Here Is a Government Program That Absolutely Should Not Exist

Posted on by David Stokes

The St. Louis Business-Journal has a story about what one government program has recently done. The Business-Journal article is just a news story about the St. Louis development loan program, but it gives a perfect example of a government program that has absolutely no reason to exist and should be eliminated tomorrow. It is nice to be able to get specific once in awhile, rather than just expressing general “cut government” statements, so here I go.

The revolving loan fund of the St. Louis Local Development Corporation serves no need that the private sector cannot meet. It serves no legitimate public purpose, and should be abolished. It should be a market decision whether two restaurateurs can get backing to open more restaurants in St. Louis. Tax dollars have no business being involved in these projects. I am fully aware that this is a loan program, not a gift program, but I don’t care. Even if they get every penny back with interest, the loans serve no legitimate public purpose, the government has no business being involved in things like this, and it still takes tax dollars above and beyond the loan amounts themselves to employ the people who work for the STLDC. The program deserves to be abolished.

Jackson Co. Hopes to KO TIF in KCMO

Posted on by David Stokes

All right, so the title of this post is a bit misleading — I just wanted to get as many acronyms and abbreviations in there as possible. Jackson County Executive Mike Sanders announced today that Jackson Co. will file suit against the make-up of the TIF Commission in Kansas City. Prime Buzz has the early scoop here.

This is a big issue, and you will see a lot more from the Show-Me Institute about it as it goes forward. Basically, I completely agree with the county on the larger issue of the KC TIF commission’s fairness. (Debating the details will have to wait a day or so until I have time to read everything carefully.) TIF commissions at the municipal level are a rigged game. The city gets to appoint so many members that the whole commission is clearly stacked. In St. Louis County, they are currently working with a modified TIF commission that gives the county more influence and the various cities less. It has not faced a real test yet, but I support the increased county role. I would support it for Jackson County, too, and I wish Co. Exec. Sanders and the county luck in this dispute.

I wrote about this issue in some detail nearly two years ago, in an op-ed arguing that all TIF decisions be made at the county level, and another piece commending St. Charles County for its resistance to the use of TIF. It looks like both of these pieces are very applicable to Kansas City and Jackson County right now. Nifty stuff.

Why Insurance Is So Expensive

Posted on by John Payne

It would be nice if every person had health insurance that covered every possible medical expense. Unfortunately, that sort of insurance would cost an astronomical amount of money. That is a simple fact in a world with scarce resources. However, that fact does not deter politicians from trying to force everyone into insurance plans that cover an ever-wider array of treatments and thus cost ever-greater amounts of money. The most recent effort for expanded coverage focuses on treatments for autism. From the Political Fix:

About one in 100 children are diagnosed with some form of autism, studies have shown.

The bills’ sponsors, Sen. Scott Rupp, R-Wentzville, and Rep. Dwight Scharnhorst, R-St. Louis County, want to make sure families can get coverage for expensive therapy known as Applied Behavioral Analysis, which often involves 20 to 40 hours a week of one-on-one sessions with therapists.

As filed, the bills would require insurance policies to cover $72,000 a year in treatment for children and adults up to age 21.

There is absolutely nothing wrong with buying insurance to cover treatments for autism, but not everyone needs or wants this insurance, so they should not have to pay for it. For example, as I read the article, a family of four would be forced to continue paying for this insurance even if neither of their children showed any signs of autism. Not everyone requires the same kind of medical coverage, but by mandating that everyone buy similar high-end insurance policies, the only thing we ensure is higher prices for everyone.

Census Singalong and More

Posted on by Sarah Brodsky

The forms that the Census Bureau sends out aren’t directed at children, and when Census workers go door-to-door collecting information about households that didn’t respond, they can’t accept answers from anyone under 15 years old. So this cute jingle telling people to raise their hands and say “Here we are” appears to target the wrong audience.

There are a few other Census promotions that I just don’t get. One is this public service announcement that urges viewers to “make your voice heard.” The Census asks people very specific and limited questions, as it should. It doesn’t ask for your opinion or for a personal statement. People who fill out every line of the Census form won’t be making their voices heard — they’ll just be reporting basic details about their households to the government.

And then there’s a clip from a legislator from the Rosebud Sioux Tribe of South Dakota that’s both inspiring and scary. I say “inspiring” because it starts off with a message of being true to yourself and overcoming whatever obstacles you face. (The legislator then loses me by saying that the way to overcome those obstacles is to participate in the Census.) The scary part is the end of the segment, when the legislator ominously warns that federal funding for health care will be insufficient if some tribal members don’t fill out their forms.

I hope Show-Me Daily readers will mail back their Census forms, in accordance with the Constitution. But I’m not expecting thunderbolts from heaven if a few of you don’t participate. And, to the people who want to express themselves: Blogs are a better medium than government paperwork.

Health Care Gets a Little Less Expensive

Posted on by Sarah Brodsky

Here’s some good news for consumers: Schnucks is dispensing free prenatal vitamins to women with prescriptions. The offer builds on Schnucks’ free antibiotics program, which brought positive publicity and new customers to Schnucks pharmacies.

This is an example of market forces lowering health care costs. Schnucks wants to draw people to its stores, and to do that it has to stand out from its competitors. Other pharmacies will probably follow suit — if not with the same promotions as Schnucks, then with discounts on other medical services or products.

In the policy debate over the cost of care in hospitals, much of the discussion deals with putting medicine under regulatory control. Instead, we should be asking: How can we make hospitals operate more like Schnucks?

