Shopping by Phone?

Posted on by Elias Tsapelas

Can a fifteen-minute call really save you 15% or more on your car insurance? I’m not sure, but it might significantly lower the cost of your next hospital bill.

It’s been a little more than two years since the federal government began requiring that hospitals disclose their prices in a consumer-friendly format. As of a few months ago, compliance was reportedly still incredibly low. The Centers for Medicare and Medicaid Services (CMS) and the American Hospital Association (AMA) claim that around 70% of hospitals were complying, which is much higher than the numbers we found in our investigation into Missouri’s hospitals.

A recent study in the Journal of the American Medical Association throws some cold water on the supposed success thus far for hospital price transparency. The problem isn’t simply that so many hospitals seem uninterested in complying with the federal rule, or at least complying in spirit. Even the hospitals that are “complying” don’t appear to be publishing their real prices. The report concludes:

Findings of this cross-sectional study suggest that there was poor correlation between hospitals’ self-posted online prices and prices they offered by telephone to secret shoppers. These results demonstrate hospitals’ continued problems in knowing and communicating their prices for specific services. The findings also highlight the continued challenges for uninsured patients and others who attempt to comparison shop for health care.

In other words, hospitals are quoting different prices if you call them than what they’re publishing online. This also means that the federal price transparency rule has not succeeded in making health care services easily shoppable—at least not if you’re only shopping online.

Price transparency is important because it allows patients to know the price of the treatment they’re receiving before getting the bill. Knowing the price can then empower patients to shop around and search for savings. Informed consumers (patients) and market forces can then apply downward pressure on the nation’s constantly rising health care costs. Or at least that’s the idea. Needless to say, for transparent prices to have the desired effects, the posted prices need to be accurate. If they’re not, how can patients, especially those uninsured, make the best financial decision for themselves with that information?

Going forward, it’s clear more needs to be done to ensure patients are armed with the information they need to make their health care decisions, and I’m hopeful Missouri policymakers will take action in 2024. But until they do, be sure to call ahead for your medical procedures just in case.

Tax Credit Trade-offs

Posted on by Elias Tsapelas

It’s long past time to rethink Missouri’s approach to economic development. Year after year, our state forgoes hundreds of millions of dollars in tax incentives for private businesses, with little to show for it. Despite countless academic studies showing the folly of governments picking winners and losers in the marketplace, economic development tax credit reform has thus far proven elusive. Why is this the case? If I had to guess, I’d say it’s the lack of transparency regarding trade-offs.

When a new tax credit program is approved, it provides a real tax incentive for some favored business (e.g.. film, construction, manufacturing, agriculture, etc.), while also promising future benefits to the state. For those approving the credits (lawmakers), one perk is that the cost of doling out the incentive doesn’t have to be included in the state’s yearly spending plan (because they aren’t technically expenditures). Even better, since the promised return from the state’s investment is in the future, there’s no real way to measure whether the credits fulfill their end of the bargain. In other words, there’s basically no transparency on the cost or benefit side of the tax credit equation.

Are there good reasons why our government should treat spending tax dollars today as fundamentally different from agreeing not to collect them? Economically, they’re the same. For taxpayers, there’s little difference except that spending is subject to Missouri’s balanced budget requirement, which means that that our government can’t agree to spend more than will be brought in via tax revenues. Economic development tax credits have no such limitation.

While there may be some practical reasons for keeping tax credits out of the state’s budget, I can’t imagine that including them would be too difficult, because it’s already how a few agricultural tax credits are treated. Ultimately, it seems to me that when economic times are tough, it would be a good idea for lawmakers to have as many options as possible. Being able to weigh the benefits of subsidizing, for example, movie production via tax credit, against other spending priorities such as education and health care would be a positive move for our state.

Going into 2024, if lawmakers are serious about reining in the state’s out of control spending, shining a brighter light on where each state tax dollar is going (whether spent or foregone) would be a great place to start. Real transparency would mean that Missouri’s economic development tax credits can no longer hide their true trade-offs in the dark.

