David Stokes, Elias Tsapelas, and Avery Frank join Zach Lawhorn to discuss Missouri’s new transitional benefits law, Chesterfield discussing the use of eminent domain in their legal battle against Dillard’s, the future of nuclear reactor construction, and more.
Produced by Show-Me Opportunity
I can describe Missouri’s current Medicaid situation in three words: Time is money.
As I wrote last month, our state lagged much of the country in resuming its Medicaid eligibility redetermination processes following the COVID-19 pandemic. Instead of starting in April as many states did, Missouri began processing redeterminations a month ago on July 1. Now that there are three months of data from across the country to look at, a new report from the Paragon Institute estimates just how much Missouri’s foot-dragging might cost.
For a quick refresher, during the pandemic, the federal government barred states from checking whether Medicaid enrollees remained eligible to receive services as they normally would. As a result, Missouri’s program set new records for enrollment and spending. But the catch is that likely more than 20% of those enrolled today aren’t eligible for coverage, so once the federal government allowed redeterminations to resume on April 1, states had significant financial interest in rightsizing their program rolls as quickly as possible.
No, this rightsizing doesn’t mean removing people from the program who are still eligible to receive services. What it means is that states typically pay health plans monthly for each Medicaid enrollee, so if 20 percent of those enrollees are ineligible, just using Missouri’s current enrollment of 1.5 million, that means taxpayers could be paying the health care costs of 300,000 people they shouldn’t be. And that’s really expensive!
So how can Missouri clean up the program’s rolls as quickly and accurately as possible? And how much will it cost if they don’t? That’s what the Paragon Institute report tries to answer.
First, the report estimates how much is being wasted per month on ineligible enrollees. For Missouri, if 20 percent of program enrollees are in fact ineligible, that means more than $120 million is wasted every 30 days. The federal government is giving states 12 months to process all of their redeterminations, but since so much is wasted per month, and since the share of these costs paid by the federal government will be declining each quarter, the sooner the eligibility checks can be completed, the better. The report suggests that if Missouri were to process all 1.5 million redeterminations in 6 months instead of the 12 months allowed, approximately $364 million could be saved.
Additionally, not all current enrollees are equally likely to be ineligible. Paragon suggests states should be prioritizing the redeterminations of the recipients who are most likely to be removed in order to maximize the savings. All told, if Missouri were to follow all of Paragon’s suggestions (other than the ones that can’t be done because it’s too late), our state could end up saving $729 million. That’s no small amount of money.
The Paragon Institute report shows us how much money Missouri’s overpopulated Medicaid rolls are costing the state, and considering how our state Medicaid agency started processing redeterminations three months later than necessary, I’m worried taxpayers are about to watch their money burn. If time really is money, Missourians should keep their eyes peeled for at least the next 12 months.
RECEPTION: 5:00 P.M.
PRESENTATION : 6:00 P.M.
Join the Show-Me Institute in St. Louis, Missouri at our annual Next Gen event as Senior fellow at the American Federation for Children, Corey DeAngelis shares his vision to revamp our nation’s education system. Corey sheds light on the challenges faced by, and failures of, today’s government schools revealing a rising tide of mediocrity, and explores the need for alternative solutions to solve America’s education crisis.
The event will take place at the Home of Rex and Jeanne Sinquefield. The Address will be provided to those who RSVP.
Show-Me Institute will pay Eventbrite ticketing fees.
*Estimated value of goods and services for reception and lecture: $80. Contributions to the Show-Me Institute are deductible for federal income tax purposes as allowed by law. The tax deduction is limited to the excess of the contribution over the fair market value of any goods or services received in exchange for the donation.
Corey DeAngelis is a senior fellow at the American Federation for Children. He is also the executive director at Educational Freedom Institute, an adjunct scholar at the Cato Institute, a senior fellow at Reason Foundation, and a board member at Liberty Justice Center.
He was named on the Forbes 30 under 30 list for his work on education policy and received the Buckley Award from America’s Future in 2020. He additionally received the Future 40 Award from Maverick PAC in 2021 and the OCPA Citizenship Award in 2022.
