Good Ideas Done Poorly in Jefferson and Perry Counties

Posted on by David Stokes

A version of this commentary appeared in the St. Louis Business Journal.

As systems evolve and become more complex over time, certain things that used to be commonly provided by cities and counties have moved beyond the realistic capacity of local governments. Two such examples are sewers and hospitals. The last public hospital in St. Louis closed in 1997, and municipal sewer systems in Arnold and Eureka have both been privatized recently. Not all of these changes result in the private sector taking over service provision. For example, in the City of St. Louis and most of St. Louis County, the Metropolitan Sewer District (MSD) is a large, independent public agency with the resources and expertise to manage the sewer system for our region. Local governments in two areas in our region are currently preparing to hand over responsibility for major services to outside providers, and in each instance the prospects for beneficial transformations are being put at risk by a process that is not being managed in the best interest of the public.

First, the sewers. Festus and Crystal City are considering selling their shared municipal sewer system to the Jefferson County Public Sewer District (JCPSD). Like MSD, this larger, regional system has more resources and expertise than the cities do. However, the leadership of both cities have missed an opportunity to get the best deal for their residents. Earlier this summer, both councils approved a plan to consider only JCPSD’s proposal for a $5 million sale of the sewer system—that is, to exclude any other potential applicants from participation—after quietly negotiating only with JCPSD for months. This is despite the fact that representatives from both Missouri-American Water, which has recently purchased systems in Jefferson County, and Central States Water Resources, which operates sewer systems throughout Missouri, expressed interest in making a proposal once the idea become public. Those private utilities have been denied the opportunity to participate thus far.

Leaders in both cities deserve credit for their willingness to consider major changes to their sewer system. JCPSD’s $5 million offer may well be the best overall proposal the cities receive. But how can the cities know it is the best deal for their residents if they don’t even take any other offers?

The hospital example is even more troubling. In Perry County, located between St. Louis and Cape Girardeau, the county hospital board is planning to sell county-owned and operated Perry County Memorial Hospital (PCMH) to Mercy. Such a deal is almost certainly necessary and likely beneficial for the county and its residents, but the manner in which it has been conducted would make former Kansas City political boss Tom Pendergast blush. While they probably don’t have smoke-filled rooms for politicians in Perry County hospital, they might as well have. There are two boards that run the hospital—one elected and one appointed—and the boards have gone so far as to deny vital financial information to elected members of the hospital’s own board who have had the audacity to ask tough questions about the deal. You read that right. Elected members of the hospital board who aren’t falling into lockstep are being shoved aside as the board majority forces the deal through. Things like the Sunshine law and open records requirements are not suggestions; they are the law, and someone needs to inform the Perry County hospital boards of that.

In general, I strongly support local government changes such as outsourcing services to the private sector or other, larger public bodies. Divesting entities like the Perry County hospital and the Festus–Crystal City sewer system could benefit both communities. However, elected officials in both places have a responsibility to go through the process in an open, transparent fashion. They have utterly failed that test in Perry County, and they aren’t off to a good start in Festus and Crystal City. Residents of Perry County, Festus, and Crystal City should demand better from their local leaders.

Show-Me Energy: Today’s Energy Sources

Posted on by Avery Frank

Energy is a very complicated topic, and policy debates around energy often involve confusing jargon along with terms and concepts that are not familiar to the average person. Therefore, I have decided to begin a blog series explaining energy topics with the goal of setting a foundation for understanding energy policy in our state and our nation.

The United States is known for its diversity: from our landscapes, to our immigrants, and to the different states across the nation—the United States truly has a wide range of interests, individuals, and industries. Our energy sources are no different, and as shown below, we use a diverse assortment of energy sources to power our nation.

Created with mapchart.net; Source: Nuclear Energy Institute (NEI)

In order to better understand energy policy for Missouri, it is important to know some background about each energy source.

Natural Gas

According to 2022 preliminary data from the U.S. Energy Information Administration (EIA), natural gas generated 39.8 percent of electricity in the United States—the largest generator in our country. Natural gas is a fossil fuel, meaning it is formed from decomposing plants and animals. Companies use seismic surveys to determine where to drill for natural gas, similar to the process used for oil. The captured natural gas is then processed, and a chemical called Mercaptan is added. Mercaptan adds the smell that makes natural gas smell like rotten eggs so leaks can be detected. This now smelly natural gas is then used for combustion turbines or steam turbines to generate electricity. In recent times, combined-cycle natural gas plants have greatly increased efficiency by using both processes together. Natural gas is burned to power combustion turbines, and the heat byproduct from the combustion turbine (think of how a car engine releases heat) is used to heat water, create steam, and turn a steam turbine.

