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

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.

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Produced by Show-Me Opportunity

Looking For Bureaucratic Efficiencies in All the Wrong Places

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.

The Future of Missouri’s Workforce with Susan Pendergrass

Zach Lawhorn speaks to Susan Pendergrass, director of education policy at the Show-Me Institute, about her new report The Future of Missouri’s Workforce.

Read the full report here.

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Produced by Show-Me Opportunity

Application Deadline for Close the Gap Grant is Almost Here

The application deadline for Missouri’s Close the Gap Grant Program is quickly approaching. The law was passed back in 2022, but after finally solving some logistical hurdles, the program is up and running. Parents have until October 23 to apply for a one-time grant of up to $1,500 to spend on education expenses.

So, what exactly is the “Close the Gap Grant”?

Close the Gap is a one-time grant paid to families with students enrolled in Missouri public schools—those in private school or homeschool are not eligible to receive these funds. With these tax-exempt funds, parents can pay for:

  • Tutoring services
  • Academic/summer camps
  • Educational materials
  • Computer equipment
  • Internet connectivity
  • Learning-relating subscriptions
  • Software to support educational activities
  • Before- and after-school programs
  • Study skills services
  • Costs associated with college credit for AP, dual credit, dual enrollment, ITV (instructional television), and international baccalaureate
  • Art enrichment lessons (such as piano, singing, or dancing lessons)

Additionally, because this program was supposed to be up and running last year, parents can also request reimbursement for an allowable service or product they purchased since July 1, 2022.

After all the applications are received, grant awards will be divvied out to families below 185 percent of the federal poverty level. If there are surplus funds still available (which there could be from the $75 million budget), applicants above the stated poverty level will receive grant awards. Parents will be notified regarding the amount of their grant reward starting on November 1st. For the awardees, grant funds do not roll over and must be used by June 1, 2024. These funds are a one-time payment; these payments are not recurring and are only available for this year. Unless Missouri finds a way to carve out new funding to continue this program, there will be no grant in 2024–2025—this grant comes from emergency federal COVID relief funds in 2022.

Who is administering this program?

An organization called Odyssey will be administrating the program. The founder of Odyssey previously founded SchoolHouse, an at home micro-school company. Odyssey is a startup that manages education scholarship accounts (ESAs) and microgrant programs. Odyssey will handle basically everything required for the Close the Gap grants: all application management, marketing and outreach, marketplace creation, payments, and customer support.

Odyssey will have an online marketplace with listed vendors where individuals can see all allowable education services and products. Along with a marketplace, the Odyssey Parent Portal will also have a tab to upload receipts for reimbursement.

With the deadline quickly approaching, make sure to sign up and get your grant award now.

College Readiness Declines

ACT, the organization that administers one of the most widely used college entrance exams, just released the scores for last spring’s graduating class and the results are troubling. Scores are down nationally and in Missouri. As a reminder, this is the class of students who were freshmen when schools closed in 2020 and most likely spent at least part of their sophomore year trying to learn remotely. We now know that this was not successful for very many students and these data confirm that.

Nationally, the average composite ACT score fell from 19.8 in 2022 to 19.5 in 2023. Prior to 2022, scores hadn’t been below 20.0 in more than thirty years. In Missouri, scores fell from 20.3 to 19.8, the lowest average composite score for the state since 2000. Missouri’s average was near that point (19.86) in 2018 when the test was required for all students, whether they intended to go to college or not. That is no longer the case. Last year, 66 percent of graduating students took the exam.

So, what does this mean? As predicted, students who were at “important” points in their K-12 education are in real trouble. Nearly 40 percent of Missouri’s 3rd graders (kindergartners in Spring 2020) scored below Basic in reading last year, meaning they don’t even have a partial understanding of the subject. They missed a critical window to develop a skill that is fundamental to their future success in school.

The same can now be said of students who were starting high school. They are, as a group, less ready for postsecondary education. This has implications for their lives as well as the quality of the Missouri workforce. Our state leaders should be addressing this as the crisis that it is. It should be a policy priority. They should be talking about it routinely. Is that what you’re seeing or hearing?

Maybe the Adults Need a Math Test

The media is finally catching on to a trend I’ve discussed often here. The number of elementary and secondary students is declining and has been declining since well before the pandemic. Meanwhile, the number of elementary and secondary teachers only grows. This trend is alive and well in Missouri, as seen in the graph below:

Missouri Elementary and Secondary Enrollment and Teachers: 2014–15 through 2021–22

Source: U.S. Department of Education, National Center for Education Statistics (NCES), Common Core of Data, Nonfiscal Survey, multiple years, nces.ed.gov/ccd

Missouri enrollment fell from 920,000 students in 2015 to 910,000 in 2019—before the pandemic. Even with the post-pandemic recovery, enrollment is still down over 30,000 students from six years ago. Interestingly, we now have over 3,000 more teachers to serve the smaller student body.

According to Dr. Marguerite Roza of Georgetown University, there have been three waves contributing to the growing teaching staff. The first was the post-recession hiring back of laid off teachers. Then there were seven boom years of growth in education funding (though not in enrollment). Finally, there has been the enormous influx of pandemic stimulus funds from the federal government.

Stimulus money is drying up, though. So, what happens next? The Department of Elementary and Secondary Education (DESE) has just submitted a budget request that has a $300 million increase. In a logic-defying move, DESE claims that fewer students means we need a higher dollar amount per student in the foundation formula. Why? Because hiring when enrollment goes down because you’ve got the money doesn’t mean you can simply fire excess teachers when the funds dry up. Public education employment contracts don’t work that way. The system needs total funding to stay the same or increase, regardless of enrollment trends. Here’s hoping the state legislature looks at the math before agreeing to this request for no accountability.

The Future of Public Transit in St. Louis with Randal O’Toole

Susan Pendergrass speaks with Randal O’ Toole about his new report “Is St. Louis Transit Built for the 2020s or the 1910s?”

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Randal O’Toole is a Research Fellow at the Independent Institute and Director of the American Dream Coalition, and Senior Economist at the Thoreau Institute. He has been Visiting Scholar at the College of Natural Resources at the University of California at Berkeley, McCluskey Conservation Fellow at the Yale School of Forestry and Environmental Studies, and Merrill Visiting Professor of Political Science at Utah State University.

Produced by Show-Me Opportunity

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