DeAngelis has authored or co-authored over 40 journal articles, book chapters, and reports on education policy, and he is the co-editor of School Choice Myths: Setting the Record Straight on Education Freedom. His research has been published in peer-reviewed academic journals, including Social Science Quarterly, School Effectiveness and School Improvement, Educational Review, and Peabody Journal of Education. He is a regular on Fox News and his work has also been published in the Wall Street Journal, USA Today, the New York Post, and National Review.
DeAngelis received his PhD in education policy from the University of Arkansas. He holds a BBA and an MA in economics from the University of Texas at San Antonio.
In part one of this post, I discussed a document posted to Governor Mike Parson’s webpage containing some claims that I suspected were too good to be true. The document lacked citations, and I struggled to find sources corroborating its claims, so I was compelled to submit a Sunshine request asking for the information. Using the archaic method of faxing, I sent a letter to the governor’s office and awaited a response.
Several days later I received a reply by, of all things, email! Thankfully, the Governor’s office sent just what I wanted: the statistics and sources behind its claims. I must note that the original graphic was updated after I sent the Sunshine request (e.g., the word “low” was removed from “Low Cost of Doing Business”). Also, while each of the office’s claims does correspond to a study, index, or ranking in the real world, your mileage may vary regarding their persuasiveness.
Some citations used by the governor are very subjective. Several of the statistics, such as “On-the-Job Training” and “Apprenticeships” were from Missouri Government agencies, which doesn’t strike me as the most unbiased source of information. The document I received also—somewhat—answers my question from the last post and clarifies the statistic as “New Apprenticeships,” but the website’s graphic remains unchanged in that regard.
In some cases, the claim is ambiguous; the second-place ranking for state-level veteran benefits is based on the number of distinct benefits offered but does not consider that one benefit may be much more or less valuable than another. Again, a very subjective ranking.
And even when the statistics could be represented more favorably for the governor, they remain misleading. The “Fourth for Personal Income Tax” is certainly not measuring the lowest or highest personal income tax rates. There are eight states with no income tax (nine if you include New Hampshire), and Missouri isn’t one of them. It turns out that the governor’s office was relying on a report that ranks governors, not states. The “personal income tax” metric is derived not only by the level of income tax, but how much it has changed over each governor’s term—the governor can thank his special session last October for getting him so highly ranked on this metric.
I do appreciate that the governor’s office didn’t drag its feet with my request and provided sources for each of the claims, but I shouldn’t have had to submit a Sunshine request in the first place. It should be standard practice for the government to include sources for the claims in the documents they produce and, more to the point, practice transparency without hiding behind a fax machine. Thankfully, there are organizations like the Show-Me Institute that employ summer interns who can hold our government accountable.
*pats self on back*
If you are interested in checking out the sources yourself, click here to see the .pdf file I received from the governor’s office.
Last month, Governor Mike Parson’s office posted the following infographic on its website to minor fanfare:
Unsurprisingly, this document found its way onto my desk with a request that I—a Policy Intern of two months—was basically bred for: fact checking. And fact check I did.
My first challenge was that the governor’s office didn’t “show its work” by citing sources for its claims. A Google search allowed me to infer where some of the rankings came from, but others were harder to verify.
Indeed, I found several online sources that issued rankings that were similar but not identical to the governor’s claims. Here, for example, Missouri is listed as sixth in cost of living, not third. Some were further off the mark; here not only is Missouri not number two for “low cost of doing business,” we’re not even on the list. And with some claims, I was completely lost. What does it even mean to be “third for apprenticeships?” Is it referring to the number of current apprenticeships? Completed apprenticeships? Apprenticeship applicants? What organization even collects that data?
After consulting longtime staff members here at the Institute, I learned a Sunshine request was probably my best way forward. Sunshine requests legally require Missouri government employees and officials to provide the requested information, provided that they actually have it. Send a request to the correct official—requests tend to bounce around like a customer service call—and if all goes well they will send back the correct records. In some cases, however, you’ll be told that the information does not exist or that there will be a charge for the collection of the information you requested.
So, I typed up a Sunshine request and went to the Governor’s website in search of a contact email to send my letter to. Instead of an email, I saw only this at the bottom of the page:
It’s 2023. Where is the email address? After browsing the website to some length, I concluded that if an email contact point existed for Sunshine law purposes, it was very well hidden. And without an email address, I had to fax it.
