Lessons Learned From Kelo

Posted on by Christine Harbin

The Wall Street Journal reflects on Pfizer’s recent decision to leave its location in New London, Conn. I like the following statement from the op-ed in particular:

If there is a lesson from Connecticut’s misfortune, it is that economic development that relies on the strong arm of government will never be the kind to create sustainable growth.

This is a lesson that cities like Saint Louis should remember and asseverate in their future development projects. As demonstrated in New London, government involvement produces opposite-than-desired results, such as driving out businesses and attracting feral cats.

The Scales of Justice

Posted on by Josh Smith

There’s an article on the Wall Street Journal‘s website about fishing rights in New England. It’s a very interesting case. It seems that a small-time commercial fisherman refuses to get the mandated fishing license, asserting that his right to fish the waterways is protected by a 423-year-old legal compact between the former British governor and the local townspeople. According to the article, a post-revolutionary war court upheld the “Dongan Patent” in 1777, and there are apparently other legal cases providing a precedent for the right to fish the local waters of Long Island’s East End without obtaining any extra permission.

As is evident from the far-reaching historical backdrop of this case, government regulation of fishing has a very long history. The economics of fishing permits are fairly cut and dried: This is an application of the tragedy of the commons. When a number of individuals have a right to consume from a public region — i.e., fishing on a river or other waterway — each one of them is individually incentivized to get as much as possible as quickly as possible, especially when it is their livelihood rather than their recreation. On the other hand, in cases where there is only a single owner, there is much less reason to worry about others “getting theirs first,” and the owner can economize with an eye on maintaining the future value of the property. The problem with a single concern having access is the same as the problem with any monopoly: higher prices and less service, with none of the benefits of competition. One solution to the tragedy of the commons is some form of social arrangement, with social stigma or other punishment for “cheating.” These sorts of arrangements have been studied at length by Elinor Ostrom, and she recently won a Nobel Prize in economics for her work.

A far more common solution, though not necessarily more efficient or desirable, is a government regulation of “the commons,” such as by requiring fishing licenses. If regulators can accurately determine the impact of each additional fishermen extracting each additional fish, they can set a price on licenses such that the most efficient outcome will be reached. This level of prescience is less likely than what actually happens in practice: License fees are set too low, in which case you still get overfishing, or they are set too high, in which case not enough fish are extracted to maximize value over time. I don’t know which case is more likely, but I strongly suspect the former is more common.

For what it’s worth, the state of Missouri sells recreational fishing licenses in unlimited quantities, and they are quite affordable — a daily pass is cheaper than a movie. Although I’m sure it’s a nice revenue stream for the Missouri Department of Conservation, I seriously question whether this is a proper area for government involvement in people’s lives.

Should Missouri Reassess Property Less Often?

Posted on by David Stokes

There is no reason Missouri could not do just fine if we went through reassessment every three years instead of every two. I’m serious, here. Today, Combest linked to a story from the Rolla Daily News about budget cuts in the state’s assessment reimbursement fund. Every county gets repaid by the state for a portion of its assessment costs, because county assessors value property for many entities other than just the county. School districts, fire districts, state government itself (for the blind pension fund), cities, and many other governments utilize property taxes based on the county assessments. So, now that we have that straight, what do we think about cuts to the assessment fund?

It’s perfectly fine with me. In tough budget times, the state has to cut spending somewhere, and assessors deserve the cuts just like everyone else. (I am fully aware of the mistaken Keynesian arguments in favor of increasing government spending at all levels right now.) The assessor in Phelps County is complaining that the cuts to the reimbursement fund — from $6 per parcel to $4 — leave him hanging:

Rasmussen said actual per-parcel, assessment-maintenance expenses amount to $28.48. Assessment maintenance includes the actual assessment, pricing new construction projects, assessing all personal property in the mobile-home count and keeping parcel ownerships current.

I have proposed a perfectly reasonable method of residential assessment, based on very common real estate property indices, that would substantially lower the cost of doing assessments. It would also make the job of the Phelps County assessor easier, and thereby less expensive, if they adopted the certificate of value method, like in St. Louis, but we all know that won’t happen. If the residents of rural Missouri don’t want certificates of value to be filed when homes are sold, that is fine with me, but they have to realize their rejection of that method might increase the local taxes they have to pay for their assessments.

