Like I Said, It’s Pretty Common

Posted on by John Payne

Most people probably believe that the mistakes of the SWAT raid on Jonathan Whitworth’s home in Columbia are extraordinarily rare. That is, unfortunately, false. I’m sure most SWAT raids do find the person and evidence they are looking for (even if the amount of force they use is unnecessary for the task), but raids that turn up nothing or hit the wrong house are unacceptably common. Today’s example comes from Georgia:

An elderly Polk County woman is hospitalized in critical condition after suffering a heart attack when drug agents swarm[ed] the wrong house. Machelle Holl tells WSB her 76-year-old mother, Helen Pruett, who lives alone, was at home when nearly a dozen local and federal agents swarmed her house, thinking they were about to arrest suspected drug dealers.

“She was at home and a bang came on the back door and she went to the door and by the time she got to the back door, someone was banging on the front door and then they were banging on her kitchen window saying police, police,” said Holl.

Holl says her house was surrounded and she was scared to open the door. When the Polk County Police Chief finally convinced her she was safe, she let them in.

“They never served her with a warrant. At that point, she said the phones were ringing with the other men that were in the yard and they realized that it was the wrong address,” said Holl. […]

“My mother has had a heart attack. She has had congestive heart failure and she is in ICU at the moment. She is not good condition and her heart is working only 35 percent,” said Holl.

Holl admits that her mother has had three heart attacks but has been doing well for the past couple of years.

“She was traumatized. Even the doctor said this is what happens when something traumatic happens. He said it’s usually like a death in the family or something like that just absolutely scares them half to death, and that is what has happened,” said Holl.

SWAT raids are designed shock and confuse, which is why, when they occur, many people believe the police are actually criminals attacking them. This can lead to heart attacks or residents attempting to defend themselves from perceived criminals, setting off a deadly firefight. When SWAT raids are used for nonviolent situations, they almost always introduce danger into the situation rather than removing it.

Also, there is this tidbit:

Police say they have had her mother’s home under surveillance for two years.

Holl says if that’s true, how could police get the wrong address?

“We have just found out from a neighbor that they (police) went into some other elderly woman’s home who was on oxygen and took her oxygen off of her and scared her half to death,” said Holl.

If the police really have been watching the house for two years and still raided the wrong house (I have my doubts), it certainly makes the Columbia Police Department’s new rule of keeping houses that they plan to raid under constant surveillance seem woefully inadequate.

Story via Hit and Run.

Raw Milk Consumption: A Consensual Crime

Posted on by Christine Harbin

The St. Louis Post-Dispatch recently published an article that synthesizes the arguments for and against raw milk consumption.

It strikes me that the debate over the appropriateness of raw milk consumption is a natural application of the general principle in Ain’t Nobody’s Business if You Do: The Absurdity of Consensual Crimes in Our Free Society, by Peter McWilliams, which we recently read for the Show-Me Institute’s book club. His central idea is the following:

You should be allowed to do whatever you want with your own person and property, as long as you don’t physically harm the person or property of a nonconsenting other.

It should not be the role of government to protect individuals from their own actions, such as consuming raw milk. Consumers of raw milk are rational, consenting adults. They can judge for themselves the costs and benefits associated with consuming milk that is unpasteurized. A person may harm himself by drinking raw milk (just as he may harm himself by drinking pasteurized milk), but he does not harm others by doing so.

Furthermore, it should not should not be the role of government to instruct individuals about which products are appropriate to consume and to produce, and which behaviors are appropriate to engage in, provided they do not hurt other individuals. Individuals who desire to buy raw milk should have the freedom to do so, and dairy farmers who want to produce and sell raw milk should similarly be free to do so.

As an unintended negative consequence, prohibiting the sale of raw milk will be ineffective at stopping its consumption; instead, it will drive such consumption underground and encourage real crimes. Raw milk bans will increase search and transaction costs for the consumer — they could join a raw milk club, travel to a state that permits it, or buy the product disguised with a misleading label.

