Page 669 – Show-Me Institute

Coming Soon: Using Tanks to Collect on Parking Tickets!

Posted on May 6, 2010May 5, 2026 by John Payne

Video of a February SWAT raid in Columbia was recently released and has been causing something of an uproar. The article accompanied by the video on the Columbia Daily Tribune‘s website currently has over 450 comments, most of them disapproving of the police officers’ tactics, which included shooting suspect Jonathan Whitworth’s two dogs while his wife and young son were present. I doubt many people would complain if the police employed such aggressive tactics in response to a hostage situation or a bank robbery, but all the police had to show for the violence was a misdemeanor amount of marijuana and paraphernalia.

Regardless of your opinions about marijuana, I think we can all agree that it is an inappropriate use of force to call out the SWAT team for misdemeanor offenses. Granted, the police argue that they suspected Whitworth was selling marijuana, and it is certainly possible that they were right but happened to raid his house when he was essentially sold out. However, the fact that the police department’s intelligence indicated that Whitworth’s son was not present when, in fact, he lived there suggests that they did not really do their homework on the case.

This case highlights the need for greater information about the use of SWAT raids in Missouri, but it is hardly an isolated incident. Cheye Calvo is the mayor of Berwyn Heights, Md., and in 2008 the Prince George’s County Sheriff’s Department deployed a SWAT team to his house after a package containing drugs meant for someone else was delivered to his house. In that case, as well, the officers shot and killed Calvo’s dogs, two Labrador retrievers. (They always seem to shoot the dogs.) Calvo fought back and was instrumental in passing a law in Maryland that requires all police departments in the state to report when and why they deploy SWAT teams. The results so far in Maryland have not been encouraging:

Over the last six months of 2009, SWAT teams were deployed 804 times in the state of Maryland, or about 4.5 times per day. In Prince George’s County alone, with its 850,000 residents, a SWAT team was deployed about once per day. According to a Baltimore Sun analysis, 94 percent of the state’s SWAT deployments were used to serve search or arrest warrants, leaving just 6 percent in response to the kinds of barricades, bank robberies, hostage takings, and emergency situations for which SWAT teams were originally intended.

If Missouri police uses SWAT forces for similar purposes, we have a right to know and a duty to do something about it.

Matt Holliday, Truman Day, and “Freakonomics”

Posted on May 6, 2010May 5, 2026 by David Stokes

This post actually has nothing to do with Matt Holliday, but it does regard holidays in general, and I thought adding him into the title of this entry would be good for the ‘ol Google hits. I love the Freakonomics franchise: books, blog, lectures, and all. But today I came across a post I thoroughly disagreed with, and one that also directly relates to a policy debate in Missouri.

Daniel Hamermesh, whose short posts on microeconomics-related subjects I really enjoy, writes that we need more national holidays because Americans deserve more time off of work, like Europeans. To this, I say: If you want more time off work, start your own business, hire employees who can do the work when you are out, and take as many — or as few — days off as you like. The idea that it is the role of the government to give us more time off just buys into the idea that the government should serve as mother-protector, and the rest of us as dependent children. (Yes, I do sometimes work on the national holidays that we have. At a prior job, I used to work on holidays regularly.)

This question applies here in Missouri because our state government has long taken off Truman’s birthday. That is one of the issues surrounding lesser national holidays (not naming any examples, lest I upset some overly profound interest group): In reality, legislating additional holidays would only lead to paid days off for government workers and bankers. Most of us would still have to work or use a vacation day if we wanted to take that day off, as well.

But back to Truman Day. It has been proposed that the state should cut its budget by eliminating Truman Day as a state holiday. It is my understanding that this would save money because some state workers are still required to work on that day (like prison guards and highway patrolmen), and they are currently paid time-and-a-half to do so. The Associated Press has reported that state employees will still get Truman Day off next week, no matter the final decision, but I support the effort to eliminate it as a state holiday. If state employees really want to take that day off, they can use some of their generous vacation time. Otherwise, go to work like the rest of us.

Thanks to Combest for the AP link.

State and Local Government Employment and Payroll Data in Missouri Follows National Trend

Posted on May 6, 2010May 5, 2026 by Christine Harbin

This month, the Cato Institute published a bulletin titled “Employee Compensation in State and Local Governments,” in which the author examines state and local compensation costs:

State and local governments face large budget deficits as revenues have stagnated and spending has remained at high levels.

I used the Show-Me Institute’s newest web tool, Interactive Database for Economic Analysis by State, to isolate state and local government employment and payroll data from U.S. Census. Next, I used this inflation calculator from the Bureau of Labor Statistics to adjust the data to 2008 dollars.

