The Economic Impact of the Missouri E-10 Ethanol Mandate

Posted on by Eric D. Dixon

Today the Show-Me Institute released a new case study about Missouri’s requirement that gasoline sold in the state must contain a minimum level of ethanol. Responding to a study by The Missouri Corn Merchandising Council that touted hundreds of millions in savings for Missourians, case study authors Justin Hauke and David Stokes point out that the inclusion of additional factors, such as the cost of ethanol subsidies and the decreased energy output efficiency of ethanol-blended fuel, means that Missourians will see a net loss of nearly $1 billion in the next 10 years.

From the case study:

Ethanol mandates will not solve Missouri’s energy problems. Contrary to the results implied by the MCMC study, ethanol mandates will not translate into fuel savings for Missouri consumers. In contrast, Missouri consumers can expect to pay more because of E-10 legislation than they would have paid otherwise.

Hauke also addressed ethanol mandates recently in this blog, noting that these subsidies hinder Missouri’s efforts to eliminate "excessive, job-killing revenues" from the state budget.

The full case study can be found on the Show-Me Institute website.

Springfield Decision on the Fence

Posted on by Patrick Eckelkamp

Today’s Springfield News-Leader has an article by columnist Sarah Overstreet that highlights an ongoing battle about city codes between Springfield and an area business owner. Tom Ray put up a fence around his property after leasing the space from businessman Jim Morris, and this has caused quite an uproar. By putting up this fence — on his property, mind you — he apparently has turned everyone in Springfield against him. See, Ray has the unfortunate circumstance of being located in the same shopping complex as a favorite local restaurant, The Pizza House, and apparently customers don’t like to see a fence when they are eating their pizza. The article points out that customers "found it forbidding, ruining the friendly feeling they’d grown accustomed to," and notes that the parking lot is now shorted a few extra spaces because of the fence. The article also recognizes, though, that those missing sparking spaces belonged to Morris, and were not intended for the use of visitors to nearby establishments.

City officials investigated and initially found that Morris and Ray were within their legal rights to build the fence. However, after public outcry following an earlier column, city officials investigated the matter again and this time found several obscure ordinances forbidding the fence. I’d argue that these ordinances tend to trample property rights and hinder personal freedom, and it would be nice if city officials seemed more concerned about these business owners’ property rights rather than appeasing the adjacent owners who find the fence "forbidding."

After his second review, the Springfield code administrator declared the fence a public nuisance. The article summarizes one of his findings this way: "the structure is built or used in violation of the building, plumbing, electrical, fuel gas or zoning ordinances of the city."

I am struggling to understand how a fence on one’s own personal property can be declared a public nuisance. Is it because it doesn’t allow for visitors to nearby businesses to park on Morris’ property anymore? Or is it because nearby business owners don’t want to look at a fence that they think is "forbidding"? It could be mere resistance to a change in the status quo. None of these reasons, though, are viable enough to deem a fence a "public nuisance" when it does nothing but protect property. As landlord, ideally Morris should be able to do whatever he pleases with his property, as long it does not affect the safety or rights of other individuals. But city officials also rattled off several other ordinances (found in the article) that state Mr. Morris is in clear violation of city codes.

I understand that some regulations are needed to prevent total chaos (I tend to side with David Stokes and Justin Hauke on the "Village Law" debate), but something as simple as adding a fence to a piece of property should not be in the control of city officials — really, they should have bigger issues to worry about. Alas, the government never ceases to amaze me. Classifying a fence on private property as a "public nuisance" is something I cannot fathom.

According to Merriam-Webster, the definition of a public nuisance is, "something that
unreasonably interferes with the health, safety, comfort, morals, or
convenience of the community and that is treated as a criminal violation". Clearly, building a fence on your own property does need meet any of the criteria here needed to classify it as a public nuisance. The only term that the city might successfully argue is "comfort." This is an ambiguous and subjective term, though — almost any action can interfere with the comfort of some individual.

Instead, the city’s rationale for its second judgment should have been "making your neighbors mad, because they don’t like your taste."

Parking Meter Blues

Posted on by Dan Grana

Kansas City residents are resisting a proposed increase in the numbers and operational hours of downtown parking meters.

As much as I want to admonish them with a tenable free-market argument in favor of meters, I can’t help but allow our shared hatred of urban inconvenience to unite us. I regularly insult the dedicated individuals who have taught me neoliberal economics by expending excessive resources to avoid meters out of shortsighted laziness and an immediate unwillingness to part with the contents of my coin tray.

But Kansas City may offer conditions that complement my irrational distaste for meters. Although I have absolutely no knowledge of Kansas City’s downtown geography, I gather that — like my native St. Louis — revitalization efforts are aimed at drawing in the suburban population. When target customers are offered similar services closer to home and without the costs of going downtown (explicit and implicit), lawmakers should be careful when imposing additional burdens on urban businesses. Concerned business owners reasonably speculate that the selective
implementation of new meters might create an incentive for city-goers to choose
economically inefficient alternatives along streets that offer free
parking. Especially in condensed urban areas, disparities in the application of avoidable burdens will produce inefficiency and hassle. However, blanketing an entire area with parking meters is probably not the solution to attracting suburban customers.