Coal

At 19.5 percent of electricity generation, coal is the second-largest energy source in the United States. Once used primarily to power locomotives and heat homes, coal is now mostly used to generate electricity by heating water to turn steam turbines. Coal, like natural gas, emerged as an electricity generator in the 1950s and grew quickly in the 1970s and 80s. However, coal emits much higher emissions than natural gas, and thus its usage is shrinking in modern times as natural gas continues to capture more market share.

Hydroelectric

Speaking of old energy sources, hydroelectric (or hydropower) is one of the oldest forms of electricity generation—with 1880 marking its first year of industrial use. President Franklin D. Roosevelt was a big proponent of hydropower, which uses moving water to spin turbines. By 1940, it generated 40 percent of our nation’s electricity. However, in 2022, it only generated 6.3 percent. American hydropower has largely fallen out of favor due to safety and environmental regulations, legal obligations to Native American tribes, and the economic costs associated with them. For example, two hydroelectric dams on the Elwha River came under attack due to environmental and legal concerns over the salmon population. The owners would have been forced to add expensive fish ladders, and continued legal pressure from the tribes persisted until they decided the dam was not worth the cost.

Nuclear Energy

Making up 18.2 percent of electricity generation, nuclear is the largest clean energy source in the United States. The first commercial reactor was built in Shippingport, Pennsylvania in 1958, and the nuclear industry grew rapidly in the 1970s, 80s, and 90s. With nuclear fission, uranium atoms are split, which causes a chain-reaction and generates an immense amount of heat—which boils water and creates steam that turns a turbine. As time has passed, stringent regulations have slowed down the construction of nuclear power plants; the average age of a reactor for the remaining 93 reactors in the United States is 42 years old. Currently, the industry is regaining momentum as it transitions from large plants built during the Cold War to safer and cheaper small-modular reactors.

Wind

Wind energy makes up 10.2 percent of electricity generation. The mechanics of wind energy are relatively straightforward. The cycle of wind is used to turn turbines which generate electricity without creating greenhouse gas. In the olden days, windmills were used to cut wood, pump water, and grind grain—but now wind turbines are used to generate electricity. Financial incentives and requirements to use renewable energy in the 1990s spurred the development of wind power, with similar incentives continuing today. These wind turbines can also be located offshore in the ocean—such as ones taller than the Statue of Liberty in Rhode Island.

Solar

Enough energy from the sun hits the planet every hour to power the entire world for a year. Comprising 3.4 percent of our electricity generation, solar energy is a relatively small source of energy in the United States. Solar energy can be harnessed in two ways—through solar thermal or solar photovoltaic. Solar thermal technology is like the hot metal slide on the playground that would make you pay for foolishly venturing down it during recess. The sun heats up metal, which heats water—creating steam and turning a turbine. Solar photovoltaic is what most people think of when they think of solar energy—panels made up of a great number of cells turned towards the sun and capturing light energy to charge up like a battery. America’s largest solar photovoltaic farm is the Solar Star Farm in California.

Petroleum

Oil is typically used in transportation, but it can also be used in electricity generation—although it makes up only a tiny 0.9 percent of generation in the United States. The process to create electricity from petroleum is similar to the process for natural gas, as it can be used in steam, combustion engines, or in a combined-cycle power plant.

Biomass

Biomass is a fancy term for burning wood or using biofuels created with corn, soybeans, etc., to turn turbines. Although it is a large U.S. export commodity, our nation only relies on biomass energy for 1.3 percent of electricity generation. Developments are in the works for converting municipal solid waste (paper, shirts, furniture), animal manure, and human sewage into electricity sources.

Geothermal

Accounting for only 0.4 percent of electricity generation, geothermal is the smallest energy source in our nation. Since the earth has an inner core, outer core, mantle, and crust (where we live), heat from pressure and magma in the outer core and mantle produce heat that we can harness for electricity. Wells are drilled into the earth’s surface (some going 2 miles deep) and the heat is used to boil water and turn a steam turbine.

