In Praise of Jennings

Posted on by David Stokes

An overriding emphasis on Big Ideas and Big Changes can obscure the fact that most improvements in life happen in small doses and over time. Which is more likely to last, the whirlwind romance that ends at the altar after a few weeks, or the relationship that begins as a friendship, grows over time into love, and leads to marriage a year or two later?

It is the same with cities and governments. Planners may want to focus on the Big Proposal that is going to “reinvent” or “transform” the community, but those Big Plans frequently fail from the beginning. Often, it is the individual homeowner or entrepreneur who are the real change agents in providing useful economic growth and community development. Which would you rather have, Soulard or Laclede Town?

Right now, many people in Saint Louis are once again engaged in a conversation about the political make-up of our area. Should the city and county merge? Should the city simply re-enter the county? What to do about the county’s 91 municipalities and patchwork of fire, school, and library districts?

These are big and important questions and it is good that they are being discussed and debated. Without buying into the assumption that bigger is automatically better, let us hope that positive changes will come from this re-examination of existing arrangements, changes that will improve government services in Saint Louis as a whole. But if we focus only on the Big Idea, we risk overlooking benefits that smaller changes in government can have for Saint Louisans right now. One city in Saint Louis County, Jennings, is showing how small improvements under our current governmental system can add up to big rewards for people.

Over the past few years, Jennings has made two principal changes moving away from the idea that every city need stand on its own. First, it became one of the few cities that switched from a point-of-sale city to a pool city in Saint Louis County’s sales tax pool system. As sales taxes within the city declined, Jennings had two choices. It could make use of tax increment financing and other political tools to try to alter market forces, or it could join the pool. Pool cities benefit from economic growth wherever it occurs in the county. Pool cities are less likely to abuse eminent domain and TIF by forcefully locating retail development in targeted areas, and not to areas where the free market would naturally lead. Jennings chose to join the sales tax pool and engage in the regional economy, not just the Jennings economy.

More recently, Jennings chose to dissolve its own city police department and contract with the county police for public safety. This will allow the city to improve the overall quality of the police force serving its residents and save money at the same time. To say this is a win – win understates the significance of the change. Other local leaders, including Fenton mayor Dennis Hancock, have made this change for their cities and it has worked out very well for their citizens.

Jennings city officials deserve a great deal of credit for these changes. Joining the sales tax pool and contracting with the county for police services will save money, provide better public services, and avoid the destructive, TIF-fueled quest for “economic development” that is pitting city against city in Saint Louis County. These simple changes in Jennings are showing the other parts of the county the way to a future prosperity that maintains city pride and independence while thinking and acting like a region. That is a Little Idea worth celebrating – one that will provide big and lasting benefits.


David Stokes is a policy analyst at the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.

A Hundred Million Here, a Hundred Million There…

Posted on by Bruce Stahl

I recently discovered that the American Planning Association (APA) has listed 15 blocks of Washington Avenue in St. Louis as a Great American Street. It appears the APA made a good call — it is a popular street. But after determining how much in public funds has been spent on the street, I wonder if it was worth the cost.

Did you know that since the year 2000, more than $167 million in economic development tax credits have been issued to those 15 blocks? Or that $17 million in state and federal funds have been spent there? Ignoring any other incentives that may have been awarded, it seems that nearly $185 million in public funds have been spent developing 15 city blocks. Was it all really worth that much?

The APA credits the Historic Rehabilitation tax credit, authorized in 1998, for giving Washington Avenue new life — but my colleague, Show-Me Institute Policy Analyst David Stokes, says the street was awesome before then. He should know; he lived there.

For $185 million, whatever urban planners have accomplished, they have accomplished at a very high cost to Missouri taxpayers — most of whom will never visit Washington Avenue. Perhaps urban planners should stop spending taxpayer money and let private businesses do the planning. After all, there are plenty of great, popular streets that the government never planned nor sponsored.

For more Show-Me Daily posts on Great Streets in America, click here and here.

We’re Not All That Different

Posted on by Josh Smith

Occupy Saint Louis is in full effect, and my co-worker Patrick Ishmael and I dropped by last Friday for the group’s afternoon march. I can only claim superficial exposure to the pulse of this particular group at that particular time, because I was in the crowd but not of it, and I didn’t take the time to talk to anyone while I was there. Most of the signs I saw and chants I heard involved “jobs,” though there was also a call-and-response that got a lot of play: Call: “Whose streets?” Response: “Our streets!” I’m not really sure what that one meant.

I have been reading quite a bit about the protests going on in New York City, in the rest of the country (my cousin participated in Occupy Omaha, he’s the one in the suit near the center) and even around the world. The protests and the protesters are not totally united in their goals or their beliefs, but there are certain common threads that bind the movement and represent a shared objective. One of the most common complaints you’ll hear is anything along the lines of “get Wall Street out of Washington.” This is an expression of the idea that business and government should not have such cozy relationships. The word for this concept in popular usage is “corporatism,” and although the protesters may not realize that a free-market think tank represents an ally in their fight, we have published countless studies and commentaries asserting that government should not be in the business of picking winners and losers in the marketplace.

We oppose tax credits such as the Aerotropolis subsidy package, film tax credits, and other publicly-funded business incentives. Indeed, so strong is our stance against corporate welfare that it’s one of our six main policy areas.

The Occupy protests and the people calling themselves the 99% are fired up and out on the streets for a reason. H.L. Mencken said “Every decent man is ashamed of the government he lives under,” but when left and right are aligned in opposition to pervasive policy that hurts all but a very few well-connected people, and when thousands take to the streets to voice their disillusion, there’s a glimmer of hope for real change to the status quo.

