Praise Given Where Praise Is Due

Posted on by Justin Hauke

I tend to be fairly negative on this blog (that’s what happens when you’re an ugly cynic like me), so it’s important for me to recognize good work when praise is due.

For better or worse, St. Louis has a dangerous reputation. It routinely ranks near the top of the list in those annual “America’s Most Dangerous Cities” publications, and is repeatedly portrayed in the entertainment media as crime-ridden (I’m looking at you, Chevy Chase).

But the St. Louis police department has really made some important strides during the past several years (and this comes from a repeat area crime victim). Since 2000, crime has decreased by about 2.5 percent per year on average, in both absolute and per-capita terms. And the metropolitan police department has gone to great lengths to make city crime data readily available to the city’s citizens.

For example, Safe City (which went online earlier this year, I believe) is a great interactive tool put together by the St. Louis police department that lets users research an address or neighborhood by reported crime incidents. You can search for particular types of crimes and even pull up a basic outline of the original police report. And the police department also publishes a monthly crime report on its website in case you’re weird like me and would rather look at numbers than pictures.

I even love Safe City‘s mission statement:

Safe City is based on the idea that in a democracy, people should have the greatest possible access to information about matters affecting their lives.

I couldn’t agree more. In fact, the idea of making information readily available to the public played a large role in the development of the Show-Me Institute’s newest website, Show-Me: Living. You might already be familiar with our tax estimator on that site. But we’ve recently released some new tools on public school education performance as well. We plan to continue to provide our visitors with new tools for understanding public policy issues in an effort to help Missourians make the best possible decisions for their lives.

But the real point of this post is to say that the St. Louis police department should be commended for its efforts to improve safety in the city, and for its commitment to working with the public to provide useful information about the city’s crime statistics. A better-informed public makes for a stronger democracy.

What’s So Bad About Tax Holidays?

Posted on by Sarah Brodsky

Dave and I have debated tax holidays before, but even he thinks the gas tax holiday is a bad idea (and so does Judy Blume, apparently). Now Cato has just published an article about the gas tax holiday. The authors, Peter Van Doren and Thomas A. Firey, show that the savings from the holiday could go to consumers rather than producers if certain conditions are met. They argue that to determine whether a gas tax holiday would be appropriate, one should simply weigh the benefit to consumers against the loss of tax revenue.

The article does a good job of showing how the burden of the tax could fall on consumers, but evaluating a gas tax holiday proposal is more complicated than they make it out to be. Basically, Van Doren and Firey analyze the holiday as if it were a permanent repeal of the tax. In fact, the holiday would offer a reprieve for only a few months. And when you get rid of a tax for a short amount of time, you have to consider the economic distortion that would result — not just the lost tax revenue. When people change their behavior in response to the arbitrary dates of the tax holiday — for example, by going on a car trip in July instead of in May — they make worse choices than they would have without the holiday. That causes economic waste. In order for the economy is function optimally, consumers must be responding to real price changes that reflect supply and demand, not government fiat.

Now, any tax changes price levels and results in some distortion. We accept this because the government needs to collect revenue. But legislators should avoid unneccesarily magnifying that distortion, which means resisting the temptation to create lots of holidays.

Women in the Missouri Legislature

Posted on by Sarah Brodsky

This article addresses the issue of women and discrimination in the General Assembly. It sounds like some women legislators have heard obnoxious comments from their male colleagues, who should cut it out. (Although I’m dubious that sensitivity training is going to have the desired effect.)

I agree that respectful treatment of women is important. But I disagree that some minimum percentage of all representatives needs to be female, as is implied by statements like these:

In Missouri, women hold four of the eight statewide elected offices — secretary of state, state auditor, state treasurer and one of the two U.S. Senate seats. But of the 197 state legislative positions, only 39 of the seats are held by women. Ironically, that near 20 percent representation of women is lower than the 25 percent mandated in the Iraqi constitution for the minimum number of women in its representative body.

