The good, the bad, the depressingly ugly, a fistful of dollars, just a few dollars more, and once upon a time in Missouri.
P.S. — Thanks to Combest for the links, MOPNS for the videos, and all the newspapers for the articles!
P.P.S. — Just to be clear, the "bad" refers to biodiesel mandates, not KY3, the latter of which I’m a big fan of.
Preschool education has been in the news lately, so I was interested to find this article in the Chicago Tribune. Here’s a word of warning about "universal" versus targeted preschool programs:
Bruce Fuller, a professor of education and public policy at the University of California-Berkeley, said he feared focusing on universal prekindergarten?making preschool a middle-class entitlement?could divert help from low-income families that need it most.
"Why would we use scarce public dollars to subsidize all families if we know the biggest impact is with poor kids?" he said.
The article quotes James Heckman, too; Heckman is a Nobel laureate in economics who’s found that early childhood education has a large positive effect on social and academic outcomes when kids get older. I was disappointed that the article doesn’t mention Heckman’s support for voucher programs that would allow parents to choose between competing preschools. Just because the state subsidizes preschool for low-income children, that doesn’t mean it needs to reinvent the wheel and actually operate preschools, too.
If you are a fan of our blog you may not have seen some of the latest op-eds and other articles we have released lately on the main site. Sarah Brodsky has just sent out an article on the benefits of tuition tax-credits for children with autism.
Dr. Joe Haslag and Rex Sinquefield have written quite extensively on the Bombardier proposal before the Missouri General Assembly now, and have been among the few to actually run the numbers and question the deal’s assumptions.
Our soon-to-exit intern Nick Loyal and I co-wrote a piece on one of Missouri’s silliest and least defensible taxes: the local pool table tax. Ironically, the supervisor of the largest pool hall in the state of Missouri (as mentioned in the article), Fr. Hagan at St. Louis University High School, died a few days ago after decades of dedication to educaton and SLUH. "Nickel!"
I meant to write about this a few weeks ago when I first heard about it. Earlier this month, a Senate panel endorsed a bill to repeal Missouri’s mandatory helmet law.
This is one of those examples of a law designed to “protect Missourians from themselves.” Would I ride a motorcycle without a helmet? Absolutely not, are you crazy? But should I be allowed to? Yes.
Opponents argue that the law’s repeal will result in more highway deaths, possibly increasing taxpayer-funded health care costs and driving up insurance premiums.
I used to hold that insurance belief as well, until I looked into the evidence a little more. From what I’ve read, there is only weak evidence that seat belt and helmet laws decrease highway fatalities, and mixed evidence that safety device laws actually cause more erratic driving (potentially offsetting the decrease in premium costs).
The insurance argument is evoked a lot, and several state supreme courts have upheld the argument. To the best of my knowledge, however, there is no empirical connection between helmet laws and insurance premiums absent some circumstantial studies about long-term effects. I would also argue that the numbers most often cited are one-sided, focused on the cost of helmet repeal alone. They don’t address the cost borne by society for enforcement and installation of “mandated safety devices” — such as airbags, etc. — that taxpayers and individuals incur already (think of all those seatbelt law commercials and the amount of time police officers are forced to spend enforcing such laws rather than, say, preventing violent crimes).
So I could go either way on this. If the law does in fact lower taxpayer costs, then I might find it justified. I tend to believe, however, that the law’s primary intent is simply to “protect us from ourselves.”
State and local economic development officials, whom one might think would ostensibly be strong supporters of capitalism and markets, are far too often just rent-seeking enablers who are so neck-deep in the muck of the government-developer complex that tax credits, abatements, etc., become the normative features of their economic model. Imagine a Missouri economic field that involved low and consistently applied taxes, limited and reasonable regulation, a fair legal system, and an educated workforce. Sounds pretty good, huh? Well, not to economic development officials, who would no longer be needed in such a system. If taxes are low, they have nothing to give away except their own purpose for employment.
Lest you think I am being too harsh, I point you to these absolutely ludicrous comments in today’s St. Joseph News-Press:
“(Legislators) didn’t step up to the plate to get the race track. I don’t think they saw the real potential in it … They will have missed another opportunity. One of the biggest challenges we face is getting our legislators to think outside the box.”
