Gonna Have to Side With the Sewer District on This

Posted on by David Stokes

The Metropolitan Sewer District, which provides stormwater and sewer services to Saint Louis city and County, has changed its billing practices. The Post-Dispatch has the story on it here. MSD’s own explanation is here. I like the change a lot, and not just because my bill is basically staying the same. I like it because it is good policy, whenever possible, to direct fees or taxes to the people who use — or, in this case, cause — the system, event, or service being provided. Now, obviously, you can’t do this for all things government provides. People who live in dangerous neighborhoods should not pay more for police protection than others. But for many policy areas, such as tolls on highways, it is good policy to make the user pay.

MSD’s new billing plan is for stormwater, not wastewater services. They are now taking into consideration how much of your property is able to absorb rainwater without sending it into the sewer system. So if you have a lot of land that is paved over, you are sending more water to the system than someone whose land is all grass and trees — so it seems very fair to me that you should pay more. To be sure, it’s the same rate, just a higher fee based on less permeable land.

The main dispute involves people who use a septic system for wastewater, who in the past did not pay anything for stormwater service either, even though they used the stormwater system. Actually, they would have received a charge for stormwater service, but because the charge was less than postage, MSD never actually billed anyone. The spokesperson for MSD could teach other PR people a thing or three about succinctness and clarity. From the article:

Lance LeComb, a spokesman for the district, said everyone should be billed because nearly all storm water eventually reaches the district’s storm water system, which includes creeks.

"Everyone benefits from it," LeComb said. "They have to pay for it."

As we often say around here, good tax policy involves basing taxes or fees widely, and then keeping them as low as possible — along with making the actual users of services pay fees directly, when that is possible. This new billing system does all of this. People on septic no longer get a free ride for stormwater service, and people who send more stormwater into the system pay more for the system. It all sounds perfectly reasonable to me.

People Respond to Pricing

Posted on by David Stokes

Incentives and prices matter. As prices change, habits and activities change. Here are two articles relating to how people are making changes because of the high cost of gasoline. The New York Times has a story about the increased use of mass transit in cities throughout America. MSNBC has an article about the booming business at bike shops across the country. The Post-Dispatch has a story about bicycling in Saint Louis. As very few people expect the price of gasoline to come down, these changes may well be long-term. In my opinion, these changes are neither good nor bad, they just are. This is the way it is (and likely will be for the future), and free, educated people will make adjustments.

Now, how does this relate to public policy, you might ask? Well, clearly in lots of ways. Let’s just take mass transit. Randal O’Toole wrote a study for the Show-Me Institute arguing against light rail for Kansas City. While most people who read it focused on the argument not to do something, the study also discussed what he thought Kansas City should do. Randal recommended that Kansas City expand its bus?rapid transit system and embrace competitive contracting for its buses. BRT, when done right, makes buses operate more like light rail at a fraction of the cost, and competitive contracting allows the power of private enterprise into the provision of transit. There is always an important role for mass transit in our cities. High gas prices make that role even more important. As for St. Louis, the potential of competitive contracting should also be embraced for the bus system.

As an aside, I love the picture accompanying the Post article. Nothing says "Share the road with bicyclists" like a biker clearly riding in the middle of the road and blocking two lanes of traffic from passing. With that in mind, this is Bike-to-Work Week and Friday is National Bike-to-Work Day. I have a meeting off-site on Friday, so I am gonna bike in on Thursday. Or maybe I’ll just walk. You worry about the price of gas a lot less when you live one mile from work.

Bike to work

More on the Missouri Health Transformation Act

Posted on by Justin Hauke

I wrote about the Missouri Health Transformation Act (MHTA) when it passed the Senate last week, so I thought I would revisit the bill now that it has reached a stalemate in the House.

The primary point of contention in the bill (and the reason it has grown to the behemoth size I lambasted before) is how to insure low-income uninsured Missourians. The House wants to control costs. The Senate doesn’t.

Essentially, House leaders believe that low-income Missourians should receive “vouchers” to shop for coverage that meet their needs, rather than receive generic broad coverage by the state. I whole-heartedly agree. If consumers shop around for the best deal, prices will be lower for everyone. This is the real problem with the existing health insurance model. Do you have any idea how much a doctor visit costs? How much does it cost to get your teeth cleaned or to get your appendix out? Honestly, I couldn’t even ballpark these things. All anyone focuses on is their insurance deductible. So if it costs you $100 out of pocket to get your appendix out, do you even care what the true cost is?