First of all, what is the point of the comparison with Iraq? Since when do we take our ideas of model government from war zones in the Middle East? If we’re supposed to conclude that as a result women are worse off in Missouri than in Iraq, that’s crazy, because women here enjoy safety, stability, and many other benefits attendant on U.S. residence — benefits that far outweigh whatever gains follow from the additional women in the Iraqi legislature.

Still, you could argue that sex quotas in legislatures are intrinsically good, and it just happens to be one thing that Iraq has gotten right and Missouri has gotten wrong. But does anyone really want to enforce strict sex ratios in other occupations? Most ballet dancers are women, even though you can’t perform the great ballets without men. And this article about employment notes that men are much less likely than women to go into nursing — only about 10 percent of nursing students are male — despite the fact that the demand for nurses is growing. In fact, because women outnumber men in thriving sectors like education and health care, they suffer less from recessions that hit other industries harder:

From last November through this April, American women aged 20 and up gained nearly 300,000 jobs, according to the household survey of the Bureau of Labor Statistics (BLS). At the same time, American men lost nearly 700,000 jobs.

Missouri women should have the opportunity to go into state government if they want to put up with annoying constituents, boring committee meetings, hectic schedules, and looming term limits. But we shouldn’t consign some arbitrary number of women to that fate.

Missouri House Approves Property Tax Bill

Posted on by Justin Hauke

Well, this is news that is sure to make David Stokes happy.

Of course, there was a nice little useless addendum (that I’m sure we both oppose) added to it (from the Kansas City Star):

The House committee also added a provision that would provide tax breaks for development of a business park on 6,000 acres owned by Kansas City near the airport. A 500,000-square-foot warehouse slated for development by Trammel Crow, a Dallas real estate developer, is the first of 11 buildings planned for the park.

The tax break would set the building’s tax assessment at the fair market value minus the cost of erecting the building on city-owned land. The Park Hill and Platte County R-3 school districts had protested the tax break, saying it would cripple their ability to generate tax revenue to pay for the additional students that the developments would attract.

It still seems to me that if your house goes up in value, you should pay more in taxes. Unless this bill increases your tax rate when the value of your house declines, it only serves to protect existing homeowners at the expense of new homeowners.

Why Is Missouri Losing Congressional Seats?

Posted on by Justin Hauke

The South County Journal poses this question without (in my opinion) the right answer. In 1980, Missouri lost its first Congressional seat when its population growth began to stagnate. Preliminary estimates suggest that Missouri will lose a second seat after the 2010 census.

John Stoeffler, the co-founder of a constitutional think tank, argues that the reason Missouri is missing out is because the Census doesn’t apportion representatives based on citizenship. In other words, he argues that the gain in congressional seats in border states is based on an influx of immigrants without voting rights.

But I wonder if something else could be going on, too? Maybe the reason why “border state” representation has been growing while Missouri representation has been declining is indicative of fundamental economic growth shifts. Could it be that Missouri is stagnating while other states are growing?

In 1900, Missouri had a larger population than California, Texas, Arizona, and New Mexico. Today, only New Mexico lags behind Missouri. An even more interesting picture emerges if we look at the compound annual growth rates of those states’ populations versus that of their household incomes since the 1980 Census.

MO TX CA NM AZ
1980-2006 CAGR (Population) 0.66% 1.90% 1.63% 1.53% 3.17%
1980-2006 CAGR (Personal Income) 2.49% 3.81% 3.24% 3.45% 4.86%

Since 1980, Missouri’s population and household income growth has lagged behind those of all four southern U.S. border states. Could it be that declining congressional representation has more to do with shifting economic importance?

Missouri is stagnating. This is why it is so important that Missourians petition their state representatives for better legislation. Lower taxes, better education, and more secure property rights will make Missouri a more competitive place to do business. For example, Missouri has a higher marginal income tax rate than any of the states listed above (except for California). Missouri’s education system continues to decline and remains below the national average. If we fix these things, Missouri will become more attractive and people will flock to the state once again.

Missouri needs better laws. That’s why it’s losing congressional seats.