So that is the worldview of at least one official, and probably many more. According to this worldview, it is the job of elected officials to direct who, what, where, when and how a business operates; it is the job of legislators to recruit and reward favored businesses, because only legislators and economic development officials know what is best for a community; and Missouri’s legislators were stupid several years ago when they did not give away enough taxpayer money to lure a favored business. There is no room here for market forces to be making these decisions — economic development officials and their largess have replaced markets as the deciders of what goes where, and they believe that is a good thing.
It should be clear to all that within the past decade or so tax giveaways have become the norm in Missouri and the rest of the country, rather than an exception to be used in truly dire cases. Now that tax credits, abatements, exemptions, etc., are the norm, every business figures them into its calculations. Businesses didn’t demand this from government. It was offered and accepted, the natural result of having government and business involved too closely for too long. The most indispensable people in this system are, of course, the government development officials — but now I’m getting out of economic policy and into philosophy.
I have no idea how to get out of this system. Of course, I want Missouri to stop — but in the interest of fairness, I want everyone to stop at exactly the same time, which will never happen voluntarily. Perhaps a federal constitutional amendment requiring that tax rates be consistent across districts is the only way to end these current practices. I would hope people see the insanity for what it is long before that.
And a shout out to Combest for the link! Congrats to he and Monica for their solid performance at trivia night on Saturday, where I believe they came in a very respectable third. As for which team won — well, that answer should be obvious. …
Well, not necessarily everywhere, but cash-strapped local governments across the country seem to be pushing significant property tax increases at a record pace.
This is particularly damaging to homeowners whose homes have lost significant value during the past two years (in some places by 20 to 30 percent, according to the Case-Schiller Index) but have not yet been reassessed.
In other words, a home that was worth $200,000 when it was last assessed might now be worth only $140,000. Not only are the existing homeowners paying property taxes on a property with an assessed value higher than the market would bear, but they are also due for a tax increase. Again, however, people only seem to clamor for reassessments when their homes have declined in value — not when they have appreciated (see David’s op-ed for some thoughts on Missouri’s rollback provisions).
The Wall Street Journal has a nice little image detailing median property taxes across the country.
Raising kids with autism is a financial challenge. Treating the disorder, which can impair speech, social interaction, and many other forms of specialized education, is expensive because of the expertise and time involved. Health insurance might cover medications and a few hours of therapy each week, but parents have to pay for the rest on their own. Some Missouri legislators have proposed a bill that would mandate health insurance coverage for autism; another possible course of action is to leave the issue to school districts. However, both of these plans have major drawbacks. Tuition tax credit scholarships for autistic children would be a more effective policy solution.
Insurance mandates are a bad idea in general — they help only those who have insurance, and they raise premiums for everyone. Higher premiums make it less likely that the uninsured will get coverage, or that those who currently have insurance will be able to keep it. In the case of autism, though, a mandate would be particularly inappropriate. Kids with autism may need up to 30 hours each week of behavioral modification, help with social skills, music therapy, and personal attention — in other words, a special school environment. Health insurance companies are set up to pay for medical treatment — which is only one part of the services autistic kids need — not to pay tuition.
Now, no one would expect a mainstream public school to provide all these services for only one or two autistic students. That’s why there are private schools that focus exclusively on teaching autistic students. High tuition can be prohibitive, though, putting specialized private schools out of reach for all but the wealthiest parents. And with tight budgets, these private schools can’t offer scholarships to everyone who needs them. In fact, they are sometimes forced to limit the number of students they serve at any given time — the Tailor Institute in Cape Girardeau, for example, can help only six students at once. Local public schools, no matter how poorly prepared they may be to treat autism, are usually the only options available to parents.
This is not to say Missourians don’t care about autism; the state generously supports autism diagnosis and treatment. However, much of that support takes the form of grants to treatment centers that provide specific services like speech therapy and counseling. If parents aren’t fortunate enough to live in one of those rare school districts that employ autism experts as teachers, they can either pay private-school tuition or settle for the best that their assigned public school can offer. According to an estimate by the Centers for Disease Control and Prevention, one out of 150 children has some form of autism — so the lack of choices for their parents is a far-reaching problem.