The Folly of MetroLink Expansion

Posted on by David Stokes

The Show-Me Institute is excited to release a new report by Randal O’Toole, one of the nation’s premier transportation economists. O’Toole’s report is titled, “Is St. Louis Transit Built for the 2020s or the 1910s?”

As Metro prepares to expand MetroLink again, we must ask one simple question. Why? Why are we expanding an expensive system that very few people use when Metro continues to cut its bus system over and over again? The bus system actually serves the people who need and use public transit, unlike MetroLink, which is primarily for those who use transit occasionally for sporting events downtown.

Did you know that the St. Louis area had more transit riders before we built MetroLink than we do now? We spent billions of dollars to build a light-rail system, and fewer people ride transit than before it even existed. What if we had spent a fraction of those billions on building a better bus system? A bus system that gets people who rely on public transit to school, work, the grocery store, and, yes, the ballpark, too.

It’s not too late to stop the latest MetroLink expansion mistake. I hope that O’Toole’s report can be a part of the discussion that convinces St. Louis’s political leadership to redirect our money for transit toward helping residents who depend on transit to go where they need to go every day instead of focusing on getting suburbanites to the soccer game a few times a year.

And Then There Were Ten

Posted on by Susan Pendergrass

Prior to two years ago, no state offered its families the benefit of choosing their children’s school—either public or private—using state education dollars. As of this week, North Carolina became number ten to do so and Texas is close to becoming number eleven. That means that over 7 million children, out of about 50 million K-12 students in the United States, can now choose a school or education setting that fits them. If Texas joins the group, that number will nearly double.

Universal school choice—which is what we call it when all families can choose a school, not just those who can afford private schools or afford to move to a “good” school district—is having an interesting political movement. Bipartisan efforts have led to many of the recent universal choice programs. The concept that a child might find themselves in a school that is not working well for them seems to cut across party lines. Divisive issues such as vaccines, curricula, and bullying (particularly of LGBTQ students) also make it easier to understand why children and families might feel trapped by school assignment policies.

Those invested in the traditional public school system have fought hard against opening up the system to choice. Many still cling to the idea that one school or one district can serve every need equally well. Most children probably fall into some range of being able to adapt (though not necessarily thrive) to whatever is offered at their neighborhood school. But should we continue to kid ourselves that the system will adapt to support those students who can’t seem to learn in their neighborhood school or who dread going there in the morning?

North Carolina families have just become entrusted with a big responsibility—taking ownership of their children’s education instead of accepting the default. They join families in Arkansas, Oklahoma, Iowa, Indiana, West Virginia, Utah, Arizona, Florida, and New Hampshire. Don’t Missouri families deserve that trust?

The Taxman Confuseth

Posted on by David Stokes

Some Missouri counties are moving forward with passing property tax freezes for seniors. This is unsurprising, as it is a classic example of something that is smart politics but poor policy. Giving one sector of the population—senior citizens (and the wealthiest sector at that)—a special tax deal is a terrible idea. But that is not actually the point of the blog post.

Counties are creating their own special rules for the tax freezes, and the fact is they simply have no authority to do that. They may be able to do whatever they want with the property tax revenues for the counties themselves (or the independent City of St. Louis), but these changes affect other entities such as school districts and municipalities.

Not all of the changes counties have included in their bills are necessarily bad (in that they may have made a bad idea slightly less bad) but a county can’t change the authority the state gave it to collect and distribute tax money for other taxing districts, like schools.

Jackson County passed an ordinance limiting the tax freeze to those with homes valued at less than $550,000. Camden County passed a senior tax freeze, and county officials stated that  improvements to the home that resulted in more than a 50% increase in assessment will trigger a reassessment and, presumably, a tax increase. It speaks to how poorly Senate Bill (SB) 190 (the bill in the Missouri Legislature authorizing the senior tax freeze) was drafted that it does not address what happens if senior citizens make substantial improvements to their home after they receive the tax freeze. Common sense would lead one to believe that the valuation and taxes are changed in that case, but maybe not?