Lessons From South Korea

Posted on by Sarah Brodsky

Neal McCluskey blogs about South Korean education and the roots of its success. McCluskey argues that the private sector is driving South Korea’s academic achievement, and that the state-mandated curriculum and tests do more harm than good. I was reminded of this article, which appeared in the New York Times about two weeks ago. The article describes how private high schools in South Korea are preparing students for American colleges, in some cases by requiring them to study for 15 hours a day. These schools go beyond the state curriculum:

Still, the schools are highly rigorous. Both supplement South Korea’s required, lecture-based national curriculum with Western-style discussion classes. Their academic year is more than a month longer than at American high schools. Daewon, which costs about $5,000 per year to attend, requires two foreign languages besides English. Minjok, where tuition, board and other expenses top $15,000, offers Advanced Placement courses and research projects.

For students who are studying many foreign languages and preparing for AP exams, a state-mandated curriculum is at best unneccesary. At worst, the required lectures could be a waste of time for students who are engaged in more interactive research and could push schools to lengthen their class time in order to fit everything in.

Besides cautioning us against state standards and tests, the case of South Korean education should give us a new perspective on educational innovations in the United States. For example, some people have objected to the Knowledge is Power Program (KIPP) charter schools that are coming to St. Louis because of the schools’ long hours and tough discipline. But compared to the Korean schools profiled in the New York Times article, KIPP school days are really not excessive. And although the KIPP program is definitely not right for every student, we can see that this approach works well for some kids in Asia.

A New Payday Pundit

Posted on by Justin Hauke

The Springfield News-Leader has another op-ed on payday lending today.

The author, Ryan Cooper, has a great anecdote at the beginning of his article (it just goes to show you how an actual writer — i.e., someone other than me — can spin the same concept with better words). He points out how his decision to use a payday lender to avoid bouncing several checks when he fell on some brief hard times ended up saving him more than he would have paid in bank fees (not to mention the damage to his credit report) had he done nothing. He correctly points out that the interest charged by payday lenders is no more usurious than the "fees" of traditional banks and that "the free market should decide the appropriate price to pay for speed and convenience."

It goes to show how well-intentioned politicians’ attempts to micromanage personal decisions are not always in their constituents’ best interest. Why not let people choose for themselves? Is it so much to ask that our legislators respect the decency and the intelligence of the individual?

A Healthy Trend

Posted on by Justin Hauke

Yahoo! Finance is reporting the largest annual federal budget deficit in history. In FY2008, the U.S. government will post a shocking $396 billion budget deficit.

Do we see an end to such budget shortfalls in the future? The U.S. government can’t issue new debt forever. Unless, of course, you think this is a healthy trend:

At some point, these bills will be due, and Americans will be forced to make some very important decisions. We either have to: a) increase taxes to record levels; b) significantly decrease governmental spending; c) devalue the dollar and crowd out private investment with higher interest rates; or, d) pretend the problem doesn’t exist, hide under the covers, and wait for somebody else to fix it. I personally prefer option b. Most politicians seem to like options c and d.

Of course it’s not just a federal problem, but a state problem as well. The Missouri General Assembly will face a $500 million budget shortfall next year as tax receipts continue to decline. This morning’s Post-Dispatch provides a good assessment of where those shortfalls are going to hit hardest:

That $500 million will have to come from the general revenue budget, which makes up only about a third of the overall $22.5 billion state budget. (The rest largely is funded by federal funds passed through to the state and by tax funds limited to specific applications such as highways and conservation.)

So most of the $500 million in cuts would have to come from just four programs: elementary and secondary education, higher education, corrections and human services (Medicaid and mental health).

Well, that’s great, because those just happen to be four areas in which the Show-Me Institute has researched ways in which the state could easily save money.

Personally, I think former Missouri governor Bob Holden says it best in the Post-Dispatch editorial when he summarizes the current fiscal situation.

There’s a solution here, but it’s going to take a level of courage and bipartisanship that hasn’t been seen in Missouri in recent decades. "It’s going to take political leadership," Mr. Holden said. "Instead of demagoguing the problem, they’re going to have to try to solve it."

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