KC Budget Crunch Continues; Payroll Still Padded

Posted on by David Stokes

The Kansas City Star continues its thorough coverage of the budget situation in KC with a clarifying and honest article about the background of the budget problems — albeit one presented in a mildly annoying Q&A format. Don’t get me wrong, the strengths of the article far outweigh the format, and at least Q&A is better than the worst writing format of all: the pathetic "5 myths about something or other." But back to the budget.

The most important part is right in the beginning (emphasis added for all following excerpts):

Q: How did the city get into this mess?

A: The bottom line is that, for years, Kansas City’s expenses have grown faster than its revenues. Since the 1970s, the city’s population has dropped from more than 500,000 to about 450,000. Its infrastructure needs have increased substantially, and revenue growth has not kept pace with inflation. The city provides millions of dollars for indigent health care and other social and cultural services that the suburbs don’t have. Since early 2000, Kansas City has also taken on mounting debt obligations and guaranteed incentive payments to developers.

Meanwhile, gasoline costs are skyrocketing and the city must spend more for pensions, health care and salary raises. Although the city downsized in 2003, the work force has crept back up from 4,344 in 2005 to 4,678 currently.

Too many TIFs and too many city employees are obviously a recipe for budget deficits, but I object to the theoretical aspects of the problem just as much as I object to the budget realities. Too many government employees are there intentionally, as part of political machines, designed to be kept on the payroll for the benefit of the governing faction. This is true even in civil service positions, because civil service employees are usually going to want to grow government for their own benefits as much as patronage employees do. (Do not take this as a criticism of civil service rules; they are clearly preferable to patronage.) Too many TIFs, or other abatements, play into the idea that the government — rather than the market — knows what the economy of Kansas City needs, by granting favors to certain plans but not others. Next point in the article:

Q: What are the main proposals to cut spending?

A: Funkhouser would slash the zoo and Liberty Memorial subsidies, eliminate 220 jobs, and close the jail and the animal shelter. At the same time, he would add $10 million for street paving, hire 20 new police officers and spend $200,000 on a citywide education summit.

City Manager Wayne Cauthen initially recommended using a $14.6 million wireless telephone settlement and across-the-board department cuts to help balance the budget. Critics said Cauthen papered over the city’s problems; he has since submitted alternatives.

Last week, Finance Committee Chairwoman Deb Hermann and Vice Chairwoman Jan Marcason submitted a compromise that pared back Funkhouser’s harshest cuts but cautioned against Cauthen’s optimistic revenue projections. It includes many difficult choices. A committee narrowly sent that plan on to the full council.

I commend the mayor for his proposal to cut government jobs, for reasons discussed above. If a job is not necessary, you should eliminate it rather than just keep someone on for the benefit of the machine — or to be nice, on the taxpayer’s dime. I think that outsourcing such things as the jail and animal shelter are worth strong consideration, but I don’t know enough about the exact details of both to argue for or against closing them. And I don’t think that now is the right time to fund a new summit of any kind, be it talking about education or climbing Taum Sauk.

Certainly, the cell phone settlement will help — as well as provide regular revenues in the future — but using a one-time windfall to close a problem just moves the problem to next year, when it may be even greater. By making the tough choices now, the Kansas City administration and council are doing what they were elected to do. I find it very impressive.

Bills About Internet Bullying

Posted on by Sarah Brodsky

An article in the Post-Dispatch summarizes the various proposals on cyber-bullying that the Missouri and Illinois legislatures are considering. Like all the other proposals I’ve seen on this issue, these would be difficult to enforce and probably wouldn’t have prevented the Megan Meier tragedy had they been law in 2006. Here’s an example:

One lawmaker has suggested making it a felony for any adult to have electronic contact that "demonstrates a knowing disregard for the health, safety and welfare" of the child.

How can you tell whether the disregard is knowing or not? But at least that proposal just forbids bad behavior (albeit ambiguously) — other ideas out there would establish new programs and requirements only tangentially related to what happened to Megan Meier. One bill would require public schools to institute policies about online bullying, never mind that Megan’s alleged harasser was an adult woman outside of the control of public school administrators.