The $64 Million Question

Posted on by Michael Rathbone

With the economy the way it is, it is no surprise that everybody is trying to scrimp and save whatever they can to manage in this difficult environment. Needless to say, many families aren’t in a position to waste money on frivolous items like diamond-crusted watches or gold-plated yo-yos (yes, they do exist). So maybe someone can answer why the state of Missouri is spending upwards of $8 million on a presidential primary in which no delegates will be selected (that is why the March 17 caucuses are being conducted).

In other news, due to stimulus money running out (slide 15 in Budget Stabilization row), there will be at least a $64 million shortfall in the Missouri Department of Elementary and Secondary Education (DESE) budget that needs to be made up from somewhere else. That is, of course, unless the state government is fine with cutting the full $64 million out of the DESE budget.

Now, canceling the presidential primary won’t automatically fix this shortfall, but it would be a significant first step.

“How Much For Parking???”

Posted on by David Stokes

I enjoy the Bernie Miklasz show on 101 ESPN FM and 101sports.com. I also enjoy his writings in the St. Louis Post-Dispatch. But the other day, while listening to his show on the way back from lunch (I think it was last Friday), I heard him complaining about parking lot operators in downtown St. Louis raising prices during the baseball playoffs. This, of course, is flabbergasting to someone like myself. Why, on God’s green earth, shouldn’t parking lot operators raise prices in response to increased demand for parking brought about by the playoffs?

There really is no legitimate argument against it. There might be legitimate gripes or complaints against it, but those aren’t arguments. Every person reading this, or listening to Bernie’s show (probably more of the latter), would – if they owned a parking lot downtown – raise prices in this situation. Parking for sporting events like this is an example of market-day supply, like the fish market in your economics textbook. The supply of parking is fixed for any individual baseball game. With the increased attendance for the playoffs (the dominant, but not only, factor, increasing demand here), the demand for parking increases. Because the supply of parking is fixed, prices will increase. This will happen in every situation everywhere, and there is nothing wrong with it. (Note: the supposition that the supply of parking is fixed in a single day is correct, but there might be some exceptions. You can’t build a new parking lot in a few days because the team makes the playoffs. However, some things could be added to the supply in response to high demand. For example, a private parking lot may open itself to the public in response to high demand and high prices. That, of course, would result in more supply and lower prices.)

None of this says that parking lot operators are taking advantage of monopolistic power. People have plenty of choices here. Parking farther away from the stadium will still be less expensive than parking closer. If you are willing to walk further, you can save money. You can carpool and share parking expenses. You can take a bus or Metrolink. If parking lot operators set the price at $1,000 per spot, they won’t sell many spots. Every parking operator is going to set the price at a level they think will result in selling all their spots for as much as they can. If they set their prices too high, they will lower them quickly as market equilibrium sets in.

Of course, Mr. Miklasz would do the exact same thing with his show and column. If his ratings skyrocket, he wil increase the advertising rates for his show. Now, he might not be able to increase his rates today in response to more listeners during the playoffs.  But that is not because he is behaving morally and parking lot owners immorally. It is likely because he has chosen to sell long-term advertising agreements with customers for so many spots over a period of time because that is the best way for him and his station to operate. The parking lot operators who service the ballpark are not under such constraints.  

If Bernie was to say, write a terrible book that for some strange reason millions of people buy and it becomes a terrible movie, he will demand a raise from his employers. If they don’t give him the raise he feels he deserves, he can write more terrible books and make money that way. If he has enough time and desire, he can try to do all of these things at once. But he will sell his services, and the various items that accompany his services (ad rates, etc.) for the highest price he can based on the ever-changing market conditions. 

The parking lot operators do the exact same thing. There is absolutely nothing wrong with it.

Watch Live Tonight — Job Creation: How It Really Works and Why the Government Doesn’t Understand It

Posted on by Patrick Ishmael

Click below for live video of the Show-Me Institute’s Speaker Series on Economic Policy, which will begin at 6:00 p.m. CDT. Tonight’s speaker at this Saint Louis University event is Andrew Puzder, the CEO of Hardee’s. Puzder’s speech, “Job Creation: How It Works and Why the Government Doesn’t Understand It,” will focus on how to achieve genuine economic growth and wealth creation.


Video clips at Ustream

No Mas

Posted on by Rick Edlund

No mas. No more. Boxing fans will remember that famous line that a thoroughly frustrated and perplexed Roberto Duran uttered as he quit in his fight with Sugar Ray Leonard. The legendary pugilist with self-proclaimed “hands of stone” realized that it was time to pack it in. Duran wasn’t out of time, but he was out of hope.

So it is now with the Missouri Legislature. Lawmakers have struggled in vain since Sept. 6 to accomplish much in their special session. But the House can’t agree with the Senate on hardly anything, especially sunset provisions for key tax credits. As the finger-pointing of blame escalates, it’s time for legislators to admit that, just like Duran, they’re out of hope. They need to officially call a halt to the special session.

The bad news is that they haven’t fixed the state’s sizeable tax credits problem. The good news is that it appears they won’t pass Aerotropolis, the so-called China Hub proposal that was a bad deal for taxpayers from the get-go. Good because it means Missouri taxpayers apparently won’t be stuck with hundreds of millions of dollars in new tax credits. And to those lawmakers (and public officials) who continue to say “We’ve got to do something” to prime the economic pump in Missouri: There is a better way. Stop handing out tax credits and start lowering the tax burden for all companies and individuals. 

Something to think about for the next legislative session.

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