Sarah Brodsky has written previously about the laws related to raw milk consumption. McWilliams would disagree that the consumption of raw milk should be illegal. From his book:

People often use the word legal too loosely. They fail to give sufficient thought as to what legal and illegal really mean. When we say a given activity should be illegal, what we’re saying is that if someone takes part in that activity, we should put that person in jail. When it comes to consensual crimes, however, when people say, “It should be illegal,” what they usually mean is, “That’s not right,” “That’s not a good idea,” or “That’s immoral.” When using the word illegal, it’s important to remember how forceful the force of law truly is. We are all entitled, of course, to our opinions about certain activities, but do we really want to lock up people who don’t go along with our opinions?

Parenthetically, from the article, I suspect that raw milk bans could be motivated by rent-seeking behavior. Producers of pasteurized milk could encourage banning raw milk as a means to create a barrier to entry to the market:

To some, new legislative efforts to relax raw milk laws could encourage more producers in the struggling dairy industry to get into the raw milk game[.]

Similarly, bans on the production and sale of raw milk discourage small farms from entering and operating in the market, and they favor larger firms that currently operate in the market and possess the resources to pasteurize their product.

Truth in Advertising

Posted on by Dave Roland

As many fans of the Show-Me Institute will already know, I have spent a lot of time during the past six months discussing the questionable constitutionality of Congress’ attempt to punish individual citizens who choose not to purchase government-approved health insurance policies. In fact, I’ll be discussing this issue tomorrow morning between 10:15 and 10:45 on Sarah Steelman‘s radio show on KWTO 560-AM in Springfield. You can also listen in online.

Early in this year’s legislative session, members of the General Assembly asked me to offer testimony on the Health Care Freedom Act, which was proposed as a constitutional amendment that would recognize the fundamental right of citizens of Missouri to decide for themselves how they will pay for their health care, and that no government could rightfully interfere with that decision. In my testimony, I pointed out that if courts decided that nothing in the U.S. Constitution prevented the government from mandating the purchase of government-approved insurance policies, a constitutional amendment of the sort contemplated in the Health Care Freedom Act could offer a legal “Hail Mary” — a last line of defense that might prevent further congressional intrusion into citizens’ lives.

Despite overwhelming support in both the House and Senate, the Missouri General Assembly did not agree to let citizens vote on this constitutional amendment. Instead, the legislature placed the original bill’s language into House Bill 1764, which would allow voters an August referendum on adopting a new statute. Many of the legislators and citizen groups who had worked to pass the original bill are now hailing the passage of HB 1764, implying that if the people vote to adopt this statute, it will have the same effect as the proposed constitutional amendment might have. Unfortunately, this is simply not true. Missouri voters may well use this referendum as a political statement through which they can express their opinions about the federal health care reform law, but the text that might have been legally useful as a constitutional amendment will have zero legal effect as a statute.

The text that will be presented at the referendum states, in part: “No law or rule shall compel, directly or indirectly, any person, employer, or health care provider to participate in any health care system.” A court called upon to evaluate whether this provision would be effective against any federal enforcement of the health insurance mandate will first point out that because the language makes no reference to any particular government, it must be assumed to apply only to law- or rule-making subdivisions of the state of Missouri. Not only is it virtually unheard of (and generally futile) for a state statute to attempt to bind the federal government or one of its agencies, the plain text of the bill says nothing to suggest that is its purpose. A court looking at this provision as a statute will almost certainly end its analysis there.

However, even if the court infers that the General Assembly intended to prevent the enforcement of certain federal laws, the statute will fail. In order for the Health Care Freedom Act to have any hope of being effective, it would have to give citizens the basis to argue that health care freedom is a fundamental right beyond any government’s rightful authority to transgress. If the citizen could make that argument, there would be a very slight chance that the U.S. Supreme Court might consider such a fundamental right sufficient to prevent the government from punishing those who chose not to abide by the individual insurance mandate. A statute, however, is not the mechanism by with citizens establish fundamental rights or liberties — they put those in their constitutions, where they are insulated from repeal or avoidance by future legislation. Thus, even if HB 1764 had purported to establish a fundamental right or liberty, courts would have been unlikely to take them seriously. It just so happens that HB 1764 does not even make such an effort, further diminishing any legal usefulness it otherwise might have had.

