Taking a Stab at “Tax Stacking”

Posted on by Caitlin Hartsell

A Farmington  lawyer, Tom Burcham, is suing southern Missouri towns that “tax stack” — a practice by which municipalities circumvent the state-mandated limit of an additional 1.5 percent in sales taxes by adding additional increases through referendum.

In the suits, Burcham and his clients seek damages and attorney fees, as well as for “illegal taxes” to be returned to the residents. He has won suits in Purdy and Iberia already, and has cases pending in six other cities.

While I admire the quest to lower taxes, I am unsure whether I agree with this particular method.

First, any money that Burcham wins in damages — which amounted to $20,000 plus attorney fees from Iberia, population 620 — comes from the town’s coffers. (He did donate to charity the money he has received so far, so one can’t accuse him of a get-rich-quick scheme, but, still, high damage awards aren’t easily accommodated by small town budgets.)

Although it would be a nice gesture, agitating for the return of the disputed tax collections to citizens is infeasible — according to a Missouri Municipal League lobbyist, at least, who estimated such rulings would bankrupt the towns. Burcham has not yet convinced a town to refund the taxpayers directly, but he is still trying.

Another factor is that these projects were voted on in referendum by the public, and mainly fund projects like improved roads and fire stations. If a particular town decides to increase sales taxes to pay for a public works project, should the state be able to cap that rate? This becomes more complicated when one considers that the towns in question were following a 1999 Department of Revenue interpretation of the existing statutes — an interpretation with which Burcham disagrees.

Is this a laudable crusade for lower taxes, or a strategy that ultimately harms the very people it intends to help? Any thoughts?

Prospects of Education Reform

Posted on by Abhi Sivasailam

Joe Knodell, opining in the Springfield News-Leader today, is hopeful about the progress of education reform in the state. Knodell, a former superintendent and current consultant for the Missouri Education Reform Roundtable Foundation, cites the recently passed Missouri Senate Bill 291 as a harbinger of future, serious discussion and action on education reform in Missouri.

S.B. 291 calls for the Joint Committee on Education to study open enrollment and how it would affect students. Were Missouri to adopt a system of open enrollment, families would no longer be confined to schools within their district boundaries and would be permitted to apply to the school districts of their choice. Knodell argues, and I agree, that students deserve schooling based not on arbitrary geographical lines but on where students would be best served. Open enrollment would introduce much-needed competition into the educational system, as schools and their districts fight to attract and retain students. When schools compete, students win.

S.B. 291 contains other stipulations, as well, ranging from support of charter schools to increased school transparency, as well as establishing virtual schools and a parents’ bill of rights — issues that the Show Me Institute has discussed since its inception. It’s heartening to see Missouri shift toward more and more measures that are rooted in competition and choice.

Nursing Favoritism

Posted on by Dave Roland

Combest pointed out this morning that the Post-Dispatch has run an article about the state auditor’s concern about the city of St. Louis paying for a set of nurses to serve three dozen Catholic and Lutheran schools. The audit revealed that this practice has been going on for about 20 years, and that it is part of a “‘memorandum of understanding’ between the Archdiocese of St. Louis and the Lutheran Elementary School Association.” It appears that this sort of public support is not being offered to any of the other private schools, and that the public schools have to pay for nursing services out of their own operating budgets. While it might be helpful to have some additional information regarding this program, it appears to be a plain violation of the Missouri Constitution as well as a potential violation of the First Amendment’s Establishment Clause.

Article I, section 7, of the Missouri Constitution reads:

[N]o money shall ever be taken from the public treasury, directly or indirectly, in aid of any church, sect, or denomination of religion […] and that no preference shall be given to nor any discrimination made against any church, sect or creed of religion, or any form of religious faith or worship.

Article IX, section 8, says:

Neither the general assembly, nor any county, city, town, township, school district or other municipal corporation, shall ever make an appropriation or pay from any public fund whatever, anything in aid of any religious creed, church or sectarian purpose, or to help to support or sustain any private or public school, academy, seminary, college, university, or other institution of learning controlled by any religious creed, church, or sectarian denomination whatever[.]