But why do we have to do the assessments? I see no problem with amending the state law to allow for reassessment every three years instead of every two, allowing for some caveats, because you probably do want to do a reassessment after each census when you have the most accurate information available. I really doubt anyone would complain if, after 2011, the next assessment does not take place until 2014. I certainly wouldn’t.

SMI Articles on Property Taxes

Posted on by David Stokes

Today, the Missouri Record carried my article on commercial property tax surcharges in Jackson County / Kansas City. Last week, the St. Louis Business-Journal carried the St. Louis version of the same idea. (The Business-Journal website only shows the first half of the piece unless you are a subscriber.) I want to thank both publications for running and hosting the op-eds.

This was a fun article to write (it was one basic article tailored to two different geographic regions). First of all, it required some real research because the issue at hand is so rarely discussed. Second, it is a pretty clear example of something that was a good idea when it began, but over a period of years has become a problem that needs to be addressed. Why was it a good idea when it was introduced? Because, in general, it involved tax simplification — always a good thing — while not increasing taxes. In the short run, that is how it worked, but over time, though, taxes have certainly increased. That is why both elected officials and voters need to be able to lower the rate and why, most obviously, the surcharge rate should fall as assessments go up. Currently, the rate always remains the same and only voters can approve a rate decrease, which has never happened.

I hope to be a part of making this change to improve Missouri’s economic climate.

Florissant, Pay Cuts, and Golf Courses

Posted on by David Stokes

The St. Louis Post-Dispatch is reporting on the budget troubles in Florissant, the largest city in St. Louis County. Not surprisingly, the police officers there are objecting to a proposed 3-percent pay cut. Now, I don’t ordinarily sympathize much with government employees, but the ones in uniforms generally deserve a little more compensation than some politically hired clerk. Even more importantly, there is a very reasonable solution, at least for the short term, that is being proposed by one of the councilmembers.

He says they should close the municipal golf course. I agree, but first they should try to sell it.

Podleski ran unsuccessfully against Lowery in April 2007 and continues to be the chief critic of the city budget. After the Monday’s meeting, he suggested the city close its golf course. The budget predicts the golf course would lose nearly $164,000 in the next fiscal year, he noted. When the city is cutting pay, “can it afford a golf course?” he asked.

No, it can’t afford a golf course, but privatization is better than closure. Even if the course only fetches a reduced amount in this economy, at least it then goes back onto the tax rolls as private property. This really is a no-brainer for Florissant. Other think tanks have done a lot of work on the issue of government golf privatization, especially Reason. I can’t think of any item that is less necessary for the government to provide than a golf course. A budget crisis might make the issue more immediate, but even if it were flush with cash, Florissant should privatize its golf course.

Gulag Demonstration at Washington University

Posted on by Christine Harbin

Gulag Demonstration at Washington UniversityYesterday was the 20th anniversary of the fall of the Berlin Wall! To celebrate the historic event, the Washington University branch of Young Americans for Liberty constructed a Gulag on their campus. Josh Smith, Caitlin Hartsell, and I trekked over to the event and talked with students about liberty.

The organization’s message was that Americans shouldn’t forget the lessons learned from a divided Germany, and that we should be wary as our government expands in size and scope.

Show-Me Institute intern Caitlin Hartsell was interviewed on KMOX (link via Combest):

“I mean it’s out there and it’s really out of the box,” said graduate student [Caitlin] Hartsell, “But I think it’s good that it really gets people thinking about what the actual implications of what socialism and communism mean.”

Ultimately, the university shut down the gulag because it was “too offensive.” Jim Hoft at Gateway Pundit reports more on this subject.

Government Transparency Done Right

Posted on by Audrey Spalding

On Friday, the state of Missouri surprised me. I’m used to long waits, unreturned phone calls, and copying fees whenever I ask a local or state official for public records. So, when I called the folks at the Missouri Accountability Portal (MAP), a state government website devoted to making state spending and revenues transparent, I expected the same. Even though, you know, the point of MAP is easy and quick access to information.

While MAP had readily searchable tables of employee salaries, state spending, tax revenues, and tax credits, the large databases behind those tables weren’t available for download as a whole; instead, they were exportable only in bite-sized tables. This made analyzing, say, state expenditures during the past decade impossible.