Now that we have a foundation on all of America’s top energy sources, we can further explore how energy is produced and transmitted and consider what would be the best energy policies for our nation and Missouri.

Kansas City and Jackson County Do Two Things Twice

Posted on by David Stokes

I am several weeks late on this, but it is worth stressing how Kansas City and Jackson County have missed a great opportunity to save tax money and improve services with their recent decision to each build a new jail.

Having both Jackson County and Kansas City build their own new local jail is ludicrous. The Jackson County jail is going to cost $301 million (at least). There was discussion of sharing facilities and some resources (such as food service) but now Kansas City is moving ahead with its own facility at a to-be-determined cost.

In the “up-is-down” government universe, the county’s jail contractor told the city council that:

J.E. Dunn, the construction company working on the new county jail, told city council last week that a shared jail would cost more in the long run, because the city would have to pay for services like food and laundry.

Will Kansas City not have to pay for food or laundry at the new facility they are going to build by themselves? Because I don’t think that is going to be a very appetizing or ambrosial jail without food or laundry.

Local governments sharing jails can absolutely work to save tax money and still provide the necessary safety and justice functions jails are there for. Regional jails are common in Virginia, and the U.S. Justice Department released a very favorable report on this practice a while back.

I don’t know who or what to blame here. Contractors running amok and running the show? Political disputes between the two bodies? Quietly disruptive employees who actively oppose service sharing and cost savings because they reduce the number of government jobs? One local elected official is putting the blame squarely on the latter, and I commend him for his blunt comments:

Jackson County Legislator Manny Abarca IV said it’s ridiculous the city and county couldn’t work out an agreement. “It’s a waste of taxpayer dollars to build two facilities that are naturally gonna have similar shared services that we could’ve combined,” he said. “As a taxpayer I’m very upset that this is the outcome.”

Abarca said it seemed like city and county staffers stalled on the project, “long enough to make this impossible to move forward.”

I am delighted that both Kansas City and Jackson County have all of this extra tax money to throw around. Now I don’t have to take the city seriously when it says it can’t afford to operate without an earnings tax.

The Lifetime Pandemic Education Tax

Posted on by Susan Pendergrass

Dr. Eric Hanushek, a senior fellow at the Hoover Institution at Stanford University, has been studying the relationship between academic achievement and spending for decades. Recently, he has been putting numbers to the lost opportunities experienced by students who were in school when they all shut down in 2020. The consequences are real. His prediction is that this generation will lose around 6 percent in lifetime earnings. For Black children, it’s 8 percent.

This is essentially a lifetime tax that isn’t being addressed as the crisis that it is. Collectively, our nation could lose as much as $28 trillion because the workforce will simply have more people who know less. That’s more than 15 times the current estimate of the economic cost of the pandemic.

The future of Missouri’s workforce is certainly not promising. Our K-12 enrollment is declining. Four in ten of our 3rd graders, who were in kindergarten in 2020, do not have even a partial understanding of 3rd-grade reading material. And last year, 40 percent of our high school graduates were not college or career ready, as measured by state standards.

Test scores matter. Declining test scores matter. Watering down the tests, backing off the grading scale, and not holding students and families accountable for chronic absenteeism only add to the negative impact.

Dr. Hanushek’s policy recommendations may seem harsh, but they’re the kind of bold ideas we ought to consider. He suggests creating meaningful financial incentives for “good” teachers to teach more students and buying out the contracts of low-performing teachers. These are solutions that prioritize the children in the system over the adults. What are the chances that Missouri is willing to take that approach?

Riverview Gardens and Normandy Are Regaining Local Control

Posted on by Avery Frank

After a decade of state control, the Missouri Board of Education recently announced it will restore local control to two struggling districts, Riverview Gardens and Normandy Schools Collaborative. While the state intervention brought financial stability and higher graduation rates, it didn’t lead to academic improvement. In 2022, only 12% and 2% of Riverview Gardens students scored proficient or advanced in English/language arts and mathematics, respectively. Normandy students scored slightly higher at 12.4% and 8.4%, but these are still alarming numbers. The lack of progress that has existed for decades under both state and local bureaucracies highlights an important question: why don’t families have the opportunity to send their children to the school that will give them the best chance to succeed?