To be clear, I do not mean to suggest that proponents of the Health Care Freedom Act are intentionally misleading people as to the likely effect of HB 1764. But Missouri’s citizens deserve to know that the bill and the upcoming referendum it authorizes can only be considered a political statement. Even if the people adopt this statute at the August referendum, their rights and liberties will be no more secure than if the bill had been defeated.

A Better Idea for the Claycomo Ford Plant

Posted on by David Stokes

This blog has had favorable things to say about the governor’s hard choices and tough decisions when it comes to the Missouri budget, so a bit of mild criticism on another issue is probably fair — just to even things out, for the fun of it. Today’s Kansas City Star has video of the governor visiting the famous Claycomo Ford Plant. (The city really is named Claycomo, as in Clay County, Mo.) The governor calls for the legislature to pass a tax credit for companies that invest in plant equipment directly leading to Missouri jobs. He explains in the clip that this credit would be different than the other types of tax credits he has said need to be cut, as the Show-Me Institute has also argued. 

Be that as it may, I still think I have a better idea. If you want to help the Ford plant in Clay County, make it easier for officials there to lower the enormous commercial property tax surcharge that county businesses pay. Clay County levies the third-highest surcharge in Missouri, at $1.59 per $100. Compare this to the GM plant in St. Charles County, which pays only $0.53 per hundred. Making it easier for the Clay County legislature to lower that rate, and changing the surcharge so that it rolls back as assessments increase, would benefit all the businesses in Clay County — the Ford Plant in particular.

For more background on the commercial surcharge in Missouri, check out this article, this testimony, and this House Resolution, which has been introduced in an attempt to make these important changes.

“You Can’t Shrink Your Way Into Prosperity”

Posted on by Christine Harbin

From a recent article in the Wall Street Journal:

[A]ccording to some analysts and students of corporate behavior, […] companies that take a limited and more-targeted approach to layoffs tend to do better in economic recoveries than those that slash employment sharply and across the board.

“You can’t shrink your way into prosperity,” says Wayne Mascio, a business professor at the University of Colorado, Denver.

Although the article focused on downsizing in private companies, I think that the conclusion applies nicely to the public sector, as well. This is particularly relevant to state agencies in Missouri as they cope with their budget problems. Instead of scaling back their operations proportionately, governmental agencies in Missouri should take a targeted approach, by identifying programs that are underperforming and subsequently eliminating or outsourcing them. This would increase the likelihood that the programs would recover and perform better in the future.

When determining which programs, or segments thereof, to cut, a firm or a government agency should also consider non-financial and indirect costs. This is because unintended negative consequences could adversely affect a firm or an agency’s bottom line, as well as its ability to perform core functions. In order to increase its overall growth and prosperity, a firm or agency should focus on the activities for which it has a comparative advantage, and then trade amicably with others that possess a comparative advantage in other activities.

The firm or government agency in question should also consider its opportunity cost for providing a program under review. Outsourcing non-core functions enables concentration on core functions, which can improve efficiency and quality. This way, firms and agencies alike could maximize their up-time and productivity.

More on the Columbia SWAT Raid

Posted on by John Payne

The SWAT raid on Jonathan Whitworth’s Columbia home — which ended with both of his dogs shot, one dead, and Whitworth pleading guilty to a misdemeanor paraphernalia charge — is generating a great deal of interest both in Missouri and nationally. The best national coverage of the story that I’ve seen so far is Andrew Napolitano’s discussion with Columbia Mayor Bob McDavid and local talk radio host Mike Ferguson. I highly encourage you to watch it:

I certainly agree with McDavid that it is inappropriate to use SWAT teams for nonviolent crimes — but, unfortunately, that is not one of the reforms already implemented by the Columbia Police Department. That said, the department is moving in the right direction, even if not quickly enough for my taste. New regulations for SWAT raids include: an order that search warrants be served within a “reasonable” period (usually eight hours) after they are issued; eliminating the power for the SWAT commander or narcotics sergeant to order such a raid, instead requiring a department captain’s order; and, continual surveillance of the area to be searched before the raid to ensure that the intelligence is correct and that, say, the suspect’s young child is not in the home.