Dear reader: if you’re under the age of 35 there’s a good chance you have never had to send a fax before and may not even know what a fax machine is. In short, think of text messaging, but with printers.
While awaiting a response, I pondered the situation. If the Sunshine law didn’t exist, I would have been hunting snipes in my quest for the truth. Yet I felt disheartened by the need to use a Sunshine request. Not every Missourian knows how to do a Sunshine request, or even that they exist—I certainly didn’t before my time at the Institute. It is good practice in any field to cite your sources. Are governments exempt from that expectation? Citizens of Missouri value government transparency and accountability and our governor should respect that value: Show-Me your work.
Several days after I sent the fax, I received a reply. Part two of this blog discusses the response I received from the governor’s office.
Property assessment increases are driving people crazy throughout Missouri. People love it when their homes increase in value, except when they hate that their homes increase in value. High inflation means that local governments will not have to roll their rates back this year as much as in prior years, so the combo of high assessment increases and small rate rollbacks will likely mean substantial tax increases for many Missourians later this year. Obviously, politicians want to address this high-profile issue.
Wanting to do something to address higher property assessments and taxes should not mean doing the wrong thing, though, and doing the wrong thing is where we are headed. Giving one population group a tax or assessment freeze, as state law allows counties to do this year and which many are considering, is wrong for reasons you can read here. A more comprehensive limit on the rise in assessed valuations or taxes, similar to what California famously did with Prop 13 in 1978, is also the wrong thing to do. Proposition 13 has certainly had its intended effect of making it easier for California residents to stay in their own homes. However, it has also reduced mobility, dramatically increased alternative taxes, limited homeownership opportunities, and caused substantial tax disparities among similar properties receiving similar services. This is not what we need for Missouri.
The easiest way to address that—for local governments to voluntarily roll their tax rates back more than legally required (as St. Charles County did in 2022)—is unlikely to happen in most places and especially unlikely for school districts, which make up the bulk of your tax bill. So, what else can we do about property taxes and assessments?
There are things people and government can do in the short term to make the overall process better. Right now, people should be pressuring their local officials to roll tax rates back, especially the Kansas City school district which is the only taxing body in the state exempt from rate rollbacks. Removing that constitutional exemption for KCSD should also be a high priority. That would involve amending the state constitution, but it should be a high priority to get that on the ballot in the next legislative session.
While we are addressing short-term impacts and constitutional changes, adding personal property to the tax rate rollback requirements should absolutely be done. In 2021 and 2022, many local governments enjoyed a windfall from increased used car values. That is not how the system is supposed to work.
Finally, did you know that a few counties require certificates of value to be filed with the assessor when property is sold but most do not? We should require them statewide to help make assessments more accurate, especially in rural areas.
In my next post, I’ll discuss what we can do in the long run to make our property tax and assessment system better.
If you spend any time reading and listening to debates about education in Missouri, you encounter a lot of arguments that don’t hold water. I saw a version of one such argument on Twitter recently from a member of the Missouri House. You can read the tweet here, but the basic idea is something along the lines of “Well, you claim Missouri public schools are in really bad shape, but I went to a Missouri public school, and I turned out fine.” (I am not trying to pick on this particular legislator—I have seen this argument in many other places.)
This is a weak argument for several reasons. The first is that people rise out of adverse circumstances and attain success all the time. Human beings are resourceful and resilient. We’re all familiar with numerous stories of people who grew up in less-than-ideal situations and still achieved great things. The relevant question with public schools is whether kids are growing up and thriving because of their public schools, or in spite of them.
There’s also the question of how far isolated examples take you. The plural of anecdote is never data. And the data about Missouri public schools do not paint a rosy picture. Per the most recent Nation’s Report Card, 40 percent of Missouri 4th-graders scored Below Basic in reading, and 39 percent of 8th graders scored Below Basic in math. Below Basic indicates that a given student doesn’t even have a “partial mastery of the knowledge and skills that are fundamental for proficient work.”
The fact that vast swathes of Missouri students don’t even have partial understanding of the work at their grade level ought to be deeply concerning. Thousands of kids in Missouri are being left behind, and I don’t imagine that the families of those kids would be comforted to know that some kids in some other places around the state ended up doing alright. How many personal success stories does it take to make it okay that huge numbers of Missouri children can’t do math or read at grade level?
