Anthony Barber wants to open a barbecue restaurant in north Saint Louis. But last summer, the city rejected his bid to buy the vacant building where he planned to put it. Now, after a yearlong investigation by Show-Me Institute Policy Analyst Audrey Spalding, the city has said that it will reconsider his application. Here's Anthony’s story.
Privatized Animal Shelter in Kansas City Having Issues
Kansas City is searching for a new operator of its animal shelter after canceling the contract with the vet who took it private about two years ago. The Star has the details, and Toellner Tells it and Tony’s Kansas City have the analysis.
I have cited this animal shelter as an example of successful privatization, so I’ve read these reports carefully. Toellner has a rundown of the great success the shelter has had, both in terms of saving animals’ lives and cutting costs (emphasis added):
Two years ago, the City Council decided to privatize the animal shelter and put the duties of running the shelter into the hands of a private group. Not only did the move save the city an estimated $175,000 a year in expenses and the hope was that it would help create more positive outcomes for the animals. And the results have proven that hope to be true.
In 2007 the city shelter, under the city’s management, killed 6,769 dogs and cats. In 2008 the city killed 4,912.
In 2009, with nearly a year of managing the shelter under their belts, the folks with VMC killed 3,101 dogs and cats — a 37% decrease in killing. The number dropped again in 2010, to 2,722 dogs and cats.
Despite these demonstrable successes, there are concerns with the leadership of the shelter. The city is now looking for another operator, although it seems from all of these articles that whoever is selected will still run it as a private entity. There have been many back-and-forth accusations and denials, and you can get those details from the above links. I have no idea whether the current manager of the private shelter has made the mistakes in care that the linked articles suggested, such as faulty recordkeeping and some (unproven) examples of animal mistreatment.
I have suspicions from reading these articles that there is a core group of animal rights activists involved who will never be satisfied until they get a no-kill shelter, either publicly or privately operated — no matter how well it is run.
If the shelter truly needs better leadership, so be it. I certainly hope that the current vet is not being forced out because of political pressures, but I have no idea what is happening behind the scenes. I’ll leave it to Toellner again to sum up how the past two years have worked out:
The great news is that so far, I’ve not heard any talk from city hall about the city taking over the contract. Privatization has clearly shown itself to be a superior option to city control — both in terms of total budget, and in animal lives saved.
I will continue to use this example as one of privatization’s success stories. Can it be made even better with a different manager? Perhaps, and I plan to continue to follow this issue.
Missouri and Utah Compete for Filmmakers’ Favor Using Tax Credits
While I was up in the air traveling over the weekend, I found an article in my in-flight magazine that advertised Utah’s film tax credit program.
Utah’s film tax credit program is less generous than Missouri’s — filmmakers get 20 cents back on every dollar they spend in Utah, but they get 35 cents back for every dollar they spend in Missouri.
According to the article, Utah has “a rare mix of different locales,” “limitless vistas,” and “abundant post-production facilities.” The state is “filled with good, honest, hard-working people,” and boasts “some of the most beautiful countryside.”
Doesn’t that sound familiar? Isn’t that exactly the language that supporters of film tax credit programs use to describe Missouri?
Additionally, from the article (emphasis mine):
“Currently, we offer a 20 percent cash rebate program based on a $1 million minimum direct spend in the state,” says Marshall Moore, director of the Utah Film Commission. It’s an incentive Utah hopes to extend for at least five more years and possibly increase to as high as 30 percent.
This shows how states try to out-compete each other by providing ever-increasing incentive packages to filmmakers. They engage in a bidding war. (I have highlighted before how this happens in the auto industry.) Policymakers have little incentive to keep the amount of these incentives in check, because taxpayers are the ones left to pick up the tab. This is obvious from the article, which says that Utah’s state government is considering increasing the amount of its tax credit. Hopefully, this won’t give policymakers in Missouri a reason to increase this state’s tax credit.
If Missouri and Utah both offered a tax credit of 30 to 35 percent of total in-state expenditures, how is that different than if neither had offered the credit at all?
As regular readers will know, film tax credit programs fail to make money for a state. Most of the production expenses are single-time costs that don’t resonate through the state economy. This is because the residents of the whole state pay for a movie that’s made in one town. A movie in St. Louis, for example, may add to the city’s revenue, albeit briefly, but it does nothing for Hannibal or Joplin. A better way to grow the economy than funneling taxpayers’ money through filmmakers would be to eliminate the program and let Missourians themselves keep their earnings to use as they see fit in the private sector.