These legislators are well-intentioned, but the most effective protection against online bullies are watchful parents.

Internship Applications Due

Posted on by Eric D. Dixon

Today is the application deadline for summer internships at the Show-Me Institute. But, because we’re so nice, we’ll continue to accept applications through Monday.

If you know any college students who may be interested, be sure to let them know. If you’re a college student currently on the fence about whether you should apply, perhaps this testimonial from our former intern Steve Bernstetter will push you over the edge:

Seriously, these guys do great work, are really nice people, and are spearheading a movement with great promise for affecting positive change. Whether you’re a naive young grad student like myself, looking to change the world for the better, or a grizzled cynical veteran of the politics game simply looking for a breath of fresh political air, you’d be a fool to pass up this opportunity.

Well said, Steve. Again.

Bad Bill, Bad Teachers

Posted on by Justin Hauke

There are several bills in the General Assembly this session concerning teacher pay. Generally, I find these bills fairly annoying because they have few qualifying requirements (such as merit pay, etc.).

A new proposal by Rep. Denis Holsman (D-Kansas City) appears, at first glance, to address teacher pay — particularly in rural districts — without providing across-the-board pay increases. Upon further reflection, though, it fails to fundamentally address the root incentive problems.

Among the bill’s merit provisions (from the Post-Dispatch’s coverage):

  • A voluntary grant given to school districts based on test scores and teacher performance. A majority of teachers in each district would have to vote to accept the grant.
  • One-time $5,000 stipends for teachers in small schools who have reached 10 and 20 years of service.
  • Recruitment bonuses of $5,000 for new teachers in small or unaccredited school districts. Math and science teachers would receive $7,500.
  • Retention bonuses ranging from $2,500 to $10,000 for teachers who stay at a small school district for 5, 10 and 20 years.
  • A $2,500 stipend for teachers in a district that moves from being unaccredited to accredited by the state Board of Education.
  • Monthly bonuses for retired teachers older than 75 whose cost-of-living adjustments are capped.

The first point is a throwaway provision to satisfy the merit-pay advocates. Individual teachers should be able to decide whether their compensation is based on their individual performance; it should not be left to the discretion of a monopolistic cartel. The majority of teachers will not vote to accept merit pay, because without merit pay, bad teachers will receive the same pay as good teachers — a tragedy of any state-run enterprise. Worse, this provision provides perverse incentives for good teachers because it discourages them from remaining in a profession where their performance quality is under-recognized. And if Missouri’s aggregate public school performance is any indication of teacher quality, there are far more bad teachers in the state than good.

The retention bonuses are also a mistake. Research indicates (as evidenced by Dr. Hanushek, the nation’s foremost education scholar) that there is little improvement in teacher performance past the two- or three-year mark (in fact, the relationship may actually be negative). So there’s little reason to reward teachers’ tenure without a corresponding performance metric. This is really the critical juncture in the teacher compensation problem. Good teachers should be rewarded for their efforts, and bad teachers should not. The teacher unions have spent years hypothesizing that tenure is a measure of teacher success, when in fact there is little evidence to suggest that this is true.

The math/science recruitment bonuses are a step in the "market" direction. If these skill areas are the ones that need the most improvement, it makes sense that these should be the areas where more money is spent. But, again, basic math and science skills should be a fundamental part of Missouri education — not something achieved only at a premium.

The worst provision, in my opinion, is the monthly bonuses for retired teachers. How will increasing retirees’ pensions improve the quality of education in Missouri?

There are some good elements of this bill (it does, nominally at least, address the merit issue), but on the whole it does nothing but increase costs without linking them to improvement in quality. Missourians — and Missouri teachers — deserve better.

Great Moments In Free-Market Theory at the St. Louis Board of Aldermen

Posted on by David Stokes

This category may well be as small as an Airplane-style leaflet, but we had an example last week with the defeat of the proposed Segway ordinance by the City Board of Aldermen’s Parks Committee. The West End Word has the story here and here. Alderman Kacie Starr Triplett lays it out very nicely:

"Alderman Krewson’s bill is extremely protectionist, and that’s not a good precedent to set in the city," said Sixth Ward Alderman Kacie Starr Triplett.