There are other holes to poke in this argument—the people who are success stories as adults today went to Missouri public schools decades ago in many cases, and our schools, per the numbers, are getting worse, not better. There’s also a perception that public schools in Missouri are only struggling in certain pockets of the state—particularly in our big cities. But even a cursory tour of the Institute’s school rankings website reveals that this isn’t true; there are underperforming schools in every corner of Missouri.
There’s nothing wrong with pointing out success stories from Missouri public schools. But one shouldn’t miss the forest for the trees and mistake these stories as an important indicator of the overall health of Missouri’s education system. Our standards simply need to be higher. Some kids doing okay isn’t anywhere close to good enough. We shouldn’t be content until all Missouri kids have a chance at a quality education. And I don’t see how you could argue that we’re anywhere close to that right now.
First the Fed pause, now the unpause: what do recent data and events mean for the U.S. economy? Just last week, the Federal Reserve announced that it was restarting its campaign of interest-rate hikes to curb still-too-high inflation. What is yet-to-be-determined is whether the most recent hike—which took the target federal funds rate to 5.25% to 5.5%—is merely an encore or a sign of future hikes to come.
This same ambiguous outlook applies to the U.S. economy as a whole. On the one hand, data released by the Department of Commerce last week reveals that real gross domestic product (GDP)—the value of all goods and services produced by the US economy, adjusted for inflation—increased at a 2.4% pace in the second quarter, following 2% growth in the first quarter. If this pace continues—a big if—then the economy will have safely avoided recession territory, having rebounded modestly from the two quarters of negative GDP growth at the beginning of 2022.
But past is not prologue. The economy still faces multiple headwinds that leave the risk of recession—or at least a significant weakening of growth—very much on the table. For one thing, the effects of monetary policy (i.e., rate hikes) on the economy operate with a time lag. The primary mechanism through which rate hikes fight inflation is by making borrowing costlier, thereby discouraging the demand for spending and, with it, the pressure on prices. The medicine from earlier doses of rate hikes is already having an effect on the economy; headline CPI inflation fell to 3% year-over-year last month, down from a peak of over 9%. However, rate hikes from late spring have not yet fully reverberated throughout the U.S. economy. Even so, the recent GDP data indicate that consumer spending only grew by 1.6% in the second quarter, with durable goods spending only growing by 0.4%. This particular subset of spending is useful as a gauge because durable goods like washing machines and other expensive household items are often purchased using credit, which now commands higher interest rates because of the Fed’s actions.
Another headwind facing the economy is the impending resumption of student loan repayments this fall. Make no mistake: student loan repayments ought to resume. Bailing out student debt by transferring it from the people who are reaping the financial gains from their education to taxpayers is regressive, fiscally irresponsible, and inflationary. However, this reality does not take away from the fact that people will feel the sting of being required to pay debts that they have been shielded from during the past few years. Consequently, consumer spending growth is likely to slow further or even turn negative. Considering that consumer spending contributed 1%age point (out of the 2.4) to GDP growth in the second quarter, a hypothetical scenario where consumer spending growth flatlines would by itself reduce GDP growth to just 1.4%. Moreover, another important component of GDP—investment—is sensitive both to rates themselves as well as business expectations about future consumer demand. It is entirely plausible—maybe even likely—that investment growth will decline from its most recent rate of 5.7%, and if that happens, GDP growth could easily fall below 1%.
Still another important headwind is the fact that, for all the progress the Fed—and the Fed alone—has made in combatting inflation, it has not yet succeeded in achieving its 2% target. As shown in the figure below, headline inflation is down to 3%, but core inflation—a better measure of fundamental pricing pressures—is still nearly 5%. Moreover, because the inflation readings are year-over-year measures, and because the monthly numbers from July and August 2022 were very low, it is quite possible that the headline year-over-year inflation numbers may rise modestly over the next few months.
Lastly, and arguably most importantly, the U.S. economy has been facing a productivity crisis over the past two years. Productivity—that is, economic output per hour of labor—has decreased by nearly 2.5% since the second quarter of 2021, which is unprecedented. By comparison, productivity rose by nearly 5% from the first quarter of 2017 to the fourth quarter of 2019. Not coincidentally, that earlier period corresponded with household income rising by over $5,000 after inflation—meaning higher purchasing power—as compared with the recent decline in purchasing power of over $2,000. The figure below gives a stark visual reminder that prices have grown consistently faster than wages since the passage of the American Rescue Plan Act “stimulus” bill in early 2021, with price growth decreasing only in response to the Federal Reserve’s interest-rate-hiking campaign.