Even if states like Utah continued their programs, policymakers in Missouri would be wise to stop providing tax credits to filmmakers. If film productions go to Utah instead of Missouri, Missourians would still be able to see films. However, instead of propping up an entire industry through their taxes, they would only have to pay the price of a movie ticket. I said it before and I will say it again: States would be better off if they disbanded their film tax credit programs.
Some people question whether ending the film tax credit program is feasible or realistic. I believe that it is. For example, the Tax Credit Review Commission recommended eliminating the film tax credit program because they determined that it is underperforming. Policymakers in the Missouri state legislature have yet to act on this recommendation, however. Fortunately for taxpayers, more and more states are realizing that they can entice businesses and industries without targeted tax credits.
Appointment of New LRA Commissioner “Imminent”
Last night, I attended the monthly meeting of the Special Administrative Board (SAB), which governs the St. Louis Public Schools. Following the meeting, I spoke with Rick Sullivan, SAB president, who confirmed that he is aware of the vacancy on the Land Reutilization Authority (LRA) Commission caused by the resignation of Howard Hayes, the longest-serving commissioner.
In an interview, SAB President Sullivan said, “I would expect an appointment to be imminent. The board discussed it today.” He continued, “I need to confirm qualifications and willingness of some people we’re considering.”
Although Sullivan did not name any potential candidates for appointment to the LRA Commission, he elaborated on the SAB’s selection criteria: “[W]e want somebody who understands all of the issues related to LRA, familiarity with real estate or otherwise.”
When asked whose interests the new appointee will represent, the school district or residents, Sullivan said that the appointee “[has] a responsibility to represent the interests of the city and take into consideration how they’re appointed. So, first and foremost are the residents of the city, city interests, and then keeping in mind where that appointment came from.”‘
Sullivan hinted strongly that the SAB hopes to have its appointment in place by the March 30, 2011, meeting of the LRA Commission.
The Show-Me Institute will continue to follow these developments closely. Stay tuned to Show-Me Daily for the latest on this story.
Audrey Spalding on ‘St. Louis on the Air’ Thursday at 11:00 a.m.
Audrey Spalding will be on KWMU, 90.7 FM, tomorrow at 11:00 a.m. to discuss the city of Saint Louis’ landholding policies. Spalding’s research has found that the city rejects roughly one out of every two offers to purchase its vacant property. Today, the city owns more than 9,000 parcels of vacant land, in part because of its reluctance to sell.
A Sky-Is-the-Limit Federal Budget
In Charles Dickens’ classic novel David Copperfield, one character observes the need for careful budgeting: “Annual income, twenty pounds; annual expenditures, nineteen pounds, ought and six; result, happiness. Annual income, twenty pounds; annual expenditures, twenty pounds, ought and six; result, misery.”
If you are not in the happy position of earning at least slightly more than you spend, what portion of your household budget comes from borrowing, or selling the family silver? Is it the seemingly modest 3 percent that spelt M-I-S-E-R-Y for Dickens’ character, who wound up in debtors’ prison? Or is it even worse than that? Say, a mind-boggling 43 percent? In percentage terms, that is the expected shortfall between U.S. government receipts and expenditures in the 2011 federal budget.
According to revised numbers released last week, the Barack Obama administration expects its annual revenues for fiscal 2011 to come in at $2.173 trillion, versus annual expenditures of $3.818 trillion. That leaves a deficit of $1.645 trillion. As a result, our government will have to borrow (or find other ways to paper over) 43 cents out of every dollar that it intends to spend.
The Obama administration has more than tripled the national deficit since the last full year of the George W. Bush administration. In doing so, it has achieved a remarkable feat: It has made the gap between federal receipts and outlays even wider than it was at the height of World War II.
U.S. spending during the war increased by a factor of eight, rising from $8.5 billion in 1940 to $70.6 billion in 1945. The huge increase in federal expenditures happened for many reasons. Among other things, it supported the 12 million men and women serving in the U.S. armed forces at the peak of the war. It also supported a hundredfold increase in annual production of military airplanes, on the way to annual production of more than 96,000 fighters, bombers, and transport aircraft in 1944.