Of course, getting help for autistic kids is a concern in other states as well. In some parts of the country, public school districts pay for autistic students to attend private schools. This solution works in the particular areas that have implemented it, but it would be difficult for the entire state of Missouri to adopt this policy. The percentage of students diagnosed with autism varies throughout the hundreds of school districts in the state, and such a policy would place much heavier demands on some districts’ budgets than on others.
Ohio has come up with a better solution. The state’s Autism Scholarship Program has been in place since 2004, and served 750 students during this past school year. If Missouri follows Ohio’s lead, we’ll be able to level the playing field and help all autistic students who wish to participate, regardless of their household income or insurance status. Also, a scholarship program financed through tax credits wouldn’t place excessive burdens on individual school districts.
Although the state can’t erase the difficulties of raising autistic kids, sensible policy can give all parents options that are now available only to a few. Tuition tax credits would offer help to every autistic student in Missouri, and would make dealing with this condition a little less daunting for parents.
Sarah Brodsky is a former policy analyst at the Show-Me Institute. She holds an A.B. in economics from the University of Chicago and is currently pursuing a master’s degree in statistics at Loyola University in Chicago.
The Missouri House of Representatives rejected a bill yesterday which would have cut the minimum wage rate for tipped restaurant employees from its current rate of $3.32 to $2.13, the same as the federal minimum wage.
When considering legislation, lawmakers should first address the following two questions: 1) Does the legislature even have the power to pass this law; and, 2) Will the law have the effect that it’s intended to have?
I would argue that most politicians don’t even consider the first question. But for the sake of argument, let’s say that they do and consider the second question. Will the higher minimum wage help or hurt restaurant employees?
The Wall Street Journal happened to profile the struggling restaurant industry the other day. Here’s what they found (emphasis added):
Adding to the pressure is a big jump in the minimum wage starting this summer, which will boost wages by 12% in some states.
That’s sent the industry into its worst slump in decades. Many chains have scaled back expansion plans or cut costs by skimping on things like extra sauce and free sour cream. Some are shuttering sites and laying off workers.
It’s tough to make the minimum wage when you don’t have a job in the first place. Studies have repeatedly found that minimum wage laws are harmful to employers and employees alike. And those that are hit the hardest are generally the least-skilled and least able to afford losing their jobs, rather than the teenager in suburbia saving up for a car. And let us also not forget that Missouri has one of the highest minimum wage rates among its state neighbors, making labor much more expensive in Missouri than, say, Tennessee.
Like everybody else, I wish that the government could be Santa Claus and magically give things out for free. But, unfortunately, they can’t be — which means that every piece of legislation has unintended consequences. In this case, it’s increased costs to a struggling industry amid a slowing economy. Are we helping or hurting restaurant employees?
An op-ed in the New York Times brings up the question of why the U.S. economy has done so well after years of public-school decline. Here’s the conclusion:
Indeed, a consensus seems to be emerging among educational experts around the world that American schools operate within the context of an enabling environment — an open economy, strong legal and banking systems, an entrepreneurial culture — conducive to economic progress.
To put it bluntly, American students may not know as much as their counterparts around the Pacific Rim, but our society allows them to make better use of what they do know.
This op-ed makes some important points, but it’s not the whole story. Yes, America’s free markets and stable legal environment can make up (to some extent) for a poor education system. That’s not because knowledge doesn’t matter in our economy like it does in the rest of the world. Instead, the best-educated make lots of money, bringing up average income statistics. And they spend some of that money on services provided by their less-educated citizens. So, when some kids are stuck in a failing education system, it doesn’t bring down the entire economy — but it’s unfortunate for them. They’ll have to spend the rest of their lives working for the people with knowledge.
Our education system hasn’t killed the economy. Is that the best we can do? Surely our goal is to share the pleasures and opportunities of learning as widely as possible — not just to avert market collapse.
