Why the SCHIP Might Go Down

Posted on by Ryan Davisson

Last Wednesday, the House of Representatives passed a bill (289-139) to expand funding for the State Children’s Health Insurance Program (SCHIP). The bill is predicted to increase funding to SCHIP by $32 billion over a period of five years.

SCHIP, created in 1997, is the biggest public health insurance program since the creation of Medicaid and is targeted to insure children that come from households that earn too much to qualify for Medicaid, but too little to afford private health insurance.

A 61-cent tax increase on cigarettes, cigars, rolling papers, chewing tobacco and related products is supposed to fund the expansion of the program. This may not be a reliable funding source, however. Since 1964, the number of adult smokers in the United States has decreased by approximately 50 percent. A Kansas City Community Health Assessment released in 2006 reported that overall tobacco use in Missouri, for all ages, is expected to continue this decline. The same report noted, “Studies have shown that a 10% increase in the price of cigarettes reduces smoking by 7% for youth and consumption by 4% in adults.” This impact could be magnified after the passage of a tax increase as large as the current bill proposes.

It is possible that legislators have overlooked the number of smokers who may quit or find other ways of avoiding the tax — by purchasing cigarettes online, for example. An even greater cause for concern is the fact that in some cases (such as in Kansas), Medicaid covers the cost of tobacco counseling for quitters. Congress may be counting on revenues that have the possibility of turning into additional expenses. In addition, a Heartland Institute letter to Congress voices concern about the increased financial pressure that such a tax increase would bring for small businesses, “which often lean on tobacco sales to stay in business.”

Steve Voeller of the Arizona Free Enterprise Club joins other economic groups in his concern that an expansionary program is being funded by a declining source of tax revenue. Regardless of one’s level of support for increased government funding of health care coverage for uninsured children, long-term sustainability of the program should come into consideration.

Incentives in School

Posted on by Sarah Brodsky

It’s happened at last: some high school courses now factor students’ performance on state exams into their final grades.

Districts have been understandably frustrated when students shrug off state assessments. To a district, low MAP scores can mean anything from a bad reputation to lost accreditation; to students, they meant nothing — until now.

There are potential drawbacks to a system in which students from many different schools take the same final. On the other hand, seniors taking the same Advanced Placement course are evaluated by the same test. And AP courses are usually considered the most rigorous high school courses, so I don’t follow this logic:

“There is that pitfall of ‘I’m only going to teach to this level of the test’ rather than ‘let’s make this a rigorous course,'” said Sara Torres, a supervisory director with the Science Teachers of Missouri.

If the state exam assumes a low level of knowledge, that shouldn’t prevent teachers from going beyond that level and adding detail when they teach.

Still, this move is not necessarily reason to celebrate, because it could take away from schools’ initiative in developing their own assessment methods.

The Peaceful Transfer of Power

Posted on by Clovis Ouangraoua

It’s official: Barack Obama is the 44th president of the United States of America. The first African-American president in the history of this great country was sworn in, in a lavish ceremony in front of nearly 2 million people. In his speech, he laid out his goals for the country’s next four years — but the great winner yesterday was democracy.

As one commentator mentioned while I watched the live coverage, “By the end of the day, former President Bush will become George Bush, citizen, and Barack Obama, citizen, President Obama — and all in the name of the Constitution. …” Obama himself said, three days ago, that “the transition of power is a symbol of democracy’s strength.”

It’s remarkable to me how most Americans go about their business, and take for granted what is still viewed in certain parts of the world as quite a challenge. In fact, in many third-world countries like mine, conceding power to a new, upcoming chain of command is sometimes seen as an agenda impossible to fulfill, a pure and simple utopia. It’s very common for such countries to have some political form of “dictatorship,” in which constitutions are amended, reviewed, and forged with the explicit goal of helping the current power sustain and maintain itself “for life.” Often, the only way out involves the death of the leader, or — in much more sinister cases — a coup d’etat that sometimes sheds the blood of innocent victims, as well as that of the “greedy” actors and players of the political arena.

A recent example of this type of situation can be seen in the case of Guinea last month. If the United States were like Guinea, Bush would have simply refused to step down from power on the morning of January 20, using the army to back him up, and subjecting the country and its institutions to an uncertain destiny and a level of chaos that the people here probably can’t imagine actually facing. But, luckily, American democracy is mature enough to teach their “know-how” to the rest of the world.

Hoorah for the smooth transition … regardless of your political views, that is America’s legacy to the world.

How to Improve Education While Spending Less Money

Posted on by Dave Roland

 

A new legislative session is under way in Jefferson City, and everyone is concerned about the budget. Legislators are searching for ways to provide services to Missouri’s citizens while still reducing the overall amount of government spending. Another major issue worrying Missourians is education — particularly given the fact that many school districts across the state are having trouble making ends meet, and the two largest school districts in the state, Saint Louis and Kansas City, have lost their accreditation.