To be perfectly clear, these constitutional provisions are problematic in their design, because they were initially intended to discriminate against Catholics who, unhappy that their tax dollars were being devoted to public schools that promoted Protestantism and denigrated Catholicism, claimed it was only fair that they should get to use public funds to create their own schools. Incensed at the prospect of publicly funded Catholic schools, many states — including Missouri — adopted constitutional measures that would prohibit such a possibility. Thus, the basis for these provisions was religious discrimination, and one of the open questions in constitutional law is whether a state constitutional provision rooted in religious discrimination might itself be invalidated under the First Amendment.

But, as time has passed (and particularly as public schools abandoned the prayer, hymn-singing, and Bible readings that had previously been common), Missouri’s constitutional requirements have come to stand first for a more general principle that religious groups (and particularly religious schools) should never be given any special favors. Some Missouri Supreme Court cases suggest that the constitutional problem might evaporate if the city were to adopt a more general program that provided nursing services to all schools and their students, although Missouri courts have previously been willing to use these constitutional sections to eliminate even aid programs that made no distinction between public and private schools.

But, if the city of St. Louis has forged a special deal to provide Catholic and Lutheran schools — and only Catholic and Lutheran schools — with nursing support, as the auditor’s report suggests, the city would certainly seem to be impermissibly playing favorites among religious groups.

Should Charters Take Over Traditional Urban Schools?

Posted on by Sarah Brodsky

From this article in the L.A. Times, it looks like Green Dot has somewhat improved a troubled California high school. If progress continues, I’m sure other cities will consider handing over problematic schools to charters.

Charter management can help existing schools by bringing in new staff and updating policies. But, ideally, charter schools should start from scratch. That way, charters are free to try radically new approaches. A charter that takes over a high school has to make do with tweaking a flawed model.

Besides, charters that move into existing schools don’t have to advertise to parents like those that are built from the ground up. That may be easier from the charter’s point of view; unfortunately, it doesn’t spur competition between schools or match students to schools based on their interests and learning styles. Green Dot has divided the Los Angeles high school into several academies in the same building, but that’s a far cry from a competitive market.

Despite Previous Defeat, Kirkwood Tries Again for Smoking Ban

Posted on by Caitlin Hartsell

Despite voting down a similar proposition two and a half years ago, Kirkwood residents will again in November face a decision of whether to ban smoking in public places, the Post-Dispatch reports.

Opposition to the ban is summed up well within the article:

Mike Duffy, a restaurant owner and president of the Kirkwood restaurant association, declared the ban “is not good for the citizens of Kirkwood. Citizens vote with their money to go to restaurants,” he said. “If they don’t want to go to a place (that allows smoking), they will go someplace else.”

To read previous Show-Me Institute discussions about smoking bans, look at these blog posts, or Show-Me Institute policy analyst Dave Roland’s testimony about a similar ban before the Clayton City Council.

Direct Democracy or Representative Republic: Which Do You Prefer?

Posted on by David Stokes

I generally prefer the actions of a representative republic over those of a direct democracy. Yesterday’s Kansas City Star had a sound article about the recently failed mayoral recall, and then dove into the larger questions of referendums, petitions, and recalls. The article explains:

Direct democracy — the ability of citizens to enact and overturn laws and representatives through initiative, referendum and recall petitions — has been a fixture of Missouri politics for a century and is deeply embedded in Kansas City’s charter, its governing document.

St. Louis County’s charter is pretty open to these things as well. St. Louis city’s rules are crazy, though, if you remember the spat of recall elections a few years back during which recalls were being used as nothing more than a weapon to continue fighting a losing campaign. (Not every recall during that period was unjustified, though, in my opinion.)

Perhaps I am being inconsistent, because I readily admit I love the Hancock Amendment and its requirements for voting on most tax increases. But for the most part, I support allowing elected officials to make decisions and then having the voters judge those decisions at the next election. Recalls should be saved for misconduct, and time spent working for initiative petitions would be better spent, in my opinion, convincing legislators to introduce and support those same proposals. If that fails, convince new people to run for office on a platform of those proposals. If that fails, maybe you need to admit that nobody likes your stupid idea.