Around a decade ago, both these districts failed to meet state standards and received the status of “unaccredited.” Because these districts lost accreditation, students were allowed to transfer to an adjoining district—and Riverview Gardens and Normandy had to pay tuition to these nearby districts.

Over 2,000 students (a quarter of the two districts’ enrollment) immediately took the opportunity to transfer—with many enrolling in Kirkwood, Mehlville, Hazelwood, Ferguson-Florissant, and Francis Howell. No receiving district gained more than a five percent increase in its student body. This exodus of students was rooted in families’ desire to improve their children’s livelihood—a sentiment that still exists today. One mother described the ability to choose a different district as follows: “She is thriving and has found a place where she fits in. She feels safe in her school environment and as her mother, I don’t worry about her safety while she’s at school.”

Reverting back to the local control is probably not going to dramatically improve the situation in Riverview Gardens or Normandy; these districts have performed terribly both before and after state control.  Parents need to be able to hold these districts accountable. Parents demonstrated they wanted choice back when students transferred out of these failing districts, and they still want it now.

Some people worry what would happen to struggling districts if families had school choice. However, these districts would not simply collapse, as they are allowed to use enrollment from any of the past four years for funding. And school choice could have other benefits for these districts. A smaller student body could lead to more academic success, and the threat of closure could serve as a wake-up call to those who love these school districts.

How much better would it be for a district if students were enrolled because they actually wanted to be there? Perhaps having a student body who actually wants to be at their school would lower the soaring absentee rates we see in these two districts and throughout the state. While I cannot guarantee that parental accountability through choice will save these districts, saving particular school districts isn’t the goal of education policy. It’s giving every student in Missouri the best opportunity to succeed. And that means giving every student in Missouri the chance to pick a school that best fits their needs.

A New Way to Tax, Redevelopment Retry, and Close the Gap

Posted on by Elias Tsapelas

David Stokes, Elias Tsapelas, and Avery Frank join Zach Lawhorn to discuss Detroit’s land tax experiment, redevelopment subsides in North St. Louis, an important deadline for Missouri parents and more.

Listen on Apple Podcasts 

Listen on SoundCloud

Produced by Show-Me Opportunity

Looking For Bureaucratic Efficiencies in All the Wrong Places

Posted on by David Stokes

There is a famous joke about the State Department. Whenever a president asks the State Department for options on a diplomatic matter, the State Department always gives the same three options:

  • Nuclear War
  • Total Surrender
  • Recommended State Department policy

The understanding of the joke is that whatever policy or ideas elected officials want to enact, it is the government employees—the bureaucrats—who have to carry it out. Too often, the bureaucrats carry it out in a manner that benefits them, not the elected officials or the public. (I care more about the latter.)

The City of St. Louis is experiencing a problem like that right now, with its efforts to combine its three 911 systems into one. Consolidating 911 centers should be one of the low-hanging fruits for service sharing among local governments. There are numerous examples of it benefitting communities in Missouri. Unfortunately, while many efforts have succeeded, a few have been stalled due to resistance from local bureaucrats.

The problems in St. Louis are all the more confusing because this effort is entirely within the same city government. In theory, it should be easier to implement service sharing in one government rather than sharing 911 services across different governments (which isn’t really that hard, either.) But, shockingly, the various city employee unions have thus far been able to stall the reform efforts. The mayor’s plans to consolidate and improve the 911 system have been blocked, thus far, by the unions representing the dispatchers who are currently within different departments. From the article:

One union represents police dispatchers, and another represents EMS and fire dispatchers. The unions have demanded bargaining over any dispatcher cross-training. Uncertainty about which union would represent a combined dispatcher position slowed attempts by Mayor Tishaura Jones and her former public safety director, Dan Isom, to allow dispatchers to handle all types of emergency calls.

The unions complained Jones and Isom’s plans for consolidation were made without consulting them and that the changes in job duties were clearly something that should be covered in contract negotiations. [emphasis mine]

Missouri attempted major public-sector union reforms a few years ago. While some reforms were passed into law, a lawsuit unfortunately led to the reforms being overturned by the Missouri Supreme Court.

St. Louis has public sector unions delaying improvements to a system that would improve the city’s currently terrible 911 system and spend tax dollars more efficiently. But hey, fiefdoms have to be protected, right?

FDR was right about public sector unions. They shouldn’t exist.

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