The City of St. Louis has proposed a bill (but it has not passed yet) that makes significant changes to the eligibility rule, including raising the age to receive the tax freeze to 65. Those changes aren’t even bad ones (mostly), but they are not allowed by the state law. This article states that Greene County passed an ordinance limiting the tax freeze to those actually receiving social security, not just those eligible for it, but I don’t see that in the ordinance so I am not sure that is correct.

As an aside, now that St. Louis County had commendably rejected the freeze but Camden County (Lake of the Ozarks area) has passed it, I am intrigued by the question of how many St. Louis County residents with second homes at the lake will change their primary address to Camden County. (You can only get the tax freeze on your primary residence, not multiple homes.) Remember, residence is mostly a matter of intent. If you “intend” for your residence at the lake to be your primary house—and you at least do the bare minimum and register to vote there—it is just about as easy as that.

These various bills from counties are going to invite legal challenges, and I, for one, look forward to that happening.

And Then There Were Three: Blue Springs Joins Jackson County Property Tax Lawsuit Party

Posted on by Patrick Ishmael

First it was Lee’s Summit and Independence initiating legal action against Jackson County for the county’s uneven and hamfisted property tax reassessment rollout. Now, Blue Springs is joining the litigation party.

Is it Johnny-come-lately political theater? Is it a principled beef against higher taxes on behalf of citizens? The court will decide!

Blue Springs will join one of its neighbors [Independence] and become the third city suing Jackson County over property tax assessments. . . .

“The mayor and City Council are authorizing legal action to ensure the residents of Blue Springs receive a fair and consistent process for the assessment of real property in compliance with state law,” the City Council said in a statement Thursday. . . .

Last month, Auditor Scott Fitzpatrick said his office’s whistleblower hotline has received complaints about significantly higher property assessments, not being able to get through the phone line, and software company Tyler Technology making decisions it might not be qualified to make.

The lawsuits by the cities are in addition to the class action lawsuit filed privately by residents on similar issues, asserting (in short) failures of notice and process by the county. For example, the Lee’s Summit suit asserts that the state’s requirement that a reassessment be the result of a physical inspection was not met for this year’s reassessment, and the Independence suit asserts that the county failed to meet a variety of deadlines, among other statutory violations.

Whether anything comes of this stack of lawsuits remains to be seen, but the fact remains that property tax reform should be a priority for legislators and county leaders in 2024, so that future reassessments will be predictable and reasonable for Missourians statewide. As for Kansas City, my colleague David Stokes would remind policymakers that the constitutional exemption that allows the Kansas City public school district to not roll its tax rate back as property assessments increase is a major issue that should be grappled with sooner, not later.

Taxpayers should demand larger rollbacks than Hancock Amendment requires

Posted on by David Stokes

A version of the following commentary appeared as a letter to the editor in the Columbia Missourian.

Earlier this year, Missouri homeowners received their reassessment notices on the value of their property. For many homeowners, the new values were quite a shock. In Jackson County, for example, the average assessment increase was 30 percent.

Missouri’s Hancock Amendment is supposed to require tax rate rollbacks as assessed values increase. Reassessment is not supposed to be a tax increase. However, the high inflation of last year allows local governments to roll back rates far less than usual, if at all. Columbia announced it was keeping its city tax rate exactly the same, despite an eight-percent average valuation increase in Boone County. Don’t let your county or other local government do the same.

In September, counties throughout Missouri are setting their tax rates for 2023. Many of them are seeing large increases in the assessed valuations within their boundaries. Missouri taxpayers need to demand that their counties—and other taxing districts within certain charter counties—roll back rates to offset the otherwise large property tax hikes people will see later this year. Yes, this means local governments should roll back rates even more than is required by Hancock.

