Spotted: Food Trucks and the Free Market

Posted on by Christine Harbin

When I was in Washington, D.C., over the weekend, I encountered a food truck parked next to the Woodley Park Metro station. A crowd of people waited in line next to the truck, with wallets wide open and hungry for lobster.

The District is evidently friendlier to mobile vending than certain municipalities in the Saint Louis region, which may even be losing some business to the D.C. area. Pi Pizzeria of Saint Louis has been restricted from Clayton, Mo., and Edwardsville, Ill. — but it expanded into the D.C. area this month! Although I can’t suppose that the Pi food truck wouldn’t have gone to D.C. anyway if the Saint Louis area were wide open for Pi’s trucks to do business, I do find the coincidence interesting.

Who would have predicted that there would be such a demand for lobster from a food truck? I bet that it wasn’t a government official.

Lobster food truck in Washington, D.C.

Lobster food truck in Washington, D.C.

Using Your Property to Criticize Us for Taking Your Property? You’d Better Believe That’s Illegal

Posted on by John Payne

End Eminent Domain AbuseOn Wednesday, lawyers from the Institute for Justice will argue before the 8th U.S. Circuit Court of Appeals in Saint Louis on behalf of Jim Roos, whose anti–eminent domain mural has become familiar to most of us in the Saint Louis metro area.

Roos painted the mural to protest the city’s decision to use eminent domain to seize numerous properties from his low-income housing nonprofit organization, Sanctuary in the Ordinary. After Roos completed the mural in 2007, the city cited him for violating its sign code and ordered Roos to remove the mural. Roos refused, and fought the case in federal court on First Amendment grounds. Last March, a U.S. District Court ruled against Roos, remarkably claiming that the mural would be legal if it were devoid of political content, like a fleur-de-lis or a Cardinals logo. This turns the First Amendment on its head, because it was explicitly added to the Constitution with the intent of protecting political speech.

The case also illustrates the unity of property rights and civil rights. If the government can legally regulate away Roos’ most effective platform, it will have the same chilling effect on free speech as direct censorship. Similarly, freedom of religion is useless if zoning laws prevent groups from building places of worship; freedom from search and seizure only applies if your home is your castle; and freedom of the press will not get you very far if the government can block access to all the presses. Many people think of property rights and civil rights as fundamentally different things, but if the government places enough restrictions on how you can use your property, it must necessarily interfere with our fundamental political rights. Let us hope that the appeals court will understand this connection and allow Roos to speak his mind.

Headline allusion here.

‘Sinful’ Tax Collections Won’t Fix Budget Woes in Missouri

Posted on by Christine Harbin

Missouri is strapped for cash, and state lawmakers have proposed a quick fix: hiking the cigarette tax rate. Smokers are an easy target, certainly. They choose to inhale a known carcinogen, and nonsmokers like me ultimately bear some of their health care costs. Unfortunately for Missourians, raising the rate on cigarettes or other targeted vices is unlikely to solve the state’s budget woes.

I credit lawmakers in Missouri for being forthcoming about the fact that the purpose of this tax hike is to generate tax revenue, not to discourage bad behavior. Lawmakers often attempt to discourage smoking on moral, ethical, or public health grounds with higher taxes, but that’s not the issue here — money is. No matter the reason for higher cigarette taxes, though, this policy won’t solve the state’s money problems. The tax hike will cause smokers to buy fewer cigarettes. Some will smoke less as a result, and others will quit entirely. Their personal health may benefit, but they won’t contribute any cigarette tax revenue.

Those who do continue to smoke will buy fewer cigarettes in Missouri because they will no longer be getting a comparative price break. By keeping its tax rate low relative to other states, Missouri encourages those who do smoke to buy their cigarettes within the state, and it motivates non-residents living close to the border to shop here, as well. After a rate increase, smokers living near the border would be much less likely to buy their cigarettes in Missouri when they come here to work and to attend sporting events downtown, instead buying their cigarettes in their home states and generating tax revenue there.

The eight states that border Missouri have an average tax rate of $0.90. If lawmakers hike the tax rate by $1, which is what they propose, the tax rate in Missouri will exceed the tax rate in all but one of its border states. Individuals will tend to vote with their feet and buy cigarettes elsewhere, and the state will see less tax revenue as a result.

Missouri residents and businesses would be better off if the state government tried other strategies to close the budget deficit instead. State officials should reform spending and operate within their means, looking for ways to lower tax rates across the board rather than raise them. Missouri would attract more business activity and, consequently, more tax revenue if policymakers fostered a low-tax environment.

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

Is Albert Worth 30 Million?

Posted on by Administrator

It seems that all of Saint Louis and much of the baseball world are asking that question these days about a contract extension for El Hombre. The numbers being bandied about seem out of this world, even for baseball’s best player. But is he worth it? The Show-Me Institute’s John Payne took a swing at that question when he appeared on the Mark Reardon Show on KMOX on Feb. 11.

Full Interview (MP3)

Missouri Spends Billions Propping Up Private Industries

Posted on by Christine Harbin

Missouri spends more than half a billion dollars annually propping up private industries.

The following graph shows the trend of subsidies to private industries in Missouri. I used Gross Domestic Product by State data from the Bureau of Economic Analysis (BEA) to produce the graph.

Some may dismiss these subsidies because they are small relative to Missouri’s gross state output (they equal 0.27 percent of GSP, on average). However, this view ignores the big picture; it ignores what Missouri is giving up when it gives handouts to private industries.

