On Jan. 20, 2006, the Show-Me Institute sponsored this presentation by Lawrence Reed, then the president of the Mackinac Center for Public Policy, presently the president of the Foundation for Economic Education. Reed explains the many flaws with the prevailing theory that Standard Oil was a monopoly or that the company’s founder and president, John Rockefeller, was exploitative — or, indeed, anything other than a shrewd and successful businessman serving his customers well. Ethelmae Humphreys, at the time a member of the Show-Me Institute’s board of directors, introduced the speech.
Show-Me Institute Open House – Keynote Speaker Arthur Laffer
Dr. Arthur Laffer discusses his essay “The Missouri Compromise,” which examines the effects of a state income tax on various states across the country, with a particular focus on Missouri and the potential benefits of replacing the income tax with a revenue-neutral sales tax. Laffer’s essay can be found here.
Laffer was the keynote speaker at the Show-Me Institute’s Open House, held Oct. 21, 2010.
Gov. Nixon’s Sky-High Travel Expenditures
While Missouri faces a $500 million budget deficit, Gov. Jay Nixon has increased his frequent flights around the state, hiding the cost of his trips by charging the expenses to various state agencies. Contributors to Show-Me Daily have highlighted this issue previously. According to an Associated Press article by David Lieb, the Missouri House leadership recently introduced legislation to end this practice.
The new policy would increase transparency in the state budget, which is clearly lacking. Taxpayers are picking up the cost of this travel, so the sheer amount of this line item should not be hidden from them. If the costs of these trips are diffused across the budgets of multiple government agencies, taxpayers will not have a clear picture of the real costs of Gov. Nixon’s travel. What good does the Missouri Accountability Portal provide if it is so disorganized?
According to Lieb’s article:
Nixon often bills a specific agency for his flights. But he sometimes splits his travel cost among about a dozen state offices when the trips have no direct connection to specific agencies, such as his attendance at sporting events.
Does anybody seriously believe that Gov. Nixon’s attendance at a sporting event generates an increase in economic output for the state economy? Additionally, when the governor travels around the state to announce a handful of jobs here and there, doesn’t that travel expenditure partly negate the ostensible benefit of the jobs?
Even though the state government faces a budget shortfall, and even though Nixon has made cuts in other agencies, he increases his own travel budget. If the governor were serious about promoting fiscal responsibility, he would take measures to reduce these expenditures, but he doesn’t. The fiscally responsible thing to do would be to seek out cheaper substitutes, such as videoconferencing, or to cease holding multiple ceremonies throughout the state for a single project.
Missourians would be better off if they weren’t picking up the cost of Nixon’s trips. These expenditures decrease the funds available in agency budgets by unexpected amounts, which means that the governor’s travel comes at the expense of other programs. If the travel expenditures were reduced, Missourians could keep a greater proportion of their earnings.
Show-Me Institute Free-Market Field Trip No. 3: Ticket Scalping
In this video, Show-Me Institute staff and interns illustrate a functioning market by scalping St. Louis Cardinals tickets at Busch stadium. Free-market lessons are interspersed throughout the video as the teams show how market transactions can make both parties better off. The video was filmed Aug. 4, 2010, in front of Busch Stadium.
Show-Me Institute Free-Market Field Trip No. 2: Payday Loans
In this video, policy analyst David Stokes, accompanied by two research assistants, endeavors to get to the heart of the payday loan debate by … actually getting a payday loan. In many ways, the experience is not what you might expect. In celebration of his success at this questionable financial decision, Stokes compounds his bad behavior by going gambling at the casino with his new money. The axiom “The house always wins” was in no danger of being toppled. Even though money was lost, lessons were learned and nobody was hurt. Filmed on location at Saint Louis–area payday loan stores and casino on April 1, 2010.
Needed: An Alfred Kahn for Health Care Reform
In the annals of progressive thought, there was a fleeting moment when Ted Kennedy, Ralph Nader, and other left-wing icons sang the praises of unfettered free-market capitalism. This happened with the passage of the 1978 Airline Deregulation Act during Jimmy Carter’s presidency.
The recent passing of Alfred E. Kahn is a reminder of that remarkable moment — when leaders on both sides of the political and ideological spectrum agreed to deregulate the U.S. airline industry. In 1977, incoming President Carter appointed the flamboyant and outspoken Kahn as chairman of the Civil Aeronautics Board, the agency responsible for setting airline routes, schedules and fares. Kahn set out on a mission of writing himself and his agency out of a job — opening the industry to real competition for the first time. Kahn gave airlines the freedom to enter (and exit) domestic markets and to price as they pleased. He also allowed new low-cost, low-fare airlines to challenge the incumbents.
Continue reading “Needed: An Alfred Kahn for Health Care Reform”
Worth the Cost? A New View of Ballpark Village
This week, the long-stalled Ballpark Village came back from the dead, one decade after it was first announced. The new project, consisting of an office building that will soon rise north of Busch Stadium, takes a much-reduced form from its original conception. Tim Logan reports on the Post-Dispatch‘s Building Blocks blog that the City’s Missouri Downtown Economic Stimulus Authority voted Wednesday to recommend the project to the St. Louis Board of Aldermen, which will consider legislation authorizing the project in the coming weeks.