Large increases in assessed valuations don’t have to translate to large tax increases, but they will if local officials keep their tax rates the same or lower them by the bare minimum required. High inflation shouldn’t be an excuse to hammer taxpayers with large tax hikes. Taxpayers deserve—and should demand—better treatment from their county officials and other local governments.

 

Royals Put Off Stadium Decision Another Month

Posted on by Patrick Ishmael

Now that it’s almost Christmas, I can’t help but compare the latest news about the Kansas City Royals to a holiday classic, White Christmas. For younger readers, White Christmas is about two entertainers (Wallace and Davis) who try to help an old friend’s ski lodge. As the movie pivots toward its conclusion, Wallace abruptly leaves dinner, inspired by something Davis has just told him. Davis, flummoxed, turns to another friend:

Phil Davis: [sighs] I don’t know what he’s up to, but he’s got that Rodgers and Hammerstein look again.

Betty Haynes: Is that bad?

Phil Davis: Not bad, but always expensive.

I’m afraid things are about to get more expensive with the Royals:

The Royals had previously announced a decision on a new Kansas City ballpark by the end of September. Now, as of Sept. 21, the team is looking to push off a decision as negotiations continue with both Jackson County and Clay County officials over the cost and funding of the projects. If the team goes downtown, the new ballpark would be located in the East Village near the downtown loop, on a 27-acre site bounded by 8th Street to the north, 12th Street to the south (where the main entrance would be located), Charlotte Street to the east to Cherry Street to the west; if the team does go with North Kansas City, an 18th Avenue and Fayette Street ballpark location would be part of the 90-acre site. The target date for both locations: 2028.

The fact that negotiations are continuing with both counties is concerning, precisely for the reason Quentin Lucas mentioned at the outset when Clay County’s bid was announced: the longer this bidding war goes on, the worse served local taxpayers are going to be. It’s hard to envision a circumstance where longer negotiations would decrease the amount of money shoveled over to the Kansas City Royals at the end of this process, so moving the decision date from late September to late October is a very unwelcome development.

Again, no public money should be going to a project like this, but if it is, it would be far better for that decision to be made sooner and not later. The decision coming later than was promised should concern all taxpayers.

Welcome to “Kensas City”: Barbie-Themed Streetcar Wrap Costs Taxpayers $25,000

Posted on by Patrick Ishmael

Are the Underpants Gnomes running the Kansas City Streetcar Authority (KCSA)? Hot on the wheels—pardon, hot on the heels—of the news that Kansas City’s riverfront streetcar extension will be going way, way over budget, we now find out that the KCSA has a very nuanced approach to making the streetcar make anything resembling sense. My best guess at the latest gnomish rationale is as follows:

Phase 1: Build the Kansas City Streetcar and make it free to ride.

Phase 2: Spend $25,000 to wrap a streetcar in a Barbie theme:

Kansas City, Missouri, unveiled a Barbie-themed streetcar, dubbed the “Dream Streetcar” earlier this month. The streetcar is decked out in familiar bubblegum-pink wrapping and even rewrites the city’s name as “Kensas City.” A lucky passenger can even choose a seat decked out to resemble characters from the recent Barbie film, like “Stereotypical Barbie, President Barbie, Cowboy Ken, and even Allan.”

Oh, and the whole thing cost taxpayers $25,000.

According to records obtained by KCUR, Kansas City’s NPR affiliate, the hefty public spending is due to the fact that the Dream Streetcar is not actually a sponsored ad for the blockbuster Barbie movie that premiered in July. Instead, it’s a project by the Kansas City Streetcar Authority (KCSA) to increase ridership, even though the streetcar is free to ride.

Phase 3: . . . Profit?

I’m of course kidding about “profit” even being a consideration here—this is government after all—but it is off-putting to see precious taxpayer resources being spent so frivolously. Ridership numbers on the streetcar have no bearing on anything except maybe the egos of city officials. Hit the link, too, for quotes from yours truly and Show-Me Institute alumnus Patrick Tuohey, now at the Better Cities Project.

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