This is a considerable amount of money on an absolute level. According to the BEA data, the government allocates an average of $539 million in subsidies to private industries in Missouri each year. Many other programs compete for this money, so the government and taxpayers face an opportunity cost equal to the amount of the subsidy. This money could pay for essential services, reduce the state budget deficit, or be returned to taxpayers to spend, save, and invest in the private sector.

Trend of Subsidies in Missouri by Industry Category (Private Sector)

Trend of Subsidies to Private Industries

Citizen Initiative Process a Crucial Check on Political Power

Posted on by Audrey Spalding

One of the checks that Missouri voters have on the power of state politicians is in jeopardy: Sen. Jolie Justus (D–Kansas City) is taking aim at the initiative petition, a process that allows Missourians to band together to put laws and constitutional amendments on the statewide ballot. This is incredibly important, because some policy changes that would greatly benefit Missouri can be so politically unviable that politicians won’t propose them. Petitions circulating this year include limiting eminent domain and imposing term limits on top state officials.

The process is already extremely difficult. To change state law, groups must get tens of thousands of the legal voters in two thirds of the state’s congressional districts to sign a petition. Missouri has more than 4 million registered voters, so any group trying to get an initiative on the ballot must collect more than 100,000 signatures.

And it’s expensive. Paul Jacob, president of Citizens in Charge, a nonprofit group dedicated to preserving and advancing the ability of U.S. citizens to petition state government directly, estimates that the minimum cost for signature collection in Missouri is more than $2 per signature, and can be significantly higher. This means that a group of people trying to change government for the better would likely need at least $300,000 even to attempt to bring a state law change before Missouri voters for their consideration.

In fact, most groups that have attempted to change state law with the current initiative petition process have failed. In recent years, Missouri Citizens for Property Rights, a group attempting to strengthen safeguards against the abuse of eminent domain, managed to gather more than 160,000 signatures from registered Missouri voters but still fell short of the already hefty requirements imposed.

Justus’ proposal will make it at least 50 percent harder (and that much more expensive) for Missourians to bring an issue to statewide voters. She proposes requiring that groups collect signatures from registered voters in all congressional districts. That would mean groups would have to collect, at minimum, signatures from an additional 45,000 registered Missouri voters. That’s at least another $100,000 in expenses. Why would Justus want to restrict this process further, so that only the most wealthy individuals and groups can participate?

According to the St. Louis Business Journal, Justus hopes that the proposed law will make it more difficult and costly for people and organizations to “buy laws and constitutional amendments.” She is certainly right — her proposal will make it more difficult. But her logic is flawed. Justus’ proposal will make it more difficult for any group to impact state government directly, not only those she suspects of trying to “buy” laws.

One of the greatest strengths of American government is that there are a number of checks and balances at the federal, state, and local levels that limit the ability of any one branch of government to abuse its power. The initiative petition process is one of those checks on power, and restricting it further will serve only to erode Missourians’ ability to limit legislators by initiating good — but politically difficult — policy change.

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

Cigarette Taxes Won’t Solve Missouri’s Budget Problems

Posted on by Eric D. Dixon

The Southeast Missourian printed a new op-ed today by Christine Harbin, Show-Me Institute policy analyst and regular Show-Me Daily contributor. She dismantles the conventional wisdom that taxing people’s vices is a good way for the state to raise revenue. Here’s a paragraph from her analysis:

I credit lawmakers in Missouri for being forthcoming about the fact that the purpose of this tax increase is to generate tax revenue, not to discourage bad behavior. Lawmakers often attempt to discourage smoking on moral, ethical or public health grounds with higher taxes, but that’s not the issue here — money is. No matter the reason for higher cigarette taxes, though, this policy won’t solve the state’s money problems. The tax increase will cause smokers to buy fewer cigarettes. Some will smoke less as a result, and others will quit entirely. Their personal health may benefit, but they won’t contribute any cigarette tax revenue.

Visit the Southeast Missourian’s site to read the rest. And, if you’d like to read more on the subject, check out an earlier commentary about cigarette taxes by former Show-Me Institute editor Tim Lee.

Wanted: More Transparency, Less Misuse

Posted on by Christine Harbin

The East-West Gateway Council of Governments report, which I discussed previously, confirms another concept that Show-Me Institute staff and scholars have highlighted repeatedly: Local incentives suffer from a lack of oversight and transparency.

If it had greater oversight, the Show-Me State could save itself money — and some embarrassment. Because of its current disorganization and lack of transparency, the state provides financial assistance to businesses and individuals (including convicted embezzlers) that have failed to meet the legal requirements. Additionally, the government would struggle less to keep track of the applications, as it does now.

From the report (emphasis mine):

In Missouri, reviews of the use of economic development incentives in the state over the past 20 years conducted by the Joint Committee on Tax Policy, the DED Incentive Review Committee and the State Auditor have all called for legislation that would increase reporting requirements, availability of data, and accountability for tax credit programs. Accountability and reporting appear to be improving with the implementation of the tax accountability portal, the requirement of the State Auditor to review all tax credits and the Joint Committee on Tax Policy’s review and hearings of tax credit programs and improvements made to TIF and TDD legislation in 2009. Yet, sufficient legislation has not been passed to provide true accountability or transparency.

With better organization, the state would be less likely to make inappropriate expenditures. If the information about local development incentives were improved, policymakers could make better decisions.

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