The lack of medical price transparency has two negative effects. One, we overuse our insurance because we have no idea what the true costs are and the costs don’t accrue to us individually. And two, medical providers have no incentive to keep costs down if costs can’t be compared. Would you have any idea whether or not your doctor charges a “fair” price? Prices of various procedures could vary widely from doctor to doctor, but we would have no idea because our copay would be the same regardless.

The House wants to cover the uninsured in a way that keeps costs lower. It wants insurance providers to encourage competition and to publicly disclose medical costs. But, as the Saint Louis Post-Dispatch covers in an article in this morning’s paper, hospitals, doctors, and other groups are balking at the request.

I’d probably be upset too if I knew that doing so would reveal that I’m charging three times as much as the next doctor to perform the same procedure.

What Is Your Definition of “Speedy”?

Posted on by Dave Roland

The Post-Dispatch ran a front-page story last Friday revealing the glacial pace of "justice" in the city of Saint Louis. Because of a variety of reasons, nearly 400 citizens have sat imprisoned in the city jail for more than a year without ever having their cases brought to trial. Eighty of those prisoners have been incarcerated for more than two years while waiting for trial.

Both the state and federal constitutions recognize in unambiguous terms that individuals accused of crimes are entitled to a speedy trial. The right to a speedy trial reflects the American notions that one must be presumed innocent until proven guilty and that the government must provide due process of law in order to deprive someone of their liberty. Those responsible for these provisions recognized that the government must not be permitted to imprison presumptively innocent people any longer than necessary to afford a fair trial. Yet here in Saint Louis, this precise evil is taking place.

Part of the problem is that the public defender’s office has a limited number of attorneys to manage the host of Saint Louis defendants who cannot afford to hire their own lawyers. According to one representative from the public defender’s office, as many as 150 extra attorneys (statewide) would be necessary to meet national caseload standards, yet legislators are hesitant to authorize any additional funds for attorney hires.

I’m certainly no advocate for increasing the size of government or the amount it spends, but let’s consider the financial repercussions of this understaffing. The city estimates that holding a prisoner in the city jail costs about $50 per person per day. The United States Supreme Court’s current position is that eight months (240 days) should be adequate time for a serious felony case to go to trial, assuming the defendant does not voluntarily initiate delays. Illinois is even stricter on the government, requiring prisoners to be released if they are not brought to trial within four months (120 days).

For an accused person to be held in jail for eight months (as opposed to posting bail), taxpayers can expect to spend roughly $12,000 per defendant, not including the cost of legal expenses. The incarceration bill for the 400 accused who have spent more than a year waiting for trial comes to at least $7.3 million — $2.5 million more than would have been necessary if they were brought to trial within the time period deemed to be reasonable by the Supreme Court, and $4.9 million more than would have been necessary under Illinois’ guidelines.

The judges responsible for overseeing St. Louis’s criminal docket have instituted new procedures that they believe will provide some improvement to the system, but they have also
asked the Board of Aldermen to consider an additional $520,000 to bring
in additional defense attorneys to help alleviate the logjam. It is true that many of these trials, once held, will likely result in convictions. In those cases, taxpayers will still bear the financial burden of incarcerating felons, although the burden will be shared by the rest of the state — whereas the city jail is financed primarily by local taxpayers. If the new public defenders resulted in just 84 of these accused citizens ending their incarcerations (either through acquittal or plea bargaining) within the Supreme Court’s eight-month guideline, the attorneys would, essentially, have paid for themselves. While I cannot speak to whether the full $520,000 would be necessary to secure the constitutional rights of those being held without trial, hiring more public defenders is an idea worthy of the city’s consideration.

Counties, Not Cities, Should Determine TIFs

Posted on by David Stokes

A 2007 change to state law granting more authority to county tax increment financing (TIF) commissions within the Saint Louis-area, at the expense of municipal TIF commissions, has led cities within Saint Louis County to initiate a lawsuit attempting to overturn the change. The suit was filed on Feb. 15 by six cities along with their umbrella organization, the Saint Louis County Municipal League. Municipalities within Saint Louis and Saint Charles counties have been enacting tax incentives, particularly TIF, with much greater frequency — and much less fiscal prudence — than the counties themselves. Unfortunately, if this lawsuit succeeds, the detrimental impact of these tax giveaways will continue unimpeded.

In fairness to the cities, the changes to the law are indeed unclear. An open reading makes one wonder whether any future TIF projects must be passed by both a municipal and county TIF commission, or just one of the two. According to lawyers familiar with the issue, bonds for upcoming projects will not be issued until these questions are settled. While I have no personal objection to seeing our area’s latest strip mall proposal face bonding problems, the General Assembly should nonetheless return to the statute language (RSMo 99.820) to rectify these issues. It should clarify the statute in the direction of more authority at the county level, though, and less at the municipal level.

