Good Faith – Bad Result

Posted on by Greg Aubuchon

The Missouri Supreme Court recently heard oral arguments in American Federation of Teachers v. Ledbetter. At issue is whether a public school district has a legal “duty” to collectively bargain in “good faith” with a teachers’ union. Currently, districts typically recognize and meet with their teachers’ designated representative, but are under no legal obligation to agree to specific proposals that the union proffers.

In its opinion leading to the supreme court hearing, the intermediate court of appeals noted the following:

. . . no Missouri court has expressly interpreted Article I, section 29 [of the Missouri Constitution] to contain a duty of good faith . . .

If the Court, in a fit of judicial activism, writes a “duty to bargain in good faith” standard into the state constitution, school districts, once vested with substantial discretion from the legislature to manage their affairs, will suffer tremendously. For example, rejections of union proposals will now spawn threats of lawsuits. Districts will hire attorneys to assess the liability risks of decisions once left to the discretion of the districts’ officials. Good faith, in this context, is an invitation to litigate. And litigation diverts scarce resources and money from the districts’ core mission: to educate our children.

Interestingly, the Missouri Legislature has rejected five attempts to statutorily adopt a good faith standard (see footnote 4 in court’s decision). Haven’t the people spoken through their elected representatives? The Court should heed this message and reject a duty to bargain in good faith standard for Missouri’s public school districts.

High-Speed Rail Supporters Are Just Making Things Up

Posted on by David Stokes

Over at the St. Louis Beacon, high-speed spending (and rail) enthusiast Rick Harnish is just flat-out misleading people to get his beloved waste-of-money concept going. Throughout the article, he keeps referring to trips between Saint Louis and Chicago taking 3, or perhaps down to 2, hours.

But the core of it is getting major cities within two or three hours of each other. So, St. Louis to Chicago within three hours — with completely new infrastructure the entire way, it’s possible you get it down under two.

But you know what? The entire project currently underway in Illinois is based on implementing a 4-hour trip each way (at best). We are spending billions to knock a little more than an hour off of the current Amtrak route, and supporters of it are intentionally downplaying that.

Later in the interview, Harnish gives a great little aside downplaying safety of cars and claiming, by insinuation, that trains are safer.

. . . if you believe that our strength and unique identity is tied to the ability to risk your life everyday in a car . . .

OK, so we risk our lives everyday in a car. Would we not risk them in a train? Now, I am not saying passenger trains are unsafe — they are indeed safe. But if you compare them to cars, there are more fatalities on passenger rail than in motor vehicles per passenger mile. According to the latest data, passenger cars have 0.9 fatalities and 83 injuries per 100 million passenger miles. Passenger rail has 2.9 fatalities and 1,226 injuries per 100 million passenger miles. So they are both safe, but let’s not pretend passenger rail is safer.

High-speed rail is to transportation policy what ethanol is to agriculture policy. They are both high-cost jokes designed to please limited constituent groups (corn farmers, unions, Keynesian economists) which would not exist if markets made these choices instead of politicians. (High-speed rail on the eastern seaboard may pass the market test, and thanks to John Combest for the link.)

Whining about Wine

Posted on by Michael Rathbone

I miss October. The weather was nice, the sky was clear, and the St. Louis Cardinals baseball team was on its way to an 11th World Series title. Also during October, many people congregated in various parts of Missouri to celebrate Oktoberfest, a fun and lively event where people enjoyed cultural activities along with certain viticultural products.

I want to make it clear that I do not want to outlaw wine in Missouri. However, it troubles me that taxpayer money is subsidizing the wine industry. Specifically, the Missouri Department of Agriculture spends $1,828,859 (click on HB 6-Agriculture and scroll down to page 133) on something called the Missouri Wine and Grape Board.

According to the Department of Agriculture’s 2012 Budget Request Form (click on HB-6-Agriculture and scroll down to page 134), “The Wine and Grape Board stimulates growth of the grape and wine industry for the economic and social benefit of the citizens of Missouri.” Aspects of the board’s functions include using funds to “develop programs for growing, selling, and marketing of grapes and grape products grown in Missouri.” Indeed, the Missouri Wine and Grape Board does have marketing products, including brochures, videos, and radio advertisements. The Wine and Grape Board also funds the University of Missouri Institute for Continental Climate Viticulture & Enology in order to fund grape research programs.

So, in essence, the board serves somewhat like a chamber of commerce for the Missouri wine and grape industry. However, unlike a chamber of commerce, participation in this program is mandatory, with a charge of a 12-cent excise tax on every gallon of wine sold in the state. Also, in all my searches through the state budget, I have yet to encounter an official appropriation for a private chamber of commerce.

I have to ask, why can’t Stone Hill or Hermannhof promote themselves with their own money? Why can’t there be a private chamber of commerce that promotes the wine industry, or all the wineries of the state? I have no problem with private groups promoting wineries, but do I think the state should be promoting them? No.

Also, there is no evidence that this expenditure actually DOES have a positive impact on the state’s wine industry. In my search, I haven’t seen anything to suggest that the Missouri Wine and Grape Board has a discernible impact on the Missouri wine industry. Even the economic development report on the Missouri Wine and Grape Board website doesn’t really show the spending cause and effect; it just shows that in recent years, Missouri wineries are doing well. However, it doesn’t link the activities of the board to the wine industry’s success.

The key issue here is funding priorities. Why is the state funding this board, at least at its current level, when there are other places in the budget that may require that money? If the choice for appropriators is between potentially laying off teachers, firing firemen, or withholding funds from vital social services, shouldn’t every area of the state budget come under review for potential savings? Just my 2 cents.

We Need TIF Reform, Not Higher Taxes

Posted on by Bruce Stahl

I am happy to report that voters on Tuesday defeated a proposed property tax increase in the Liberty School District. I blogged about the proposal before the vote — it’s important because it highlights the perils of Tax Increment Financing (TIF). TIF allows property taxes which should go to schools to be redirected toward property development, thereby restricting school revenue. Liberty is not an isolated case; it’s happening all across the state.

Tuesday’s vote is a wake-up call: reform TIF.

Residents of St. George Slay the Municipal Dragon

Posted on by David Stokes

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?

Posted on by Bruce Stahl

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

Posted on by Audrey Spalding

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.

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