I think there are three major policies missing from these reforms. First, there should be a public record of every instance in which a SWAT team is used, and for what purpose. Without such a record, it will be impossible for the public to hold the police department accountable for any departures from the other policies. (I contacted the Columbia Police Department earlier today to ask whether such a record exists, or whether it will be required in the future, but have not heard back from them yet.) Second, there is no change to the department’s policy on using lethal force against animals. They could consider using non-lethal methods of subduing an animal, such as pepper spray. At the very least, though, a more thorough definition of “aggressive” behavior seems warranted. Finally, the use of SWAT-style raids should be legally confined to violent situations. Unless officers can prove that there is a high probability that the suspect is armed and likely to resist, a SWAT raid designed to confuse and terrify is more likely to lead to violence than prevent it.

It is again worth mentioning that events like this are hardly isolated incidents. Just last month, a police officer in Bellefontaine Neighbors in North Saint Louis County shot and killed a dog under the false impression that it was a different dog that had been reported to be vicious and on the loose. The state of Missouri should institute stricter guidelines for both SWAT teams and the use of lethal force (even against domestic animals) in order to avoid tragedies like these in the future.

In Support of Eliminating the Corporate Income Tax

Posted on by Christine Harbin

Last week in the Wall Street Journal, Michael Boskin published an editorial described the negative effects of corporate income taxes on an economy:

Reducing or eliminating the corporate tax would curtail numerous wasteful tax distortions, boost growth in both the short and long run, increase America’s global competitiveness, and raise future wages. […]

Junking both the corporate and personal income taxes and replacing them with a broad revenue-neutral consumption tax would produce even larger gains.

Although Boskin focuses on the federal corporate income tax, his conclusion would also hold true for the state corporate income tax in Missouri. Eliminating the state corporate income tax and replacing it with a broad-based consumption tax would attract more employers, business activity, and migration to the state. This echoes the scholarly work published by the Show-Me Institute, finding that taxes and economic activity are inversely related. When you tax something, you get less of it, after all.

Sixteen states have a lower corporate income tax rate than Missouri’s, which now stands at 6.25 percent. Businesses have a marginal incentive to locate in those states, instead of in Missouri, because they would enjoy a higher after-tax return to capital. As a consequence of realizing that higher return, the firms in these low- or no-tax states would supply more production.

Eliminating the corporate income tax would also be a more efficient and fair way to attract businesses to Missouri than targeted incentive programs, which is the state government’s current practice.

Blindly Picking Winners and Losers

Posted on by Audrey Spalding

Facing declining tax revenues, Gov. Jay Nixon is pushing a proposal to cap the amount that Missouri hands out in tax credits each year. Tax credits, which reduce a recipient’s tax burden dollar for dollar, are transferable and are nearly as good as cash. Missouri awards tax credits for specific categories, such as redevelopment, housing, business recruitment, and agriculture. Businesses and individuals don’t receive tax credits automatically; they have to apply for them.

So far, the arguments for and against capping tax credits has circled around the issue of whether tax credits encourage economic development, job growth, and other activities that are in the best interest of the state. Proponents argue that tax credits are beneficial: The state gets more than what it pays out (because of the so-called economic multiplier), they say, and so capping tax credits would hurt the state as a whole. Those who oppose targeted tax credits argue that the loss of revenue given away by the state to a few recipients — but collected from the rest of the state’s taxpayers — far outweighs any benefit accrued from the activities that such credits encourage. Furthermore, as Show-Me Institute Research Analyst Christine Harbin has written, when state legislators create targeted tax credits, they are favoring one industry over another, frequently because of political pressure.