The following graph shows this information for all states for 2008. Wyoming has the highest number of public employees per capita, at 927, and Nevada had the lowest, at 437. Missouri was in the middle — it was ranked the 29th highest (alternatively, the 23rd lowest) in this category:

Click to enlarge.

The data for Missouri reflect the general growth in the size of government described in the Cato bulletin. From 1993 to 2008, the number of total employees grew by 29 percent, the number of full-time employees grew by 27 percent, and the number of part-time employees grew by 44 percent.

The data also show that payroll is growing at a faster rate than the number of employees. From 1993 to 2008, after adjusting for inflation, total monthly payroll grew by31 percent, full-time payroll grew by 30 percent, and part-time payroll grew by 55 percent:


Click to enlarge.

Given this rate of growth in monthly payroll and number of employees, Missouri’s present budgetary problems are no surprise to me.

Dreadful Assessment Lawsuit in Platte County

Posted on May 5, 2010May 5, 2026 by David Stokes

A simply atrocious lawsuit has been filed in Platte County (which includes part of Kansas City), according to the St. Joseph News-Press, regarding the assessment of a power plant there. You might think, from the opposition, that the power plant had received a tax exemption, or a TIF, or a CID, but no. People are complaining — and suing — because the new plants were assessed at a reduced rate while they were under construction.

If you go out and build your dream home with a worth of $500,000, should your county begin taxing you at a rate based on a half-million dollar property as soon as you lay the cornerstone, or wait until the house is completed and you move in? I have to believe that every single person reading this (which is a very large number of people, I trust), thinks the full assessment should start when the house is complete. In Missouri, in fact, that is exactly how it works. The full assessment applies according to the date of the final passing inspection / occupancy permit / utility hookup, and the annual taxes are prorated for that year. (Unlike cars or boats, which are taxed as of Jan. 1, real estate can be prorated for taxes; also, the land would have been fully taxable during contruction.) Presumably, the land for the power plants was fully assessed during the construction, and the building was assessed at 50 percent (the article does not make a distinction). That seems perfectly reasonable to me. Now that the project is finished, the company is paying taxes based on its full assessment. Anyway, the final decision should rest with the voters who elect, or unelect, the assessor — not on a lawsuit.

The single silliest (putting it nicely) statement in the article belongs to one of the lawyers in the case:

“It’s been difficult for school districts to have a voice in the assessment process,”

I will gladly stand corrected if anyone can show me one place anywhere in Missouri law that says school districts are supposed to have a voice in assessments — or any taxing district of any type, for that matter. TIF commissions and tax exemptions are not an answer to this challenge; they deal with rates and abatements, not assessments. Assessors are supposed to be independent, so that they can set market assessments as fairly as possible, from which various taxing districts can set their rates. School districts are in no way, shape, or form supposed to have a voice in those valuation decisions. It is just an unbelievable statement.

Monopolies Seek Further Rate Hike Legislation

Posted on May 5, 2010May 5, 2026 by Caitlin Hartsell

The St. Louis Post-Dispatch editorial board wrote a piece yesterday about a number of bills in the legislature that would allow utility companies to request rate hikes every six months, as opposed to the current policy that limits a change to every 11 months. The Public Service Commission regulates the rates of investor-owned utilities, like Ameren electric and Laclede gas.

From the article:

Under the proposed new law, rate hike cases could last no more than six months, meaning utilities could file two requests each year.

That’s not just two rate hike cases for each electric company, including AmerenUE. It also means extra rate cases for water companies, including Missouri American Water, which is seeking a 21 percent rate hike, and for gas companies, including Laclede Gas, which has a $52.6 million rate hike request before utility regulators.

Last year, when AmerenUE raised its rates by 8 percent after a 12.1-percent increase the previous year, the utility’s president justified it in order to continue “maintaining reliable electric service.” He also said:

“Much of the increase covers the costs of projects initiated to improve the reliability of our electric system, the costs of environmental and efficiency improvements at our generating plants, and the costs of fuel for those plants.”

It is hard to evaluate the validity of these claims without a field of competitors providing greater incentives for efficiency and cost reduction. That competition doesn’t exist, though, because utilities are generally viewed as a natural monopoly, an industry that requires economies of scale so large that it is most efficient to have a single supplier. As a result, municipalities generally restrict entry into utility markets. In The Concise Encyclopedia of Economics, economist David Henderson pointed out that this restriction is probably unnecessary:

Economists tend to oppose regulating entry. The reason is as follows: If the industry really is a natural monopoly, then preventing new competitors from entering is unnecessary because no competitor would want to enter anyway. If, on the other hand, the industry is not a natural monopoly, then preventing competition is undesirable. Either way, preventing entry does not make sense.