The school districts’ financial challenges are growing, because of the economic crisis. Many families that had previously sent their children to private schools can no longer afford to do so, meaning that a number of these students will now depend on the resources of their local public schools. While the state’s educational funding formula should guarantee that local districts will receive additional resources from the state for each of the new students they serve, there will be no similar increase in the amount of local funding available. As public school enrollment rises, districts relying heavily on local tax revenues will now have to divide those limited funds among a larger number of students, driving down the total amount they can spend per pupil.

Fortunately, there is a way for Missouri to address this challenge, potentially saving taxpayers millions of dollars in the process.

According to the Department of Elementary and Secondary Education, state and local taxpayers pay a statewide average of $9,338 for each student attending Missouri’s public schools. In 2008, taxpayers spent an average of $15,549 for each child attending Saint Louis public schools, and $15,142 for each child attending Kansas City public schools. Taking Saint Louis as an example, consider that all but the most expensive private schools in the city charge tuition that ranges between $5,000 and $14,000. Thus, private schools tend to be able to provide educational services for significantly less than it costs Saint Louis public schools to offer their services. The same could be said for private schools in communities all over the state.

The General Assembly could help school districts and students across the state by adopting a three-year pilot program that would permit local districts to contract with private schools or other nearby public school districts to educate some of their students.

The program could specify that the cost of tuition at a contract school could not exceed, say, 80 percent of the district’s per-pupil funding. Half of any leftover funding would remain for the district’s use, and the other half would become pure savings for the government. Districts taking advantage of the program would thus be able to keep and use at least 10 percent of each student’s funding, even though the public schools would no longer expend resources to educate that student.

Here’s an example of how the pilot program could work: If the Saint Louis Public Schools chose to participate, the district could contract with several private schools in the area to educate 200 students at an average tuition of $8,000 per student, per year. The district would normally spend more than $3.1 million educating these students, but under the pilot program the district would only spend $1.6 million for that purpose. Of the remaining amount, $750,000 would be available to help educate the students remaining in the public schools — and the state and local taxpayers would still be saving another $750,000!

While this idea may sound unusual, the General Assembly long ago authorized Missouri school districts to contract with “other political subdivisions, public agencies, not-for-profit organizations, or private agencies” in order to send certain students to schools for which they were better suited. My proposal would simply take that concept a step further. Not only would it help parents find schools that might better fit their children, it should increase the per-pupil funding for participating school districts while also saving state and local taxpayers thousands of dollars per child.

Importantly, 10 states and the District of Columbia have already proven the value of this concept by adopting similar programs. During 2007, the Milton and Rose D. Friedman Foundation published a study showing that, since 1990, these 11 jurisdictions had saved at least $444 million by creating programs that help students transfer from traditional public schools to less-expensive alternatives. With the economy flagging, and so many school districts struggling to make ends meet, Missouri would be wise to consider following in their footsteps.

Dave Roland is an expert on school choice programs and a policy analyst with the Show-Me Institute.

 

One Reason We Don’t Want Too Many People in Jail

Posted on by Sarah Brodsky

Legislators might get crazy ideas about how to rehabilitate them.

State Rep. T.D. El-Amin wants to recruit nonviolent offenders for the Missouri National Guard, as an alternative to spending time in prison. And who wouldn’t jump at the chance to be a guard instead of a prisoner?

This proposal may be penny wise, but it’s pound foolish. You’d save a little bit in expenditures on prisons; the downside is that the National Guard would be composed of people in various stages of rehabilitation. If nonviolent offenders want to serve, they should go through the regular application process like everyone else — after they’ve completed their sentences in prison.

All Zoning, All Day

Posted on by David Stokes

Let’s move from the theoretical debate over zoning to an actual example taking place right here near the Show-Me Institute’s Clayton office. Today’s Post-Dispatch has a story about the possibility that Clayton may allow local neighborhoods to establish strict architectural guidelines for the demolition or alteration of homes within historic districts. It would take 51 percent of property owners to petition for the creation of a local preservation district with very broad powers to limit tear-downs, establish property rules, etc., and would then require two-thirds of the property owners vote in favor for it to take effect. There is no denying that this could lead to 70 percent of the property owners in an area — perhaps the 70 percent who plan on staying long-term — causing economic harm to the 30 percent who might have a desire to significantly alter or improve their property before selling it. That part is clear, and I am not even necessarily opposed to this.

This is a pretty stark example of the threat of the tyranny of the majority versus the tyranny of the minority. Here you have the potential for enough property owners who agree with the plan to limit the rights and options of the few who might disagree with it. Most of the people here at the Show-Me Institute fear the tyranny of the majority much more than the reverse, and no doubt it is the much larger threat to liberty. But the reverse can be true, too. You get the tyranny of the minority when one atheist files suit to block a prayer at graduation that the other 999 students desire. Or when one parent objects to something in a textbook — evolution, perhaps — so the entire school either becomes subject to a disclaimer, or ditch the book entirely. Sometimes, one loud person who complains about their rights enough can restrict the rights for an entire group. Sometimes that person is right, and sometimes they are just a jerk.