New Study Says Film Production Incentives Don’t Incite Economic Growth

Posted on by Christine Harbin

Yesterday on the Tax Foundation’s Tax Policy Blog, Joseph Henchman discusses Michigan’s filmmaker tax credit program. He asks many of the same questions that I have raised on this blog, e.g.: Why is the state targeting the film industry and not others? Why should the state compete with other states through subsidy when it could still consume the product regardless?

He references a study that The Tax Foundation released last Thursday, “Movie Production Incentives: Blockbuster Support for Lackluster Policy,” which concluded that production incentives such as targeted tax credits do not incite economic growth.

Henchman cautions:

With Michigan so determined to pour its tax dollars into filmmakers’ pockets as the state falls apart, other states should be wary of taking them on.

I hope that Jeff City is listening!

Supporters for film productive incentives argue that they encourage employment, but I see little evidence that this is happening in Michigan. Far and away, Michigan continues to have the highest unemployment rate in the nation: 14.7 percent. (Rhode Island is the runner up, with “only” 12.7 pecent). I also want to note that, despite the fact that Michigan’s unemployment rate decreased from 15.1 percent in October, its labor force shrunk by 4,346 people during that period. This can probably be attributed partly to people giving up their job hunts or moving out of state to find work.

Is a Little Open Enrollment a Dangerous Thing?

Posted on by Sarah Brodsky

In an article about Missouri’s open enrollment proposal, the Post-Dispatch quotes the director of a Minnesota education center:

“I don’t see school choice as good [or] as bad,” he said. “It’s like freedom. You have to use it carefully, otherwise it will cause problems.”

This quote sheds light on the worldview of people who are indifferent to parental choice. Freedom isn’t good or bad? And it’s liable to cause problems if we’re not super careful? The attitude is even more astonishing in the context of an open enrollment discussion. We’re talking about parents choosing between public school districts, which receive funding and directives from local government, state government, and federal government. Open enrollment would not allow families to choose a school subject to any less government control. And, for most students, choices would be limited because there are only a handful of districts close enough for them to attend. I just don’t see what this proposal has in common with unbridled freedom.

Open enrollment as it’s proposed would be a small step forward for Missouri’s current system — not a revolution. The term “open enrollment” sounds like a free-for-all, but the vast majority of students would actually stay in their current districts. That’s because under the plan, districts would be able to set limits on how many students they’ll accept, or to close their doors to transfer students altogether. And parents would have to decide where they’d like their children to transfer to by January, many months before the start of the school year. So, last-minute switches that could prove a hassle for districts would be ruled out.

Besides, Missouri already does allow some students to cross district lines. The St. Louis Public Schools’ magnets haven’t descended into chaos by enrolling students from the county, nor does the arrangement set county districts behind SLPS. Other examples include St. Louis–area students who attend the Program for Exceptionally Gifted Students, and rural students who petition to attend nearby schools out of their districts. Inter-district enrollment isn’t dangerous in those cases, and expanding it to all districts would also do no harm.

Should We Raise Taxes to Fund Road Improvements?

Posted on by David Stokes

Today’s Kansas  City Star has a story by Brad Cooper about the efforts of the Missouri Transportation Alliance to generate discussion of the future of transportation funding in Missouri. I commend the MTA for its efforts, but I am concerned that it is focusing too much on simply trying to decide which tax (or taxes, plural) to raise:

The group has looked at various ideas for funding transportation — gas taxes, sales taxes, licensing fees — but hasn’t settled on any ideas that could eventually be taken to voters to approve, McKenna said.

Too little of the discussion appears to be devoted to the question of the role that private financing can play in Missouri — or, put another way, how can the laws be changed to allow for more private financing in Missouri? My own preference is for a dramatic expansion of private financing and tolling for projects both big and medium (it does not really work nearly as well for small projects), along with a small increase in the gas tax. But check out the story in the Star and visit the MTAs web site for more details of their work.

More About the Earnings Tax

Posted on by Caitlin Hartsell

The 1-percent earnings tax on Kansas City and St. Louis residents and workers has received a lot of press as of late. The Kansas City Star published an article about the “city’s crucial earnings tax.” Christine Harbin recently posted about the earnings tax in Kansas City, pointing out how a land tax would be better than an earnings tax, because it would encourage landowners to utilize their property productively. The St. Louis Post-Dispatch wrote about the earnings tax from another angle, mentioning Show-Me Institute President Rex Sinquefield and the institute’s research on the tax.

The Post-Dispatch editorial used a loaded term, “public safety tax,” to describe the earnings tax, not because it pays for the Metropolitan Police Department — it doesn’t — but because its revenue is coincidentally equal to the Police Department’s budget. This is not the first time the Post-Dispatch has taken a contrary position regarding the earnings tax than Show-Me Institute writers, though it has toned down its rhetoric since August. The new article discusses a need for a replacement tax for the earnings tax revenue, neglecting to mention that the Show-Me Institute has suggested a replacement: the land tax.

Specifically, Show-Me Institute publications have suggested a two-tiered land tax that would impose separate taxes on property and buildings. Land is fixed in quantity, so this would encourage long-term development. In the long run, rescinding the earnings tax could cause the St. Louis city population to double.

Both St. Louis and Kansas City have watched their city populations and businesses stagnate while their suburbs have grown, and the earnings tax is one contributing component that needs to be addressed. Petition proposals have been approved to collect signatures for the St. Louis earnings tax to be reconsidered on the ballot, with the stipulation that a revenue replacement needs to be found. For St. Louis, the land tax makes the most economic sense as that replacement. When an editorial claims that eliminating the earnings tax is infeasible, it’s important to take into account the potential of the land tax to provide a less-distortionary source of revenue and ultimately promote future economic growth.

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