In “The Myth of the Natural Monopoly,” Loyola University economics professor Thomas J. DiLorenzo cited economist Walter J. Primeaux’s findings from more than 20 years of studying electrical utilities and competition:

Contrary to natural monopoly theory, costs are actually lower where there are two firms operating;

Contrary to natural monopoly theory, there is no more excess capacity under competition than under monopoly in the electric utility industry;

The theory of natural monopoly fails on every count: competition exists, price wars are not “serious,” there is better consumer service and lower prices with competition, competition persists for very long periods of time, and consumers themselves prefer competition to regulated monopoly;

If a utility is providing the lowest price, a competitor’s challenge will not be a serious threat. Competition itself — or the potential for competition — can keep prices low. Regulatory boards, on the other hand, historically have not been successful in lowering prices, as DiLorenzo noted:

In one of the first statistical studies of the effects of rate regulation in the electric utilities industry, published in 1962, George Stigler and Claire Friedland found no significant differences in prices and profits of utilities with and without regulatory commissions from 1917 to 1932. Early rate regulators did not benefit the consumer, but were rather “captured” by the industry, as happened in so many other industries, from trucking to airlines to cable television.

If barriers to entry are low enough, the potential for competition can increase efficiency and cost reduction in existing utilities. Instead of a focus on how often a utility company can change its rates, Missouri residents would benefit more from lowered regulatory barriers to entry in utility markets. In that case, future rate increases — like the recent decision to increase rates by 3 percent in order to promote energy efficiency — will be weighed against the possibility of a competitor attracting market share through lower prices.

A Place That Puts Some Fun Into Life

Posted on May 3, 2010May 5, 2026 by John Payne

The Wall Street Journal ran an article over the weekend about Saint Louis’ beloved City Museum, its potential hazards, and the lawsuits they sometimes generate. The museum is privately owned — few government agencies would ever make something as quirky and fun as the City Museum — by Bob Cassilly, who emerges from the article as a heroic if offbeat businessman fighting to keep his dream alive against tiresome safety scolds:

“We like to be the devil’s advocate for society,” says Bob Cassilly, the museum’s 60-year-old founder, a self-described “idiot savant” with wild gray hair. “When you have millions of people do something, something’s going to happen no matter what you do.”

The City Museum, housed in 10-story brick building, shows none of the restraint or quiet typical of museums. A cross between a playground and a theme park, it recycles St. Louis’ industrial past into such attractions as slides made from assembly-line rollers. Just about everything can be touched or climbed, including dozens of Mr. Cassilly’s sculptures, among them a walk-through whale on the first floor.

Despite the whiff of danger, or perhaps because of it, the City Museum is one of St. Louis’s most popular attractions. Its 700,000 annual attendance is roughly twice the population of St. Louis and dwarfs the turnout at refined destinations such as the St. Louis Art Museum.

The injuries and lawsuits put the City Museum at the center of an enduring argument over the line between liability and personal responsibility. Some of the injured and their lawyers say the museum is deceptively dangerous and doesn’t do enough to publicize its risks through signs or other warnings.

Mr. Cassilly counters that it is as safe as it can be without being a bore. “They [lawyers] are taking the fun out of life.”

How very true. There are numerous warnings throughout the museum to avoid certain activities and that everything done there is at your own risk, but apparently that’s not enough for people who think life should be risk free. The City Museum is essentially a giant playground for children and adults alike, and like all playgrounds, the players occasionally get injured. That’s unfortunate, but it’s no reason to sue playgrounds out of existence.

Should Florissant Keep Its Strong Mayor System?

Posted on May 3, 2010May 5, 2026 by David Stokes

This weekend’s Post-Dispatch had an interesting article on Florissant Mayor Robert Lowery. The article discussed at length the political difficulties and fights he is engaged in, but that is not my focus here. I will, however, briefly comment on one aspect of that — the criticism of his work schedule:

Lowery sets his own work schedule, often not getting to City Hall until midafternoon.

I think I have to side with the mayor, here, and not just because I’d like that schedule, too. I have been active in local politics, and I have no doubt that the mayor goes to innumerable nightly meetings of neighborhood associations, community groups, etc. I also believe him when he says that many of his lunch meetings are work-related. His job involves city management, various methods of civic boosterism, and sometimes just returning a bunch of phone calls. If he can do the job successfully from home, work, and the car, then I really don’t think the amount of time he spends in the office is an important measure.

Without going into detail, I think the article’s criticisms of using city workers for campaign purposes are much more valid. But onto the system debate.

Most cities like Florissant have a city manager. There are only two really comparable cities to Florissant in St. Louis County: Chesterfield and University City (where I live). Both of them use a full-time city manager or administrator. If Florissant were to choose such a system, the mayor could focus on the civic and political leadership aspect of the mayor’s office, a set of responsibilities that he is very good at performing, according to everything I have heard.