Yet another argument against state tax credits is the fact that state governments have demonstrated that they are often incapable of a substantive review of tax credit applications. As a negative consequence of this lack of oversight, these programs invite fraudulent activity. In Iowa, three film production companies have been charged with inflating the values claimed on tax credit applications, and the director running the state’s film tax credit program was fired because of the lack of oversight. From the Quad-City Times:

The invoices also included various sizes of step ladders that ranged from $900 each up to $1,125, and a 24-foot extension ladder reported to have been rented for $1,350.

There are many additional examples of fraudulent activity resulting from a lack of oversight. In March, the state of Michigan awarded a $9 million business tax credit to a convicted embezzler who promised to create 765 jobs in Flint. He did this all while living rent-free at a friend’s mobile home. Earlier this year in Louisiana, a man was charged with selling nearly $2 million in Louisiana film tax credits to members of the New Orleans Saints. He never filed for them.

I suspect that Missouri’s Department of Economic Development may also occasionally miss tax credit application discrepancies. Based on a cursory review of the recently approved application for $19 million in Distressed Areas Land Assemblage (DALA) tax credits submitted by a Saint Louis–area development company, NorthSide Regeneration, LLC, it appears that the company overstated its costs for at least five properties (third column of DALA tax credit application PDF documents contain the property’s reported purchase price):

Address DALA tax credit claim amount Certificate of value amount
1836-1842 N. 22nd St. $147,200 $128,000
1916, 1918, and 1920 Wright St. $172,500 (total) $140,000
2301, 2305, 2313, and 2317 Howard St. $105,000 (total) $87,500
3059, and 3065-71 Martin Luther King Dr. $241,500 (total) $210,000
1700 25th St. $174,800 $152,000

These problems are inherent in a bureaucratic program tasked with awarding benefits, and operating with limited information. The paperwork accompanying a tax credit application is usually substantial, and even if the agency charged with administering a state’s tax credit program does due diligence, the information available can be limited to what the tax credit applicant supplies.

The tax credit fraud cases that do make the news are egregious. I am sure there are instances of companies padding their reported costs on tax credit applications that the state and general public have missed. Instead of using public dollars to attempt to pick winners and losers, while running the risk that the state may not have all the available information even to weed out tax credit fraud and application discrepancies, the state should let consumers and investors decide which businesses, developments, and films succeed.

Should Jackson County Amend Its Charter?

Posted on by David Stokes

Today’s Kansas City Star has a good summary of charter amendments being proposed in Jackson County. Charter counties like Jackson — there are only four of them in Missouri — go through this charter review process once each decade. I was pleasantly underwhelmed by the proposals, because I don’t think Jackson County’s government needs major charter changes.

It appears that they won’t be considering any changes to the partial at-large voting on their county council, which is unique among Missouri’s charter counties. There has been a good deal of work done on the question of at-large versus district representation. Public choice economics has provided some evidence that at-large voting leads to lower spending levels. The theory is simple enough: Officials elected at large have less of an incentive to engage in district-specific spending (think congressional “pork” writ local), because all of their constituents both benefit from and pay for all of the same things. My “Government in Missouri” study for the Show-Me Institute addresses this idea in detail on pages 25 and 26, and provides endnote citations to major public choice studies on the subject, for anyone who is interested enough to do further research. (This is usually the part of my government talks where people start to fall asleep.) When I compared the suburbs in St. Louis County that have at-large voting to those with the more common district voting found in city elections, I found limited evidence that the at-large cities spent less. I say “limited” because the differences were not huge, and the sample size was very small — but it’s all in the study.

The portion of the charter proposals that will generate a good deal of attention is the pay raise for local legislators. The charter committee report recommends:

  • Set new pay levels for elected county officials, including boosting current legislators’ salaries by more than 10 percent to $28,916 annually. Legislators also would be guaranteed raises based on the local consumer price index.

I see nothing wrong with raising salaries to $28 K per year for nine council officials serving in a county of 650,000 people. There is nothing out of line with that. I do, however, disagree with the proposal to raise it automatically each year, according to the consumer price index. Raising your pay is one of the tough votes that elected officials have to make. Usually, moderate raises that are implemented rarely enough will be supported by the public, as I expect this one will be. However, it should still require a vote, rather than being turned over to a commission or a computer.

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