Ballpark Village, April 2010, View to Northeast
The anchor tenant for the development, Stifel Financial, will relocate from its present downtown St. Louis headquarters, which stands six blocks north of Ballpark Village. Tax dollars, in the amount of at least $35 million and potentially increasing to $188 million, are essential to the project’s financing. These monies will be spent up-front by the developers, assuming that the project’s bonds find willing buyers. Despite assurances that the city of St. Louis will not need to cover potential shortfalls on the project’s bond revenues, the St. Louis Comptroller’s Office has reportedly expressed concern about the size of the proposed financial package and its fiscal impact on St. Louis city government.
Taxing districts at both the local and state levels will forgo revenues that they would otherwise collect in order to fund this project. The Missouri Downtown Economic Stimulus Act, like Tax Increment Financing, allows an authorized project to capture revenue growth from activities on the site. Unlike TIF, however, MODESA funding allows a development project to capture state tax dollars in addition to local tax dollars. Keep in mind that this off-budget spending will come from a city government that claims its inability to provide basic services should the earnings tax go away!
In the absence of economic growth, publicly funded projects like Ballpark Village simply move economic activity from one site to another, which may cause governments to run deficits. Government, therefore, must either cut spending by $35 million or raise taxes and fees to cover this shortfall.
Is increasing bonded indebtedness by a minimum of $100 per city resident worth the cost? Is this what city taxpayers signed up for a decade ago, when the city of St. Louis eliminated the “Amusement Tax” on Cardinals tickets?
You be the judge.
DED Awards $8 Million in Tax Credits to Developer Ruled Ineligible by Courts
In 2010, it appeared that the Missouri Department of Economic Development (DED) could sink no further. After all, the agency had initially awarded tax credits to a Cape Girardeau businessman who pleaded guilty to passing bad checks, and has been scolded by the State Auditor’s Office for (perhaps accidentally) pulling numbers out of thin air that overstate the economic benefits of tax credit projects.
But the DED has outdone even itself. On Jan. 5, the St. Louis Post-Dispatch reported that the agency had awarded $8 million to a redevelopment project that a court judge has ruled no longer exists.
NorthSide Regeneration LLC, the company behind an enormous and ambitious project slated to occur in north Saint Louis, received the $8 million. However, the tax credits that the DED awarded must be tied, according to state statute, to a “redevelopment agreement.”
State statute specifies that such a redevelopment agreement exists only when a city has selected a developer (in this case, NorthSide), by passing an ordinance to award additional local tax incentives to the company. Unfortunately for the NorthSide company, although city alderman passed such an agreement, it was thrown out by a judge in July — so, according to the statute, NorthSide simply isn’t entitled to the money.
This does not mean that NorthSide’s development should halt. The company has put forward a great deal of money to get the project started, and if the developer believes that the project will be successful without government subsidy, the project will move forward. But the DED should not be in the business of subverting state statute.
The Post-Dispatch article includes a sadly amusing quote from DED spokesman John Fougere: “We have to abide by the statute as it stands and as it stands, there are no safeguards for taxpayers.”
Of course, what Fougere fails to mention is that one easy way of safeguarding Missouri taxpayers is not to award $8 million to a redevelopment agreement that has been thrown out by the court. Instead, the department awarded the tax credits, but with a specification that if a court were to throw out the redevelopment agreement again, the company has to give back the money.
In essence, the DED has awarded NorthSide an interest-free loan, just in case the company manages to prevail in court at some point in the future. Why on earth would the DED do this? Surely, DED employees wouldn’t ignore their statutory obligations?
A possible reason is that because NorthSide is in the process of appealing this ruling, the DED viewed the judge’s ruling as not final — it could be overturned. However, it is strange that the DED, especially in light of recent public scrutiny, would not take the more prudent course of awaiting the result of the appeal before awarding tax credits.
Not only does Missouri desperately need a thorough, critical review of tax credit programs in general, it is clear that the workings of the DED need to be examined. This agency awards hundreds of millions of dollars each year, and is neglecting its duty to safeguard taxpayer money.
Audrey Spalding is a policy analyst for the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.
Celebrate National School Choice Week With Us on January 27!
Next week is National School Choice Week, when groups around the country will hold events in support of school choice. As our contribution to the dialogue, the Show-Me Institute is sponsoring a showing of The Cartel at the Tivoli Theater (6350 Delmar) in Saint Louis on Thursday, Jan. 27, at 6:30 p.m. (registration starts at 6:00).
The documentary (you can watch the trailer at the film’s website) examines the failures of New Jersey’s public school system, which spends more per student than that of any other state but is still home to a frighteningly large number of failing schools. Director Bob Bowdon traces how money is frequently diverted from classrooms, and flows instead to administrators, union coffers, and political patronage positions. Although Bowdon focuses on New Jersey, the problems he uncovers are often the same as those we find here in Missouri and across America.
The special screening will be followed by a panel discussion featuring two Missouri State representatives at the forefront of the education issue in our state: Rep. Scott Dieckhaus (R), the chairman of the House Committee on Elementary and Secondary Education, and Rep. Tishaura Jones (D), assistant minority floor leader and also a member of the House Committee on Elementary and Secondary Education. They will share their views on the issues that come before this important committee, and on which of those may find their way into legislation during the 2011 session.
The event is free, but if you would like to come, please RSVP to our public relations representative, William Kay.