If the people of Florissant want the mayor to keep some role in daily city operations, they could choose the city administrator form of local government. If they want the mayor to have a very limited role in daily operations, they could choose the city manager form. In both instances, though, the role of the hired professional is to manage day-to-day government operations. The mayor would become more focused on the leadership aspects of the job, and less on the management aspects.

Obviously, the salary of the mayor would likely be cut significantly if either of those options were chosen, but the city manager form of government might be the proper compromise for Florissant. It would entail a limited role in daily operations for the mayor, and — considering the experience he has had as mayor and a police chief — the people might want to continue making use of that value. Here is the Missouri Municipal League’s description of the city administrator position:

The city administrator is employed by the governing body with the approval of the mayor. The administrator serves as the chief administrative assistant to the mayor and has general superintending control of the administration and management of city business and municipal employees, subject to the direction and supervision of the mayor. When the governing body adopts a city administrator ordinance, they may provide that all other officers and employees of the city, except elected officers, may be appointed and discharged by the city administrator, subject to reasonable rules and regulations of the governing body. However, the ordinance may provide that such powers are to be retained by the mayor.

Florissant is a charter city, so it has some latitute in establishing a government that works best for its residents. I think that the city administrator form might be a good compromise for Florissant.

A Self-Defeating Proposal

Posted on April 30, 2010May 5, 2026 by John Payne

Writing in the St. Louis Beacon, Washington University professor of Earth and planetary sciences Bob Criss argues that raising the Missouri gas tax could solve a number of environmental and social ills. Although I’m opposed to pretty much all taxes, I’m somewhat amenable to Criss’ argument. If we have to tax something, it is far better to tax something no one wants, like pollution, than to tax something everyone wants, like income (or general consumption, for that matter).

However, the Missouri Constitution makes implementing Criss’ proposal somewhat problematic. The state Constitution requires that funds generated by the gas tax be dedicated to building and repairing roads, bridges, and highways. The goal of a higher gas tax for Criss is that people would use less gasoline by driving less or using more fuel-efficient vehicles, but more and better roads will at least marginally increase people’s incentive to drive by allowing them to reach more destinations more quickly and comfortably. Increased roadwork would also generate a fair amount of air pollution. Those effects probably would not completely eliminate the environmental gains of a higher gas tax, but they are worth considering.

Furthermore, if people drive less but there are more gas tax revenues to spend, we will end up wasting that money on underused roads and highways. In short, while Criss’ proposal is not without merit, implementing it properly would involve a much greater challenge than simply raising the gas tax.

Tax Loophole Analysis Sinks in Its Own Metaphor

Posted on April 30, 2010May 5, 2026 by Caitlin Hartsell

Initially, when I saw the title of this piece from the Missouri Budget Project, “Missouri should close tax loopholes,” I expected to agree with the article’s arguments. After all, tax credits and loopholes are inefficient and counterproductive for economic growth. But the piece goes on to call for increasing state revenue as the solution to Missouri’s budget issues.

The author emphasizes the problems with Missouri’s budget by repeatedly comparing it to a “sinking ship.” She calls for tax credit transparency, but taxpayers would benefit even more from tax credit limits or reductions, as the governor has suggested.

The author also suggests raising taxes. At any point, but especially during a recession, taxes impinge on further economic growth because an increase in the tax burden decreases compensation for additional time spent working. The decision to work or not work is a marginal trade-off; the lower per-hour compensation makes other activities — like leisure or spending time with family — more appealing. Economists have shown that economic growth occurs when production increases, but taxes decrease the incentive to work and save. A recent study released by the Show-Me Institute demonstrates this inverse relationship with taxes and economic growth. Spending cuts are better for Missouri’s overall fiscal health than tax increases because they promote growth and allow money that would have gone toward government spending to instead flow toward generally more efficient market uses.

The 2011 budget relies on $7.22 billion in tax revenue, which is lower than the $8 billion collected before the recession, in fiscal year 2008, but still higher than the $6.97 collected in fiscal year 2010. Within that budget is room to pay for the vital services the author calls for, like schools, roads and health care for the elderly. It is a matter of prioritizing and “rearranging the deck chairs.” If tax credits are not the most efficient expenditure of resources, as the higher education system is currently contending, as the recent audit suggests, and as Show-Me Institute scholars have repeatedly pointed out, then it makes sense for Missouri to place more stringent limits on tax credits. In any case, Missouri’s present and future economy would benefit the most from lower taxation and spending rates, which would promote future growth and higher living standards for the state’s residents.

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