad schools close in order to enable good schools to thrive. In any endeavor, whether it is business, art, or even education, there will always be some successes and some failures. It is important to encourage success and limit failure.
The esablishment of charter schools, which are outside the traditional school district framework, is one way to do this. The theory behind charter schools is that the good ones will thrive on their own merits, and the charter schools that do a poor job of educating students will lose students and funding.
Based on the Post-Dispatch coverage, along with the mayor’s and the education commissioner’s statements, the Imagine schools in Saint Louis City certainly appear to be failing. As such, students and funding should be shifted to schools that do a better job of educating students. If the sponsor of the schools has been negligent in monitoring whether they have been successful (an intricacy created by our convoluted education law), then calls from the mayor and education commissioner to close schools are certainly warranted.
However, I think that this controversy can also be a learning experience. Yes, Imagine schools appear to be failing. But failing is not unique to charter schools. There are certainly many public schools that are failing their students — be it in providing safety, an adequate mathematics education, or curtailing dropout rates.
For example, Yeatman-Liddle Middle School in Saint Louis City has had increasingly fewer students score proficient or better on the state mathematics test. During the 2007 school year, 35.5 percent of students at the school scored “below basic” on the eighth-grade state math test. In 2010, 64.9 percent of students scored below basic, a proportion almost twice as high as the students scoring below basic just a few years ago. A much more thorough review would have to be conducted, but it appears Yeatman may be doing a poor job of teaching math to its students.
Letting a failing school continue does not help current students. During the past Missouri legislative session, I testified before the House Education Committee to discuss a proposal that would enable parents of students at a failing school to trigger reform, a proposal that I think might help address the problem of failing schools.
Rather than treating Imagine as an isolated incident, let’s recognize that schools can fail — regardless of structure — and consider ways to allow that failure while encouraging successful schools to grow.
What Would You Cut From The Saint Louis County Budget?
Last week, Show-Me Institute Policy Analyst David Stokes wrote at length about the Saint Louis County proposal to close its parks; the County would shut down operation of 23 of its 50 parks to help close what the county executive says will be a $10 million budget shortfall in 2012. If you’re unfamiliar with the story, David’s post is a must-read.
Given the continued furor surrounding the park-closure idea, it is probably worthwhile for Saint Louis County residents to see the proposed budget for themselves. I have embedded it below for review. The 300-plus-page document is searchable, and I’ve queued it to the budget summary (listed as page 10 in the County document).
(We’ve also added the County’s recommended budget to our Show-Me Sunshine library of documents.)
If County residents don’t like the idea of cutting parks, there’s always the option of simply cutting other expenditures. Which budget items would you trim?
Elementary, My Dear Watson
It appears the state of Missouri might be running into some revenue problems (net general revenue collections were down in October compared to October 2010). I previously identified some low-hanging fruit that can be cut without too much damage, but if the state still faces a shortfall next year, which is very possible, then officials might have to make some difficult choices.
Many politicians are justifiably concerned when the topic of education budget cuts is raised. It is easy to imagine why. Nobody welcomes the prospect of facing a 30-second advertisement detailing the many reasons he/she doesn’t care about children because he/she proposed cuts in education spending. However, out of a Missouri Department of Elementary and Secondary Education (DESE) budget of more than $5 billion, it is definitely possible to find some savings. For example, one school district paid lifetime health care insurance just to retain its superintendent another year. Isn’t that a worthwhile issue to examine regarding budget cuts?
I can hear the concern of those who think budget cuts to DESE would cause great harm, but would some cuts really be so horrible? Not really, at least according to figures from the National Center for Education Statistics. Compared to 2003, the test scores for Missouri students ROSE for both fourth and eighth graders in math (for fourth graders, the average score in 2003 was 235; the average in 2011 was 240) and scores remained the same for eighth graders in reading (see page 51). Only fourth-grade reading scores dropped (222 in 2003 compared to 220 in 2011) over that period.
I’m not saying that cutting the state education budget will necessarily lead to BETTER test scores. All I’m saying is that cutting the education budget MIGHT not be as much of a disaster as some may fear. We have been trying the opposite approach for a while now and it’s not producing significant results. It is difficult to argue that there is NO room for savings in the DESE budget. In regards to balancing the budget next year, everything should be on the table.
Saint Louis County: County Executive’s 2012 Recommended Budget
Sad CID Sighting in Central Missouri
Voters in Columbia, Mo., are currently voting on a proposal for a downtown Community Improvement District (CID). I say “currently” because this is one of those mail-in ballots to a small number of residents of a mostly commercial area, and the deadline is tomorrow (Nov. 8). Here is a Columbia Missourian article on the issue, which Eapen Thampy, who is leading the fight against the CID, sent to me.
I think this proposal is poor public policy. It disproportionately benefits a very small number of people while taxing a huge number of people who visit downtown Columbia, in order to finance public spending for things that hardly pass the public goods test (event promotion, business marketing, free Wi-Fi). For more on why I think CIDs in general are a bad idea, please check out this testimony I gave in Nixa, Mo., earlier this year.
TIF is Everyone’s Education Problem
Remember the school district in Kansas City that is asking for a tax increase because of lost tax revenue? Show-Me Institute’s Bruce Stahl wrote last week that Tax Increment Financing (TIF) is the culprit.
Supporters of TIF often say that it is harmless. The rationale behind TIF subsidy is that a development’s taxes are “frozen” at current levels for a number of years. If a developer improves the property during that time, he won’t pay additional property taxes on the improvement.
However, TIF amounts to tax redirection without representation. Tax dollars intended for a school district (which come from property taxes) can be used to pay for costs associated with the subsidized development. Unlike school district officials, city officials tend to be enthusiastic about TIF because they can reap the benefits from increased sales taxes (which generally increase when TIF is used to subsidize box store development) without bearing much of the cost of lost property tax revenue.
Many voters get no say in the matter when they live in a school district impacted by TIF but outside of the city that is imposing the TIF. Some readers may think this is fine. After all, these are local subsidies — residents in Joplin certainly won’t pay for a proposed TIF in Columbia. Aren’t the cities of Brentwood and Saint Louis free to use TIF as much as they want?
Well, thanks to the intricacies of Missouri’s tax system, we all pay for TIF, even if we live in cities that do not award such subsidies.
School districts primarily receive funding from three sources: local property taxes, state aid, and federal aid. State officials use the local property tax base as part of the equation to calculate the funding it sends to school districts.
So, when TIF carves out a portion of the property tax base from a school district, the state can end up sending more funding to that district.
According to a 2003 study by the Brookings Institution’s Center on Urban and Metropolitan Policy, TIF can increase state aid by up to 7 percent in Kansas City-area districts, and up to 5 percent in Saint Louis-area districts. The author, Thomas Luce, estimated that up to 21 percent of the state aid going to the Fort Zumwalt School District in St. Charles County was attributable to TIF revenue losses.
Not only does TIF result in dollars intended for schools to be redirected to development, we all end up paying for it through state income and sales taxes. And yet, it is unlikely that a taxpayer in Cape Girardeau will ever benefit from a Kansas City TIF development that he helped subsidize.
If TIF is truly as transformative as supporters believe, then it should stand on its own. The state funding formula should not reimburse school districts for property tax revenues lost to local governments’ development bets.