Some of my erstwhile allies in the article do a pretty good job of changing my own opinion, however:

“I think the legislative process at its best is far superior to the initiative process,” said Bob Stern of the Center for Governmental Studies in Los Angeles, a group proposing major reforms in the state’s initiative and referendum procedures.

In a recent study — which refers to voters as government’s fourth branch — Stern’s group found that initiative petitions “are frequently too long and complex. … Voters frequently struggle to make informed decisions.”

With friends like these … I guess you have to really love government to envision it “acting at its best,” and I bet legislators “struggle to make informed decisions,” too. How many officials actually read the stimulus bill? And voters are the dumb ones?

What I don’t like is the ease of putting new laws on the ballot, like they have in California. New laws should be hard to enact, with checks and balances, not just put on the ballot because some group has enough funding to pay signature gatherers. (A practice that should be legal, by the way, just not encouraged.)

While I prefer letting legislators do, or better yet, not do, their jobs, I agree it is important to keep the options of petitions, recalls, etc. available. I think their mere presence has a positive impact, especially in controlling the most unethical behaviors. Some times the petition process has been crazy, and sometimes it has been outstanding. I am sure it has a higher batting average than legislators themselves, but I still think it should be used as a check and balance, not the primary way we make decisions.

The Standards MacGuffin

Posted on by Sarah Brodsky

Edudiva responds to Caitlin Hartsell’s standards post by arguing that Missouri’s education standards don’t come up to the difficulty level of the MAP tests. She predicts that joining the coalition of states will improve our standards, and that we have nothing to lose:

We won’t look bad when compared to states with easy assessments when they upgrade their tests. We won’t need to “dumb down” ours; instead, the rest of the country will need to catch up to our assessments.

This is wishful thinking. If other states wanted to improve their tests, they could do that right now without joining a group. A coalition of states won’t necessarily bring everyone up to the level of the best state. It will create new standards, which will be some kind of compromise among all the different participants. States with the worst standards may get a boost; other states might very well dumb down their standards, or they could leave the coalition — in which case, what will have been the point?

The discrepancy between state standards and MAP test content is clear evidence that standards don’t matter. We often hear about teaching to the test or schools engaging in excessive test prep. Standards are rarely mentioned outside of the context of the MAP. Standards don’t drive district behavior; this is apparent from the wide range of outcomes among districts, all of which are held to the same state standards.

We’ll see a similar result from national standards. One set of standards will apply to all 46 or 47 states that join, but outcomes will still vary greatly as some states apply them better than others, or ignore them entirely.

High-Speed Rail Would Take Taxpayers for a Ride

Posted on by Josh Smith

There’s an unfortunate discussion going on among Midwestern governors and the federal government about a possible high-speed rail line linking major Midwestern cities. The Show-Me Institute has covered the problems with light rail in the past, but surely some of the arguments carry over: This project will likely cost more than projected, and the benefits are almost certainly overstated.

If this issue appeals to you, stay tuned to Policy Pulse for stories relating to this and other topics of interest.

Keeping St. Charles Safe From Hot Dog Vending Chaos

Posted on by David Stokes

The denizens of Missouri’s first capital can rest easy tonight, knowing that the effort to subject them to hot dog vendors within the city has been defeated. The Suburban Journals has the story. 

The city council, in its debate of a proposal to allow a hot dog stand, seemed to have a disproportionate amount of concern for something so simple (emphasis added):

Several members of the council expressed concerns that approving a permit for Daily could lead to many more people hoping to set up carts on city property.

Others were worried a late-night hotdog stand would lead to more people loitering after bars close.

It would clearly be a disaster for St. Charles if all of a sudden more people tried to sell food out of a cart to loiterers. Next thing you know, St. Charles will be like Las Vegas and they’ll do away with laws altogether! (Note: Sorry, but I can’t find the Onion article I just referenced.)

In all fairness, at least one councilman is going to keep trying to allow hot dog vendors. I give him credit for staying at it. Regulating and taxing street vendors is better than an outright ban, I guess. Why is it so difficult for someone to sell a hot dog to people who might want to buy one? Oh, yeah, because the government gets involved. (“But David, it’s for your own safety!” “I guess I forgot that for a moment.”)

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