Which level of government should really be making these decisions about tax increment financing or other types of tax incentives? The debate tends to weigh two sides: cities that presumably know what is best for their city and their residents, or higher levels of authority that can hopefully consider the larger picture — which generally affects much more than just the cities. I believe the county level works best here. After all, county government is local government by every measure. I trust that the powers that be in Saint Louis County are not so far removed in their Clayton skyscrapers that they have no idea what is best for the people of Saint Ann.

Counties are also large enough to put proposed tax incentives into perspective, making decisions outside of a municipal vacuum. If these incentive decisions were made at the county level, cities would no longer face the fear and pressure to “remain competitive” with surrounding cities by issuing generous incentives. Cities would certainly maintain a voice in the process, along with school districts, through rotating appointments on the county TIF commission that would be determined by the locations of future proposals.

In their lawsuit, the cities claim that the new statute is unconstitutional because it treats Saint Charles, Saint Louis, and Jefferson counties differently from the state’s other counties.  This claim strikes me as absurd. Our statutes contain numerous laws written especially for one county or another. Because the lawsuit involves six cities from Saint Louis County, I’ll give two — out of many — examples where Saint Louis County is treated differently from the rest of the state. The legal process for municipal annexations and incorporations is different, and more controlled, in Saint Louis County than elsewhere, and only taxing districts in Saint Louis County are allowed to declare varying tax rates for multiple property classifications. Are these laws, and the many others like them involving cities and counties throughout the state, all also unconstitutional?

If judges and elected officials ultimately determine the commission power rests at the county level, we could expect an end to TIFs and similar giveaways in Saint Charles, and a reduction in their use in Saint Louis and Jefferson counties. The tremendous fiscal discipline shown by Saint Charles, while still experiencing great economic growth, demonstrates why these decisions should be made at the county level. And while it has not been quite as sagacious as Saint Charles, Saint Louis County has been more discriminating in its use of incentives than have many of the municipalities within its borders.

All of the prominent abuses of TIF in Saint Louis County — most famously at the West County Mall — have occurred within municipalities, rather than in the unincorporated areas. Similarly, the ugly case of tax incentives and eminent domain abuse that was recently heard by the state Supreme Court occurred in the city of Arnold — not unincorporated Jefferson County. I believe the residents of all three counties would be better served by having countywide commissions and elected county officials responsible for tax incentive determinations.

David Stokes is a policy analyst at the Show-Me Institute, a Missouri-based think tank.

 

Hell Hath No Fury Like a Bureaucrat Scorned

Posted on by Justin Hauke

A new bill would create a 24-member panel to study autism in the state and recommend policy actions (KMOX coverage here).

This baffles me. The fiscal note (an estimate of the fiscal cost to the state) for this legislation is nearly identical to the anticipated costs of the Special Needs Tax Credit. But, in true bureaucratic fashion, lawmakers would rather spend money on “analyzing” the problem (maybe they’ll issue a report!) instead of actually helping those affected.

Sarah Brodsky wrote a great op-ed about this topic. Why not let parents decide what’s best for their autistic children? Considering the idiosyncrasy of the disorder (it affects individuals in vastly different ways), any general approach to addressing it will prove difficult anyway. It’s better to let parents deal with their children’s condition on an individual level.

If we’re going to spend taxpayer money on autism, shouldn’t the money actually go to those that are affected?

Athletes And Entertainers Get Special Love, And Special Tax

Posted on by David Stokes

Combest links to an article by Shawn Clubb in today’s Suburban Journals of St. Louis that discusses the athletes and entertainers tax, and its use to fund various special causes in Missouri. (Please note that I said special causes, not bad causes.) Why is this article important? Well, for many reasons — not least of which is that I am quoted in it — as well as its citation of an op-ed written by our former editor, Tim Lee. Joe Edwards of Blueberry Hill is also quoted in it, so I am pleased to be in good company. Please take a moment to check it out. And it really is a stupid tax…

Interesting Ideas About Downtown Parking in KC

Posted on by David Stokes

The Kansas City Post has a very interesting piece (link via Prime Buzz in the Star) about parking in downtown Kansas City. I don’t agree with everything in it, but I recommend the piece highly. The economic analysis strikes me as very good, but I can give him one very vibrant area that benefits heavily from having a large amount of free parking: The Loop in University City. The Post piece is based on the situation in KC, but its arguments apply to any downtown area in the state. It’s thought provoking, which is one of the highest compliments in blog world.

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