To raise additional revenues during the war, the government came up with the ingenious device of a withholding tax on payroll checks. Federal tax receipts rose from $8.2 billion in 1940 to $41.5 billion in 1945 — a fivefold increase. That left an annual deficit in 1945 of $29.1 billion, or 41 percent, on total expenditures of $70.6 billion.
Thus, during the greatest war in human history, the United States — supplying not just its own forces, but those of Britain and Russia — had a budget deficit two percentage points below the gap that now looms for fiscal 2011.
When a nation is at war against a deadly enemy, many people accept that the government will demand sacrifices on the part of citizens. During World War II, this included not just increased taxes, but rationing, price controls, conscription, and other limitations on individual freedom. As Nobel laureate economist F.A. Hayek wrote in The Road to Serfdom, “The only exception to the rule that a free society must not be subjected to a single purpose is war and other temporary disasters when subordination of almost everything to the immediate and pressing need is the price at which we preserve our freedom in the long run.”
Does the Obama administration live up to Hayek’s test? I believe not. The all-encompassing unity of national purpose of which Hayek spoke disappears under all but the gravest and most immediate peril.
Federal spending will reach an estimated 25.3 percent of gross domestic product in fiscal 2011, up almost five percentage points since 2008. To what end? Far from kick starting the economy, the government’s heavy reliance on deficit spending has only served to expand an already bloated public sector and to constrict the private sector. This is, indeed, the road to serfdom.
Andrew B. Wilson is senior editor at the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.
Longest-Serving LRA Commissioner Resigns
The head of the Saint Louis Land Reutilization Authority (LRA), which owns more than 9,300 vacant city parcels, has resigned. The resignation of LRA Commissioner Howard Hayes came two weeks after the Show-Me Institute began inquiring about Hayes’ appointment, and three weeks after the institute met with LRA staff members to discuss the city’s landholding policies. The LRA’s Board of Commissioners consists of three members, one each appointed by the city’s mayor, comptroller, and Board of Education.
Hayes was the longest-serving member of the LRA, having begun his service on Jan. 1, 1999, as the representative appointed by the Saint Louis Public Schools. During his tenure, the LRA’s property holdings rose from 8,729 parcels to more than 9,300 — an increase of nearly 8 percent.
The Show-Me Institute made an effort to contact each member of the LRA Commission prior to publication of the institute’s initial LRA findings. Indeed, the institute contacted Saint Louis Public Schools for comment about our research multiple times, on Jan. 31, Feb. 2, and Feb. 11, and met with LRA staff members in late January.
On Feb. 14, Hayes resigned his unpaid position as a member of the LRA Commission with the following statement:
This letter is to serve as my official resignation from the Land Reutilization Authority.
It has been a unique experience that will long be remembered.
A phone call today to Saint Louis Public Schools confirmed that the Special Administrative Board will meet Thursday night, March 10. The school district’s communications director promised me that he will ask the SAB whom it intends to nominate as Hayes’ replacement.
Our yearlong study into the practices of the LRA found that the agency rejects roughly one out of every two offers to purchase vacant city property.
The Show-Me Institute will be following the selection of a new commissioner closely, because this represents an opportunity for a fresh start at the LRA. Will a new commissioner choose to sell more property? Will a new commissioner change LRA policy? We’ll keep you posted.
David Stokes on the Radio in Springfield Wednesday Morning
David Stokes will be discussing his op-ed about nuclear power financing regulations on KWTO AM 560 with Dan Vaughn and Dan Calfano, at 9:00 on Wednesday morning. Please listen in if you are able.
David Stokes Guest Hosting on the Marconi Machine This Afternoon
Show-Me Institute Policy Analyst David Stokes will be guest hosting on the Dr. Gina Loudon Show this afternoon from 4:00 to 6:00, on KJSL 630 AM in St. Louis. Please listen in, if you can. Scheduled topics include nuclear power expansion, and housing prices and demography in St. Louis. Other potential topics include:
- The harms of occupational licensing
- Mardi Gras
- The earnings tax in St. Louis and Kansas City
- English punk rock of the 1970s with a focus on The Clash
- The Missouri minimum wage
- St. Louis University High School
- Public pension fund problems
- David’s adorable children