David interestingly noted in a previous discussion of the same issue that the University City Loop benefits from its free public parking. The Loop’s successful model may not be suited to the financial hub in central Kansas City, but it might be applicable to surrounding areas, like the Crossroads Arts District, that are being considered for new parking meter placement.

Fall Intern Candidates, Apply Now!

Posted on by Eric D. Dixon

The Show-Me Institute recently announced its fall internship program. For those interested in applying, the internship will run from early September through early- to mid-December, and will be based at the Show-Me Institute’s Clayton office near Saint Louis. Applications are due on July 3.

If you’re wondering what a Show-Me Institute internship is like, you may want to read this blog entry by our Spring 2007 intern, Steve Bernstetter.

Here’s a quote from one of our Summer 2007 interns, Maurice Harris:

The Show-Me Institute provided me with the opportunity to do research on policy that I was interested in and that has an effect on many people in Missouri. I enjoyed the statewide focus of the institute, where the research could have a direct effect on policy and can be seen quickly. Overall, being at a place where they give interns vast opportunities really taught me a lot and encouraged me to pursue my interests.

How about this quote from our Spring 2008 intern, Nicholas Loyal:

The last four months have been an invaluable experience for me in terms of developing an idea of policy work, and seeing this organization achieve so much at such an early stage has really given me hope that positive change can be affected in the world through a small group of dedicated individuals. I’ll never forget the lessons I learned, I’ll never forget seeing my name in print, and I’ll never forget all that you all have done for me.

If you’re a college student (or you know one) who would like to have a similar experience conducting real research and making a difference in the world of Missouri public policy, apply today!

Is the ‘Missouri Plan’ Good for Missouri?

Posted on by Joshua Hall

Recent judicial appointments in Missouri have intensified calls for reform of Missouri’s judicial selection process. While these debates can seem like mere partisan bickering, judicial independence is critical to a well-functioning legal system, which is an important factor in economic growth. Research has found that judicial independence and legal system quality matter for economic growth, and that the outcomes of a state’s legal system depend in part on how its judges are selected. Although the General Assembly decided not to pursue legislation that might alter the “Missouri Plan” during this past legislative session, the quality of the state’s legal system and its potential effect on economic growth is an issue worthy of ongoing attention.

Policymakers need evidence about the relationship between judicial selection and legal system quality. Our recent Show-Me Institute study analyzed how judicial selection methods affect the quality of state legal systems. We looked at seven general methods used across states: (1) nonpartisan elections; (2) partisan elections; (3) legislative elections; (4) gubernatorial appointment with a nominating commission; (5) gubernatorial appointment with a nominating commission and legislative confirmation; (6) gubernatorial appointment with legislative confirmation only; (7) gubernatorial appointment with approval by an executive council.

To measure legal system quality, we used a study of state legal systems by the Institute for Legal Reform. Based on a survey of corporate lawyers, this study admittedly has a bias in that it attempts to gauge how the state legal systems are viewed by large public corporations. But this bias is also one of its advantages. Most legal reforms are enacted to promote economic growth and development, and it is precisely the perception of the state’s legal climate toward business that is being measured by this index. The study scores each state on a scale from zero to 100, with higher scores representing higher levels of legal quality. For each of the seven methods of judicial selection we calculated the average index score of each group from 2002–07.

We find that two methods of judicial selection tied for the highest average index scores during this period: gubernatorial appointment from a nominating commission both with and without legislative confirmation (both averaged a score of 65.3). Gubernatorial appointment with legislative confirmation came in third (65.0), followed by election by legislature (63.8), nonpartisan elections (61.2), and gubernatorial appointment with council approval (60.7). States using partisan elections handily received the worst average index score for judicial system quality during the period (53.4).

Based on conventional techniques for measuring statistical significance, we find that Missouri’s current method of judicial selection is statistically superior to judicial elections (either partisan or nonpartisan) and also to gubernatorial appointment with council approval alone. Based on our analysis, we conclude that Missouri could well err by moving to one of these three other methods.

We find that no other method of judicial selection results in average scores or rankings that are statistically better than Missouri’s current system. Thus, we cannot say that a switch to another type of system would result in an improved legal system. Election by legislature, gubernatorial appointment from a nominating commission with legislative confirmation, and gubernatorial appointment with legislative confirmation alone produce, on average, legal scores and rankings statistically equal to Missouri’s current system.

Thus, our findings suggest that Missouri would at least be no worse off if it wanted to experiment with selecting judges by either: (a) election by the legislature; (b) adding legislative confirmation to the existing appointment process; or, (c) gubernatorial appointment with legislative confirmation, but without a nominating commission. We note, however, that for all three of these alternative methods, there are states using them that both score both better and worse than Missouri. Based on our analysis, Missouri’s current system appears to be far superior in promoting economic growth than some of the alternatives — most notably judicial elections.