This leads back to the question at hand in Clayton. Should the will of the majority stand, as will likely happen through passage of historic preservation districts? Or should the rights or people to do what they want with their property take precedence? Let’s be clear — this is not eminent domain, because no property will be taken away. But, conversely, I don’t think the plan calls for compensating anyone who can prove they are financially damaged if their proposed tear-down project is denied.

I know what some will say: If the neighbors want to preserve their historic values so much, they should buy the property of those who don’t. That is putting their money where their mouth is. On the other hand, it only takes one property owner surrounded by historic homes to put up a monstrosity that damages the property values for everyone. Then again, I have always liked the Miami Vice house on Lindell, and I am pretty sure it didn’t damage any property values there.

I say go with the will of the majority when it comes to historic preservation districts. But I really do see both sides of the argument.

Questions About the BBB

Posted on by David Stokes

I have praised the Better Business Bureau several times here at the Show-Me Institute, particularly in discussions about occupational licensing. So, in the interest of fairness, I want to highlight this disturbing AP article in the Columbia Daily Tribune (the Post-Dispatch is also carrying it today), about recent concerns over strongarm tactics by the BBB.

The issues raised are serious. The BBB should not give higher ratings to businesses who are members than they do to nonmembers. (Although focusing their search engine toward member businesses seems fine to me.) Any insinuation to businesses from the membership staff that their ratings could be downgraded if they don’t join must be eliminated. The issues raised in these articles are serious and important, but the BBB does appear to be taking strong steps to address the problem — such as firing people.

No Sure Things Except Death and Zoning

Posted on by David Stokes

There is some good stuff in the Columbia Daily Tribune today. First, there is a very interesting article about the struggles of a couple of funeral homes in Columbia to locate in certain areas where the zoning does not allow them. Now, common sense appears to be prevailing and it looks like the city will amend the zoning regulations to allow these two funeral homes to locate in abandoned churches (which is typical in the industry).

Zoning is one of the main areas of disagreement among the staff here at the Show-Me Institute. I, as well as Justin before he left for the big city, favor the rights of local government to enact zoning. Dave Roland does not. (I expect he’ll comment on this later.) I admit that zoning can easily lead to silliness and regulatory hoops, like with the issues outlined in the abovementioned story, but I still feel citizens have a right, through their elected officials, to lay a basic groundwork for which types of activities can take place within certain areas. Dave, if I may put words in his mouth, would say that those restrictions are improper and neighbors should recover in civil court any damages they might incur from a certain type of activity taking place near them. (I think that is way too optimistic a faith in our civil court system; pretty common among lawyers.)

The good news is that it appears the two new funeral homes will be allowed to open. While you might bemoan the hoops they jumped through to get going, if the fact that there was a zoning fight now means that there won’t be a lawsuit by the neighborhood later, then they are no worse for the wear. That is more hard realism than good logic or policy, but it’s probably accurate.

The best part of the article are the comments from the litigious neighborhood activist who appears to take his role very seriously. This guy really believes in his neighborhood, but apparently not in the free market. If I had discussions about zoning with this guy, I’d probably switch over to Dave Roland’s opinion. His comments are revealing (emphasis added):

Peter Anger, secretary of the Parkade Neighborhood Association, spoke at the September meeting of the Columbia Planning and Zoning Commission, where the Carr-Yeager request was discussed.

“My only concern is the zoning,” Anger said at the time. “I have no problem with a funeral home without a crematorium in there. I think ‘office’ zoning is appropriate.”

Anger yesterday said zoning would outlast any business that establishes itself on the site. “Whatever happens to be on that tract of land is governed by the zoning,” he said. “Businesses come and go at the whim of the economy, and I don’t want to see a McDonald’s on that corner.”

Anger is no stranger to modifying zoning ordinances and once appealed a city zoning decision to allow a concrete and asphalt plant all the way to the Missouri Supreme Court. He said office zoning would be appropriate for mortuaries without crematories.

“My recommendation, as an experienced neighborhood executive and spokesperson, would be to rewrite zoning to allow a mortuary without crematorium. It would be a great buffer” between residential neighborhoods and commercial districts, Anger said. “We have these buffers for very specific reasons

Who Doesn’t Want to Tour a Water Treatment Plant on the Coldest Day in Decades?

Posted on by David Stokes

I want to quickly thank Bradley Brown and Robert Fuerman of Missouri-American Water for taking me on a tour of their Missouri River water treatment facility yesterday. The tour was part of the learning process for an upcoming study I am writing, and the whole facility was awesome. It was incredible to stand on the plant’s intake tower on the Missouri River while it was 0 degrees out and watch the river go by. That is one part of Chesterfield most people never get to see, and I really enjoyed it.

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