Unfortunately, I think the precedent for protectionism in the city is well established in the code, but that’s not Alderman Triplett’s fault. If this statement and the defeat of the Segway bill are an indication of the views of Alderman Triplett and other young members of the board, politics in the City of St. Louis may well have a very bright future.

The Missouri Plan

Posted on by Justin Hauke

The Federalist Society has released a study investigating the correlation between states with a merit selection judiciary (the so-called “Missouri plan” model) and school finance litigation.

The “Missouri Plan” amended the state Constitution such that judicial nominations are selected — at least in part — through an independent nominating counsel (generally comprising state American Bar Association-appointed lawyers) instead of by popular election. Today, 26 states have adopted some form of the “Missouri Plan” for their judicial appointments.

The legal benefits of the “Missouri Plan” are debatable. Many studies have examined the impact of such plans on business-friendly legislation (the argument being that judicial nominations appointed by ABA members will be less friendly to issues that might limit the market for lawyers). In fact, in an upcoming policy report, the Show-Me Institute will examine the Missouri Plan in detail. (Stay tuned for the excitement!)

The Federalist Society’s research highlights at least one negative aspect, however. To date, 45 states have addressed education adequacy litigation. According to data gathered by Columbia University, about two-thirds of adequacy decisions in Missouri Plan states strike down the legislatures’ funding statutes. This means that courts have effectively commandeered the power of the purse — something clearly within the proper domain of the legislatures.

In addition, in a joint study by the Institute for Justice and the American Legislative Exchange Council, analysts found that school voucher systems are constitutional in 77 percent of states with popularly elected judiciaries, versus 50 percent in Missouri Plan states.

So I guess this was a long way of me saying that there is evidence that courts are friendlier to the school choice movement in states where judges are elected by the people themselves.

Missourians Should Save Their Stimulus Checks

Posted on by Eric D. Dixon

Amid the clamor about an uncertain economy, government officials feel pressure that they should do something to fix it all. First, we have the federal tax rebate checks, as part of a "stimulus" package intended to spur consumer spending (David Stokes handily addressed that topic last month). Now we have a sales tax holiday proposal (link via John Combest) to provide an even greater incentive to spend rather than save.

It’s true that consumer spending is a crucial part of any healthy economy, but officials have confused cause with effect. Spending doesn’t create economic growth — rather, it’s a symptom of the growth that results from saving.

That’s right, saving. When you sock money away in the bank, you’re not hoarding it. You’re investing in capital growth. Economic literature is filled with explanations of how this works, but economist Mark Skousen summed it up nicely in a 2004 article about spending vs. saving:

Studies in business cycles and marketing demonstrate repeatedly that CEOs, entrepreneurs, capitalists and other business decision-makers are the primary activators of the economy, and determine when to start investing in capital again and turn the economy around. Government leaders cannot depend on consumers to lead the recovery. They tend to be passive, responding to rather than creating new products and services.

In normal times, increased savings expands the pool of capital investment, lowers interest rates, and allows firms to adopt new production processes, new technologies, and create new jobs. Thus, saving is just as much a form of spending as consumption, only a different form of spending, and in some cases, a better form of spending when it fulfills a need for more capital and investment.

So when you get that stimulus check in a few months, don’t let the tax holiday tempt you to rush out and buy something you don’t really need. Save it for a rainy day, and help lay the foundation for a real, lasting economic recovery.

For Those of You Looking to Compare Individual Missouri Schools’ Academic Performances …

Posted on by Justin Hauke

Look no further.

I was introduced to SchoolDigger this morning as a nifty little cut-and-dried Missouri school evaluator. Unfortunately, the school rankings are assessed entirely by MAP test scores, and many alternative (and charter) schools are omitted. There’s also no direct district comparison, which would be useful, and even the individual school comparisons aren’t that helpful.

But the Google Maps feature is sweet!

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