Joshua Hall is an assistant professor of economics at Beloit College, and Russell Sobel is professor of economics and James Clark Coffman Distinguished Chair at West Virginia University. Read their full study of judicial selection systems.

 

Show-Me: The Grades

Posted on by Justin Hauke

The Joplin Globe ran a comprehensive review of "Show-Me: The Grades" in a series of articles and editorials published over the weekend.

The institutional criticism stated by these editorials was that school rankings in general are a "crude tool for measuring [school] improvement" and that the Show-Me Institute’s ranking methodology was "overly simplistic."

As the creator of "Show-Me: The Grades," I understand these criticisms, but that doesn’t mean that our rankings are meaningless or uninformative. A cursory glance of the schools and districts appearing at the top and bottom of our lists confirms anecdotal opinions about many of the state’s best-performing and worst-performing public school systems. And the "report card generator" application is a great tool for graphically comparing test scores by school, district, and state averages. The state should have created such an application for parents and teachers to use years ago.

I would also like to reiterate that the rankings used in "Show-Me: The Grades" are computed by using the state’s own data, which is reported somewhat ambiguously in the news coverage. So any criticism of the MAP index score methodology must ultimately be a criticism of the Department of Elementary and Secondary Education, rather than the Show-Me Institute’s "agenda." There will always be critics of ranking systems, regardless of methodology. For example, had the Show-Me Institute included No Child Left Behind (NCLB) data instead of MAP scores, critics of NCLB would point out that such performance numbers are suspect and easy to distort. In fact, in a congressional review of NCLB, Missouri admitted as much, stating that officials had actually lowered academic standards in order to "game the system" and report significant academic improvement. And may I remind Missourians of the problems inherent in even the most scientific of rankings.

The Show-Me Institute has not taken a particular position on the quality of Missouri’s public school system based on MAP index rankings. But, in the interest of public transparency, we wanted to make this data readily available to the public. We believe we have done this, and that "Show-Me: The Grades" is ultimately a tool to help Missourians make informed choices. Some parents will value standardized test scores more than others. If parents are happy with the educations their children are receiving at a particular public school, then we are happy too.

As I stated in my interview with the Joplin Globe, this is really about giving parents a greater choice in finding schools that meet their children’s needs:

"If a parent finds from this ranking that their school is not meeting their children’s needs, then why force them to remain in substandard schools?" Hauke said. "But if a parent is happy with where their children are going and that the teachers and staff are doing a good job, by all means it’s a good school."

Isn’t that what education should really be about?

Springfield and the Courts, a Love Story

Posted on by David Stokes

The Springfield News-Leader ran an op-ed about our recently published study of the "Missouri Plan" for judicial selection. The piece was written by the study’s authors, professors Joshua Hall and Russell Sobel. (Thanks again to Combest for the link on Saturday.)

The Show-Me Institute study of judicial selection is topical in Springfield for several reasons.  First — and this is really more of a statewide issue — there is another vacancy on the Missouri Supreme Court, so our system shall again be put into action and to the test. Also, some community leaders in Springfield are beginning a process to consider whether Greene County should join the five other local circuits in the state that use the non-partisan court plan at the local level. While the study itself focused on the Supreme Court, I believe its findings — that our current system of judicial selection is good for our economy — apply just as well to the local courts. And, clearly, from what television tells me, the legal community in Springfield could use some improvement. 

When Think Tanks Attack!

Posted on by David Stokes

The Post-Dispatch rips a think tank in an editorial today, and — whew! — it ain’t us. The editorial (link via Combest) notes how a recent study by the National Center for State Courts had what the Post-Dispatch called a "fatal flaw" in its reasoning when it concluded the St. Louis City Circuit could make do with four fewer judges. The flaw was that more criminal cases go to trial in the city than elsewhere, trials take much longer than other caseload items (obviously), and the study did not realize this. Admittedly, this does seem like a substantial oversight by the think tank (that I will, again, repeat was not us).

Should the city lose some judges? Probably not now. But as tort reform kicks into high gear as the cases filed pre-reform get disposed of, and the city sees fewer overall cases, it might be a worthy idea in the near future.   

Light Rail Op-Ed By Randal O’Toole in the Post-Dispatch

Posted on by David Stokes

Randal O’Toole had an op-ed published in the Post-Dispatch yesterday, about light rail and the environment. It is a very interesting read. As some of you may recall, Randal wrote a major Kansas City light rail study for the Show-Me Institute earlier this year (although he created this particular op-ed in his capacity with the Cato Institute). As both St. Louis and Kansas City move forward with major votes on mass transit, it is important to hear voices like Mr. O’Toole’s.

More O’Toole from this weekend on NPR, here. Thanks to my brother Mike for the link.

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