As speculation continues over the near-term trajectory of the U.S. economy, it is worth mentioning again the essential need to raise productivity—not just to avoid recession, but to lift the economy out of the doldrums of 1% to 2% growth and return to or exceed its historical norm of 3% growth. While these numbers may seem difficult to relate to, a rule-of-thumb may prove useful. The amount of time (in years) that it takes for the U.S. economy to double in size is roughly 70 divided by the growth rate. Thus, if an economy grows at 3% per year, it will take approximately 70/3 = 23.3 years to double in size. By contrast, if the economy grows at 2% per year, it will take 70/2 = 35 years to double, and it will take 70/1 = 70 years to double if growth is persistently only 1%. That would be a disaster for the U.S.’s potential to remain the leading economy in the world.
So how do we achieve growth liftoff? Answering this question is much too large for a single blog post, but the key is productivity, and one important point to remember is that raising productivity is not about squeezing more out of workers and making life at work more of an unpleasant grind. Quite to the contrary. The most effective way to increase productivity is to ensure that workers are equipped with the skills to succeed, unencumbered by regulations to find the best occupation and employer to realize their potential, and where both workers and employers are able to keep more of the fruits of their productive activity. That phrase—productive activity—is key to keep in mind. While public debate often focuses on spending, spending, spending, it’s time to shift our attention to producing.
Open enrollment—a policy that allows students to transfer to any school of their choice in the state—has been gaining momentum nationwide. While Missouri decided to ride the bench this session, numerous states expanded opportunities to help families find the best fit.
The nonprofit yes. every. kid. released a report that discusses how allowing non-residential students (those outside the district) access to individual classes and extracurriculars could effectively complement open enrollment. Whereas open enrollment focuses on full-time transfers, this complementary policy would allow students to remain in their school and enroll part-time in individual classes—maximizing flexibility. According to the report, eight states* allow students to enroll in classes outside of their current school. In these states, students in a smaller rural district could enroll in physics, AP calculus, or even a music program in another district if their school does not have these classes or programs available. If open enrollment finally gets its long-needed day in Missouri, this policy could create additional opportunities for families across the state.
First, how could this benefit students?
Well, the answer is pretty obvious—more classes and more opportunities to help every kid in our state!
Second, why would a school with no physics program want its own students to participate?
The number one reason is that districts should care about their students. Competition can be cooperative, and districts should all be on the same team to best educate the students of Missouri. I chose physics as my example subject because there is a legitimate shortage of qualified physics teachers. These sending districts should want every student in their district to succeed, and many simply cannot provide classes in valuable subjects. Additionally, allowing your students to participate would lower their incentive to leave. If Johnny wants to study physics in college, but your district does not have it, he may be forced to leave your district by moving or enrolling in a private school.
Third, why would a receiving school share its resources?
The freeloading problem goes like this: “This policy would incentivize bad schools to not expand or offer new programs because they can simply mooch off our resources (and tax levies).” In Arizona, one of the states that employs this policy, part-time students (those which enroll in individual classes at different schools) are funded by the state at one fourth, one half, or three fourths of a full-time student—depending on how many classes they are taking. Therefore, state funding follows the student. Missouri does not have backpack funding like Arizona does (which we need), but a similar policy could be implemented to compensate receiving districts. Additionally, if you properly paired this policy with open enrollment, these classes could attract students. It would go both ways, as many students would stay in their home district and take individual courses elsewhere so they would not have to transfer away from their friends, sports teams, or other extracurriculars.
Receiving districts should care about all the students in our state trying to receive the best education they can. I can understand why one might take issue with another district benefitting from your district’s resources, but the most important thing is doing what works best for students. One may not think it is “fair,” but is it “fair” that a student cannot learn physics just because they live within arbitrary boundaries? Petty jealousies over dollars and cents should not stand in the way of opportunities for children across the state.
*Arizona, Florida, Idaho, Iowa, Kansas, Minnesota, Utah, and Wisconsin (all these states have open enrollment)