I left a voicemail; they left a voicemail. I left another voicemail. And then, on Friday, I was told that the web page was up.

That’s right, not only did the folks at MAP fulfill my request, but they thought they might as well fix this problem for everyone. Here’s the link: http://mapyourtaxes.mo.gov/MAP/Download/Default.aspx. On this page, you can download: state expenditures for the past decade, either by year or as a gigantic database; stimulus revenues and expenditures; a database of employee salaries for the past three years; and the amounts that the state has given away in tax credits during the past decade. Oh, and the spreadsheets for this year are updated each night — so you don’t get stale data.

I have never had such an experience of helpfulness and ease when requesting public information. I want to thank the folks at MAP for being so forthcoming and for working to make the website that much more useful for everyone.

Missouri’s Homeschooling Laws Are Fantastic

Posted on by Sarah Brodsky

I knew homeschoolers in Tennessee faced some restrictions, but I wasn’t aware that parents need a bachelor’s degree or their superintendent’s permission to homeschool high school–aged students. (Parents of younger children need only a high school diploma or GED.)

There are many happy homeschooling families in Tennessee, and I haven’t heard of widespread protests over the degree requirements. My guess is that many homeschooling parents in Tennessee earned these credentials before they had children. Or, if they don’t have the degrees they need, they could enroll their children in an online school or a correspondence school and combine its structured program with their homeschooling. It’s also possible that superintendents readily grant exemptions, either because they personally know the homeschooling families in their districts, or because they want to avoid the hassle of a bunch of homeschoolers demanding appeals.

If Tennesseans want to improve their homeschooling laws, they need look no further than Missouri for an excellent model. Missouri doesn’t set any rules about credentials or impose other prerequisites. Homeschoolers have to keep a log of the hours they spend on certain subjects, but no one looks at the logs unless there’s a problem. Missouri parents don’t need to get permission or prove anything before they can homeschool.

Homeschooling laws like Missouri’s are of course desirable from the point of view of homeschooling parents. And their effects extend further. Free homeschooling laws contribute to a free education market in general; any district can potentially face competition from homeschooling. No one in a public district can say, “We don’t need to satisfy these parents. They couldn’t pull their kids out to homeschool, because they don’t meet the requirements.”

Parents as Teachers: A Middle-Class Entitlement

Posted on by Sarah Brodsky

This article in the Kansas City Star celebrates the Parents as Teachers Program, and the fact that it makes no effort to focus on people who really need help:

Saturday marked the 25th anniversary of legislation in 1984 that forced all Missouri school districts to offer the experimental Parents as Teachers program to families living in their boundaries.

Not just to targeted families. Not just for low-income families. But any family in every district.

Maybe you’re thinking, “So what if it’s not targeted by law? Probably disadvantaged families are more likely than others to sign up.” Think again. Better yet, read the statistics from last year’s Parents as Teachers Program in the Columbia Public Schools. About 36 percent of participating parents were from low-income households. (I’m assuming they counted one parent per family. If they counted more than one parent per family, the percentage was smaller.) Only 12 percent mainly spoke a language other than English, and a tiny 5 percent were teen parents.

Parents as Teachers sends out teachers to read and play with kids, most of whom don’t need any intervention at all. We see a similar pattern across a variety of social programs: Middle-class parents are good at finding educational opportunities for their kids, and they crowd out families that need the help. Legislators write eligibility rules and income limits into laws to prevent this, but no such language found its way into the formulation of Parents as Teachers. So the program continues to grow, using tax dollars to entertain middle-class kids and do things their pediatricians could do just as well (like screening for vision and hearing problems).

However, some experts disagree with my analysis and argue that everyone needs Parents as Teachers:

“I’m supposed to be a world authority (on child development), but when we brought my son home from the hospital, I didn’t know what to do. We all need this service.”

Perhaps all parents could benefit, but not all parents need to receive the service for free. World authorities who are paid commensurately with their vast knowledge need to hire their own pediatricians and early childhood educators.

And then there’s the argument that open eligibility removes any stigma from the program, allowing the neediest parents to participate without feeling uncomfortable. There may be some truth to that — but keeping the program open to all imposes a tremendous cost on taxpayers, who have to spend more than $1,000 for each family visited by Parents as Teachers. Removing a stigma isn’t worth that expense.

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